MD Warranty Support Services Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 04759193 (England and Wales)

Report of the Director and

Financial Statements for the Year Ended 31 December 2020

for

MD Warranty Support Services Ltd

Page

Company Information

1

Report of the Director

2

Report of the Independent Auditors

3

Income Statement

7

Balance Sheet

8

Notes to the Financial Statements

9

DIRECTOR:

G J Devaney

SECRETARY:

Ms J A Goodman

REGISTERED OFFICE:

2 Shore Lines Building

Shore Road

Birkenhead

Merseyside

CH41 1AU

REGISTERED NUMBER:

04759193 (England and Wales)

AUDITORS:

Haines Watts

Statutory Auditor

3rd Floor Pacific Chambers

11-13 Victoria Street

Liverpool

Merseyside

L2 5QQ

The director presents his report with the financial statements of the company for the year ended 31 December 2020.

PRINCIPAL ACTIVITY

The principal activity of the company was that of a registered Building Regulations Approved Inspector.

DIRECTOR

G J Devaney held office during the whole of the period from 1 January 2020 to the date of this report.

RISK OF BUSINESS INTERRUPTION

The recent business interruption caused by the COVID-19 Pandemic has provided the business with a present and future risk to consider. The company has taken all steps possible to ensure the safety of our employees whilst working hard to develop processes that ensure the business has the financial resilience to prosper through this difficult period. At present we continue to follow government guidelines and operate cautiously in the wake of an ever evolving economic landscape. Despite the challenges the company has faced throughout the COVID-19 Pandemic, we feel we are in a good position to maximise the opportunity that will inevitably materialise through the growth of the economy.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is 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 director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is 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 he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Haines Watts, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

G J Devaney - Director

29 September 2021

Opinion

We have audited the financial statements of MD Warranty Support Services Ltd (the 'company') for the year ended 31 December 2020 which comprise the Income Statement, Balance Sheet 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 December 2020 and of its loss 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

In auditing the financial statements, we have concluded that the director's 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 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 director with respect to going concern are described in the relevant sections of this report.

However, not all future events or conditions can be predicted. The COVID-19 viral pandemic is one of the most significant economic events for the UK with unprecedented levels of uncertainty of outcomes. It is therefore difficult to evaluate all of the potential implications on the company's trade, customers, suppliers and wider economy. The Directors' view on the impact of COVID-19 is disclosed on page 2 of the Report of the Director.

Other information

The director is responsible for the other information. The other information comprises the information in the Report of the Director, but does not include the financial statements and our Report of the Auditors 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 Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Director has 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 Report of the Director.

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 director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Director.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page two, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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 auditor's 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.

In identifying and assessing risks of material misstatement in respect of fraud, including irregularities and non-compliance with laws and regulations, our procedures included the following:

We obtained an understanding of the legal and regulatory frameworks applicable to the company financial statements or that had a fundamental effect on the operations of the company. We determined that the most significant laws and regulations included, but were not limited to, United Kingdom Generally Accepted Accounting Practice, Companies Act 2006, distributable profits legislation and tax legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statements items. Our tests including agreeing the financial statement disclosures to underlying supporting documentation, review of board meeting minutes, enquiries with management and review of correspondence with external legal advisors.

We assessed the susceptibility of the company's financial statements to material misstatement including how fraud might occur. Audit procedures performed by the engagement team included:

- Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;

- Inquiring of management and those charged with governance about any known actual, suspected or alleged fraud;

- Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;

- Challenging assumptions and judgements made by management in its significant accounting estimates; and

- Identifying and testing journal entries, in particular any journal entries with unusual characteristics or posted by senior management.

Our audit did not identify any key audit matters relating to the detection of irregularities including fraud. However, despite the audit being planned and conducted in accordance with ISAs (UK) there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity likely involve collusion, forgery, intentional misrepresentations, or the override of internal controls.

A further description of our responsibilities for the audit of the financial statements is located on the

Financial Reporting Council's website at: http://www.frc.org.uk/auditorsresponsibilities This description forms part of our auditor's report.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Mr Michael Forshaw (Senior Statutory Auditor)

for and on behalf of Haines Watts

Statutory Auditor

3rd Floor Pacific Chambers

11-13 Victoria Street

Liverpool

Merseyside

L2 5QQ

29 September 2021

TURNOVER

1,591,672

6,080,558

Administrative expenses

1,784,648

6,056,482

(192,976

)

24,076

Other operating income

94,302

-

OPERATING (LOSS)/PROFIT

(98,674

)

24,076

Interest payable and similar expenses

2,352

(34

)

(LOSS)/PROFIT BEFORE TAXATION

(101,026

)

24,110

Tax on (loss)/profit

(16,834

)

-

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(84,192

)

24,110

FIXED ASSETS

Intangible assets

4

-

-

Tangible assets

5

25,077

44,868

25,077

44,868

CURRENT ASSETS

Debtors

6

5,264,273

5,335,638

Cash at bank

4,991

38,157

5,269,264

5,373,795

CREDITORS

Amounts falling due within one year

7

5,101,384

5,141,514

NET CURRENT ASSETS

167,880

232,281

TOTAL ASSETS LESS CURRENT LIABILITIES

192,957

277,149

CAPITAL AND RESERVES

Called up share capital

2

2

Retained earnings

192,955

277,147

SHAREHOLDERS' FUNDS

192,957

277,149

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the director and authorised for issue on 29 September 2021 and were signed by:

G J Devaney - Director

1.	STATUTORY INFORMATION

MD Warranty Support Services Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Significant judgements and estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future event that are believed to be reasonable under the circumstances.

There are not considered to be any critical judgements in applying the company's accounting policies.

Turnover

Turnover includes amounts received in relation to building control services, which are often provided as part of a structural warranty package.

Whist it is normal for an insurance intermediary to recognise revenue at the inception of a policy, where the contractual obligations have been performed and the right to consideration has been established prior to the inception of the underlying policy, such as the point of sale, revenue is recognised at the earlier date. Such revenue recognition is subject to a reduction in revenue in respect of provisions for amounts likely to be repayable on cancellation of policies on a best estimate basis.

Other operating income

Income from government grants is presented within other operating income. Grants relating to revenue are recognised as income over the periods when the related costs are incurred. During the year the company claimed £94,302 in relation to furlough payments within the governments Coronavirus Job Retention Scheme.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

-

10% on cost

Computer equipment

-

25% on cost

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Debtors

Short term debtors are measured at transaction price, less any impairment.

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty or notice of not more than 24 hours.

Financial instruments

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and loans to related parties.

Debt instruments (other than those wholly repayable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.

Financial assets that are measured at cost and amortised are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement and retained earnings.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Going concern

The financial statements have been prepared on a going concern basis. The Directors have reviewed and considered relevant information, including the annual budget and future cash flows for the group in making their assessment. In particular, in response to the COVID-19 pandemic, the Directors have tested their group cash flow analysis to take into account the impact on their business of possible scenarios brought on by the impact of COVID-19, alongside the measures that they can take to mitigate the impact. Based on these assessments, given the measures that could be undertaken to mitigate the current adverse conditions, and the current resources available, the Directors have concluded that they can continue to adopt the going concern basis in preparing the annual report and accounts.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 24 (2019 - 95 ) .

4.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 January 2020

and 31 December 2020

376,449

AMORTISATION

At 1 January 2020

and 31 December 2020

376,449

NET BOOK VALUE

At 31 December 2020

-

At 31 December 2019

-

5.	TANGIBLE FIXED ASSETS

Plant and

machinery

etc

£

COST

At 1 January 2020

152,339

Additions

4,079

Disposals

(62,292

)

At 31 December 2020

94,126

DEPRECIATION

At 1 January 2020

107,471

Charge for year

18,452

Eliminated on disposal

(56,874

)

At 31 December 2020

69,049

NET BOOK VALUE

At 31 December 2020

25,077

At 31 December 2019

44,868

6.

DEBTORS

31.12.20

31.12.19

£

£

Amounts falling due within one year:

Trade debtors

1,603,265

2,615,762

Amounts owed by group undertakings

3,057,643

2,655,979

Other debtors

81,010

63,897

4,741,918

5,335,638

Amounts falling due after more than one year:

Trade debtors

522,355

-

Aggregate amounts

5,264,273

5,335,638

A bad debt provision of £48,400 (2019 - £36,399) was recognised against trade debtors within the company.

Amounts owed by group undertakings are repayable on demand and attract no interest.

7.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.20

31.12.19

£

£

Trade creditors

40,603

16,623

Amounts owed to group undertakings

4,906,459

4,932,785

Taxation and social security

101,193

125,987

Other creditors

53,129

66,119

5,101,384

5,141,514

Amounts owed to group undertakings are repayable on demand and attract no interest.

8.	SECURED DEBTS

Barclays Bank holds a cross guarantee and debenture between MD Affinity Schemes Limited, MD Insurance Services Limited, MD Remedial Contractors Limited, MD Warranty Inspection Services Limited, MDIS (International) Limited dated 18/08/2020.

9.	RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

10.	ULTIMATE CONTROLLING PARTY

MD Insurance Services Limited (MDIS) is deemed to be the immediate and ultimate parent company, by virtue of its 100% shareholding in the company.

MDIS is registered in England and Wales at the same address as the company, as shown on page 1.

MDIS is the smallest and largest group in which the company's results are consolidated in to, copies of the consolidated financial statements are filed on Companies House and copies can be obtained from the company's registered office address, as shown on page 1.