REGISTERED NUMBER: |
MMD COMMUNICATIONS LTD |
Strategic Report, Directors' Report and |
Audited Financial Statements for the Year Ended 31 January 2024 |
REGISTERED NUMBER: |
MMD COMMUNICATIONS LTD |
Strategic Report, Directors' Report and |
Audited Financial Statements for the Year Ended 31 January 2024 |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Contents of the Financial Statements |
FOR THE YEAR ENDED 31 JANUARY 2024 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Directors' Report | 3 |
Directors' Responsibilities Statement | 5 |
Independent Auditors' Report | 6 |
Income Statement | 9 |
Statement of Financial Position | 10 |
Statement of Changes in Equity | 11 |
Notes to the Financial Statements | 12 |
MMD COMMUNICATIONS LTD |
Company Information |
FOR THE YEAR ENDED 31 JANUARY 2024 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
INDEPENDENT AUDITORS: |
Chartered Accountants and Statutory Auditors |
36-38 Northland Row |
Dungannon |
Co. Tyrone |
BT71 6AP |
BANKERS: |
11 Market Street |
Magherafelt |
Derry |
BT45 6EE |
SOLICITORS: |
42-46 Fountain Street |
Belfast |
Co. Antrim |
BT1 5EF |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Strategic Report |
FOR THE YEAR ENDED 31 JANUARY 2024 |
The directors have the pleasure in presenting the Strategic Report for the year ended 31 January 2024. |
RESULTS AND PERFORMANCE |
The franchise agreements operated by the company where terminated by the franchisor on 31 March 2024 and the company has ceased to trade at that date. The financial statements for the year ended 31 January 2024 have therefore been prepared on a basis other than going concern. |
The Directors consider that the key performance indicators are those that communicate the financial performance and strengths as a whole, being revenue, gross profit margin and operating profit as provided below. |
Revenue for the year has decreased by 11% to £21,831,754 (2023: £24,647,724).The gross profit has decreased from £7,923,578 in 2023 to £7,891,332 in 2024 and gross profit margin has increased from 32% to 36%. Operating profit has increased from £3,236,781 in 2023 to £3,422,161 in 2024. |
PRINCIPAL RISKS AND UNCERTAINTIES |
Management of the business and execution of the company's strategy were subject to a number of risks. The key business risks and uncertainties affecting the company related to competition. The directors carried out regular strategic reviews including assessments of competitor activity and market trends. |
BUSINESS ENVIRONMENT |
The Northern Ireland and UK telecommunication industry is highly competitive, particularly in the mobile phone sector where our business is focused. |
KEY PERFORMANCE INDICATORS |
The Key Performance indicators during the year were as follows: |
2024 | 2023 |
£ | £ |
Revenue | 21,831,754 | 24,647,724 |
Gross profit | 7,891,332 | 7,923,578 |
Profit for the year | 2,710,295 | 2,737,767 |
Shareholders' Funds | 18,957,033 | 16,246,738 |
Employee numbers | 90 | 111 |
FUTURE DEVELOPMENTS |
The company was bought out of its franchise agreement with O2 on 31 March 2024. The company ceased all trading activity at this date. |
ENVIRONMENT |
The company recognise their corporate responsibility to carry out their operations whilst minimising the environmental impacts. The directors' complied with all applicable environmental legislation, prevent pollution and reduce waste wherever possible during the year. |
HEALTH AND SAFETY |
The company are committed to achieving the highest practicable standards in health and safety management and strive to make all sites and offices safe environments for employees and customers alike. |
HUMAN RESOURCES/EMPLOYEES |
The most important resource of the company during the year was the people employed: their knowledge and experience was crucial to meeting customer requirements.Retention of key staff during the year was crucial. |
ON BEHALF OF THE BOARD: |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Directors' Report |
FOR THE YEAR ENDED 31 JANUARY 2024 |
The directors present their report with the financial statements of the Company for the year ended 31 January 2024. |
PRINCIPAL ACTIVITY |
The principal activity of the company was the operation of several O2 Franchises in the telecommunications market across Northern Ireland and Scotland. The franchise agreements operated by the company where terminated by the franchisor on 31 March 2024 and the company has ceased to trade at that date. |
DIVIDENDS |
No interim dividend was paid in the year (2023:£nil). The directors do not recommend payment of a final dividend. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 February 2023 to the date of this report. |
GOING CONCERN |
The franchise agreements operated by the company where terminated by the franchisor on 31 March 2024 and the company has ceased to trade at that date. The financial statements for the year ended 31 January 2024 have therefore been prepared on a basis other than going concern. |
DISCLOSURES REQUIRED UNDER SCHEDULE 7 |
In accordance with Section 414C (11) of Companies Act 2006, the director has elected to disclose details of the business review, principal risks and uncertainties, employment policy and future developments in the company's Strategic Report which would otherwise be required to be disclosed in the Director's Report. |
FINANCIAL RISK MANAGEMENT |
The company's operations expose them to a variety of financial risks that include price risk, foreign exchange risk, credit risk, liquidity risk and interest rate risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs. Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department. |
Price risk |
The company are exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. |
Foreign exchange risk |
While the greater part of the company's revenues and expenses are denominated in sterling, the company are exposed to some foreign exchange risk in the normal course of business, principally on sales recorded in Euros and borrowing denominated in Euros. While the company have not used complex financial instruments to date to hedge foreign exchange exposure, it does from time to time use simple forward contracts; this position is kept constantly under review. |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Directors' Report |
FOR THE YEAR ENDED 31 JANUARY 2024 |
FINANCIAL RISK MANAGEMENT CONTINUED |
Credit risk |
The company operate policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to individual customers is subject to a limit, which is reassessed regularly by the board. |
Liquidity risk |
The company actively maintain a mixture of long-term and short-term debt finance that is designed to ensure that the company have sufficient available funds for operations and planned expansions. |
Interest rate risk |
The company have both interest bearing assets and interest bearing liabilities. Interest bearing assets include cash balances, which earn interest at a variable rate. Interest bearing liabilities relate to shareholder loans, bank overdrafts and loans and obligations under hire purchase and finance lease agreements, which bear interest at market rates. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information. |
AUDITORS |
The auditors, CavanaghKelly, (Chartered Accountants) have indicated their willingness to continue in office in accordance with the provisions of Section 485 of the Companies Act 2006. |
ON BEHALF OF THE BOARD: |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Directors' Responsibilities Statement |
FOR THE YEAR ENDED 31 JANUARY 2024 |
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial |
statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to: |
- select suitable accounting policies and then apply them consistently; |
- make judgements and accounting estimates that are reasonable and prudent; |
- state whether applicable 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. |
Independent Auditors' Report to the Members of |
MMD Communications Ltd |
Opinion |
We have audited the financial statements of MMD Communications Ltd (the 'Company') for the year ended 31 January 2024 which comprise the Income Statement, Statement of Financial Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the Company's affairs as at 31 January 2024 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. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 |
We draw attention to Note 3 of the financial statements, which indicates that the accounts have been prepared on a basis other than going concern due to its cessation of trade post year end. Our opinion is not modified in respect of this matter. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report, the Directors' Report and the Directors' Responsibilities Statement, but does not include the financial statements and our Auditors' Report thereon. |
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. |
In connection with our audit of the financial statements, 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 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. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements. |
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 where 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 directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Independent Auditors' Report to the Members of |
MMD Communications Ltd |
Responsibilities of directors |
As explained more fully in the Directors' Responsibilities Statement set out on page five, 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 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. |
Auditors' 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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
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. The objectives of our audit in respect of fraud are to assess the risk of material misstatement due to fraud, design and implement appropriate responses to those assessed risks and to respond appropriately to instances of fraud or suspected fraud identified during the course of our audit. However, the primary responsibility for the prevention and detection of fraud rests with management and those charged with governance of the company. |
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following: |
- | We obtained understanding of the legal and regulatory requirements applicable to the company’s financial statements and considered the most significant are the Companies Act 2006, Financial Reporting Standards (FRS102) and UK taxation legislation; |
- | We have assessed the risk of material misstatement of the financial statements, including risk of material misstatement due to fraud and how it might occur by holding discussions with management and those charged with governance; |
- | We enquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations; |
- | Understanding the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; and |
- | Discussions amongst the audit engagement team regarding how fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion we identified the following potential areas where fraud may occur: timing of revenue recognition and management override. |
The audit response to risks identified included: |
- | Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the relevant laws and regulations above; |
- | Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risk of material misstatement due to fraud; |
Independent Auditors' Report to the Members of |
MMD Communications Ltd |
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud - continued |
In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are reasonable and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report. |
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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants and Statutory Auditors |
36-38 Northland Row |
Dungannon |
Co. Tyrone |
BT71 6AP |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Income Statement |
FOR THE YEAR ENDED 31 JANUARY 2024 |
2024 | 2023 |
Notes | £ | £ |
REVENUE |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
2,803,519 | 3,243,910 |
Other operating income | ( |
) |
OPERATING PROFIT | 6 |
Finance income |
3,451,794 | 3,239,341 |
Finance costs | 8 | ( |
) | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 9 | ( |
) | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Statement of Financial Position |
31 JANUARY 2024 |
2024 | 2023 |
Notes | £ | £ |
NON-CURRENT ASSETS |
Intangible assets | 10 |
Property, plant and equipment | 11 |
CURRENT ASSETS |
Inventories | 12 |
Receivables | 13 |
Cash at bank and in hand |
PAYABLES |
Amounts falling due within one year | 14 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PAYABLES |
Amounts falling due after more than one year |
15 |
( |
) |
PROVISIONS FOR LIABILITIES | 18 | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Retained earnings |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Statement of Changes in Equity |
FOR THE YEAR ENDED 31 JANUARY 2024 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 February 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 January 2023 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 January 2024 |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements |
FOR THE YEAR ENDED 31 JANUARY 2024 |
1. | STATUTORY INFORMATION |
MMD Communications Ltd is a company limited by shares, incorporated in Northern Ireland, within the United Kingdom. The company's registered number and registered office address can be found on the Company Information page. The nature of the company's operations and its principal activities are set out in the Directors' Report. The financial statements have been presented in Pound Sterling (£) which is also the functional currency of the company. |
2. | STATEMENT OF COMPLIANCE |
The financial statements of the company for the year ended 31 January 2024 have been prepared in accordance with the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland (FRS 102) issued by the Financial Reporting Council and in accordance with the Companies Act 2006. |
3. | ACCOUNTING POLICIES |
Basis of preparation |
The franchise agreements operated by the company where terminated by the franchisor on 31 March 2024 and the company has ceased to trade at that date. The financial statements for the year ended 31 January 2024 have therefore been prepared on a basis other than going concern. |
The financial statements have been prepared under the historical cost convention. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
FRS 102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions. |
The company has taken advantage of the following exemptions: |
- from presenting its own Statement of Comprehensive Income in these financial statements as permitted under Section 408 of the Companies Act 2006; |
- from preparing a Statement of Cash Flows or Profit and Loss account on the basis that is a qualifying entity; its cash flows and profit and loss is included in the cash flows and profit and loss in the consolidated financial statements; |
- from the Financial Instrument disclosures, required under FRS 102 paragraphs 11.41(b) to 11.48(c) and 12.26 to 12.29, as the information is provided in the consolidated statement disclosure; and |
- from disclosing the company's key management personnel compensation as required by FRS 102 paragraph 33.7. |
Revenue |
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised: |
Sale of goods: |
Revenue from the sale of goods is recognised when all of the following conditions are satisfied: |
- the significant risks and rewards of ownership have been transferred to the buyer; |
- the company retains no continuing involvement or control over the goods; |
- the amount of revenue can be measured reliably; |
- it is probable that future economic benefits will flow through the group |
- the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Revenue is recognised on customer receipt. |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements - continued |
FOR THE YEAR ENDED 31 JANUARY 2024 |
3. | ACCOUNTING POLICIES - continued |
Revenue continued |
Rendering of services and contracting: |
Revenue from a contract to provide services is recognised in the period in which the serves are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied: |
- the amount of revenue can be measured reliably; |
- it is probable that the company will receive the consideration due under the contract; |
- the stage of completion of the contract at the end of the reporting period can be measured |
reliably, and; |
- the costs incurred and the costs to complete the contract can be measured reliably. |
Goodwill |
Purchased goodwill arising on the acquisition of a business represents the excess of the acquisition cost over the fair value of the identifiable net assets including other intangible fixed assets when they were acquired. Purchased goodwill is capitalised in the Statement of Financial Position and amortised on a straight line basis over its economic useful life of 5 years, which is estimated to be the period during which benefits are expected to arise. On disposal of a business any goodwill not yet amortised is included in determining the profit or loss on sale of the business. |
Goodwill is reviewed for impairment at the end of the first full financial year following acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable. |
Goodwill was impaired at the year end as a result of the company ceasing to trade post year end. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Amortisation is not provided on franchise fees. |
Franchise fees where impaired at the year end as a result of the company ceasing to trade post year end. |
Property, plant and equipment and depreciation |
Property, plant and equipment are stated at cost or at valuation, less accumulated depreciation. The charge to depreciation is calculated to write off the original cost or valuation of property, plant and equipment, less their estimated residual value, over their expected useful lives as follows: |
Long leaseholds | - 25% Reducing balance |
Plant and machinery | - 25% Reducing balance |
Fixtures, fittings and equipment | - 25% Reducing balance / 33% Straight |
line |
Motor vehicles | - 25% Reducing balance |
The carrying values of property, plant and equipment are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable. |
Property, plant and equipment that where not disposed post year end have been impaired at the year end as a result of the company ceasing to trade post year end. |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements - continued |
FOR THE YEAR ENDED 31 JANUARY 2024 |
3. | ACCOUNTING POLICIES - continued |
Inventories |
Inventories are valued at the lower of cost and net realisable value. Cost comprises expenditure incurred in the normal course of business in bringing Inventories to their present location and condition. Full provision is made for obsolete and slow moving items. Net realisable value comprises actual or estimated selling price (net of trade discounts) less all further costs to completion or to be incurred in marketing and selling. |
Exceptional Items |
Exceptional items are those that the directors' view are required to be separately disclosed by virtue of their size or incidence to enable a full understanding of the company's financial performance. |
During the current year the franchise agreement for several stores was not renewed and post year end the company was bought out of its remaining franchise agreements by the franchisor. The costs and compensation for this event have been disclosed separately. |
Financial instruments |
The company have chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments. |
(i) Financial assets |
Basic financial assets, including trade and other receivables, cash and bank balances and amounts owed by group companies are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method. |
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Income Statement. |
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements - continued |
FOR THE YEAR ENDED 31 JANUARY 2024 |
3. | ACCOUNTING POLICIES - continued |
Financial instruments - continued |
(ii) Financial liabilities |
Basic financial liabilities, including trade and other payables, bank loans and overdrafts and hire purchase contracts 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 receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates. |
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. |
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. |
(iii) Offsetting |
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. |
Taxation and deferred taxation |
Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Statement of Financial Position date. |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the Statement of Financial Position date where transactions or events have occurred at that date that will result in an obligation to pay more tax in the future, or a right to pay less tax in the future. Timing differences are temporary differences between the company's taxable profits and its results as stated in the financial statements. |
Deferred tax is measured on an undiscounted basis at the tax rates that are anticipated to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the Statement of Financial Position date. |
Hire purchase and leasing commitments |
Property, plant and equipment held under leasing and Hire Purchases arrangements which transfer substantially all the risks and rewards of ownership to the company are capitalised and included in the Statement of Financial Position at their cost or valuation, less depreciation. The corresponding commitments are recorded as liabilities. Payments in respect of these obligations are treated as consisting of capital and interest elements, with interest charged to the Income Statement. |
Pensions |
The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. Annual contributions payable to the company's pension scheme are charged to the Income Statement in the period to which they relate. |
Share capital |
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds. |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements - continued |
FOR THE YEAR ENDED 31 JANUARY 2024 |
3. | ACCOUNTING POLICIES - continued |
Going concern |
The financial statements have not been prepared on the going concern basis as post year end, the company's principal franchisor bought the company out of its franchise agreement. |
The directors of the company believe the company has the ability to discharge all of its debts on the cessation of its trade. |
4. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
Critical judgements in applying the entity's accounting policies |
No critical judgement have been made in applying the entity's accounting policies. |
Critical accounting estimates and assumptions |
No critical accounting estimates and assumptions have been made in applying the entity's accounting policies. |
5. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2024 | 2023 |
Average number of employees |
2024 | 2023 |
£ | £ |
Directors' remuneration |
6. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2024 | 2023 |
£ | £ |
Commissions payable |
Depreciation - owned assets |
Profit on disposal of fixed assets | ( |
) | ( |
) |
The auditing of accounts of any associate of the company |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements - continued |
FOR THE YEAR ENDED 31 JANUARY 2024 |
7. | EXCEPTIONAL ITEMS |
Included within other income: |
2024 | 2023 |
£ | £ |
Store Closure Bonus | 618,642 | - |
Included within expenditure: |
2024 | 2023 |
£ | £ |
Redundancy costs | 8,730 | - |
Lease renunciation | 200,000 | - |
Dilapidation | 34,000 | - |
Loss on disposal of tangible fixed assets | 97,258 | - |
Impairment losses for intangible fixed assets | 33,000 | - |
Impairment losses for tangible fixed assets | 410,874 | - |
783,862 | - |
8. | FINANCE COSTS |
2024 | 2023 |
£ | £ |
Bank interest |
Interest payable |
Hire purchase interest |
9. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2024 | 2023 |
£ | £ |
Current tax: |
UK corporation tax |
Adjustments in respect of |
prior periods | - | (67,310 | ) |
Total current tax |
Deferred tax | ( |
) | ( |
) |
Tax on profit |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements - continued |
FOR THE YEAR ENDED 31 JANUARY 2024 |
9. | TAXATION - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2024 | 2023 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Adjustments to tax charge in respect of previous periods | ( |
) |
Group relief | (1,616 | ) | (1,309 | ) |
Non-relevant depreciation | 7,792 | 7,283 |
Impact of super-deduction | - | (16,592 | ) |
Impact of rate change | - | 7,052 |
Movement in unrecognised deferred tax | (128,022 | ) | (889 | ) |
Total tax charge | 728,562 | 454,461 |
10. | INTANGIBLE FIXED ASSETS |
Franchise |
Goodwill | Fees | Totals |
£ | £ | £ |
COST |
At 1 February 2023 |
Disposals | ( |
) | ( |
) |
Impairments | (3,067,825 | ) | (33,000 | ) | (3,100,825 | ) |
At 31 January 2024 |
AMORTISATION |
At 1 February 2023 |
Eliminated on disposal | ( |
) | ( |
) |
Impairments | ( |
) | ( |
) |
At 31 January 2024 |
NET BOOK VALUE |
At 31 January 2024 |
At 31 January 2023 |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements - continued |
FOR THE YEAR ENDED 31 JANUARY 2024 |
11. | PROPERTY, PLANT AND EQUIPMENT |
Fixtures |
Long | Plant and | and | Motor |
leasehold | machinery | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 February 2023 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) |
Impairments | (724,357 | ) | (116,676 | ) | (2,027,613 | ) | - | (2,868,646 | ) |
At 31 January 2024 |
DEPRECIATION |
At 1 February 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) |
Impairments | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 January 2024 |
NET BOOK VALUE |
At 31 January 2024 |
At 31 January 2023 |
Included above are assets held under finance leases or hire purchase contracts as follows: |
2024 | 2024 | 2023 | 2023 |
Carrying amount | Depn charge | Carrying amount | Depn charge |
£ | £ | £ | £ |
Motor vehicles | 97,457 | 32,486 | 151,593 | 43,009 |
12. | INVENTORIES |
2024 | 2023 |
£ | £ |
Inventories |
13. | RECEIVABLES |
2024 | 2023 |
£ | £ |
Trade receivables |
Amounts owed by group undertakings |
Other receivables |
Prepayments |
Amounts owed to group companies are considered repayable on demand and no interest has been charged on advances made. |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements - continued |
FOR THE YEAR ENDED 31 JANUARY 2024 |
14. | PAYABLES: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Hire purchase contracts (see note 16) |
Trade payables |
Tax |
Social security and other taxes |
VAT | 794,393 | 1,116,993 |
Other payables |
Accruals and deferred income |
15. | PAYABLES: AMOUNTS FALLING DUE AFTER ONE YEAR |
2024 | 2023 |
£ | £ |
Hire purchase contracts (see note 16) |
Accruals and deferred income |
16. | LEASING AGREEMENTS |
Minimum lease payments under hire purchase fall due as follows: |
2024 | 2023 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
17. | SECURED DEBTS |
The following secured debts are included within creditors: |
2024 | 2023 |
£ | £ |
Hire purchase contracts | 126,362 | - |
Assets held under hire purchase are secured against the assets they relate to. |
18. | PROVISIONS FOR LIABILITIES |
2024 | 2023 |
£ | £ |
Deferred tax | - | 29,384 |
Deferred tax |
£ |
Balance at 1 February 2023 |
Credit to Income Statement during year | ( |
) |
Balance at 31 January 2024 |
MMD COMMUNICATIONS LTD (REGISTERED NUMBER: NI070158) |
Notes to the Financial Statements - continued |
FOR THE YEAR ENDED 31 JANUARY 2024 |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
value: | £ | £ |
Ordinary Share Class 1 | £1 each | 2 | 2 |
20. | PENSION COMMITMENTS |
The company operates a defined contribution pension scheme in respect of the directors and employees. The scheme and its assets are held by independent managers. The pension charge represents contributions due from the company and amounted to £139,888 (2023: £123,053). |
21. | FINANCIAL COMMITMENTS |
Total future minimum lease payments under non-cancellable operating leases are as follows: |
2024 | 2023 |
£ | £ |
Due: |
Within one year | 166,774 | 442,090 |
Between one and five years | - | 777,542 |
In over five years | - | - |
166,774 | 1,219,632 |
22. | RELATED PARTY DISCLOSURES |
The entity has identified the following transactions which fall to be disclosed under FRS 102 para 33: |
Balance | Balance |
2024 | 2023 |
£ | £ |
Sea Eagle Properties Ltd | 2,888,318 | 2,888,181 |
Sea Eagle Properties Ltd is a company under common control with Maurice Devlin, director. The company is incorporated in Northern Ireland. Included in other debtors an amount of £2,888,318 was owed by Sea Eagle Properties Ltd in respect of expenses paid on its behalf. |
The company has availed of the exemption under FRS 102 in relation to the disclosure of transactions with group companies. |
23. | POST BALANCE SHEET EVENTS |
The franchise agreements operated by the company where terminated by the franchisor on 31 March 2024 and the company has ceased to trade at that date. The financial statements for the year ended 31 January 2024 have therefore been prepared on a basis other than going concern. |
24. | ULTIMATE CONTROLLING PARTY |
The company's ultimate parent undertaking is MMD Communications Holdings Ltd. |
The address of MMD Communications Holdings Ltd is 53 Main Street, Coalisland, BT71 4NB. |
The company's ultimate controlling party is Mr Maurice Devlin. |