Group M Services Limited
Annual Report and Financial Statements
For the year ended 30 September 2022
Company Registration No. 03705227 (England and Wales)
Group M Services Limited
Company Information
Directors
M C Denmark
R W G Whitehair
R E Elliot
C N C Denmark
T C M Denmark
Secretary
R W G Whitehair
Company number
03705227
Registered office
47 Great Marlborough Street
London
W1F 7JP
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Group M Services Limited
Contents
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
Group M Services Limited
Strategic Report
For the year ended 30 September 2022
Page 1
The directors present the strategic report for the year ended 30 September 2022.
Fair review of the business
The company's principal activity is that of group management services on behalf of the Media Concierge (Holdings) Group. There have been no significant changes in these activities during the year ending 30 September 2022.
Principal risks and uncertainties
The company provides the business services to the Media Concierge (Holding) Group. There has been no significant change to those activities being services provided to the UK and ROI business and with the group trading profitability in both regions the company will continue to provide those services.
Some of the services are provided to the ROI and as such there is some risk in relation to foreign currency rates. These risks are minimised by matching where possible payments and receipts in local currencies. The company does not make use of derivatives or other financial instruments.
The company had net cash at 30th September 2022 of £3.7m. In addition, the company owns on part of the group two Freehold Land and Buildings with a combined NBV of £2.4m.
R E Elliot
Director
8 March 2024
Group M Services Limited
Directors' Report
For the year ended 30 September 2022
Page 2
The directors present their annual report and financial statements for the year ended 30 September 2022.
Principal activities
The principal activity of the company continued to be that of management services for associated group companies.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M C Denmark
R W G Whitehair
R E Elliot
C N C Denmark
T C M Denmark
Auditor
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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:
select suitable accounting policies and then 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;
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 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.
Group M Services Limited
Directors' Report (Continued)
For the year ended 30 September 2022
Page 3
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
R E Elliot
Director
8 March 2024
Group M Services Limited
Independent Auditor's Report
To the Member of Group M Services Limited
Page 4
Opinion
We have audited the financial statements of Group M Services Limited (the 'company') for the year ended 30 September 2022 which comprise the Profit and Loss Account, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity 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 FRS 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 company's affairs as at 30 September 2022 and of its profit 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.
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.
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.
Group M Services Limited
Independent Auditor's Report (Continued)
To the Member of Group M Services Limited
Page 5
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 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.
Group M Services Limited
Independent Auditor's Report (Continued)
To the Member of Group M Services Limited
Page 6
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Group M Services Limited
Independent Auditor's Report (Continued)
To the Member of Group M Services Limited
Page 7
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Colin Turnbull
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
8 March 2024
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Group M Services Limited
Profit and Loss Account
For the year ended 30 September 2022
Page 8
2022
2021
Notes
£
£
Turnover
3
11,648,412
10,607,822
Administrative expenses
(7,783,323)
(10,742,000)
Other operating income
18,000
246,731
Profit before taxation
3,883,089
112,553
Tax on profit
8
(652,618)
Profit for the financial year
3,230,471
112,553
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Group M Services Limited
Statement of Comprehensive Income
For the year ended 30 September 2022
Page 9
2022
2021
£
£
Profit for the year
3,230,471
112,553
Other comprehensive income
-
-
Total comprehensive income for the year
3,230,471
112,553
Group M Services Limited
Balance Sheet
As at 30 September 2022
Page 10
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
4,023,221
3,689,845
Current assets
Debtors
10
12,157,707
23,414,613
Cash at bank and in hand
3,675,419
2,736,381
15,833,126
26,150,994
Creditors: amounts falling due within one year
11
(16,028,532)
(29,029,370)
Net current liabilities
(195,406)
(2,878,376)
Total assets less current liabilities
3,827,815
811,469
Provisions for liabilities
Provisions
12
(218,654)
(432,779)
(218,654)
(432,779)
Net assets
3,609,161
378,690
Capital and reserves
Called up share capital
15
100
100
Profit and loss reserves
3,609,061
378,590
Total equity
3,609,161
378,690
The financial statements were approved by the board of directors and authorised for issue on 8 March 2024 and are signed on its behalf by:
R E Elliot
Director
Company Registration No. 03705227
Group M Services Limited
Statement of Changes in Equity
For the year ended 30 September 2022
Page 11
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 October 2020
100
266,037
266,137
Period ended 30 September 2021:
Profit and total comprehensive income for the period
-
112,553
112,553
Balance at 30 September 2021
100
378,590
378,690
Year ended 30 September 2022:
Profit and total comprehensive income for the year
-
3,230,471
3,230,471
Balance at 30 September 2022
100
3,609,061
3,609,161
Group M Services Limited
Notes to the Financial Statements
For the year ended 30 September 2022
Page 12
1
Accounting policies
Company information
Group M Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is 47 Great Marlborough Street, London, W1F 7JP.
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.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors of the parent company, Media Concierge (Holdings) Limited, have prepared a cash flow forecast for a period of 12 months from the date of approval of these financial statements which indicates that the group and company will have sufficient funds to meet liabilities as they fall due for that period. The cash flow forecast has assessed the impacts of external factors and has concluded that there is no significant impact to the going concern status of the company. Thus the directors 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 consideration received or receivable for management services provided in the normal course of business, and is shown net of VAT and other sales related taxes with any amounts unbilled at the end of the period fully accrued. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
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:
Freehold land and buildings
Over 50 years
Leasehold land and buildings
Over the length of the lease
Fixtures and fittings
8 years straight line
Computers
3 - 5 years straight line
Motor vehicles
2 - 4 years 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.
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
1
Accounting policies
(Continued)
Page 13
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
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.
1.7
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.
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
1
Accounting policies
(Continued)
Page 14
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.
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.
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
1
Accounting policies
(Continued)
Page 15
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.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the fair value of 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.
1.9
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 periods 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.
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
1
Accounting policies
(Continued)
Page 16
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
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
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
2
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 amount 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
Page 17
3
Turnover
2022
2021
£
£
Turnover analysed by class of business
Group recharges
11,648,412
10,607,822
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
396,662
275,910
Operating lease charges
665,234
836,202
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
280,000
234,200
For other services
Taxation compliance services
18,000
16,200
Other taxation services
9,000
8,100
Accountancy services
15,000
13,500
All other non-audit services
20,000
18,000
62,000
55,800
The audit fees and other compliance fees reported above are for the group and are borne by this entity.
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
29
34
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
6
Employees
(Continued)
Page 18
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
608,715
5,363,999
Social security costs
219,051
818,693
Pension costs
59,572
42,665
887,338
6,225,357
7
Directors' remuneration
2022
2021
as restated
£
£
Remuneration for qualifying services
426,320
5,157,600
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
238,045
4,662,888
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
652,618
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
8
Taxation
(Continued)
Page 19
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:
2022
2021
£
£
Profit before taxation
3,883,089
112,553
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
737,787
21,385
Tax effect of expenses that are not deductible in determining taxable profit
72,893
36,561
Group relief
(11,298)
(41,844)
Under/(over) provided in prior years
(34,299)
(34,116)
Capital allowances
(4,568)
18,014
Defferred tax
(107,897)
Taxation charge for the year
652,618
-
9
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 October 2021
2,983,212
851,845
360,542
918,490
2,386,584
7,500,673
Additions
305,406
9,561
81,571
333,500
730,038
At 30 September 2022
2,983,212
1,157,251
370,103
1,000,061
2,720,084
8,230,711
Depreciation and impairment
At 1 October 2021
507,429
75,429
323,669
702,646
2,201,655
3,810,828
Depreciation charged in the year
123,167
12,761
106,371
154,363
396,662
At 30 September 2022
507,429
198,596
336,430
809,017
2,356,018
4,207,490
Carrying amount
At 30 September 2022
2,475,783
958,655
33,673
191,044
364,066
4,023,221
At 30 September 2021
2,475,783
776,416
36,873
215,844
184,929
3,689,845
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
Page 20
10
Debtors
2022
2021
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
7,262,040
22,484,276
Other debtors
4,296,616
565,834
Prepayments and accrued income
427,577
300,926
11,986,233
23,351,036
Deferred tax asset (note 13)
171,474
63,577
12,157,707
23,414,613
11
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
255,507
116,762
Amounts owed to group undertakings
13,526,082
22,990,301
Corporation tax
278,482
79,899
Other taxation and social security
212,974
3,097,648
Other creditors
352,716
411,971
Accruals and deferred income
1,402,771
2,332,789
16,028,532
29,029,370
12
Provisions for liabilities
2022
2021
£
£
Dilapidations provision
218,654
432,779
Movements on provisions:
Dilapidations provision
£
At 1 October 2021
432,779
Utilisation of provision
(214,125)
At 30 September 2022
218,654
The provisions relate to the obligation under operating leases to correct any damage caused on expiry of lease. This is expected to be utilised within 2 to 5 years.
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
Page 21
13
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2022
2021
Balances:
£
£
Accelerated capital allowances
171,474
63,577
2022
Movements in the year:
£
Asset at 1 October 2021
(63,577)
Credit to profit or loss
(107,897)
Asset at 30 September 2022
(171,474)
14
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
59,572
42,665
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.
15
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
16
Financial commitments, guarantees and contingent liabilities
The bank overdraft facilities are secured by way of a fixed and floating charge and a composite accounting agreement between all group companies with a bank account. An unlimited cross guarantee in respect of these companies has been given to the bank. The total outstanding liability for the group in respect of the overdraft facility is £nil (2021: £nil).
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
Page 22
17
Operating lease commitments
Lessee
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:
2022
2021
£
£
Within one year
682,088
702,434
Between two and five years
1,185,188
1,867,275
1,867,276
2,569,709
Group M Services Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2022
Page 23
18
Related party transactions
The company has taken advantage of the exemption available under paragraph 33.1A of the Financial Reporting Standard 102 not to disclose transactions with any wholly owned members of the group.
At the balance sheet date the company was owed £3,432,050 by the directors (2021: £244,464 owed to). The total amount paid in by directors was £nil (2021: £2,528,941) with £3,676,513 (2021: £1,137,248) withdrawn.
At the balance sheet date the company owed £168,512 (2021: £163,011) to companies under common control.
At the balance sheet date a fellow group undertaking owed the company £20,000 (2021: £5,714).
During the year there were service charges of £20,000 (2021: £nil) made to a fellow group undertaking.
19
Ultimate controlling party
The immediate and ultimate parent company is Media Concierge (Holdings) Limited, a company incorporated in England and Wales.
The smallest and largest entity preparing consolidated accounts is Media Concierge (Holdings) Limited. The consolidated group accounts are available from 47 Great Marlborough Street, London, W1F 7JP.
The ultimate controlling party is M C Denmark by virtue of his shareholding in Media Concierge (Holdings) Limited.
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