METRO_INSPECTION_SERVICES - Accounts

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 31 January 2022 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their 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.

Metro Inspection Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3rd Floor, 8 Boundary Row, London, United Kingdom, SE1 8HP.

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 on the historical cost convention. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

The ability of the company to continue trading is dependent on the company generating sustainable profits and positive cash flows. In addition, the ability of the company to continue as a going concern depends on it continuing to receive financial support from its parent company to allow it to meet its financial obligations as they fall due and also the management and recoverability of intra-group and loan balances so that they don't place unnecessary financial pressure on the company. The directors of the parent company have prepared forecasts for the period to 31 January 2023 which indicate that the group will be able to generate positive cash flows and manage its working capital to enable it to pay its debts as they fall due. Accordingly the directors believe that it is appropriate to prepare the financial statements on a going concern basis.

The duration of the UK Government’s measures announced to tackle the COVID-19 pandemic has not been defined, and there is inevitable uncertainty in measuring the potential impact of the measures on the business, results of operations, financial position and cash flows. These factors and any future policy announcements by the UK Government, whilst largely outside of the control of the company’s management, could have an impact on the company; although with due consideration this is not expected to be significant.

As set out in the statement of directors' responsibilities statement on page 2, in preparing these financial statements the directors are required to prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. In satisfaction of this responsibility the directors have prepared forecasts and considered their expectations for the company over the next 12 months and the company’s ability to meet its liabilities as they fall due, based upon the information available to the directors at the date of these financial statements.

At the time of approving the financial statements the company is continuing to achieve its overall order and enquiry targets and continues to operate within its borrowing facilities. Supply chains remain intact and are not noticeably affected by the pandemic.

The company has forecast overheads for the remainder of 2022 and into 2023 and assessed the extent to which income would need to reduce before it could no longer achieve a breakeven position as a minimum. Overheads have been substantially reduced with the ending of the previous office lease at the end of September 2021 which, with a move to hybrid working, has allowed a significant reduction to the office space leased.

Based on these forecasts and ongoing and flexible support from the parent company the directors have a reasonable expectation that the company has adequate resources to contend with the uncertainties that may arise as a result of the COVID-19 pandemic, and 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.

Turnover comprises revenue recognised by the company in respect of services supplied, exclusive of Value Added Tax and trade discounts.

Turnover consists of income from repeat services performed under service contracts and one-off services. The turnover is recognised on completion of the contracts or over the length of the contract based on the service provided.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

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.

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.

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 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, including creditors, bank loans and loans from fellow group companies 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.

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.

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.

The costs of short-term employee benefits are recognised as a liability and an expense.

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.

The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

The average monthly number of persons (including directors) employed by the company during the year was:

The hire purchase is secured against the assets to which it relates.

The bank loans are secured as follows:

Cross company guarantees exist between the company, its fellow subsidiary undertakings and its parent company.

Lloyds Bank plc has a debenture and an unlimited guarantee over the assets of the group companies in respect of the bank loans totalling £134,585 (2021: £237,729). Interest on the bank loans are 2.94% and 2.95%. The bank loans are repayable in equal monthly instalments over 10 years.

Some of the directors have provided personal guarantees to Lloyds Bank plc as security in respect of the bank loans. At 31st January 2021 these personal guarantees were £450,000 (2021: £450,000) from Mr D. Ungoed-Thomas and £550,000 (2021: £550,000) from Mr A. Paten with a legal charge over a property belonging to him.

The company took out a Coronavirus Business Interruption Loan in July 2020 with Lloyds Bank plc. At 31st January 2022 the amount owed on that loan was £630,000. The interest rate on the loan is 2.54% above the Bank of England base rate.

With regards to the other loans totalling £292,553 (2021: £387,462 ), two of the directors have provided personal guarantees.

There is a charge over the assets of the companies amounting to £45,000 in respect of the rent deposit already paid.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

A cross party guarantee exists between the company and other group companies whereby the company's assets are held as security against the secured debts in other group companies. At the balance sheet date, the total of those companies' secured debts amounted to £428,498. No losses are expected to arise as a result of this guarantee.

As a wholly owned subsidiary of Metro Safety Group Limited, the company has taken advantage of the exemption available under FRS 102 Section 33.1A not to disclose transactions with other wholly-owned members of the group.

The ultimate parent undertaking and controlling party is Metro Safety Group Limited, a company incorporated in England and Wales.