Company Registration No. 01487797 (England and Wales)
MORTGAGE GUARANTEE LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
PAGES FOR FILING WITH REGISTRAR
MORTGAGE GUARANTEE LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
MORTGAGE GUARANTEE LIMITED
BALANCE SHEET
AS AT 30 APRIL 2021
30 April 2021
- 1 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
3
54,645
43,195
Investments
4
51
51
54,696
43,246
Current assets
Debtors
6
10,363,469
11,024,789
Cash at bank and in hand
2,502,887
1,324,068
12,866,356
12,348,857
Creditors: amounts falling due within one year
7
(160,918)
(167,412)
Net current assets
12,705,438
12,181,445
Net assets
12,760,134
12,224,691
Capital and reserves
Called up share capital
8
65,000
65,000
Profit and loss reserves
12,695,134
12,159,691
Total equity
12,760,134
12,224,691
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.
true
For the financial year ended 30 April 2021 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he member has not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 14 December 2021
Mr K Johnson
Director
Company Registration No. 01487797
MORTGAGE GUARANTEE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
- 2 -
1
Accounting policies
Company information
Mortgage Guarantee Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Lynwood House, 373-375 Station Road, Harrow, Middlesex, HA1 2AW.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section
399
of the
Companies Act 2006 not to prepare consolidated accounts
, on the basis that the group of which this is the parent qualifies as a small group
. The
financial statements
present information about the company as an individual entity and not about its group
.
1.2
Turnover
Revenue, described as turnover represents the value of interest and related charges receivables under contracts to the extent that there is a right to consideration and is recorded when the consideration falls due.
1.3
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
Nil
Plant and equipment
15% reducing balance
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.4
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in
profit
or
loss
.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
MORTGAGE GUARANTEE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
1
Accounting policies
(Continued)
- 3 -
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
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.
MORTGAGE GUARANTEE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
1
Accounting policies
(Continued)
- 4 -
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
MORTGAGE GUARANTEE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
1
Accounting policies
(Continued)
- 5 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.13
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
MORTGAGE GUARANTEE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
- 6 -
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Total
4
4
3
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 May 2020
4,578
102,269
106,847
Additions
64,446
64,446
Disposals
(91,074)
(91,074)
At 30 April 2021
4,578
75,641
80,219
Depreciation and impairment
At 1 May 2020
4,577
59,075
63,652
Depreciation charged in the year
16,825
16,825
Eliminated in respect of disposals
(54,903)
(54,903)
At 30 April 2021
4,577
20,997
25,574
Carrying amount
At 30 April 2021
1
54,644
54,645
At 30 April 2020
1
43,194
43,195
4
Fixed asset investments
2021
2020
£
£
Shares in group undertakings and participating interests
51
51
5
Subsidiaries
Details of the company's subsidiaries at 30 April 2021 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
Kingsbridge Securities Limited
England & Wales
Ordinary shares
51.00
MORTGAGE GUARANTEE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
5
Subsidiaries
(Continued)
- 7 -
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Kingsbridge Securities Limited
2,756,312
379,625
6
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
6,048,859
6,613,035
Amounts owed by group undertakings
3,195,805
3,377,943
Other debtors
3,411
3,411
9,248,075
9,994,389
Deferred tax asset
10,264
9,223
9,258,339
10,003,612
2021
2020
Amounts falling due after more than one year:
£
£
Trade debtors
1,105,130
1,021,177
Total debtors
10,363,469
11,024,789
The amount due from the subsidiary company, Kingsbridge Securities Limited of £3,
195,805
(2020: £
3
,
377,943
) is secured by way of a debenture over the assets of the subsidiary company and is repayable on demand.
7
Creditors: amounts falling due within one year
2021
2020
£
£
Taxation and social security
145,560
150,636
Other creditors
15,358
16,776
160,918
167,412
MORTGAGE GUARANTEE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
- 8 -
8
Called up share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
65,000
65,000
65,000
65,000
9
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2021
2020
£
£
66,000
78,000
10
Coronavirus Pandemic
T
he consequences of the Co
ronavirus
outbreak have materially and adversely affected businesses worldwide. On 23 March 2020, the UK Government announced a nationwide lockdown which was gradually lifted in June 2020 only to be followed by a second and third lockdown on 5 November 2020 and 5 January 2021, respectively. Whilst this
had
an impact on the results for the year to 30 April 2021, it is anticipated that in the long term, the company's business will revert to pre- pandemic levels.
11
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Interest receivable
Net management charges receivable
2021
2020
2021
2020
£
£
£
£
Entities over which the entity has control, joint control or significant influence
177,859
198,508
7,946
13,208
The following amounts were outstanding at the reporting end date:
2021
2020
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
3,195,805
3,377,943