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Mentor Communications Consultancy Limited |
Registered Number:03616607 |
For the year ended 31 December 2023
England and Wales
Unaudited Financial Statements
2
Mentor Communications Consultancy Limited
Statement of Financial Position
2022
2023
Property, plant and equipment |
47,398
54,390
2
47,398
54,390
Trade and other receivables |
616,270
582,827
3
414,842
Cash and cash equivalents |
367,290
950,117
1,031,112
Trade and other payables: amounts falling due within one |
year |
(477,535)
(454,462)
4
553,577
495,655
Net current assets
Total assets less current liabilities |
543,053
607,967
Trade and other payables: amounts falling due after more |
than one year |
(7,185)
-
5
(7,300)
(8,250)
Provisions for liabilities |
535,753
Net assets
592,532
77
77
529,278
587,032
6,398
5,423
535,753
592,532
Shareholders' funds
For the year ended 31 December 2023 the company was entitled to exemption from audit under Section 477 of the Companies Act 2006 relating to small companies. |
The members have not required the company to obtain an audit of its financial statements for the year ended 31 December 2023 in accordance with Section 476 of the Companies Act 2006 |
The directors acknowledge their responsibilities for:a) ensuring that the company keeps proper accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and |
b) preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of |
each financial year and of its profit or loss for each financial year in accordance with the requirements of Section |
394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial |
statements, so far as applicable to the company. |
In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered. |
The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime. |
Mr Toby Coulsting Director |
These financial statements were approved and authorised for issue by the Board on 10 September 2024 and were signed by: |
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3
For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Statement of Financial Position Continued
The notes form part of these financial statements |
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4
For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Notes to the Financial Statements
Statutory Information
Mentor Communications Consultancy Limited is a private limited company, limited by shares, domiciled in England |
and Wales, registration number 03616607. |
West End Studios
4 West End
Somerset Street
Bristol
BS2 8NE
The presentation currency is £ sterling. |
Basis of preparing the financial statements
These financial statements have been prepared in accordance with the provisions of Section 1A of Financial |
Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the |
Companies Act 2006. The financial statements have been prepared under the historical costs convention. |
Significant judgements and estimates
On the grant of share options, management is required to use an appropriate pricing model, or basis, to value the issue of equity to employees or those providing similar services. Any charge to the profit and loss account is therefore a function of the chosen pricing model or valuation method, which in turn is based on a range of assumptions. In choosing the basis or model used to calculate the value of issue of equity the Directors have taken into account the size of the entity, the marketability of its share capital, and the materiality to the financial statements of the values determined, in relation to the options in equity issued under the scheme. The Directors' evaluation of the Fair Value of the options granted in March 2019 with an original value, before allowance for the potential of options to lapse, of £13,333. The Directors' evaluation of the Fair Value of the options granted in June 2020 with an original value, before allowance for the potential of options to lapse, of £1,333. The Directors' evaluation of the Fair Value of the options granted in April 2023 with an original value, before allowance for the potential of options to lapse, of £1,562. The accounts include a charge to the profit and loss account of £975 (2022 £500) in relation to the Directors' calculation of the value attributable during the year to the options issued to certain employees under the Enterprise Management Incentive Scheme that was originally put in place during March 2019, with further options granted in June 2020 and April 2023. |
Revenue recognition
Turnover represents amounts receivable for services. Amounts receivable for services performed over time are based upon the stage of completion of the services performed. Where amounts are received in advance of completion of the work to be performed these amounts are carried forward to future accounting periods as deferred income. |
Research and development
Expenditure on research and development is written off in the year in which it is incurred.
Property, plant and equipment
Tangible fixed assets, are stated at cost or valuation less depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets, less their estimated residual value, over their expected useful lives on the following basis: |
Equipment
Fixtures and fittings
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5
For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Notes to the Financial Statements Continued
Government grants
Government grants received are credited to deferred income. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants received towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred. |
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All foreign exchange differences are included in the profit and loss account. |
Hire purchase and leasing commitments
Where the company enters into a lease that entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a finance lease. Where an asset is obtained under such a lease or under a hire purchase agreement, the asset is recorded in the balance sheet as a tangible fixed asset and is depreciated over its estimated useful life. Future instalments under such leases or contracts, net of finance charges, are included within creditors. Amounts payable are apportioned between the finance element, which is charged to the profit and loss account, and the capital element, which reduces the outstanding obligation for future capital repayments. All other leases are accounted for as operating leases and the rental charges are charged to profit or loss on a straightline basis over the period of the lease. |
Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme for the benefit of its directors and employees, the assets of which are held separately from those of the company in an independently administered fund. Contributions payable are charged to the profit and loss account in the period in which they arise from related salary and remuneration payments. |
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For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Notes to the Financial Statements Continued
Share option schemes and employee benefits
The company operates an Enterprise Management Initiative share option scheme. |
Some employees of the Company receive remuneration in the form of share-based payments, whereby employees |
render services in exchange for rights over shares ("equity-settled transactions"). The cost of equity-settled |
transactions with employees is measured with reference to the fair value at the date on which they are granted. |
Fair value is measured after allowing for holdings of a minority interest and using a basis to allow for the value of the |
options after taking into account the period of time expected to lapse before the time the option might vest and |
allowing for both the uncertainties surrounding the achievement of the required market conditions and the |
satisfaction of the required service conditions, The expected life used in the model has been further adjusted, based |
on the Directors' best estimates, to allow for the effects of non-transferability, exercise restrictions and behavioural |
considerations. |
When choosing the method of evaluation of the Fair Value of the options adopted, the Directors have taken into |
account the size of the Company and the restricted marketability of its share capital and all of the subjective |
valuation variables therefore to be applied. The Directors have further considered both the cost of obtaining a |
valuation using a different basis and the materiality of any potential misstatement in the estimated value to the |
financial statements that might then be indicated to exist. |
The cost of equity-settled transactions determined is recognised, together with a corresponding increase in equity, |
over the term in which the performance conditions are fulfilled, ending on the Directors' current best estimate of the |
date on which the relevant employees may become fully entitled to the award ("vesting date"). |
At each reporting date, the cumulative expense recognised for equity-settled transactions reflects the extent to which |
the vesting period has expired and the number of options, which in the opinion of the Directors, will ultimately vest. |
Directors' estimates are based on the best information available at that date. |
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon |
a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, |
provided that all other performance conditions are satisfied. |
2. Property, plant and equipment |
Equipment
108,945
97,741
11,204
8,745
8,745
-
(7,006)
-
(7,006)
11,204
99,480
110,684
Provision for depreciation and impairment |
54,555
45,629
8,926
Charge for year
15,737
14,012
1,725
(7,006)
(7,006)
-
63,286
52,635
10,651
553
46,845
47,398
2,278
52,112
54,390
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For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Notes to the Financial Statements Continued
3. Trade and other receivables |
2022
2023
435,566
366,822
Prepayments and accrued income |
15,106
12,460
132,155
236,988
616,270
582,827
4. Trade and other payables: amounts falling due within one year |
2022
2023
19,714
39,417
Taxation and social security |
172,244
117,585
Accruals and deferred income |
228,999
287,069
13,721
14,022
Obligations under HP/Financial leases |
7,185
8,300
12,599
11,142
454,462
477,535
5. Trade and other payables: amounts falling due after more than one year |
2022
2023
7,185
-
Obligations under HP/Financial leases |
7B Provisions for liabilities and charges The provision for liabilities and charges wholly relate to the provsion for deferred tax. |
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For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Notes to the Financial Statements Continued
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For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Notes to the Financial Statements Continued
8A Reserves and Fair Value Reserve (Share option reserve): |
Details of the movements in reserves are shown within the Statement of Income and Retained earnings on page 6. |
The fair value reserve arises as a result of the issue of share options to key employees. The credit balance on the |
reserve, after a £975 (2022 £500) charge to the profit and loss account during the year, at 31 December 2023 |
amounted to £6,375 (2022 £5,400). |
The company first issued share options under the terms of an Enterprise Management Incentive Scheme (EMIS), |
during March 2019. The Actual Market Value, and Unrestricted Market value of each £0.05p share was determined |
to be £.05p and this value has been agreed with, and formally accepted by, HM Revenue and Customs (HMRC). The |
company issued further options under the terms of the Enterprise Management Incentive Scheme (EMIS) in June |
2020 and April 2023. |
Under the EMIS, the Company or the Trustees of the employee trust may grant options over shares in the Company |
to eligible employees. The eligible employees to whom options are granted and the terms of such options will be |
determined by the Directors of the Company or the Trustees. The employees who are eligible to participate in the |
EMIS are all employees (but not currently Directors) of the Company. Options are not transferable. |
The exercise price of options may not be less than the market value of the Company's shares (as agreed by HMRC) |
on the date of grant. If the Trustees or the Directors have determined that the exercise of an option will be satisfied |
by the issue of ordinary shares, the exercise price may also not be less than the nominal value of ordinary shares. |
The options may vest on the occurrence of a number of specified market conditions (including the sale of the |
Company or the sale of its business activities or assets and the exit proceeds exceed £1,250,000) or, otherwise in |
ten years, on 15 March 2029 (providing that the market value of the Company at that time is at least £1,250,000). |
This is providing that the individuals remain employed by the company at the time such an event takes place or, |
otherwise, on 15 March 2029. |
Share options were initially granted in March 2019 for 338 £0.05p Ordinary shares at £0.05p. Following a |
subdivision of the shares on 17 December 2019 this equates to total options for 4,394 "A" ordinary shares of |
£0.0025 at £0.0025p plus 2,366 "B" ordinary shares of £0.0025 at £0.0025p. Further additional options for 494 "A" |
ordinary shares of £0.0025 at £0.0025p plus 266 "B" ordinary shares of £0.0025 at £0.0025p were granted in June |
2020. Further additional options for 494 "A" ordinary shares of £0.0025 at £0.0025p plus 266 "B" ordinary shares of |
£0.0025 at £0.0025p were granted in April 2023. |
During the year ended 31 December 2019 one of the original six employees to whom options were issued left the |
company resulting in 494 |
options for new "A" ordinary shares of £0.0025 and 266 options for new "B" ordinary shares of £0.0025 being |
forfeited. |
During the year ended 31 December 2020 another of the original six employees to whom options were issued left the |
company resulting, in a further 728 options for new "A" ordinary shares of £0.0025 and 392 options for new "B" |
ordinary shares of £0.0025 being forfeited |
Based on the six (2022 five) employees that remained eligible to take part in the scheme at the Statement of |
Financial Position date this might result in a further 4,160 (2022 3,666) "A" ordinary shares of £0.0025 and 2,240 |
(2022 1,974) "B" ordinary shares of £0.0025 shares being issued at par. |
The transfer (charge) to the profit and loss account of £975 (2022 £500) during the year represents the Directors' |
effective valuation of staff cost benefits arising due to the scheme that they anticipate might be expected to vest. |
This charge represents an appropriate proportion of the value of the options that remain to be allocated to this year |
as a proportion of the period to March 2027 (2022 March 2027) before which time the Directors estimate as the |
shortest period of time before the options might vest. The period of time to the point the options might vest has was |
extended following the disruption arising as a result of COVID 19. This value is based on the Directors' calculation, |
based on a Simple Tax Option Valuation, of the options of £9,333 (in respect of the options granted in March 2019), |
£1,200 (in respect of the options granted in June 2020) and £1,250 (in respect of the options granted in April 2023) |
after applying discounts for minority interest holdings, non-transferability, share value volatility, exercise restrictions, |
behavioural considerations, and other appropriate factors. |
The Directors' evaluation of the Fair Value of the initial options (before allowance for any potential lapses) are |
£13,333 (in respect of the options granted in March 2019), £1,333 (in respect of the options granted in June 2020) |
and £1,563 (in respect of the options granted in April 2023). |
The value of share capital of £77 consists of 20,020 "A" ordinary shares of £0.0025 and 10,780 "B" ordinary shares |
of £0.0025 that are allotted, called up and fully paid. |
As referred to under the note regarding the fair value reserve, at the financial statement date there were outstanding |
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For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Notes to the Financial Statements Continued
options in respect of a further 4,160 (2022 3,666) "A" ordinary shares of £0.0025 and 2,240 (2022 1,974) "B" |
ordinary shares of £0.0025 shares. Under the terms of the options held these shares may be purchased at par if |
certain market and service conditions are satisfied. |
7. Related party transactions |
The company trades from premises which it rents from West End Bristol Limited (a company of which the Directors |
are also directors and shareholders). The Company occupies the premises on a fully repairing basis and pays rent |
monthly, at what is considered to be a market rent, of £67,200 per annum from 1 October 2022 (previously £54,000 |
per annum). The charge in the accounts to 31 December 2023 amounted to £67,200 (2022 £57,300). |
At the date of the Statement of Financial Position. Other debtors include a balance of £132,155 (2022 £132,155) in |
respect of amounts advanced or loaned to West End Bristol Limited. The balance on the inter-company account |
represents funding provided to West End Bristol Limited in excess of the rental charge and is interest free and |
repayable on demand. |
There were no further transactions with related parties other than in relation to movement on Director's current |
accounts. As shown in note 5, creditors include £7,294 (2022 £4,832) in respect of amounts due to the Directors at |
the Statement of Financial Position date. |
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For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Notes to the Financial Statements Continued
8. Guarantees and other financial commitments |
Guarantees and contingent assets and liabilities |
Further to advice from the Company's appropriately qualified specialist professional consultants, the company has |
made claims for Research and Development relief in respect of the groundbreaking and award winning work that it |
has undertaken. |
In line with recent policy changes, HM Revenue & Customs are currently challenging the Company's claims for |
additional tax deduction in relation to claims for Research and Development expenditure. HM Revenue & |
Customs, whilst considering the costs incurred by the company to be ineligible for relief, have acknowledged that |
the Company has followed proper process in its appointment of professionally recognised Research and |
Development Consultants; and have therefore confirmed that they accept that no penalties are appropriate in |
respect of the Research and Development claims made. |
As the Company's advisors continued to consider the claims (that they have assisted the Directors to prepare) to |
be valid, they requested that the case be reviewed by a more senior officer. Further to this review, HM Customs & |
Revenue continue to dispute the claims under review. The Company's professional consultants remain firmly |
convinced of their opinion and consider that HM Revenue & Customs current interpretation and application of the |
legislation (in the context of the developments and advances achieved by the company) is too narrow and |
therefore technically flawed. In view of this the consultants have requested (on the Company's behalf) that the |
case be reviewed at a higher level. As a result, the case has now been referred to the HM Revenue & Customs |
Solicitors Office for independent review. The outcome of the independent review remains outstanding. |
The Company's advisors have confirmed to the Directors that, should the Company's claim for Research and |
Development relief prove to be unsuccessful, they will refund the fees that have been charged in respect of |
providing the related advice to the Company. A provision for the refund of these fees (together with the related |
additional related additional tax charges) would therefore be expected to arise should the opinion held by HM |
Revenue & Customs ultimately be accepted. |
Further to the foregoing, the financial statements to 31 December 2023 include no provision or adjustments for the |
potential additional Corporation Tax and reversal of Research and Development Tax Credits liability that would |
arise should the view by HM Revenue & Customs be confirmed. If the challenge by HM Revenue & Customs were |
ultimately proved to be successful, the following additional liabilities and income might be expected to arise: |
Firstly, a £87,730 increase in the corporation tax charge for the year to 31 December 2022, together with: an |
additional reduction of £75,020 to the value of retained reserves at 31 December 2021 for additional corporation |
tax liabilities to that date; and |
Secondly, a £17,630 reduction to the value of administrative expenses (for the provision for recoverable |
professional fees) for the year to 31 December 2022; and a related £4,410 increase in the provision for corporation |
tax, together with: an increase of £15,050 to the value of retained reserves at 31 December 2021 for provision for |
additional recoverable professional fees to that date; and a related £3,760 increase in the provision for corporation |
tax liabilities to that date. |
Thirdly, an additional charge to interest on the late payment of Corporation tax of £3,060 (including interest of £380 |
for period up to 31 December 2022), together with a related reduction in the corporation tax charge of £765. |
The net impact of the potential adjustments would result in a total net reduction to the value of profit after tax in the |
year to 31 December 2023 of £140,535. |
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For the year ended 31 December 2023
Mentor Communications Consultancy Limited
Notes to the Financial Statements Continued
At 31 December 2023, the Company had total obligations under operating leases or agreements of £813,380, wholly |
in respect of land and buildings (2022 £881,457 including £880,580 in respect of land and buildings). |
Of the above obligations £68,580 (2022 £68,077), including £68,580 (2022 £68,580) in respect of land and buildings, |
falls due within one year. A further £268,800 (2022 £268,800) wholly in respect of land and buildings, falls due within |
two to five years. The balance of £476,000 (£2022 £543,200), all in respect of land and buildings, falls due in more |
than five years. |
The obligations in respect of land and buildings relate to an agreement which includes an annual break option to |
take effect on 26 January each year, which requires notice to be provided at least six months prior to the annual |
break date. |
9. Average number of persons employed |
During the year the average number of employees was 33 (2022 : 28)
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