Ardula Limited - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 02845374 (England and Wales)

Financial Statements

for the Period 29 September 2018 to 27 September 2019

for

Ardula Limited

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTORS:

R K Hemmings

P Brasier

REGISTERED OFFICE:

Barn Oast, Woodfalls

Gravelly Ways

Laddingford

Maidstone

Kent

ME18 6DA

REGISTERED NUMBER:

02845374 (England and Wales)

AUDITORS:

McCabe Ford Williams

Statutory Auditors &

Chartered Accountants

Invicta Business Centre

Monument Way

Orbital Park

Ashford

Kent

TN24 0HB

FIXED ASSETS

Tangible assets

4

1,105,921

1,095,561

Investments

5

907

21,538

1,106,828

1,117,099

CURRENT ASSETS

Stocks

-

3,750

Debtors

6

3,804,601

3,431,420

Cash at bank and in hand

5

4,638

3,804,606

3,439,808

CREDITORS

Amounts falling due within one year

7

2,596,498

2,233,410

NET CURRENT ASSETS

1,208,108

1,206,398

TOTAL ASSETS LESS CURRENT LIABILITIES

2,314,936

2,323,497

CREDITORS

Amounts falling due after more than one year

8

(275,225

)

-

PROVISIONS FOR LIABILITIES

11

-

(105,324

)

NET ASSETS

2,039,711

2,218,173

CAPITAL AND RESERVES

Called up share capital

10,004

10,004

Share premium

6,597

6,597

Capital redemption reserve

2

2

Retained earnings

2,023,108

2,201,570

2,039,711

2,218,173

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

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 12 March 2021 and were signed on its behalf by:

R K Hemmings - Director

P Brasier - Director

1.	STATUTORY INFORMATION

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

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

Going Concern

The company is a wholly owned subsidiary of the Ardula Group Ltd.

On 28 February 2021, the bank confirmed their agreement to continue to offer an invoice finance facility to the group, subject to some changes. These changes include a planned reduction in the prepayment percentage from 90% down to 80% by 31 October 2021 and a personal guarantee given by both directors on a joint and several basis of £100,000.

As part of the agreement, the group it to provide the bank further financial information by 30 June 2021, in respect of the funding of debt owed to the previous owners of Ardula Ltd, with payments due to commence in March 2022 following the repayment of the Ardula Group Ltd bank loan. The bank has reserved the right to take appropriate action should this information not be provided or they see a decline in performance.

A recent review of the business has been carried out by the bank who are seeing the positive actions and improvements in trading being reflected in the financial performance to September 2020 and beyond.

In the 17 month period since this period end, the company has been profitable, despite Covid-19.

Management have prepared forecasts for the group which includes new sources of income secured from land remediation and soil stabilisation work, and have made provision for the payment of VAT and PAYE which had been deferred owing to the pandemic, together with the payment of the bounce back loans.

On the basis of these forecasts and reliance on the continued support of the bank, management consider that the group will be in a position to meet its financial obligations as they fall due. They plan to seek alternative funding to enable the debt to the former owners to be settled and will be having discussions with the former owners in this respect. Consequently management consider that it is appropriate to prepare the financial statements on a going concern basis.

.

Related party exemption

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

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

As detailed under the tangible fixed assets policy, the assets residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or there is an indication of a significant change since the last reporting date.

Bad debts are provided for on the basis of specific amounts that in the opinion of the directors will not be recovered. Certain balances are covered under the invoice finance arrangement with the company's exposure limited to an excess of £500.

Turnover

Turnover is recognised to the extent that it is probable that the economic benefit will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, VAT and other sales taxes.

Turnover for haulage and tipping services is recongised on acceptance of the load from the counterparty.

Accrual is made for turnover relating to customers on self-billing terms of settlement.

Tangible fixed assets

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

Plant and machinery

-

15% on a reducing balance basis

Motor vehicles

-

15% on a reducing balance basis

Computer equipment

-

25% on a reducing balance basis

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.

The asset 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 the statement of income and retained earnings.

Assets held under finance leases are capitalised in the balance sheet with the associated finance included under liabilities and an appropriate finance charge recognised in the statement of income and retained earnings. These assets are depreciated over the term of the finance lease.

Investments in subsidiaries

Investments in subsidiaries are measured at cost less accumulated impairment.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Financial instruments

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

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

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an assets carrying amount and the present value of estimated cash flows discounted at the assets original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an assets carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets held under hire purchase contracts are capitalised in the balance sheet and are depreciated over their useful lives. The interest element of these obligations are charged to the statement of income and retained earnings over the relevant period and represent a constant proportion of the capital payments outstanding.

Pension costs and other post-retirement benefits

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

The company pays fixed contributions to a separate entity. Once the contributions have been paid the company has no further obligations. The assets of the plan are held separately from the company in independently administered funds.

Debtors

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.

Creditors

Short term creditors are measured at 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.

Invoice financing

The company has an invoice financing arrangement. Finance is raised against certain sales invoices of the company for which charges are made. The amounts advanced are secured against the trade debtors until paid and the advance outstanding at the year end is included under creditors due within one year. The finance costs being charged to the statement of income and retained earnings as incurred.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the period was 31 (2018 - 28 ) .

4.	TANGIBLE FIXED ASSETS

Plant and

Motor

Computer

machinery

vehicles

equipment

Totals

£

£

£

£

COST

At 29 September 2018

20,680

2,091,450

102,595

2,214,725

Additions

3,150

231,825

2,209

237,184

Disposals

(3,623

)

(138,473

)

(2,992

)

(145,088

)

At 27 September 2019

20,207

2,184,802

101,812

2,306,821

DEPRECIATION

At 29 September 2018

10,463

1,024,553

84,148

1,119,164

Charge for period

2,007

170,207

4,994

177,208

Eliminated on disposal

(3,624

)

(89,568

)

(2,280

)

(95,472

)

At 27 September 2019

8,846

1,105,192

86,862

1,200,900

NET BOOK VALUE

At 27 September 2019

11,361

1,079,610

14,950

1,105,921

At 28 September 2018

10,217

1,066,897

18,447

1,095,561

5.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 29 September 2018

21,538

Impairments

(20,631

)

At 27 September 2019

907

NET BOOK VALUE

At 27 September 2019

907

At 28 September 2018

21,538

The following are wholly owned subsidiary undertakings::

PTC (South East) Limited and Mantransco Limited. Both of these companies are incorporated in the UK and are involved in the bulk tipper haulage of aggregates and haulage of building materials respectively.

Mantransco Limited ceased trading on 31 December 2018 . In the previous period the directors carried out an impairment review and wrote off £886,000 of the investment in those financial statements.

The balance of the investment of £20,451 being written off in these financial statements.

The aggregate of capital and reserves at 27 September 2019 being as follows:

PTC (South East) Limited - £(127,379), loss £212,396.

Mantransco Limited - £(82,116), loss £153,434.

.

6.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Trade debtors

1,169,281

1,091,164

Amounts owed by group undertakings

2,575,997

2,270,275

Other debtors

59,323

69,981

3,804,601

3,431,420

7.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Bank loans and overdrafts

39,270

94,260

Hire purchase contracts and finance leases

93,425

121,533

Trade creditors

1,225,680

961,893

Amounts owed to group undertakings

137,279

45,074

Taxation and social security

54,829

110,803

Other creditors

1,046,015

899,847

2,596,498

2,233,410

8.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2019

2018

£

£

Hire purchase contracts and finance leases

275,225

-

9.	SECURED DEBTS

The following secured debts are included within creditors:

2019

2018

£

£

Hire purchase contracts and finance leases

368,650

121,533

Invoice finance

1,009,054

850,834

1,377,704

972,367

The invoice finance arrangement is secured by a fixed and floating charge created on 20 February 2017.

The company is part of a multilateral guarantee dated 11 April 2017 given by Ardula Group Ltd, PTC (South East) Ltd and Mantransco Ltd, being all the companies within the group, to secure all liabilities of each other.

A contract monies charge was registered on 8 September 2017.

Assets held under hire purchase contracts and finance leases are secured against the particular assets concerned.

There are cross guarantees for hire purchase by the group.

10.	FINANCIAL INSTRUMENTS

Financial assets measured at fair value through profit or loss comprise of cash and bank balances of

£5. (2018 £4,638).

Financial assets that are debt instruments measured at amortised cost comprise trade debtors and other debtors of £3,804,601. (2018 £3,431,420).

Financial liabilities measured at amortised cost are trade creditors and other creditors of £2,463,803 (2018 £2,017,616).

.

11.	PROVISIONS FOR LIABILITIES

2019

2018

£

£

Deferred tax

-

105,324

Deferred

tax

£

Balance at 29 September 2018

105,324

Losses for tax purposes

(105,324

)

Balance at 27 September 2019

-

12.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

We draw attention to note 2 in the financial statements regarding going concern. On 28 February 2021 the bank confirmed their agreement to continue to offer an invoice finance facility to members of the Ardula Group Ltd which includes Ardula Ltd, subject to some changes. These changes include a planned reduction in the prepayment percentage from 90% down to 80% and a personal guarantee given by both directors on a joint and several basis of £100,000.

In addition, the directors have to provide the bank with further financial information by 30 June 2021 in respect of the funding of debt owed to the previous owners of Ardula Ltd, with payments due to commence in March 2022, following the repayment of the bank loan to Ardula Group Ltd. The bank has reserved the right to take appropriate action should this information not be provided or they see a decline in performance. A recent review of the business has been carried out by the bank who are seeing the positive actions and improvements in trading being reflected in the financial performance to September 2020 and beyond.

In the 17 month period since this period end the company has been profitable despite Covid-19.

Management have prepared forecasts which include the new sources of income secured (see note 15) and on the basis of these forecasts, which rely on the continued support of the bank, consider that the company will be in a position to meet its financial obligations as they fall due.

These matters along with the other factors set out in note 2, indicate that a material uncertainty exists and this may cast doubt on the company's ability to continue as a going concern.

B W Wright FCA (Senior Statutory Auditor)

for and on behalf of McCabe Ford Williams

13.	OTHER FINANCIAL COMMITMENTS

The company operates a defined contribution pension scheme for the benefit of the employees. 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 £25,776 (2018 £30,350). The contributions outstanding at the balance sheet date were £2,005.(2018 £2,012).

The pension scheme also includes employees from the two subsidiary companies, PTC (South East) Ltd and Mantransco Ltd. The contributions relating to those companies being included in their financial statements.

14.	POST BALANCE SHEET EVENTS

Since the period end, the directors have had to address the impact of the global pandemic, COVID-19 , on the company. The initial lockdown period resulted in some employees being furloughed, and claims were made in respect of the coronavirus job retention scheme. Drivers were furloughed as customer sites were closed because of the pandemic However since the initial lockdown and the announcement of building and construction sites being allowed to open, the number of staff on furlough reduced with drivers being rotated working two out of four weeks.All staff are now back working full time, although the increased testing performed, lead to an increase in track and trace alerts and a reduction in the utilization rates of the company's drivers for a period.

The directors have taken advantage of the time to pay arrangement announced by the government in respect of its VAT liability at 31 March 2020. This liability is £58,937, and the directors will apply to repay the amount over 12 months, commencing 1 April 2021.

Formal agreement has been reached with HMRC in December 2020 regarding the payment of PAYE arrears of £197,403. Payment is being made by monthly instalments and is due to be settled by 31 August 2021.

A bounce back loan was taken out of £50,000 in May 2020. Repayments will commence in June 2021 with the loan being repayable over 5 years.

The directors are continually reviewing the impact of the pandemic on the business. However the growth in the amount of construction work in Kent, together with additional work secured in respect of land remediation and soil stabilisation processes has resulted in increased work for the Ardula Group, which includes Ardula Ltd, since the latter part of 2020 and is expected to continue during 2021.

15.	ULTIMATE CONTROLLING PARTY

The ultimate controlling party is R K Hemmings.