Registered number:
FOR THE YEAR ENDED 30 JUNE 2023
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MAVERICK ADVERTISING & DESIGN LIMITED
COMPANY INFORMATION
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MAVERICK ADVERTISING & DESIGN LIMITED
CONTENTS
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MAVERICK ADVERTISING & DESIGN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
2022/23 saw the impact of the slowdown in the UK economy, highlighted as a possibility in the 21/22 report. Turnover was down to 20/21 level, despite a number of new business wins and productivity remaining at similar levels to the last 2 years. EBIT margin has faced downward pressure too, to 7.3%.
The principle headwinds around turnover have been driven by clients delaying commitment to new projects, due to a weak underlying economic outlook and uncertainty created by a series of interest rate rises. In tandem, the pressure on margins has been driven by a combination of inflationary driven costs increases and the business maintaining its headcount, which has seen a significant investment over the previous 2 years. The cashflow position have remained resilient despite this and the group structure approach has enabled the business to replace some revenue where clients have delayed making decisions on other projects. The diversification of the customer base and new business acquisition will continue to feature strongly as we step from 2022/23 into 2023/24. As the report is written a number of clients have started to commit to delayed projects and more, and new business wins in Q1 2024 are back to 2021/22 levels. Overall 22/23 has been a challenge to see if the business could maintain most of its re-growth post-covid, in the face of what is clearly quite a strong economic slowdown/recession. The results show that partially it has been possible to do that, but some momentum has been pushed into the following 2023/24 year. The investment in marketing from 2022/23 has continued to drive awareness of its profile and reputation. This has resulted in significant further coverage, amplified by the business been awarded two Drum Awards for best campaigns across Social Purpose, further building on the previous years recognition as the No.1 Independent Agency of its size in the UK (The Drum) and in the top 10 of Independent Agencies in the UK (The Drum).
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MAVERICK ADVERTISING & DESIGN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
2022/2023 was a year in which the overall economic headwinds became much clearer to see and impacted many business’s performance. The overall turnover for Maverick Group was down by 17%, having grown by 14% the previous year. Defending the strong bounce back that the business saw in 20/21 and 21/22 was the primary goal, and although turnover dropped, the core accounts and projects that were gained across the two years remained strong, with almost all the revenue attrition being focused around budget allocation to those accounts and projects.
A decision was made not to materially cut headcount within the year, as the business has invested heavily in talent over the previous 2 years coming out of the Covid environment. The ability to attract, retain and grow clients has been driven by the investment in talent, and the pressure on client budgets and project delays is viewed as potentially viewed as short term. Cutting significant headcount would take the business back a step and not easily able to respond to a business environment that has been expected to improve, especially in 2024. A policy though of not employing replacement staff where there were leavers and controlling freelance spending helped create a stronger performance in Q3 and Q4. One of the highlights for 2022/23 have been new and existing client growth. Strong new business wins and the expansion of the client base, have helped to support the softening of budgets across some of the established programs. Client diversification increased by 42% (an addition of 9 international clients to the roster) in 2022/23, and this is a strategy that we are focusing on in 2023/24 also. Our new induction program introduced in 2021/22 has been really well received, with new joiners commenting on the comprehensive nature and support they have had. The continuation of monthly town halls post Covid has maintained strong communication, also supported by a return to the office of employees for part of their working week. This is not mandatory yet, but the policy is for teams to be collaborating face-to-face around new ideas generation and project delivery. The online weekly newsletter and more regular face to face social catch ups, has helped maintain the culture also. This has led to strong retention and the company being recognized as a Great Place To Work in November 2022.
STRATEGY
Building on the decision in 2020 to redefine the structure of the business into a group, and the strong bounce back from Covid the business experienced in 2020/21 and 2021/22, the business has continued to scale and refine the propositions it offers client, in line with the established strategy. The full array of propositions that Maverick offers includes: Electric – Integrated Advertising Engage – Cultural Change and Engagement Maverick Sports & Entertainment – Brand Sponsorship/Partnership Maverick Studio – Design and Artwork Services MTS – Digital products, services and experiences Pulse – Research & Behavioural Insight Eric – Film and Content Creation Global – Transcreation Evolution: In 2022/23 The business has built on the launch of MTS, it has re-shaped one of the propositions (Mavis) and started an associated unit called Reputation by Maverick. Maverick Technology Solutions The major evolution in 2022 was the re-shaping of Hive, the digital offering, into a more all encompassing umbrella that offers digital products, services and experiences to drive innovation and transformation for clients. The business operation commenced in April 2022, and immediately picked up three clients. It has continued to become an integral part of what the business offers and can deliver,enabling a far greater range of capability than previously. It now supports the majority of the clients the business has , across an expanded client base in 2022/23.
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MAVERICK ADVERTISING & DESIGN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
Mavis
In order to support a focus on a broader brand and design proposition, the team from Mavis have been incorporated into the Maverick Studio. This has allowed the business to present a wider range of pure design and branding related services, with an approach that is simplified, to allow for a more cost-conscious client to access the capability of the business. Reputation In order to support the advertising and social media services of the business, in February 2023, the assets of Quiet PR were acquired for a nominal sum by the shareholders of Maverick. This offers the opportunity to build a complimentary, retainer focused business that could also act as an introducer to the wider services of The Maverick Group. Reputation by Maverick is a full service PR Agency, specialising in crisis management, traditional corporate and consumer PR, content creation, influencer marketing and events. The team of experts protect brand’s reputation with Crisis Management; from dealing with wrongful allegations, cyber-crime, spiralling press storms and more. Senior specialised crisis and reputation experts help clients get back on the front-foot by building a positive online profile. They also offer traditional and digital PR strategy and services, which create positive and engaging conversation about clients brand. The overall strategy looking ahead is to continue to grow and refine the Maverick propositions, by investing in talent and making small, highly specific acquisitions to scale the growth of the Group’s businesses. Any acquisition that we undertake would only be on the basis that: It enhances the overall group capability It enables at least one, but preferably two or three of the group’s capabilities to scale further It drives top line growth and bottom-line EBIT It offers value in terms of the price paid versus future value It enables the business to be positioned for the future We are still seeing a number of strong smaller businesses that are currently looking for partners to support their re-growth plans, so we continue to quietly look for the right opportunities to allow the business to scale and make up ground post-Covid. At the time of writing we are assessing another acquisition of a complimentary business in the Culture Transformation space, that will enable Maverick Engage to accelerates its scaling. As one of the two largest and most profitable units this offers an exciting opportunity to grow a future proofed area of the business, and achieve strong growth objectives over the next 2-3 years.
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MAVERICK ADVERTISING & DESIGN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
There are a number of risks that are apparent for 23/24, that are continuation from 2022/23. Some risks appear to have receded too, most notably Covid.
The major risks are primarily twofold. Firstly economic and secondly geo-political. The economic outlook has been seriously damaged by over excessive monetary tightening, reminiscent of 1989-92. A bank of England warning of recession has started to become a reality within 2023 too, as inflation has remained stubbornly high – significantly more so than in Europe or the US. There has been little stimulous in the UK either, which is markedly different to the US. The outlook therefore appears to indicate that a downturn will continue until inflation starts to reduce significantly and interest rates recede – we believe this will happen by mid-year 2024. We also believe that the downturn is sharper than the data is being interpreted and that unemployment data will start to rise. Our feeling currently is that in a post-Covid environment demand for services will not drop as much as previous slowdowns, or clients face losing almost a decade in terms of growth and performance. Also businesses post-covid are in better shape to deal with headwinds and are already operating with a leaner approach. This is something to keep a close eye on though as the other risk around additional geo-political shockss could hold back a perceived recovery in 2024. The wars in the Ukraine, Gaza and strong tensions with China, aswell as big election moments in the UK and US are all events to be navigated and could have a bearing on the global and thereby local economies. With the above in mind the business has embarked on a strategy to anticipate these risks and defend its business volume, whilst looking for further opportunities. An additional focus on cost reduction, expansion of the European client base, targeting clients in new geographies like ME and Asia, and small, low cost strategic acquisitions, are measures designed to offset risk and build on the strengths of the business. With 80% of the revenue from non-UK clients, The business is strongly positioned to continue to build its world class international customer base, which has been the basis of its historical growth. The Company also continues to have substantial cash balances and manages financial risk by ensuring sufficient liquidity is available to meet foreseeable needs. Overall, there is an opportunity to utilize the business’s momentum to defend it’s volumes and increase net revenues with key clients in 2022/23. If the landscape does not improve in 2024, the measures being taken and new opportunities across the various geographies and customers the business serves, aswell as strategic acquisitions, offers a strong counterweight to the various headwinds. It also positions the business very well in the medium term.
During the year 2022/23, sales were £11,949,211. The company delivered profit before tax of £867,558 (Prior year £2,089,383 ) maintaining an operating profit margin of 7.3%. The business improved profitability in the last six months of the year generating an operating profit margin of 13%.
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MAVERICK ADVERTISING & DESIGN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
This report was approved by the board and signed on its behalf.
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MAVERICK ADVERTISING & DESIGN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
The Directors present their report and the financial statements for the year ended 30 June 2023.
The Directors who served during the year were:
The profit for the year, after taxation, amounted to £672,028 (2022 - £1,669,971).
Dividends paid during the year amounted to £1,202,394 (2022 - £997,816).
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
A statement on future developments has been included within the Strategic Report on page 5, in accordance with S414C (11) of the Companies Act 2006.
A statement on research and development activities has been included within the Strategic Report on page 5, in accordance with SI2008/410 Sch 7,7(c) of the Companies Act 2006
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MAVERICK ADVERTISING & DESIGN LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
The auditors, Price Bailey LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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MAVERICK ADVERTISING & DESIGN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MAVERICK ADVERTISING & DESIGN LIMITED
We have audited the financial statements of Maverick Advertising & Design Limited (the 'Company') for the year ended 30 June 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, 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).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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.
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MAVERICK ADVERTISING & DESIGN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MAVERICK ADVERTISING & DESIGN LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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.
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MAVERICK ADVERTISING & DESIGN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MAVERICK ADVERTISING & DESIGN LIMITED (CONTINUED)
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 Auditors' 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:
•Review of legal fees incurred;
• Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias; • Agreeing the financial statement disclosures to underlying supporting documentation • Enquiring of management including those responsible for the key regulations; • Reviewing the key accounting estimates
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 Auditors' Report.
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MAVERICK ADVERTISING & DESIGN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MAVERICK ADVERTISING & DESIGN LIMITED (CONTINUED)
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 Auditors' 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
Chartered Accountants &
Statutory Auditors
24 Old Bond Street
W1S 4AP
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MAVERICK ADVERTISING & DESIGN LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
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MAVERICK ADVERTISING & DESIGN LIMITED
REGISTERED NUMBER: 04462001
BALANCE SHEET
AS AT 30 JUNE 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 28 form part of these financial statements.
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MAVERICK ADVERTISING & DESIGN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
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MAVERICK ADVERTISING & DESIGN LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
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MAVERICK ADVERTISING & DESIGN LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2023
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Maverick Advertising & Design Limited (the ‘Company’) is a private company limited by shares incorporated in England & Wales, United Kingdom.
The address of the registered office is 5 Gainsford Street, London, SE1 2NE. The Company's principal activity is that of the provision of marketing and advertising services.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
Functional and presentation currency
Transactions and balances
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in SOCE.
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of
financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares. Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan. Financial assets and liabilities that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
The directors make estimates and assumptions concerning the future based on their knowledge of the business and the markets it operates in. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results.
Analysis of turnover by country of destination:
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Page 24
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
12.Taxation (continued)
Future tax charges will be affected by the change in corporation tax rate from 19% to 25%. 3 months of the current year have been affected by this change.
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Page 26
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Maverick Advertising & Design Limited has entered into an Omnibus Guarantee and Set-Off Agreement, as guarantor, in favour of the lenders to Oliver Estates Limited in respect of any liabilities arising to the lenders from Oliver Estates Limited. This amounted to £5,161,676 (2022 - £5,550,464) in total.
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MAVERICK ADVERTISING & DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
The group operates a defined contributions scheme. The assets of the scheme are held seperately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £
The controlling parties are the directors
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