Registration number:
M P J Enterprises Ltd
for the Year Ended 31 December 2016
Manex Accountants Ltd
Chartered Accountants and Statutory Auditors
9 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RD
M P J Enterprises Ltd
Contents
Company Information |
|
Strategic Report |
|
Director's Report |
|
Statement of Director's Responsibilities |
|
Independent Auditor's Report |
|
Income Statement |
|
Statement of Changes in Equity |
|
Statement of Financial Position |
|
Statement of Cash Flows |
|
Notes to the Financial Statements |
M P J Enterprises Ltd
Company Information
Director |
M P Jarrett |
Company secretary |
B J Jarrett |
Registered office |
|
Auditors |
|
Page 1 |
M P J Enterprises Ltd
Strategic Report for the Year Ended 31 December 2016
The director presents his strategic report for the year ended 31 December 2016.
Principal activity
The principal activity of the company is the operation of a chain of limited menu quick service restaurants.
Fair review of the business
The results for the year end and financial position are shown in the annexed financial statements. As operators of a chain of six McDonald's restaurants we consider our key performance indicators are turnover and gross profit. The period ended 31 December 2016 has returned satisfactory results with turnover increasing by 21.36% and gross profit remaining consistent with the previous year. As for many businesses we believe the trading environment in which we operate to be challenging. However the company remains optimistic and has continued it's reinvestment with an additional store purchase and a major refurbishment at one of our restaurants during the year.
Principal risks and uncertainties
The management of the business and the nature of the company's strategy are subject to a number of risks. The director is of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks identified. Where possible, processes are in place to monitor and mitigate such risks.
As an operator of a McDonald's restaurant franchise a lot of the main risks (food cost inflation, utility prices, wage cost inflation and competition) are managed by our franchisor.
Approved by the Board on
.........................................
M P Jarrett
Director
Page 2 |
M P J Enterprises Ltd
Director's Report for the Year Ended 31 December 2016
The director presents his report and the financial statements for the year ended 31 December 2016.
Director of the company
The director who held office during the year was as follows:
Financial instruments
Objectives and policies
The company's principal financial instruments comprise cash and bank loans. The main purpose of these financial instruments is to raise finance for the company's operations. The company does not enter into derivative transactions. It is, and has been throughout the period under review, the company's policy that no trading in financial instruments shall be undertaken.
Price risk, credit risk, liquidity risk and cash flow risk
The main risks arising from the company's financial instruments are interest risk and liquidity risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.
Interest rate risk
The company's exposure to market risk for changes in interest rates is limited to bank loans. The additional requirement for medium to long term debt will be reviewed by the directors based on the company's forecast requirements.
Liquidity risk
The company's objective is to maintain a balance between continuity of funding and flexibility through the use of cash and bank loans.
Employment of disabled persons
It is the policy of the company to give full and fair consideration to applications for employment made by disabled persons, to continue where possible the employment of those who become disabled and to provide equal opportunities for the training and career development of disabled employees.
Employee involvement
The company communicates regularly with all employees on matters relating to its performance. Employees are encouraged to contribute to the decision making process through regular staff meetings. In addition there is a bulletin board in each restaurant where memoranda relating to company policy are displayed. There is also an online portal known as Our Lounge, which contains news and information for McDonald's people.
Disclosure of information to the auditors
The director has taken 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. The director confirms that there is no relevant information that he knows of and of which he knows the auditors are unaware.
Reappointment of auditors
The auditors Manex Accountants Ltd are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Page 3 |
M P J Enterprises Ltd
Director's Report for the Year Ended 31 December 2016
Approved by the Board on
.........................................
M P Jarrett
Director
Page 4 |
M P J Enterprises Ltd
Statement of Director's Responsibilities
The director acknowledges his responsibilities for preparing the Annual Report 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 apply them consistently; |
• |
make judgements 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; and |
• |
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 and in accordance with FRS 102. 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.
Page 5 |
M P J Enterprises Ltd
Independent Auditor's Report to the Members of M P J Enterprises Ltd
We have audited the financial statements of M P J Enterprises Ltd for the year ended 31 December 2016, set out on pages 8 to 21. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
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 auditor’s 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.
Respective responsibilities of the director and auditor
As explained more fully in the Statement of Director's Responsibilities (set out on page 5), the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors to the financial statements.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on the financial statements
In our opinion the financial statements:
• |
give a true and fair view of the state of the company's affairs as at 31 December 2016 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. |
Page 6 |
M P J Enterprises Ltd
Independent Auditor's Report to the Members of M P J Enterprises Ltd
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Director's Report have been prepared in accordance with applicable legal requirements. |
In the light of our 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 and the Director's Report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• |
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
• |
the financial statements are not in agreement with the accounting records and returns; or |
• |
certain disclosures of directors’ remuneration specified by law are not made; or |
• |
we have not received all the information and explanations we require for our audit. |
......................................
For and on behalf of
9 Castle Court 2
Castlegate Way
West Midlands
DY1 4RD
Page 7 |
M P J Enterprises Ltd
Income Statement for the Year Ended 31 December 2016
Note |
Total |
Total |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Operating profit |
|
|
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
(41,367) |
(29,118) |
||
Profit before tax |
|
|
|
Taxation |
( |
( |
|
Profit for the financial year |
|
|
The above results were derived from continuing operations.
The company has no recognised gains or losses for the year other than the results above.
Page 8 |
M P J Enterprises Ltd
Statement of Changes in Equity for the Year Ended 31 December 2016
Share capital |
Profit and loss account |
Total |
|
At 1 January 2016 |
|
|
|
Profit for the year |
- |
|
|
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2016 |
|
|
|
Share capital |
Profit and loss account |
Total |
|
At 1 January 2015 |
|
|
|
Profit for the year |
- |
|
|
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2015 |
|
|
|
Page 9 |
M P J Enterprises Ltd
(Registration number: 04026818)
Statement of Financial Position as at 31 December 2016
Note |
2016 |
2015 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
Other financial assets |
7,500 |
6,250 |
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current liabilities |
( |
( |
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Profit and loss account |
|
|
|
Total equity |
|
|
Approved and authorised by the
.........................................
M P Jarrett
Director
Page 10 |
M P J Enterprises Ltd
Statement of Cash Flows for the Year Ended 31 December 2016
Note |
2016 |
2015 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Loss on disposal of tangible assets |
|
- |
|
Finance income |
( |
( |
|
Finance costs |
|
|
|
Income tax expense |
|
|
|
FA investment - unlisted other shares additions |
(1,250) |
- |
|
|
|
||
Working capital adjustments |
|||
Increase in stocks |
( |
( |
|
Decrease/(increase) in trade debtors |
|
( |
|
(Decrease)/increase in trade creditors |
( |
|
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Acquisition of intangible assets |
( |
- |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Proceeds from bank borrowing draw downs |
2,966,000 |
- |
|
Repayment of bank borrowing |
(1,566,932) |
(333,355) |
|
Dividends paid |
( |
( |
|
Net cash flows from financing activities |
|
( |
|
Net increase in cash and cash equivalents |
|
|
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
1,367,857 |
746,955 |
Page 11 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
General information |
The company is a private company limited by share capital incorporated in England.
The address of its registered office is:
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
Going concern
The financial statements have been prepared on a going concern basis.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.
The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
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 taxable income.
Page 12 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Plant and equipment |
between 5 and 12 years straight line |
Office equipment |
3 years straight line |
Motor vehicles |
5 years straight line |
Goodwill
Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Intangible assets
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.
Licences have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Licence fees |
straight line over the remaining life of the licence |
Stamp duty |
straight line over the shorter of the remaining life of the lease or 20 years |
Goodwill |
straight line over the remaining life of the lease |
Page 13 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Stocks
Stocks are stated at the lower of average cost and net realisable value. Net realisable value is based on estimated selling price less further costs expected to be incurred prior to completion and disposal.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Income Statement over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Page 14 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
Revenue |
The analysis of the company's revenue for the year from continuing operations is as follows:
2016 |
2015 |
|
Sale of goods |
|
|
Rendering of services |
|
|
|
|
Other gains and losses |
The analysis of the company's other gains and losses for the year is as follows:
2016 |
2015 |
|
Gain (loss) on disposal of property, plant and equipment |
( |
- |
Operating profit |
Arrived at after charging/(crediting)
2016 |
2015 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Operating lease expense - property |
|
|
Loss on disposal of property, plant and equipment |
|
- |
Auditor's remuneration - The audit of the company's annual accounts |
1,925 |
1,755 |
Other interest receivable and similar income |
2016 |
2015 |
|
Interest income on bank deposits |
|
|
Interest payable and similar expenses |
2016 |
2015 |
|
Interest on bank overdrafts and borrowings |
|
|
Page 15 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
Staff costs |
The aggregate payroll costs (including director's remuneration) were as follows:
2016 |
2015 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Other short-term employee benefits |
|
|
Pension costs, defined contribution scheme |
|
|
Other employee expense |
|
|
|
|
The average number of persons employed by the company (including the director) during the year, analysed by category was as follows:
2016 |
2015 |
|
Production |
|
|
Administration and support |
|
|
|
|
Director's remuneration |
The director's remuneration for the year was as follows:
2016 |
2015 |
|
Remuneration |
|
|
Auditors' remuneration |
2016 |
2015 |
|
Audit of the financial statements |
|
|
Page 16 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
Taxation |
Tax charged/(credited) in the income statement
2016 |
2015 |
|
Current taxation |
||
UK corporation tax |
|
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
|
|
Tax expense in the income statement |
|
|
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2015 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2016 |
2015 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Tax increase from effect of capital allowances and depreciation |
|
|
Total tax charge |
|
|
Deferred tax
Deferred tax assets and liabilities
2016 |
Liability |
Accelerated capital allowances |
|
2015 |
Liability |
Accelerated capital allowances |
|
Page 17 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
Intangible assets |
Goodwill |
Licence fees |
Stamp duty |
Total |
|
Cost or valuation |
||||
At 1 January 2016 |
|
|
|
|
Additions acquired separately |
- |
|
|
|
At 31 December 2016 |
|
|
|
|
Amortisation |
||||
At 1 January 2016 |
|
|
|
|
Amortisation charge |
|
|
|
|
At 31 December 2016 |
|
|
|
|
Carrying amount |
||||
At 31 December 2016 |
|
|
|
|
At 31 December 2015 |
|
|
|
|
Tangible assets |
Office equipment |
Motor vehicles |
Plant and equipment |
Total |
|
Cost or valuation |
||||
At 1 January 2016 |
|
|
|
|
Additions |
|
|
|
|
Disposals |
- |
( |
- |
( |
At 31 December 2016 |
|
|
|
|
Depreciation |
||||
At 1 January 2016 |
|
|
|
|
Charge for the year |
|
|
|
|
Eliminated on disposal |
- |
( |
- |
( |
At 31 December 2016 |
|
|
|
|
Carrying amount |
||||
At 31 December 2016 |
|
|
|
|
At 31 December 2015 |
|
|
|
|
Page 18 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
Other financial assets (current and non-current) |
2016 |
2015 |
|
Non-current financial assets |
||
Financial assets at cost less impairment |
|
|
Stocks |
2016 |
2015 |
|
Other inventories |
|
|
Debtors |
2016 |
2015 |
|
Other debtors |
|
|
Prepayments |
|
|
Total current trade and other debtors |
|
|
Cash and cash equivalents |
2016 |
2015 |
|
Cash on hand |
|
|
Cash at bank |
|
|
Short-term deposits |
|
|
|
|
Creditors |
Note |
2016 |
2015 |
|
Due within one year |
|||
Loans and borrowings |
|
|
|
Trade creditors |
|
|
|
Amounts due to related parties |
|
- |
|
Social security and other taxes |
|
|
|
Other payables |
|
|
|
Accrued expenses |
|
|
|
Income tax liability |
122,429 |
7,527 |
|
|
|
Page 19 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
Note |
2016 |
2015 |
|
Due after one year |
|||
Loans and borrowings |
|
|
Deferred tax and other provisions |
Deferred tax |
Total |
|
At 1 January 2016 |
|
|
Increase (decrease) in existing provisions |
|
|
At 31 December 2016 |
|
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
Share capital |
Allotted, called up and fully paid shares
2016 |
2015 |
|||
No. |
£ |
No. |
£ |
|
|
|
100 |
|
100 |
Page 20 |
M P J Enterprises Ltd
Notes to the Financial Statements for the Year Ended 31 December 2016
Loans and borrowings |
2016 |
2015 |
|
Non-current loans and borrowings |
||
Bank borrowings |
|
|
2016 |
2015 |
|
Current loans and borrowings |
||
Bank borrowings |
|
|
Dividends |
2016 |
2015 |
|
£ |
£ |
|
Interim dividend of £
|
290,000 |
250,000 |
Related party transactions |
Transactions with directors |
2016 |
At 1 January 2016 |
Repayments by director |
At 31 December 2016 |
M P Jarrett |
|||
Interest free loans |
128,787 |
( |
- |
2015 |
At 1 January 2015 |
Advances to directors |
At 31 December 2015 |
M P Jarrett |
|||
Interest free loans |
11,952 |
|
|
Page 21 |