The directors present their strategic report of MRF Legal Limited (‘the Company’) and its subsidiaries (together ‘the Group’) for the year ended 30 April 2024.
Principal Activities
The Company is the parent company of BB Legal Limited trading as Birchall Blackburn Law and Aldsol Limited trading as Alderstone Solicitors. The principal activity of the two trading subsidiaries is the provision of regulated legal services to consumers. The services provided by Birchall Blackburn Law include conveyancing, commercial property, equity release, matrimonial and family law, wills, trusts, probate, and court representation. The services provided by Alderstone Solicitors include claims relating to serious personal injury, asbestos, mesothelioma and industrial diseases, clinical and professional negligence.
Vision for the Future
The Group’s forward strategy is built on the solid foundation of our legacy while dynamically embracing the evolving legal services landscape. Our focus is to provide exceptional service, uphold the highest quality standards, and attract and retain clients by investing significantly in our people and cutting-edge technologies. With a commitment to efficient and data-driven planning, we aim to enhance our strengths, foster growth, and sustain our leadership in the market.
Diverse Services and Innovative Delivery
The trading subsidiary companies in the Group offer a comprehensive range of legal services. The Group’s commitment to continuous improvement and innovation keeps us at the forefront of industry trends. By integrating advanced digital and electronic methods, we deliver highly personalised legal services of the highest quality. We adapt to the evolving market with structural changes that enhance efficiency and reduce unnecessary administration, ensuring we exceed our clients' and stakeholders' expectations.
Alderstone Solicitors’ board of directors is satisfied with the route to market for personal injury work, which focuses on third-sector networking and securing legal panel status. Alderstone Solicitors has working relationships with a number of high-profile charities and is one of a handful of law firms providing legal support to three major road crash victim charities (Brake, RoadPeace and Aftermath Support). Alderstone Solicitors also directly supports case workers for the Brain Charity based in two major North West hospitals. Alderstone Solicitors continues to target high value serious and catastrophic compensation cases, which is where our experience and expertise lies.
Navigating the Competitive Market
Our focus is delivering reliable and accessible legal representation in the competitive UK legal market. We proactively address challenges, such as the volatility of the residential conveyancing market, and changes in government policy, demonstrating our resilience and commitment to our clients. Understanding the significance of cost sensitivity in our clients’ decision-making process, we provide high-quality, accessible, and affordable services. This approach reinforces our market position and fosters client engagement and retention.
Client-Centric Focus
Our client strategy is rooted in exceptional service and unwavering dedication to our clients. The "Always There" tagline utilised within Birchall Blackburn Law embodies our commitment to supporting clients throughout their legal journeys.
We value highly client feedback, which drives continuous improvement in our services. Our client service teams provide support and enhance our services based on valuable customer feedback, earning us prestigious awards and commendations. By leveraging innovative processes and technologies, we ensure seamless communication and superior service, aiming to build lifelong relationships with our clients through a comprehensive portfolio of services.
Investing in Our People
Our people are the cornerstone of the Group’s success. We are dedicated to nurturing their growth, honing their skills, and making their expertise readily available to our clients. With an inclusive, respectful, and diverse working environment, we inspire our teams to excel. Our commitment to employee development includes customised training programs, attractive compensation and benefits, and promoting a healthy work-life balance. By supporting personal and professional growth, we empower our workforce to remain motivated and committed, driving the Group’s success.
Embracing Technology
Enhancing our organisational agility through IT advancements is at the heart of our service delivery model. We have significantly improved our core systems and incorporated cutting-edge technologies to refine the accessibility and efficiency of our services. These IT advancements are driven by our commitment to providing an unparalleled client experience, cementing our position as leaders in innovation and client service within the legal industry.
Community Engagement
With offices across the Northwest, Birchall Blackburn Law sees building solid relationships with local communities as integral to our culture. Our "Always There" promise extends to supporting local charities through fundraising, volunteering, and event sponsorship. Birchall Blackburn Law's engagement goes beyond financial contributions; our solicitors provide legal advice to local communities, work with charitable trusts, and support local schools and colleges during Career and Future Learning Fairs. Our partnership with the sight loss charity Galloway’s Society for the Blind has allowed us to share regional offices and reduce facility expenses. Annually, we select a local charity to make a meaningful impact on people's lives.
Alderstone Solicitors’ work with charities and in the community is similarly extensive. Staff are encouraged to take part in a variety of charity events and fundraising throughout the year. We also raise awareness of charities and their campaigns through our social media channels. Two members of staff are Committee members and a Trustee for the Critical Care Support Network (CCSN); we fundraise every November for National Road Safety Week; we take part in Hats for Headway; highlight Action for Brain Injury (ABI) Week for The Brain Charity and have sponsored the charity’s poetry competition; sponsored runs for Maggie’s Merseyside and Cerebra; directly support regional conferences on reducing road deaths with Brake; support the End of Life Partnership and the Specialist Palliative Care Education Partnership; we provide free handheld fans and information leaflets to clinical lung disease units; and our NAH helpline and website is a free resource for anyone impacted by asbestos. These are just a few examples of the help Alderstone Solicitors provide to the third sector and we are also committed to pro-bono work with our charity partners by supporting families at inquests, criminal proceedings, and advising on benefits.
Recognitions and Reviews
We are proud of our Law Society accreditations and recognition from various trade bodies. Despite significant competition, Birchall Blackburn Law has been honoured with multiple awards, including commendations at the Modern Law Conveyancing and British Conveyancing Awards.
Alderstone Solicitors’ Manchester Personal Injury office is an Accredited Practice with the Association of Personal Injury Lawyers (APIL). This means that we are an office open to the public, where you can consult with an accredited lawyer and all legal work is undertaken by individuals working to recognised APIL standards of competence and quality. Alderstone Solicitors is also a signatory to the Personal Injury Guide. The APIL/FOIL Guide to the Conduct of Cases Involving Serious Injury was developed with the objective of parties working together, allocating tasks, and narrowing the issues throughout the claim, for the benefit of clients.
Both Birchall Blackburn Law and Alderstone Solicitors consistently receive high ratings on most major review websites, and the high ratings are a testament to our colleagues' hard work and dedication in all areas of the Group’s business.
Confident Future
The Group’s future is bright. Our adaptable and forward-thinking practices will ensure our success despite market competition and economic uncertainty. We remain steadfast in our direction and strategy, confident in our ability to thrive and continue providing exceptional legal services.
The Board and management continue to monitor and report on top-line turnover and "adjusted EBITDA." Adjusted EBITDA is defined as profits before interest payable, taxation, depreciation, and amortisation. This measure excludes interest received from the traditional EBITDA definition because this part of income does not correlate directly with business performance or funding.
Considering the impact of the business split in 2022 and the volatility within the residential property market in the financial year, the Board is pleased with the current year's turnover and adjusted EBITDA figures for the current and previous 4 years.
Turnover – fees billed
2024 - £13,143,333
2023 - £14,209,166
2022 - £13,969,956
2021 - £12,051,073
2020 - £13,940,507
Adjusted EBITDA
2024 - £1,902,639
2023 - £1,722,841
2022 - £2,709,187
2021 - £2,010,790
2020 - £1,391,148
The Board is fully aware of the potential risks associated with its current strategy and has taken proactive measures to implement governance practices that can effectively mitigate these risks. The Board is committed to ensuring that all risks are thoroughly assessed and addressed promptly and efficiently without compromising its objectives. The identified key risks are monitored closely, and the board remains vigilant in maintaining a safe and sustainable operational environment.
Financial Management Risks
The Group's operations expose it to various financial risks, including changes in debt market prices, credit risk, liquidity risk, cash flow risk, and interest rate risk.
The Group's primary financial instruments include bank loans, overdrafts, accounts receivable, and accounts payable. Liquidity risks are actively managed through strategic short-term borrowing to finance operations, maintain stability, and improve cash flow, ensuring continuity of funding. All cash balances are held in ways that achieve competitive interest rates, and cash flow projections are utilised to manage plans and developments.
A robust risk management framework is in place to minimise the negative impact on financial performance. While the Group does not use derivative financial instruments to manage interest rate costs or apply hedge accounting, the Board has delegated the responsibility of monitoring financial risk management to the directors of each trading subsidiary company. The finance department of each trading subsidiary company implements the policies set by the board of directors of that subsidiary company.
Competition
The Group remains acutely aware of competitive pressures and continuously works to enhance its products and services. Through regular evaluation and active marketing efforts, it strives to stay at the forefront of the industry and provide the best possible experience for its customers.
Employee Risks
The Group values its employees highly, supporting their success through training, rewards, and promoting positive behaviours. The Group continues to evolve, adopting a more flexible and streamlined structure to meet future demand effectively.
Economic Risks
The Board acknowledges the risks associated with the current economic climate and constantly assesses the situation. The business regularly evaluates the demand for its key legal services to effectively adapt to changing economic conditions.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 April 2024.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £695,177. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
MHA were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
We have audited the financial statements of MRF Legal Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
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.
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
Challenging assumptions and judgements made by management in their significant accounting estimates.
Auditing the risk of management override of controls, including testing journal entries and other adjustments for appropriateness;
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing how management identify and track compliance with key laws and regulations. Scrutinising legal and professional costs incurred for indications of non-compliance and consequential financial implications.
Performed sales transaction testing and sales cut-off testing for evidence of incomplete revenue.
Because of the field in which the client operates, we identified the following areas as those most likely to have an impact on the financial statements: SRA compliance, employment law and compliance with the UK Companies Act.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £695,177 (2023 - £510,507 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
MRF Legal Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 5 Cambridge Road, Hale, Altrincham, WA15 9SY.
The group consists of MRF Legal Limited and all of its subsidiaries.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company MRF Legal Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 April 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Revenue for services represents the fair value of legal services provided during the year on client assignments. Fair value reflects the amount expected to be recoverable from clients and is based on time spent, expertise and skills provided, and expenses incurred. Fee income is stated net of Value Added Tax.
Legal services provided to clients during the year which, at the balance sheet date, have not been invoiced to clients, have been recognised as fee income in accordance with Section 23 Revenue of Financial Reporting Standard 102. Fee income can be recognised on a number of bases. Some fee income is recognised on an assessment of the fair value of services provided by the balance sheet date as a proportion of the total value of the engagement. Some fee income, where the services includes an indeterminate number of acts occurring, recognises revenue over the life of the service provided on a straight-line basis.
Unbilled fee income is included as stated at fair value where the right to consideration has been obtained. Provision is made against unbilled amounts on those engagements where the right to receive payments is contingent on other factors outside the control of the group. Contingent fee income (over and above any agreed minimum fee which is recognised as above) is recognised in the period in which the contingent event occurs.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
In the application of the group’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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The valuation of unbilled revenue involves significant judgement and affects the amount of revenue recognised. The valuation is based on an estimate of the amount expected to be recoverable from clients on unbilled items based on such factors as time spent multiplied by average recovery rates, percentage completion at the reporting date multiplied by the fixed fee and expertise provided. For PI matters, where the fee arrangement is on a no win no fee basis, only matters where either damages have been received, an offer has been made or full admission has occurred are included. The directors review historical trends to ensure that the method for accounting for the amounts recoverable on contracts is the most accurate for each department.
The useful life of the goodwill involves significant judgement and affects the carrying amount of intangible assets recognised. The assessment is based on factors included in note 1.4.
At each balance sheet date, management undertake an assessment of the recoverability of trade debtors and unbilled disbursements based upon their knowledge of the customers, ageing of the balances outstanding and previous write off history. Where necessary, an impairment is recorded as a doubtful debt.
The actual level of debt collected may differ from the estimated level of recovery.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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:
From 1 April 2023 the government have enacted changes to the corporation tax rate, increasing the main tax rate to 25% for companies with augmented profits greater than £250,000. For companies with augmented profits between £50,000 and £250,000 the tax due is calculated at 25% but tapered down using a marginal relief calculation.
Details of the company's subsidiaries at 30 April 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Of the above bank loans, £1,239,627 (2023: £1,700,760) is secured 80% by the government and is also secured by a personal guarantee of £500,000 dated 2 July 2020 from directors of the company.
There is also a debenture held with the Bank that takes a first charge over all assets and undertakings of the business.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period. The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
MRF Legal Limited issued shares with a nominal value of £8,000,000 which were used to acquire subsidiaries with investments and capital of £1,900 leaving a consolidated debit balance on the merger reserve of £7,998,100.
Group
The group has entered into a cross company guarantee in respect of bank borrowings, with each group company acting as a guarantor for fellow group companies.
MRF Legal Limited
MRF Legal has entered into a cross company guarantee in respect of the bank borrowings with its subsidiaries. At the year end there is a potential liability of £nil.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
BB Legal Limited has provided an unlimited guarantee in respect of the operating leases of Aldsol Limited. At the year end there is a potential liability of £32,321,
The remuneration of key management personnel is as follows.
The following amounts were outstanding at the reporting end date:
The company has taken advantage of the exemption permitted under Section 33 'Related Party Disclosures' paragraph 33.1A from disclosing transactions with the subsidiary companies.
During the year BB Legal Limited entered into the following transactions with related parties:
Birchall Blackburn Limited and Accident Angels Limited are wholly owned dormant subsidiaries of BB Legal Limited. No transactions took place with either company during the year.
Rent of £21,271 (2023: £21,271 ) was paid into directors SIPPs in the year.
Dividends totalling £579,617 (2023 - £461,340) were paid in the year in respect of shares held by the company's directors.