Company registration number 07817549 (England and Wales)
MELLOR FINANCE LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
PAGES FOR FILING WITH REGISTRAR
MELLOR FINANCE LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 6
MELLOR FINANCE LIMITED
BALANCE SHEET
AS AT 31 MAY 2024
31 May 2024
- 1 -
2024
2023
Notes
£
£
£
£
Current assets
Debtors
4
314,887
113,221
Investments
5
9,907,302
8,734,986
Cash at bank and in hand
385,357
302,165
10,607,546
9,150,372
Creditors: amounts falling due within one year
6
(3,659,136)
(3,513,189)
Net current assets
6,948,410
5,637,183
Creditors: amounts falling due after more than one year
7
(1,607,635)
(1,242,241)
Net assets
5,340,775
4,394,942
Capital and reserves
Called up share capital
1
1
Profit and loss reserves
5,340,774
4,394,941
Total equity
5,340,775
4,394,942
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 31 May 2024 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 8 October 2024
Mr M S Johnson
Director
Company registration number 07817549 (England and Wales)
MELLOR FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
1
Accounting policies
Company information
Mellor Finance Limited is a private company limited by shares incorporated in England and Wales. The registered office is Bridge House, Newbridge Lane, Stockport, Cheshire, SK1 2NA.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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
Turnover
Assets leased to customers under arrangements that transfer substantially all the risks and rewards of ownership of the assets to the lessee, other than legal title, are classified as finance leases.
The gross earnings from a finance lease (including any items of income incidental to the leases) are allocated to accounting periods using the sum of digit method as a proxy to approximate to the constant periodic rate of return on the Company’s net cash investment in the lease and is included in turnover.
Under the sum of digits method, the total gross earnings are apportioned over the term of the lease in proportion to the number of rentals outstanding. This method is considered immaterially different to the actuarial approach required by FRS 102.
Initial direct costs, which are incremental to the Company and are directly associated with negotiating and consummating the lease transactions are included in the net investment in finance leases and reflected in the calculation of the lease income.
Other costs and income are recognised in the profit or loss when incurred.
Net investment in finance leases at the financial position date represents the minimum lease rentals accruing to the Company less the gross earnings allocated to future periods. There are no guaranteed residual values available to the Company at the end of any leases and as unguaranteed residual values are not considered to be material to the Company, they are not reflected in the net investment in finance leases.
Any gain or loss on disposal of assets arising at the end of the lease is included in turnover when all the risks and rewards have been transferred by the Company.
Any gain or loss on early terminations of leases, calculated as the difference between the total net sums recovered and the book value of net investment in finance leases, is included in the profit or loss when such terminations arise.
Secondary rentals are recognised in the profit or loss as they accrue, after taking account of the possibility of bad debts.
Specific provision is made in respect of finance leases, which have been identified as impaired. Further, a general provision is made in respect of amounts not specifically identified, but considered to be impaired based on past experience, taking into account of current economic conditions and the level of specific provisions. Any provision for bad debts is set against the net investment in finance leases.
1.3
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
MELLOR FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 3 -
1.4
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.
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.
1.5
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.6
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
MELLOR FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 4 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.7
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.
1.8
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.9
Assignment of finance leasses
Under certain arrangements entered into by the Company, finance lease arrangements may be assigned to counterparties (“assignees”) and on assignment substantially all the risks and rewards in the assets of the finance lease arrangements are transferred to the assignees.
The related net investment in finance lease outstanding at the date of the transfer is derecognised and any gain is recognised within turnover.
Volume related bonuses and incentives received form the assignees are recognised in profit or loss when realised within turnover.
Where the Company subsequently re-acquires assets from assignees for onward disposals, any gain or loss on disposal of these assets is recognised by turnover, at the point it can be determined that all risks and rewards in the assets have been transferred by the Company.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
MELLOR FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 5 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Total
1
1
4
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
8,385
Other debtors
25,327
11,088
25,327
19,473
Deferred tax asset
289,560
93,748
314,887
113,221
5
Current asset investments
2024
2023
£
£
Other investments
9,907,302
8,734,986
6
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
53,838
28,991
Amounts owed to group undertakings
655,960
903,695
Taxation and social security
203,717
360,490
Other creditors
2,745,621
2,220,013
3,659,136
3,513,189
Included within total creditors is interest bearing debt of £4,308,272 (2023: £3,432,184) and non interest bearing debt of £655,960 (2023: £903,695).
7
Creditors: amounts falling due after more than one year
2024
2023
£
£
Other creditors
1,607,635
1,242,241
MELLOR FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 6 -
8
Loans and overdrafts
2024
2023
£
£
Other loans
4,308,271
3,432,184
Payable within one year
2,700,636
2,189,943
Payable after one year
1,607,635
1,242,241
Creditors included in the above liabilities, on which security has been given by the company. This represents amounts owing under block discounting agreements which are secured by a fixed and floating charge over the relevant current asset investments.
9
Parent company
The company's parent is Johnson Reed Holdings Limited, incorporated in United Kingdom. It's registered office is Bridge House, Newbridge Lane, Stockport, SK1 2NA.