Company registration number SC365033 (Scotland)
M & F FUNERAL SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 25 SEPTEMBER 2023
M & F FUNERAL SERVICES LIMITED
COMPANY INFORMATION
Directors
Mrs R B Lees
Mr R T Givan
Secretary
Mrs R Lees
Company number
SC365033
Registered office
Babs Court
4 Shorthope Street
Musselburgh
East Lothian
EH21 7DB
Auditor
Thomson Cooper
3 Castle Court
Carnegie Campus
Dunfermline
Fife
KY11 8PB
M & F FUNERAL SERVICES LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Profit and loss account
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 23
M & F FUNERAL SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 1 -

The directors present the strategic report for the year ended 25 September 2023.

Fair review of the business

The principal activity of the company during the year continued to be that of a funeral director and funeral plan provider.

 

This year has proved to be another strong year of trading as shown in the financial results reported below.

 

M&F Funeral Services Ltd trading performance reflects the number of funerals carried out in the year to 30 September 2023. The company opened an additional branch in Musselburgh High Street in December 2022 which contributed towards an increase in the sale of Funeral Plans.

 

Outlook

 

The company will continue to invest in its business in 2024.

 

The financial year 2024 may see an increase in expenditure as a result of:

Principle risks and uncertainties

The directors are ultimately responsible for the system of internal control, which covers all aspects of the business, and for reviewing its effectiveness. However, any such system is designed to manage, rather than eliminate, the risk of failure to achieve the company's objectives. Therefore any system is only able to provide reasonable, and not absolute assurance against material misstatement or loss. The directors regularly review the risks to which the company is exposed, as well as the operation and effectiveness of the system of internal controls. This is an ongoing process, involving the identification, evaluation and management of the significant risks faced by the group.

 

Risks are assessed on a regular basis across all areas but, in particular, health and safety, information flow, asset protection and regulatory requirements.

M & F FUNERAL SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 2 -

Risk and impact

Mitigations

Market Risk

Competition

The company faces competition from other firms operating within our target locations. Failure to react to market pricing could result in business being lost to our competitors. Failure to meet or exceed our customers’ expectations could result in a loss of customers and income.

 

  • The company monitors demand and pricing on a regular basis and reacts as necessary.

 

  • The company is continually working to improve customers’ experience.

 

  • The company monitors funeral customers’ feedback and reacts as required.

 

Operational Risks

Health & Safety

A major health & safety incident at one or more of our properties could result in the closure of operations, suppressed income, reputational damage and extra costs.

 

 

  • Completion of health & safety training is monitored by the Board.

Regulatory Compliance

The company is exposed to FCA compliance for the provision of Funeral Plans in addition to compliance in other areas such as health & safety, taxation, data protection. There is a risk of fines, operational difficulties, rectification costs and reputational damage

 

 

  • The company performs regular compliance reviews as part of risk management and actions are monitored at board level.

Staffing

The company would suffer operational difficulties and reputational damage if it were unable to recruit and retain the best staff to run the business

 

  • The company monitors market pay rates to ensure it is competitive in the recruitment market.

 

  • The company invests in training and benefits to maintain a good level of staff retention.

 

Financial Risks

Liquidity

The business would not be able to operate if it ran out of cash and would risk creditor actions

 

  • The company regularly monitors its cashflow forecast.

 

Key performance indicators

The key financial indicators used by the directors are detailed below:

 

 

2023

2022

2021

 

£’000

£’000

£’000

Turnover

1,106

1,127

959

Gross Profit

677

622

593

Operating Profit/(Loss)

287

187

212

M & F FUNERAL SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 3 -

On behalf of the board

Mr R T Givan
Director
5 March 2024
M & F FUNERAL SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 25 September 2023.

Principal activities

The principal activity of the company was that of a funeral directors.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £100,000. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mrs R B Lees
Mr R T Givan
Auditor

In accordance with the company's articles, a resolution proposing that Thomson Cooper be reappointed as auditor of the company will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the annual 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:

 

 

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 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.

Strategic report

The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the principal activities, business review and principal risks and uncertainties of the company.

M & F FUNERAL SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 5 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr R T Givan
Director
5 March 2024
M & F FUNERAL SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF M & F FUNERAL SERVICES LIMITED
- 6 -
Opinion

We have audited the financial statements of M & F Funeral Services Limited (the 'company') for the year ended 25 September 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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:

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 company 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

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

M & F FUNERAL SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M & F FUNERAL SERVICES LIMITED
- 7 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 company or to cease operations, or have no realistic alternative but to do so.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was considered capable of detecting irregularities, including fraud

We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: existence and timing of recognition of income, posting of unusual journals along with complex transactions and non-compliance with laws and regulations including those governed by the Financial Conduct Authority (FCA). We discussed these risks with management, designed audit procedures to test the timing and existence of revenue, tested a sample of journals to confirm they were appropriate and enquired of officers and directors and reviewed correspondence with the FCA of any reference to breaches of laws and regulations.

We also reviewed the laws and regulations in areas that directly affect the financial statements including applicable company law and considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.

With the exception of any known or possible non-compliance with relevant and significant laws and regulations, and as required by the auditing standards, our work in respect of these was limited to enquiry of the officers and management of the company.

We communicated identified laws and regulations and potential fraud risks throughout our team and remained alert to any indications of non-compliance or fraud throughout the audit. However the primary responsibility for the prevention and detection of fraud rests with the director.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

M & F FUNERAL SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M & F FUNERAL SERVICES LIMITED
- 8 -

Use of our 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.

Sharon Collins (Senior Statutory Auditor)
For and on behalf of Thomson Cooper, Statutory Auditors
Dunfermline
5 March 2024
M & F FUNERAL SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
2
1,105,535
1,127,203
Cost of sales
(428,639)
(505,254)
Gross profit
676,896
621,949
Administrative expenses
(389,456)
(435,061)
Operating profit
3
287,440
186,888
Interest payable and similar expenses
5
(2,659)
-
0
Profit before taxation
284,781
186,888
Tax on profit
6
(47,665)
(37,360)
Profit for the financial year
237,116
149,528

The profit and loss account has been prepared on the basis that all operations are continuing operations.

M & F FUNERAL SERVICES LIMITED
BALANCE SHEET
AS AT
25 SEPTEMBER 2023
25 September 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
497,182
140,992
Current assets
Stocks
9
27,073
27,722
Debtors
10
18,692
38,738
Cash at bank and in hand
106,514
350,109
152,279
416,569
Creditors: amounts falling due within one year
11
(256,485)
(448,329)
Net current liabilities
(104,206)
(31,760)
Total assets less current liabilities
392,976
109,232
Creditors: amounts falling due after more than one year
12
(103,763)
-
0
Provisions for liabilities
(44,512)
(1,647)
Net assets
244,701
107,585
Capital and reserves
Called up share capital
16
100
100
Profit and loss reserves
244,601
107,485
Total equity
244,701
107,585
The financial statements were approved by the board of directors and authorised for issue on 5 March 2024 and are signed on its behalf by:
Mr R T Givan
Director
Company Registration No. SC365033
M & F FUNERAL SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 26 September 2021
100
157,957
158,057
Year ended 25 September 2022:
Profit and total comprehensive income
-
149,528
149,528
Dividends
7
-
(200,000)
(200,000)
Balance at 25 September 2022
100
107,485
107,585
Year ended 25 September 2023:
Profit and total comprehensive income
-
237,116
237,116
Dividends
7
-
(100,000)
(100,000)
Balance at 25 September 2023
100
244,601
244,701
M & F FUNERAL SERVICES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
19
66,477
480,083
Interest paid
(2,659)
-
0
Income taxes paid
(37,373)
(43,459)
Net cash inflow from operating activities
26,445
436,624
Investing activities
Purchase of tangible fixed assets
(424,290)
(49,358)
Proceeds from disposal of tangible fixed assets
75,645
8,000
Net cash used in investing activities
(348,645)
(41,358)
Financing activities
Payment of finance leases obligations
184,917
1,531
Dividends paid
(100,000)
(200,000)
Net cash generated from/(used in) financing activities
84,917
(198,469)
Net (decrease)/increase in cash and cash equivalents
(237,283)
196,797
Cash and cash equivalents at beginning of year
343,797
147,000
Cash and cash equivalents at end of year
106,514
343,797
Relating to:
Cash at bank and in hand
106,514
350,109
Bank overdrafts included in creditors payable within one year
-
0
(6,312)
M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 13 -
1
Accounting policies
Company information

M & F Funeral Services Limited is a private company limited by shares incorporated in Scotland. The registered office is Babs Court, 4 Shorthope Street, Musselburgh, East Lothian, EH21 7DB.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

1.2
Going concern

At the time of approving the financial statements the directors consider that the company has adequate resources to continue in operational existence for a period of not less than twelve months. The directors have reviewed the cashflow requirements and are satisfied that the company has sufficient cash reserves and as such continue to adopt the going concern basis of accounting in preparing the financial statements.true

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
20 Straight Line
Motor vehicles
10% - 20% Straight Line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 18 -
2
Turnover
2023
2022
£
£
Turnover
1,105,535
1,127,203
3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
29,389
23,335
Depreciation of tangible fixed assets held under finance leases
14,716
-
Profit on disposal of tangible fixed assets
(51,650)
(2,574)
4
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
14
12

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
212,690
226,636
Social security costs
19,674
21,142
Pension costs
4,046
2,972
236,410
250,750

The key management personnel are considered to be the directors of the company and the funerals manager. The directors received no remuneration in the year therefore the key management compensation received by the funerals manager is £52,035 (2022 - £53,190)

5
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
2,659
-
M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 19 -
6
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
4,800
37,400
Deferred tax
Origination and reversal of timing differences
42,865
(40)
Total tax charge
47,665
37,360

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
284,781
186,888
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
54,108
35,509
Tax effect of expenses that are not deductible in determining taxable profit
412
1,349
Adjustments in respect of prior years
(77)
-
0
Group relief
(11,271)
-
0
Permanent capital allowances in excess of depreciation
(28,558)
542
Deferred tax
42,865
(40)
Profit on sale of fixed assets
(9,814)
-
0
Taxation charge for the year
47,665
37,360
7
Dividends
2023
2022
£
£
Final paid
100,000
200,000
M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 20 -
8
Tangible fixed assets
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 26 September 2022
4,699
186,569
191,268
Additions
6,045
418,245
424,290
Disposals
-
0
(35,151)
(35,151)
At 25 September 2023
10,744
569,663
580,407
Depreciation and impairment
At 26 September 2022
470
49,806
50,276
Depreciation charged in the year
1,938
42,167
44,105
Eliminated in respect of disposals
-
0
(11,156)
(11,156)
At 25 September 2023
2,408
80,817
83,225
Carrying amount
At 25 September 2023
8,336
488,846
497,182
At 25 September 2022
4,229
136,763
140,992

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Motor vehicles
403,384
-
0
9
Stocks
2023
2022
£
£
Finished goods and goods for resale
27,073
27,722
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
14,010
16,970
Other debtors
250
100
Prepayments and accrued income
4,432
21,668
18,692
38,738
M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 21 -
11
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
13
-
0
6,312
Obligations under finance leases
81,154
1,531
Trade creditors
71,104
52,719
Amounts owed to group undertakings
-
0
222,857
Corporation tax
4,827
37,400
Other taxation and social security
2,290
72,428
Other creditors
35,035
25,457
Accruals and deferred income
62,075
29,625
256,485
448,329

The Royal Bank of Scotland Plc hold floating charges dated 14th July 2020 over all property and undertakings of the company.

12
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
103,763
-
0
13
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
-
0
6,312
Payable within one year
-
0
6,312
14
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
44,512
1,647
M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
14
Deferred taxation
(Continued)
- 22 -
2023
Movements in the year:
£
Liability at 26 September 2022
1,647
Charge to profit or loss
42,865
Liability at 25 September 2023
44,512
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
4,046
2,972

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
100
100
100
100
17
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
56,500
56,500
Between two and five years
226,000
226,000
In over five years
94,355
150,855
376,855
433,355
18
Ultimate controlling party

The parent company of M & F Funeral Services Limited is M & F (Scotland) Limited and its registered office is is Babs Court, 4 Shorthope Street, Musselburgh, East Lothian, EH21 7DB.

M & F FUNERAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 25 SEPTEMBER 2023
- 23 -
19
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
237,116
149,528
Adjustments for:
Taxation charged
47,665
37,360
Finance costs
2,659
-
0
Gain on disposal of tangible fixed assets
(51,650)
(2,574)
Depreciation and impairment of tangible fixed assets
44,105
23,335
Movements in working capital:
Decrease/(increase) in stocks
649
(2,512)
Decrease in debtors
20,046
19,542
(Decrease)/increase in creditors
(234,113)
255,404
Cash generated from operations
66,477
480,083
20
Analysis of changes in net funds/(debt)
26 September 2022
Cash flows
25 September 2023
£
£
£
Cash at bank and in hand
350,109
(243,595)
106,514
Bank overdrafts
(6,312)
6,312
-
0
343,797
(237,283)
106,514
Obligations under finance leases
-
(184,917)
(184,917)
343,797
(422,200)
(78,403)
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