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Registered number: 04632279
MPD FM LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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MPD FM LIMITED
COMPANY INFORMATION
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Unit 20 Dagenham Business Centre
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Accendo Consulting Limited
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Chartered Certified Accountants and Statutory Auditors
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MPD FM LIMITED
CONTENTS
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Independent Auditors' Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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MPD FM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
The directors present their strategic report for the year ended 30 June 2023.
The main activities of the company were security guarding services.
Over the past year, MPD FM has continued to strengthen its presence in the security guarding sector, reinforcing our status as a premier provider of security services. Our origins as a single-person operation in 2003 have expanded to an organisation that now employs more than 340 trained professionals, all of whom meet the stringent training standards required in the security sector.
In 2015, the company took strategic steps to address the critical demand for high-quality security solutions across the nation. Our expansion was a calculated move to enhance our services and capitalise on the growing need for outsourced security within the facilities management industry. This initiative has positioned us as a leading security services provider, dedicated to evolving with the market and client needs.
Navigating through the competitive landscape of the security sector, the company has successfully established and maintained a robust portfolio of contracts with both public and private sector clients. This success is a direct result of our effective leadership and our unwavering commitment to meeting the complex needs of our clientele.
Our excellence in service and management was acknowledged with the prestigious Chairman's Recognition Award in 2020. The past year has seen a strategic emphasis on refining our service capabilities to ensure comprehensive support and security solutions for our clients.
At the heart of our operations lies a deep appreciation for the unique talents and backgrounds of our staff. MPD FM nurtures an environment where every individual is encouraged to bring their personal strengths and experiences to the fore, thereby enhancing our collective service quality and fostering a culture of professional growth.
Integrity is the cornerstone of the company's operations. We are committed to the highest ethical standards, ensuring that recognising potential, rewarding achievements, and cultivating a positive, forward-looking work environment are integral to our business model.
As we look to the future, we remain dedicated to the pursuit of service excellence and ethical business practices. We are committed to sustaining our growth, exploring innovative solutions, and upholding the trust placed in us as a leading provider of security guarding services.
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MPD FM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
Principal risks and uncertainties
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The security industry faces a variety of inherent risks and uncertainties. At MPD FM, we proactively identify and manage these to safeguard our business operations, our staff, and our clients. The principal risks and uncertainties facing our company, and the strategies in place to mitigate them, include:
Market Competition and Client Retention
The security sector is highly competitive, with constant pressure to provide exceptional services at competitive prices. Our risk mitigation strategy includes continuous service enhancement, maintaining close relationships with clients, and staying abreast of market trends to ensure our offerings are second to none.
Regulatory Compliance
Our operations are subject to rigorous regulatory requirements. Changes in legislation could impact our methods and costs of service provision. We manage this risk through diligent legal monitoring and compliance checks to ensure that all our operations align with current laws and standards.
Technological Advances
Technological evolution presents both opportunities and risks. The increasing sophistication of security systems and the integration of artificial intelligence necessitate ongoing investment and training. We address this by allocating resources to the regular upskilling of our staff and the adoption of cutting-edge security technologies.
Cybersecurity
As a provider of security guarding services, it is imperative that our systems are secured against cyber threats. We employ robust cybersecurity measures and conduct regular reviews and updates of our IT infrastructure to protect against potential breaches.
Economic Uncertainty
Fluctuations in the economic climate can affect client budgets and, consequently, their spending on security services. The company aims to mitigate this risk by diversifying our client base across various industries and offering flexible, cost-effective solutions that meet our clients' changing needs.
Interest Rate Risk
As with many businesses that have borrowings, the company is exposed to interest rate risk. At the year-end, the company has a loan of £560,000, which is subject to an interest rate of 2.09% above the Bank of England base rate. The base rate has seen a considerable increase from 0.1% to 5.25% over the past couple of years, which presents a potential risk to our cost structure and profit margins. We continually seek to improve operational efficiencies to offset any increased financial costs resulting from rising interest rates.
Credit risk
All customers who wish to trade on credit terms are subject to credit verifications procedures. Trade debtors and retentions are reviewed on a regular basis and any overdue balances are chased.
Health and safety
Health & safety is a major area of concern for our employees, clients, and members of the public. The company has a dedicated health & safety department which reviews and monitors this area of risk.
Human Resources
The success of our company hinges on the performance and reliability of our staff. We face risks related to recruitment, retention, and staff welfare. Our comprehensive training programmes, competitive remuneration packages, and focus on career development are designed to attract and retain top talent while ensuring their wellbeing.
Reputational Risk
In our business, reputation is paramount. Incidents that compromise the quality of our service could impact our standing with clients and the public. We mitigate this through strict adherence to operational protocols, excellence in client service, and transparent communication.
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MPD FM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
In conclusion, while the landscape of risk is ever evolving, the company remains vigilant and committed to implementing robust risk management procedures to navigate these challenges effectively and ensure the long-term success of our company.
Financial key performance indicators
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Throughout the year, we continued to track various financial key performance indicators (KPIs) to measure our performance. The attention to these metrics has ensured that we have maintained robust financial health even in a climate of economic uncertainty.
Profitability
Our EBITDA in the year ending 30 June 2023 has demonstrated a substantial increase to £878k, up from £522k in the previous year. This improvement of over 68% is indicative of our operational efficiency and effective cost management strategies. Similarly, our operating profit has strengthened to £861k, an increase from the £487k recorded in 2022, underscoring our ability to translate revenue growth into sustainable profit.
Financial Position
The net assets of the company have seen a healthy rise, with the year ending 30 June 2023 reporting £2.99m compared to £2.7m in 2022. Despite a more challenging economic environment, we have been able to maintain solid growth in our net asset base, which is crucial for our long-term strategic objectives.
Liquidity
The bank balances have shown a decrease to £424k in 2023 from £1.1m in 2022. However, our net current assets stand at £2.1m, a testament to our liquidity and our capability to navigate current market conditions. This financial buffer ensures that MPD FM can sustain operations and commit to growth initiatives without significant adverse impacts from external economic fluctuations.
KPIs
We continue to measure our success through several KPIs, with a particular focus on revenue growth, gross profit percentage, and EBITDA percentage. These indicators are essential in gauging the efficiency of our operations and the company's overall financial health.
Our revenue growth speaks to our expanding market presence and client base. The gross profit percentage highlights our ability to control the costs and to operate effectively. The EBITDA percentage allows us to monitor our earnings before interest, taxes, depreciation, and amortisation, as a proportion of our revenue, giving a clear view of our operational performance independent of tax structures and financing decisions.
In conclusion, our diligent monitoring and strategic management of financial KPIs have enabled MPD FM to sustain a strong financial position and remain well-prepared for future challenges and opportunities.
Key performance indicators
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Turnover has increased by 4% as compared to last year. In the last few years the company has won several significant contracts with prestigious National and London companies and turnover is expected to increase in future periods.
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MPD FM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
Other key performance indicators
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At MPD FM, we pride ourselves on being a premier provider of security services, recognised for our professional, high-quality service delivery to clients across the nation. Our trajectory since inception in January 2003 has marked us as one of the fastest-growing companies within the UK security and facilities management (FM) sector.
Compliance and Standards
We are steadfast in our commitment to operational excellence, adhering to a suite of rigorous standards that guide our processes and ensure the highest quality of service. These include:
BS EN ISO 9001
BS7499:2007
BS 7858:2006
BS 7958:2009
BS 7984
BS 8517
BS 7960:2005
In addition, we are fully compliant with relevant legislation and acts that govern our operations, such as the Police and Criminal Evidence Act 1984, the Regulation of Investigatory Powers Act 2004, the Data Protection Act, the Private Security Industry Act 2001, and the Human Rights Act 1998.
Accreditations and Industry Recognition
MPD FM holds the NSI Gold accreditation — a testament to our ‘Gold Standard’ in security provision — and we are proud members of the elite top 5% club within the Security and FM Sector. These accolades underscore our dedication to service excellence and industry best practices.
Customer Relationships and Management Structure
Our ability to forge enduring customer relationships stems from consistent service delivery excellence. This commitment to our clients has elevated MPD FM as a leading security company within the UK. Despite a diverse contract portfolio, our strategic approach ensures that no single contract is disproportionately material in terms of revenue, maintaining a balanced and sustainable business model. Our strong management structure, featuring key account managers for major contracts, facilitates this balance and underscores our focus on customer satisfaction and service continuity.
Audit Achievements and Continuous Improvement
In our management and environmental audits, MPD FM achieved high scores, reflecting our unyielding commitment to maintaining exemplary standards in all facets of our working environment. Our request for migration to ISO 45001 in the 2020 audit, alongside concurrent audits for ACS - ISO 27001 and ISO 22301, was favourably received. The audits, conducted by Alcumus ISOQAR Limited, affirm our adherence to, and mastery of, the standards assessed.
The feedback we received attests to the robustness of our management system, its alignment with industry standards, and the systematic achievement of product and service requirements in line with our policy and objectives. Such commendation reinforces the commitment and insight of our senior management team and bolsters our resolve for ongoing enhancement of our company and services.
Management Commitment and Vision
The senior management of MPD FM, comprising three dedicated directors actively engaged in daily operations, instils a culture of continuous improvement and a steadfast dedication to our service offering. The team’s comprehensive grasp of the industry landscape and their infectious enthusiasm for progress positions MPD FM uniquely within the competitive market.
In summary, MPD FM’s robust compliance framework, esteemed industry accreditation, customer-centric approach, laudable performance, and forward-looking management practices collectively represent our key
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MPD FM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
performance indicators outside of financial metrics. They reflect our aspiration and trajectory towards becoming an industry leader in the security services sector.
This report was approved by the board and signed on its behalf.
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M S Bhatti
Director
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MPD FM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
The directors present their report and the financial statements for the year ended 30 June 2023.
Directors' responsibilities statement
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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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), 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 for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK 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 to 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.
The Company's principal activity during the year continued to be security guarding services.
The profit for the year, after taxation, amounted to £568,382 (2022 - £332,513).
The directors recommended a dividend of £300,000 for the year (2022: £Nil).
The directors who served during the year were:
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MPD FM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
As we navigate towards the future, MPD FM remains firmly rooted in our core services that have been the cornerstone of our success: providing manned guarding, patrols, key-holding, and reception management services. Our operational footprint spans across the UK, manifesting our commitment to national coverage and service accessibility.
The past year has seen sustained growth, a tangible reflection of our strategic initiatives and the market's response to our service quality. Looking ahead to 2024, buoyed by our strong financial performance and the recognition we have garnered within the industry, we are poised for further growth. The directors anticipate a burgeoning portfolio as we continue to capitalise on emerging opportunities and extend our reach within the sector.
This optimism is underpinned by the resilience and adaptability that MPD FM has consistently demonstrated. Our strategic vision encompasses not just the consolidation of our existing services but also the exploration of innovative solutions that respond to the evolving needs of our clients. We are dedicated to maintaining our reputation for excellence, enhancing our competitive advantage, and providing unparalleled security services.
In conclusion, the directors are confident that the forthcoming year will bring new ventures and milestones for MPD FM. With a robust foundation, a clear strategic direction, and a committed team, we are ready to embrace the opportunities that the future holds and to cement our position as leaders in the security services industry.
Engagement with employees
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MPD FM's commitment to its employees has been a driving force behind our recent business wins, laying the groundwork for our ambition to become the employer of choice in the security market. This commitment to our workforce is reflected not just in our ability to attract exceptional talent in a competitive market, but also in our high retention rates, which are crucial to the successful delivery of our services.
The UK’s labour market is characterised by near-full employment, presenting unique challenges in attracting and retaining skilled personnel. Despite this, MPD FM stands out by fostering a workplace that values each member of our team. Our emphasis on being an employer of choice has translated into tangible successes, both in terms of growth and the seamless execution of contracts.
Our employment policies are rooted in principles of equality and non-discrimination. We firmly believe that the diversity of our workforce is a source of strength and innovation. We adhere to a policy that ensures no employee or potential employee is discriminated against. Inclusion and accessibility are not just ethical imperatives but are also integral to our operational philosophy.
We consider all disabled people applying for employment on the basis of their aptitudes and abilities. Our employment policy provides that existing employees who become disabled will have the opportunity to retrain where necessary and to continue in employment.
Qualifying third party indemnity provisions
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The company has granted an indemnity to its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third-party indemnity provision remained in force during the year end and as at the date of approving the directors’ report.
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MPD FM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
Matters covered in the Strategic Report
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Information, such as principal risks and uncertainties are not included within Directors’ Report but have instead been covered in the Strategic Report.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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There were no significant events after the balance sheet date that need to be disclosed.
The auditors, Accendo Consulting Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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M S Bhatti
Director
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MPD FM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MPD FM LIMITED
We have audited the financial statements of MPD FM Limited (the 'Company') for the year ended 30 June 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, 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 30 June 2023 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.
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 United Kingdom, including the Financial Reporting Council'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
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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 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.
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MPD FM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MPD FM LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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.
Opinion on other matters prescribed by the Companies Act 2006
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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
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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 in relation to which 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.
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 6, 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 is 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.
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MPD FM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MPD FM LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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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.
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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Extent to which the audit was considered capable of detecting irregularities, including fraud:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to irregularities:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
The nature of the industry and sector, control environment and business performance including the design of the Company’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets; results of our enquiries of management about their own identification and assessment of the risks of irregularities and any matters we identified having reviewed the Company’s policies and procedures; the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in and focused on those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006 and local tax legislation.
Audit response to risks identified
As a result of performing the above, we identified revenue recognition as key audit matter related to the potential risk of fraud. Our procedures to respond to risks identified included the following:
- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
- enquiring of management, concerning actual and potential litigation and claims;
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
- obtaining an understanding of provisions and discussing with management to understand the basis of recognition or non-recognition of tax provisions; and in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the
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MPD FM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MPD FM LIMITED (CONTINUED)
judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
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MPD FM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MPD FM LIMITED (CONTINUED)
R M Asif Rafique (Senior Statutory Auditor)
for and on behalf of
Accendo Consulting Limited
Chartered Certified Accountants and Statutory Auditors
29 March 2024
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MPD FM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial year
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There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.
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There was no other comprehensive income for 2023 (2022:£NIL).
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The notes on pages 19 to 38 form part of these financial statements.
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MPD FM LIMITED
REGISTERED NUMBER: 04632279
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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M S Bhatti
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The notes on pages 19 to 38 form part of these financial statements.
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MPD FM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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Total transactions with owners
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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The notes on pages 19 to 38 form part of these financial statements.
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MPD FM LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Purchase of investment properties
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Net cash from investing activities
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Cash flows from financing activities
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Repayment of/new finance leases
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Movements on invoice discounting
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Net cash used in financing activities
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Net (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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MPD FM LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2023
The notes on pages 19 to 38 form part of these financial statements.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
The entity is a private company limited by shares and incorporated in England & Wales. The company’s registered office and registration number are on company information page.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The company meets its day-to-day working capital requirements through close management of its cash flows and an invoice discounting facility.
As at the date of approval of these accounts the business has sufficient cash, net current assets and financing facility to cover its fixed costs for the foreseeable future. The business has continued to win and retain contracts and expects this to continue in future.
The directors are satisfied that at the date of approval of financial statements, the company has sufficient resources to continue as a going concern and there are no material uncertainties that would cast doubt over the ability of the company to continue as a going concern for at least one year from the date of approval.
The directors, having considered this and the financial position of the company, have a reasonable expectation that the company will continue in operational existence and thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
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 Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services 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.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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Leased assets: the Company as lessee
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
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Long-term leasehold property
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Over estimated useful life of 40 years
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investment property is carried at fair value determined annually by external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
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.
The company has invoice discounting facility with its bankers. Creditor is recognised when funds are withdrawn against sales invoices. The amount withdrawn is settled on receipts from customers. Interest is charged on outstanding balance of invoice discounting facility.
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the reporting date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the reporting date.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form.
Financial liabilities within the scope of IAS 39 are initially classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs.
Subsequently, the measurement of financial liabilities depends on their classification as follows:
Interest bearing loans and borrowings
Obligations for loans and borrowings are recognised when the Group becomes party to the related contracts and are measured initially at the fair value of consideration received less directly attributable transaction costs.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.
Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised respectively in finance revenue and finance cost.
Derecognition of financial liabilities
A liability is derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such as an exchange or modification, this is treated as a derecognition of the original liability, such that the difference in the respective carrying amounts together with any costs or fees incurred are recognised in profit or loss.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Estimates and judgements are continually evaluated and are based on historic experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances.
Key sources of estimation uncertainty
The estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are outlined below:
Useful economic lives of tangible fixed assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful
economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on
technological advancement, future investments, economic utilisation and physical condition of the assets.
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An analysis of turnover by class of business is as follows:
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Security guarding services
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All turnover arose within the United Kingdom.
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The operating profit is stated after charging:
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Other operating lease rentals
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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During the year, the Company obtained the following services from the Company's auditors:
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Fees payable to the Company's auditors for the audit of the Company's financial statements
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Other interest receivable
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Interest payable and similar expenses
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Other loan interest payable
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Finance leases and hire purchase contracts
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Current tax on profits for the year
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 20.5% (2022 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 20.5% (2022 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Short-term timing difference leading to an increase (decrease) in taxation
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Total tax charge for the year
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Factors that may affect future tax charges
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The standard rate of tax applied to reported profit on ordinary activities is 20.5% (2022: 19%). In the Finance Bill 2021, the Government announced that from 1 April 2023 the corporation tax rate would increase to 25%. The Finance Bill 2021 and the new 25% rate were substantially enacted on 24th May 2021, this means that the 25% main rate of corporation tax and marginal relief are relevant for any timing differences expected to reverse on or after 1 April 2023.
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Dividends - ordinary shares
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Long-term leasehold property
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Charge for the year on owned assets
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Leasehold properties were acquired in 2012 and 2014 on 150 and 175 years leases.
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The net book value of land and buildings may be further analysed as follows:
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Freehold investment property
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The 2023 valuations were made by Douglas Allen, on an open market value for existing use basis.
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If the Investment properties had been accounted for under the historic cost accounting rules, the properties would have been measured as follows:
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Amounts owed by joint ventures and associated undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Proceeds of factored debts
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Accruals and deferred income
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Creditors: Amounts falling due after more than one year
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The following liabilities were secured:
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Invoice discounting facility
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Details of security provided:
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The company has invoice discounting facility of £3 million with Royal Bank of Scotland. RBS finance 60% of invoice value at a rate of 2.75% per annum. The financing is secured by fixed and floating charge over all property and assets, present and future, including goodwill, debts, uncalled capital, buildings, fixtures, fixed plant & machinery. The charge was created on 21st February 2013.
The bank loan and overdraft facility is secured via fixed charge on the company’s leasehold property at Unit 20, Dagenham Business Centre, Rainham Road North, Dagenham RM10 7FD. The charge was created on 4th August 2015.
Natwest Bank Plc have fixed and floating charge over all assets of the company. The charge was created on 22nd July 2015 and contains negative pledge.
The company received CBILS loan of £1m during 2021. The loan is repayble by July 2026 in 56 monthly instalments. Interest is charged at 2.09% per annum over base rate. The loan is secured via 1st legal charge on the company’s leasehold property at Unit 20, Dagenham Business Centre, Rainham Road North, Dagenham RM10 7FD.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Financial assets measured at fair value through profit or loss
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Allotted, called up and fully paid
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5,000 (2022 - 5,000) Ordinary shares of £1.00 each
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The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £69k (2022: £123k). Contributions totalling £13k (2022: £92k) were payable to the fund at the reporting date and are included in creditors.
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Transactions with directors
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At the year end the company owed £21k to its directors (2022: £14k). The balance is repayable on demand and there is no interest due.
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Related party transactions
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RKS Investments London Ltd (RKS) is controlled by company’s directors. During the year, the company purchased a property for £712k from RKS. At the year end RKS owed £443k (2022: £712k) to the company.
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MPD FM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
The company is under control of its directors who own all of the issued share capital.
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