Registration number:
for the
Year Ended
Mayfourth Holdings Limited
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Consolidated Profit and Loss Account |
|
Consolidated Balance Sheet |
|
Balance Sheet |
|
Consolidated Statement of Changes in Equity |
|
Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Notes to the Financial Statements |
Mayfourth Holdings Limited
Company Information
Directors |
D A Coombs G R Styles |
Company secretary |
P Jethwa |
Registered office |
|
Auditors |
|
Mayfourth Holdings Limited
Strategic Report for the Year Ended 31 March 2020
The directors present their strategic report for the year ended 31 March 2020.
Principal activity
Mayfourth Holdings Limited acts as a holding company for the Group.
Mayfourth Holdings Limited and its subsidiaries (the Group) operates in the commercial energy market as an intermediary between sales brokers and energy suppliers, and is the largest dedicated aggregator of commercial sales contracts in this marketplace.
Fair review of the business
The results for the year which are set out in the profit and loss account show turnover of £28,578,463 (2019 - £27,346,861) and an operating profit before exceptional items of £1,656,199 (2019 - £738,615). At 31 March 2020 the group had net assets of £239,394 (2019 - £756,250). The directors consider the performance for the year and the financial position at the year end to be satisfactory.
There has been investment in staffing and software in order to position the Group for future growth plans and to develop the system functionality for its brokers. As a result further growth is predicted in the coming years.
Principal risks and uncertainties
The Board considers the principal risks and uncertainties facing the business to be:
• Regulatory and statutory changes and compliance
• Customer service levels and broker performance
• System reliability
• Exposure to volatility in the energy market
• Recruitment and retention of adequately skilled staff
Financial key performance indicators
The directors of the Group monitor its performance by reference to the following indicators:
Net asset position - Net assets at the Balance Sheet date amounted to £239,394 (2019: £756,250).
Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) adjusting for exceptional costs - the Group achieved EBITDA of £2,728,199 (2019: £2,810,407).
Approved by the
.........................................
Director
Mayfourth Holdings Limited
Directors' Report for the Year Ended 31 March 2020
The directors present their report and the for the year ended 31 March 2020.
Directors of the company
The directors who held office during the year were as follows:
Future developments
Future developments will see continued focus on further development of the customer portal functionality which will facilitate growth in the customer base and contract volumes. In addition, further opportunities to be considered will arise through potential product expansion and leveraging the software platform.
The Covid-19 pandemic in 2020 will have an impact on the results for 2020/21, mainly due to the impact on end-user businesses, particularly in sectors such as hospitality. Partly as a result of the resultant economic uncertainty, there has also been a general reduction in contract term lengths. However, the business has been able to continue to work effectively remotely, and hence the impact on our ability to trade has been minimal. Government guidelines have been followed at all times and the requisite risk assessments and safe working practices implemented.
Disclosure of information to the auditor
Each director has taken the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Independent auditors
PricewaterhouseCoopers LLP resigned as auditors in the year and Hazlewoods LLP have been appointed as auditors.
Approved by the
.........................................
Director
Mayfourth Holdings Limited
Statement of Directors' Responsibilities
The directors are responsible for preparing the Strategic Report, 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
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 group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Mayfourth Holdings Limited
Independent Auditor's Report to the Members of Mayfourth Holdings Limited
Opinion
We have audited the financial statements of Mayfourth Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2020, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• |
give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2020 and of the group's loss for the year then ended; |
• |
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• |
have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
• |
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
• |
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
Mayfourth Holdings Limited
Independent Auditor's Report to the Members of Mayfourth Holdings Limited
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• |
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• |
the parent company financial statements are not in agreement with the accounting records and returns; or |
• |
certain disclosures of directors’ remuneration specified by law are not made; or |
• |
we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Mayfourth Holdings Limited
Independent Auditor's Report to the Members of Mayfourth Holdings Limited
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of this report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
......................................
For and on behalf of
Windsor House
Bayshill Road
GL53 7AU
Mayfourth Holdings Limited
Consolidated Profit and Loss Account for the Year Ended 31 March 2020
Note |
2020 |
2019 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Exceptional administrative expenses |
(2,156,768) |
- |
|
Other operating income |
- |
|
|
Operating (loss)/profit |
( |
|
|
Other interest receivable and similar income |
|
- |
|
Interest payable and similar charges |
( |
( |
|
(Loss)/profit before tax |
( |
|
|
Taxation |
|
( |
|
(Loss)/profit for the financial year |
( |
|
|
Profit/(loss) attributable to: |
|||
Owners of the company |
( |
|
The above results were derived from continuing operations.
The group has no other comprehensive income for the year.
Mayfourth Holdings Limited
(Registration number: 10204867)
Consolidated Balance Sheet as at 31 March 2020
Note |
2020 |
2019 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets/(liabilities) |
|
( |
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Capital redemption reserve |
|
- |
|
Merger relief reserve |
|
|
|
Profit and loss account |
( |
|
|
Total equity |
|
|
Approved and authorised by the
.........................................
Director
Mayfourth Holdings Limited
(Registration number: 10204867)
Balance Sheet as at 31 March 2020
Note |
2020 |
2019 |
|
Fixed assets |
|||
Investments |
|
|
|
Current assets |
|||
Debtors |
|
|
|
Creditors: Amounts falling due within one year |
( |
( |
|
Net current liabilities |
( |
( |
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Capital redemption reserve |
|
- |
|
Merger relief reserve |
|
|
|
Profit and loss account |
|
( |
|
Total equity |
|
|
The company made a loss after tax for the financial year of £84,449 (2019 - loss of £135,211).
Approved and authorised by the
.........................................
Director
Mayfourth Holdings Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 March 2020
Equity attributable to the parent company
Share capital |
Capital redemption reserve |
Merger relief reserve |
Profit and loss account |
Total |
|
At 1 April 2019 |
|
- |
|
|
|
Loss for the year |
- |
- |
- |
( |
( |
Purchase of own share capital |
(9,500) |
9,500 |
- |
(9,500) |
(9,500) |
Other share capital movements |
- |
202,670 |
- |
(202,670) |
- |
At 31 March 2020 |
|
|
|
( |
|
Share capital |
Capital redemption reserve |
Merger relief reserve |
Profit and loss account |
Total |
|
At 1 April 2018 |
|
- |
|
( |
|
Profit for the year |
- |
- |
- |
|
|
At 31 March 2019 |
|
- |
|
|
|
Mayfourth Holdings Limited
Statement of Changes in Equity for the Year Ended 31 March 2020
Share capital |
Capital redemption reserve |
Merger relief reserve |
Profit and loss account |
Total |
|
At 1 April 2019 |
|
- |
|
( |
|
Loss for the year |
- |
- |
- |
( |
( |
Dividends |
- |
- |
- |
|
|
Purchase of own share capital |
(9,500) |
9,500 |
- |
(9,500) |
(9,500) |
Purchase of preference shares |
- |
202,670 |
- |
(202,670) |
- |
At 31 March 2020 |
|
|
|
|
|
Share capital |
Capital redemption reserve |
Merger relief reserve |
Profit and loss account |
Total |
|
At 1 April 2018 |
|
- |
|
( |
|
Loss for the year |
- |
- |
- |
( |
( |
At 31 March 2019 |
|
- |
|
( |
|
Mayfourth Holdings Limited
Consolidated Statement of Cash Flows for the Year Ended 31 March 2020
Note |
2020 |
2019 |
|
Cash flows from operating activities |
|||
(Loss)/profit for the year |
( |
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance income |
( |
- |
|
Finance costs |
|
|
|
Income tax expense |
( |
|
|
Income tax expense |
- |
40,167 |
|
|
|
||
Working capital adjustments |
|||
Increase in trade debtors |
( |
( |
|
Increase in trade creditors |
|
|
|
Increase/(decrease) in provisions |
|
( |
|
Cash generated from operations |
( |
|
|
Income taxes paid |
( |
- |
|
Net cash flow from operating activities |
( |
|
|
Cash flows from investing activities |
|||
Interest received |
|
- |
|
Acquisitions of tangible assets |
( |
( |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Payments for purchase of own shares |
( |
- |
|
Proceeds from bank borrowing draw downs |
|
- |
|
Repayment of bank borrowing |
( |
- |
|
Payments to finance lease creditors |
( |
( |
|
Interest on preference shares |
( |
( |
|
Net cash flows from financing activities |
|
( |
|
Net increase in cash and cash equivalents |
|
|
|
Cash and cash equivalents at 1 April |
|
|
|
Cash and cash equivalents at 31 March |
1,829,166 |
1,270,093 |
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
England
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.
The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 March 2020.
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Going concern
After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The critical judgements that the directors have made in the progress of applying the Company's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below;
(i) Intangible assets
The directors obtained an external valuation on the intangible assets and the useful life of these assets. The directors have considered the historic valuation as well as continuing market conditions to evaluate the carrying amounts of these assets.
(ii) Fixed asset investment
The directors have undertaken an assessment of the valuation and believe the fair value is not significantly different to the cost.
(iii) Revenue
The directors make an estimate of the value of revenue recoverable on a contract based on historical trends, estimate of usage and expected future market conditions.
The directors make a judgement over the split of services rendered and delivered at the point of contract agreement compared with those services delivered over the contract period. Revenue recognition is split across these periods accordingly. This means for small and medium customers revenue is typically recognised at contract agreement. For corporate customers who have an ongoing service requirement, a proportion of revenue is recognised at contract agreement with the remaining amounts spread over the contract life and estimate of usage.
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Revenue recognition
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.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Motor vehicles |
25% straight line |
Fixtures and fittings |
25% straight line |
Computer and office equipment |
20-33% straight line |
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Research and development
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Intangible assets
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.
Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Goodwill |
10 years |
Future order book |
6 years |
Current contracts |
1.5 years |
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Debtors
Short term 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.
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Creditors
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.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Provisions
Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Financial instruments
Classification
Recognition and measurement
Impairment
A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.
The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.
Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.
For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.
Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Revenue |
All revenue arose within the UK and relates to the Company's principle activity.
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2020 |
2019 |
|
Other operating income |
- |
|
Operating profit |
Arrived at after charging/(crediting)
2020 |
2019 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Research and development cost |
|
|
Foreign exchange (gains)/losses |
( |
|
Operating lease expense - property |
|
|
Operating lease expense - other |
24,644 |
- |
Exceptional items |
2020 |
2019 |
|
Exceptional expenses |
2,156,768 |
- |
Exceptional costs in the year are made up of provisions for HMRC investigations into historic tax schemes £340,549, costs incurred in setting up a new trading entity £1,528,396 and the write off of an historic intercompany balance £287,823.
Other interest receivable and similar income |
2020 |
2019 |
|
Interest income on bank deposits |
|
- |
Interest payable and similar expenses |
2020 |
2019 |
|
Interest on bank overdrafts and borrowings |
- |
|
Interest on preference shares |
|
|
Interest expense on other finance liabilities |
|
|
|
|
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2020 |
2019 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2020 |
2019 |
|
Managers |
|
|
Finance |
|
|
Sales |
|
|
Admin |
|
|
IT |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2020 |
2019 |
|
Remuneration |
|
|
During the year the number of directors who were receiving benefits and share incentives was as follows:
2020 |
2019 |
|
Accruing benefits under money purchase pension scheme |
|
- |
In respect of the highest paid director:
2020 |
2019 |
|
Remuneration |
|
|
Benefits under long-term incentive schemes (excluding shares) |
|
- |
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Auditors' remuneration |
2020 |
2019 |
|
Audit of these financial statements |
21,500 |
45,000 |
Other fees to auditors |
||
All other non-audit services |
- |
|
Taxation |
Tax charged/(credited) in the profit and loss account
2020 |
2019 |
|
Current taxation |
||
UK corporation tax |
- |
|
UK corporation tax adjustment to prior periods |
( |
|
(78,823) |
145,586 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
- |
Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods |
- |
(7,027) |
Total deferred taxation |
( |
( |
Tax (receipt)/expense in the income statement |
( |
|
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2019 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2020 |
2019 |
|
(Loss)/profit before tax |
( |
|
Corporation tax at standard rate |
( |
|
Effect of revenues exempt from taxation |
- |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Effect of tax losses |
|
- |
(Decrease)/increase in UK and foreign current tax from unrecognised temporary difference from a prior period |
( |
|
Tax increase from effect of capital allowances and depreciation |
- |
|
Tax decrease arising from group relief |
( |
( |
Tax decrease from effect of adjustment in research and development tax credit |
- |
( |
Other tax effects for reconciliation between accounting profit and tax expense (income) |
|
- |
Total tax (credit)/charge |
( |
|
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Deferred tax
Group
Deferred tax assets and liabilities
2020 |
Asset |
Fixed asset timing differences |
( |
Short term timing differences - trading |
|
Tax losses carried forward |
|
|
2019 |
Liability |
Fixed asset timing differences |
|
Short term timing differences - trading |
- |
Tax losses carried forward |
- |
|
Intangible assets |
Group
Future order book |
Current Contracts |
Goodwill |
Total |
|
Cost |
||||
At 1 April 2019 |
|
|
|
|
Amortisation |
||||
At 1 April 2019 |
|
|
|
|
Amortisation charge |
|
- |
|
|
At 31 March 2020 |
|
|
|
|
Carrying amount |
||||
At 31 March 2020 |
|
- |
|
|
At 31 March 2019 |
|
- |
|
|
The aggregate amount of research and development expenditure recognised as an expense during the period is £
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Tangible assets |
Group
Motor vehicles |
Fixtures and fittings |
Computer equipment |
Total |
|
Cost |
||||
At 1 April 2019 |
|
|
|
|
Additions |
- |
|
|
|
At 31 March 2020 |
|
|
|
|
Depreciation |
||||
At 1 April 2019 |
|
|
|
|
Charge for the year |
|
|
|
|
At 31 March 2020 |
|
|
|
|
Carrying amount |
||||
At 31 March 2020 |
|
|
|
|
At 31 March 2019 |
|
|
|
|
Investments |
Company
2020 |
2019 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost |
|
At 1 April 2019 and at 31 March 2020 |
|
Carrying amount |
|
At 31 March 2020 |
|
At 31 March 2019 |
|
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Group
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the group holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2020 |
2019 |
Subsidiary undertakings |
||||
|
Electus House, 900 Pavilion Drive, Northampton, NN4 7RG |
Ordinary A, B & D |
|
|
England & Wales |
||||
|
Electus House, 900 Pavilion Drive, Northampton, NN4 7RG |
Ordinary A, B & C |
|
|
England & Wales |
||||
|
Electus House, 900 Pavilion Drive, Northampton, NN4 7RG |
Ordinary A, B & C |
|
|
England & Wales |
||||
|
Electus House, 900 Pavilion Drive, Northampton, NN4 7RG |
Ordinary |
|
|
England & Wales |
||||
|
Electus House, 900 Pavilion Drive, Northampton, NN4 7RG |
Ordinary |
|
|
England & Wales |
||||
|
Electus House, 900 Pavilion Drive, Northampton, NN4 7RG |
Ordinary |
|
|
England & Wales |
||||
|
1 Fore Street Avenue, London, England, EC2Y 9DT |
Ordinary |
|
|
England |
* indicates direct investment of Mayfourth Holdings Limited
Subsidiary undertakings
The principal activity of Online Direct Limited is |
The principal activity of Business Energy Exchange Limited is |
The principal activity of Energy Engine Limited is |
The principal activity of Energy Engine (North America) Limited is |
The principal activity of Mayfourth Labs Limited is |
The principal activity of Zellar Limited is |
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Debtors |
Group |
Company |
|||
2020 |
(As restated) |
2020 |
2019 |
|
Trade debtors |
|
|
- |
- |
Other debtors |
|
|
|
|
Prepayments |
|
|
- |
- |
Total current trade and other debtors |
|
|
|
|
A reclassification of £8,611,081 was made to the prior year prepayments figure to remove credit balances and make the balance more comparable to the current year.
Creditors |
Group |
Company |
||||
Note |
2020 |
(As restated) |
2020 |
2019 |
|
Due within one year |
|||||
Loans and borrowings |
|
|
- |
- |
|
Trade creditors |
|
|
- |
- |
|
Amounts due to related parties |
- |
- |
|
|
|
Social security and other taxes |
|
|
- |
- |
|
Outstanding defined contribution pension costs |
|
- |
- |
- |
|
Other creditors |
|
|
|
|
|
Accrued expenses |
|
|
- |
- |
|
Corporation tax liability |
248,562 |
145,586 |
- |
- |
|
|
|
|
|
||
Due after one year |
|||||
Loans and borrowings |
|
|
- |
- |
|
Other non-current financial liabilities |
|
|
|
|
|
5,781,768 |
4,157,238 |
4,706,150 |
4,123,820 |
4,123,820 2% cumulative preference shares were issued in Mayfourth Holdings Limited in a share for share exchange on 31 March 2017 as part of the acquisition of Online Direct Limited and Energy Engine Limited. The preference share are irredeemable and carry no voting rights. On 31 July 2019, 202,670 shares were cancelled leaving 3,921,150 2% cumulative preference shares.
A reclassification of £8,611,081 was made to the prior year accrued expenses figure to remove debit balances and make the balance more comparable to the current year.
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Loans and borrowings |
Group |
Company |
|||
2020 |
2019 |
2020 |
2019 |
|
Current loans and borrowings |
||||
Bank borrowings |
|
- |
- |
- |
Finance lease liabilities |
|
|
- |
- |
|
|
- |
- |
Group |
Company |
|||
2020 |
2019 |
2020 |
2019 |
|
Non-current loans and borrowings |
||||
Bank borrowings |
|
- |
- |
- |
Finance lease liabilities |
- |
|
- |
- |
|
|
- |
- |
The bank loan is within Online Direct Limited and is secured by a cross company guarantee with Mayfourth Holdings Limited. The effective interest rate on the loan is 4.45% and monthly repayments amount to £28,721.
Deferred tax and other provisions |
Group
Deferred tax |
Annuity provision |
HMRC settlement |
Commission clawback |
||
At 1 April 2019 |
|
- |
|
|
|
Additional provisions |
- |
|
- |
- |
|
Provisions used |
( |
- |
( |
( |
|
At 31 March 2020 |
( |
|
- |
- |
|
Total |
|||||
At 1 April 2019 |
|
||||
Additional provisions |
|
||||
Provisions used |
( |
||||
At 31 March 2020 |
|
||||
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
It was identified in prior years that due to system problems at an energy supplier a number of contracts had been overpaid to Online Direct Limited. The energy supplier had changed their operating systems and as a result had overpaid Online Direct Limited on Renewal contracts and an Agent portfolio. A negotiated figure of £222,660 (2019: £222,660) had been agreed both parties have negotiated a repayment plan and agreed the loan will be paid back at £10,000 per month. During the year repayments against this provision totalled £68,000 (2019: £122,000). No further provision is required.
During a prior year a HMRC enquiry issued a settlement in relation to an Employer-Financed Retirement Benefits Scheme (EFRBS) entered in to by Business Energy Exchange Limited, a subsidiary of the Company. This scheme was entered in to by the subsidiary prior to the hive up of its trade and assets to other Company, as such the ultimate liability will be borne by the Company. A provision was made in 2017 by the Company in relation to the enquiry of £512,000, with £381,063 having been paid during 2017 and 2018, through an Annual Payment Notice (APN) and a further £28,255 having been paid during the year ended 31 March 2020. This settlement has now been fully paid.
During the year the company received notification from HMRC regarding a settlement on an annuity scheme set up by the company. The potential amounts payable on this settlement at the year end is £192,554 and this amount has been provided for. This settlement has been appealed by the company.
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to
£
Contributions totalling
£
Share capital |
Allotted, called up and fully paid shares
2020 |
2019 |
|||
No. |
£ |
No. |
£ |
|
|
|
5,000 |
|
5,000 |
|
|
78,849 |
|
78,849 |
|
- |
- |
|
4,750 |
|
- |
- |
|
4,750 |
|
|
|
|
The remaining 3,921,150 2% cumulative preference shares are treated as debt within the Company. During the year, the ordinary B and C shares were repurchased by the company for the consideration equal to the nominal value of shares.
Reserves |
Group
The merger reserve was created as a result of a share for share exchange following the management buy out of Online Direct Limited and Energy Engine Limited in March 2017. It represents the excess of the fair value over the nominal value of the shares at that time.
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
The capital redemption reserve was created as a result of the share purchase and cancellation of ordinary shares in the the current year.
Obligations under leases and hire purchase contracts |
Company
Operating leases
The total of future minimum lease payments is as follows:
2020 |
2019 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
Later than five years |
|
|
|
|
Related party transactions |
Company
Summary of transactions with key management
Transactions with directors |
2020 |
At 1 April 2019 |
Advances to directors |
At 31 March 2020 |
G R Styles |
|||
Directors loan |
489,955 |
|
|
2019 |
At 1 April 2018 |
Advances to directors |
At 31 March 2019 |
G R Styles |
|||
Directors loan |
142,175 |
|
|
There are no set repayment terms and no interest accruing on the directors loan.
On 28 September 2015 Online Direct purchased an annuity contract from a former director of Online Direct for £139,584 which was used to repay the directors loan account as at 31 March 2015. Under the terms of the contract the Company will receive annual payments of £9,835 commencing on 5th April 2029 for the lifetime of the former director.
On 28 September 2015 Online Direct purchased an annuity contract from G R Styles for £148,819 which was used to repay the directors loan account as at 31 March 2015. Under the terms of the contract the Company will receive annual payments of £11,349 commencing on 5th April 2029 for the lifetime of the G R Styles.
Mayfourth Holdings Limited
Notes to the Financial Statements for the Year Ended 31 March 2020
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate controlling party is