Registered number:
05549542
M5 ASSOCIATES LIMITED
UNAUDITED
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
|
M5 ASSOCIATES LIMITED
COMPANY INFORMATION
|
M5 ASSOCIATES LIMITED
CONTENTS
|
|
|
|
|
|
Statement of Income and Retained Earnings
|
|
|
|
Notes to the Financial Statements
|
|
|
M5 ASSOCIATES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2020
The directors present their report and the financial statements for the year ended 31 May 2020.
Directors' responsibilities statement
|
The directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgements and accounting estimates that are reasonable and prudent;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors who served during the year were:
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board on
1 March 2021
and signed on its behalf.
- 1 -
|
M5 ASSOCIATES LIMITED
CHARTERED ACCOUNTANTS' REPORT TO THE BOARD OF DIRECTORS ON THE PREPARATION OF THE UNAUDITED STATUTORY FINANCIAL STATEMENTS OF M5 ASSOCIATES LIMITED
FOR THE YEAR ENDED 31 MAY 2020
In accordance with our engagement letter dated
20 October 2020 and in order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of the Company for the year ended 31 May 2020 which comprise the Statement of Income and Retained Earnings, the Balance Sheet and the related notes from the Company's accounting records and from information and explanations you have given to us.
As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at www.icaew.com/en/members/regulations-standards-and-guidance/.
Respective responsibilities of directors and accountants
You have acknowledged on the balance sheet for the year ended 31 May 2020 your duty to ensure that the Company has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the Company's assets, liabilities, financial position and loss. You consider that the Company is exempt from the statutory requirement for an audit for the year.
This report is made solely to the Board of Directors of M5 Associates Limited, as a body, in accordance with the terms of our engagement letter dated 20 October 2020. Our work has been undertaken solely
to prepare for your approval the financial statements of the Company and state those matters that we have agreed to state to the Board of Directors, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept nor assume responsibility to anyone other than the Company and its Board of Directors, as a body, for our work or for this report.
We
have not been instructed to carry out an audit or review of the financial statements of M5 Associates Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the financial statements.
Mazars LLP
Chartered Accountants
90 Victoria Street
Bristol
BS1 6DP
1 March 2021
- 2 -
|
M5 ASSOCIATES LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MAY 2020
|
|
|
|
|
|
|
|
Retained earnings at the beginning of the year
|
|
|
|
|
|
|
|
Retained earnings at the end of the year
|
|
|
|
There were no recognised gains and losses for 2020 or 2019 other than those included in the statement of income and retained earnings.
|
The notes on pages 6 to 13 form part of these financial statements.
|
- 3 -
|
M5 ASSOCIATES LIMITED
REGISTERED NUMBER:
05549542
BALANCE SHEET
AS AT
31 MAY 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debtors: amounts falling due after more than one year
|
|
|
|
|
|
Debtors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
Total assets less current liabilities
|
|
|
|
|
|
Creditors: amounts falling due after more than one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 4 -
|
M5 ASSOCIATES LIMITED
REGISTERED NUMBER:
05549542
BALANCE SHEET
(CONTINUED)
AS AT
31 MAY 2020
The directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The
financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
1 March 2021
.
The notes on pages 6 to 13 form part of these financial statements.
- 5 -
|
M5 ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
M5 Associates Limited is a private company limited by shares and is incorporated in England & Wales, registered number 05549542. Its registered office is 12 Gold Tops, Newport, NP20 4PH.
The principal activity of the company is short term lending to businesses.
2.
Accounting policies
|
|
Basis of preparation of financial statements
|
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of
Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The functional currency of the Company is Pounds Sterling as this is the currency of the primary economic environment in which the Company operates. Monetary amounts in these financial statements are rounded to the nearest £.
The following principal accounting policies have been applied:
The Covid-19 pandemic and associated economic downturn has had a significant impact on many businesses. The directors have considered the impact of the pandemic and general economic environment when assessing going concern. There are a number of operating uncertainties for the company. Building and construction work has slowed due to working restrictions and this has led to projects taking longer to complete. In addition, completed projects have taken longer to sell as a result of both economic uncertainty dampening demand and restrictions facing potential customers visiting properties. These factors impact the company’s ability to recover debt extended to property developers, increases the risk of default and creates uncertainty around the timings of repayment. The directors' assessment is that while these factors remain challenging, the company has the financial resilience to manage the impact of a range of reasonably possible scenarios that the current environment has created and as a result have prepared the financial statements on a going concern basis.
- 6 -
|
M5 ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
2.
Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙
the amount of revenue can be measured reliably;
∙
it is probable that the Company will receive the consideration due under the contract;
∙
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙
the costs incurred and the costs to complete the contract can be measured reliably.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
- 7 -
|
M5 ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
2.
Accounting policies (continued)
|
|
Tangible fixed assets (continued)
|
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
|
|
Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
- 8 -
|
M5 ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
2.
Accounting policies (continued)
|
|
Financial instruments (continued)
|
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Income and Retained Earnings.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
|
Judgements in applying accounting policies and key sources of estimation uncertainty
|
Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:
Provisions
The provision for bad debt is an estimate and the actual costs and timing of future cash flows are dependent on future events. The difference between expectations and the actual future liability will be accounted for the period when determination is made. The company performs rigorous checks on borrowers and holds security over debts to mitigate the risk of exposure to bad debts. The debts are considered on a line by line basis and provision made if appropriate.
|
The average monthly number of employees, including directors, during the year was
9
(2019 -
9
)
.
|
- 9 -
|
M5 ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
|
The highest paid director received remuneration of £
153,748
(2019 - £
804,408
)
.
|
|
The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £
NIL
(2019 - £
NIL
)
.
|
|
Key management personnel of the company are deemed to be the two directors.
|
|
Factors affecting tax charge for the year
|
|
The tax assessed for the year is higher than
(2019 - higher than)
the standard rate of corporation tax in the UK of
19
%
(2019 -
19
%)
. The differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on ordinary activities before tax
|
|
|
|
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2017 - 19.83%)
|
|
|
|
|
|
|
|
Expenses not deductible for tax purposes
|
|
|
|
Other permanent differences
|
|
|
|
|
|
|
|
Adjust closing deferred tax to average rate of 19%
|
|
|
|
Adjust opening deferred tax to average rate of 19%
|
|
|
|
Remeasurement of deferred tax for changes in tax rates
|
|
|
|
Deferred tax not recognised
|
|
|
|
Total tax charge for the year
|
|
|
- 10 -
|
M5 ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
6.
Taxation (continued)
|
Factors that may affect future tax charges
|
The company has trade losses of £2,104,211 to carry forward.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for the year on owned assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 11 -
|
M5 ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
|
Due after more than one year
|
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: Amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other taxation and social security
|
|
|
|
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
- 12 -
|
M5 ASSOCIATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
|
Creditors: Amounts falling due after more than one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
|
The amount owed to group undertakings is an interest free revolving facility that is renewed annually.
|
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £3,979 (2019 - £4,366). Contributions totalling £884 (2019 - £829) were payable to the fund at the balance sheet date and are included in creditors.
|
Related party transactions
|
|
In accordance with the exemption offered by FRS 102 Section 1A, the Company has not disclosed within the financial statements any transactions with entities that form part of the group headed by M Group Holdings Limited.
|
The immediate parent company is M Group Holdings Limited and the ultimate parent company is M Group Topco Limited. The group is under the control of P L Jeffreys who owns 100% of the issued share capital of M Group Topco Limited.
The largest and smallest group of undertakings for which group accounts have been drawn up is that headed by M Group Holdings Limited, a company registered in England & Wales. The registered office of M Group Holdings Limited is the same as for this company and the group accounts are available from this address.
- 13 -
|