The Martlet Group Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 03004608 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 29 MAY 2020

FOR

THE MARTLET GROUP LTD

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

14

DIRECTORS:

P J Butler

I G F Wilson

SECRETARY:

Ion Management Limited

REGISTERED OFFICE:

Units 7-8B Mid Sussex Business Park

Folders Lane East

Ditchling

Hassocks

West Sussex

BN6 8SE

REGISTERED NUMBER:

03004608 (England and Wales)

AUDITORS:

Watson Associates (Audit Services) Ltd

Statutory Auditor

30 - 34 North Street

Hailsham

East Sussex

BN27 1DW

The directors present their strategic report for the year ended 29 May 2020.

REVIEW OF BUSINESS

It has been a challenging year in the market, which has seen a drop in the gross profit % on the previous year, as well as a drop in revenue and a net loss.

The directors are confident for the future and feel that the company will see an increase in its revenue and profits.

In March 2020 its operations in the UK were reduced due to the imposed lockdown as a result of the

COVID-19 pandemic.

This continues to be an unprecedented situation that has caused a significant amount of uncertainty for the

company and the wider economy. The principle risks and uncertainties the company continues to have as a

result of COVID-19 are liquidity risk, credit risk and strategic risk.

The directors have considered the potential implications of COVID-19 and have taken the following actions to

mitigate the principle risks and uncertainties. All measures taken by the company have taken into account the

effect of the extent and duration of social distancing measures announced by the government in March 2020,

as well as the impact on the economy and asset prices generally:

-Utilised the government's job retention scheme

-Deferral of PAYE payments in accordance with government guidelines

-Deferral of VAT payments in accordance with government guidelines

-Utilised the CBILS loan facility

Further measures are reviewed on an ongoing basis.

PRINCIPAL RISKS AND UNCERTAINTIES

This period experienced a great deal of uncertainty in both the political situation in the UK over Brexit with the delays and impasse during 2019 leading up to the General Election at the end of that year; plus the uncertainty in the early Spring of 2020 as the Coronavirus global pandemic started to take hold and lockdowns not only in the company's sales market of the UK; but also in the territories of its main suppliers in Europe; the USA; and the FarEast seeing short term factory closures leading to delays in supply chains.

During this period, management took strategic steps to greatly modernise the business for the future. These steps included streamlining the portfolio to concentrate with greater emphasis on the core product range, which inevitably gave rise to a reduction in sales in the short term. At the same time, the business took the opportunity to clear out and make adjustments for slow moving and obsolete stock of the products which the company would no longer be representing.

At the same time, the business invested heavily in technology and also product development of its own brand of bicycles. As such, management is of the view that the business was well placed at the end of this accounting period for the future and indeed, is now experiencing the benefits of that investment and growth in sales.

ON BEHALF OF THE BOARD:

I G F Wilson - Director

1 April 2021

The directors present their report with the financial statements of the company for the year ended 29 May 2020.

DIVIDENDS

Interim dividends were paid during the period of £nil

The directors recommend that no final dividend be paid.

The total distribution of dividends for the period ended 29 May 2020 was £nil.

DIRECTORS

The directors shown below have held office during the whole of the period from 30 May 2019 to the date of this report.

P J Butler

I G F Wilson

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 and then apply them consistently;

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

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

The 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 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Watson Associates (Audit Services) Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

I G F Wilson - Director

1 April 2021

Opinion

We have audited the financial statements of The Martlet Group Ltd (the 'company') for the year ended 29 May 2020 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 29 May 2020 and of its loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Stephen James Moore (Senior Statutory Auditor)

for and on behalf of Watson Associates (Audit Services) Ltd

Statutory Auditor

30 - 34 North Street

Hailsham

East Sussex

BN27 1DW

1 April 2021

TURNOVER

10,693,368

12,323,506

Cost of sales

(8,715,208

)

(9,376,905

)

GROSS PROFIT

1,978,160

2,946,601

Distribution costs

(1,087,531

)

(1,679,707

)

Administrative expenses

(1,480,117

)

(1,245,767

)

(589,488

)

21,127

Other operating income

13,214

-

OPERATING (LOSS)/PROFIT

4

(576,274

)

21,127

Provision for amounts recovera

ble

5

-

(30,000

)

(576,274

)

(8,873

)

Interest payable and similar expenses

6

(151,517

)

(112,120

)

LOSS BEFORE TAXATION

(727,791

)

(120,993

)

Tax on loss

7

20,000

7,007

LOSS FOR THE FINANCIAL YEAR

(707,791

)

(113,986

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(707,791

)

(113,986

)

FIXED ASSETS

Intangible assets

8

544,084

580,957

Tangible assets

9

214,639

307,906

758,723

888,863

CURRENT ASSETS

Stocks

10

1,530,867

1,973,749

Debtors

11

6,410,268

5,770,672

Cash at bank and in hand

(2,501

)

34,704

7,938,634

7,779,125

CREDITORS

Amounts falling due within one year

12

(5,105,948

)

(5,572,493

)

NET CURRENT ASSETS

2,832,686

2,206,632

TOTAL ASSETS LESS CURRENT LIABILITIES

3,591,409

3,095,495

CREDITORS

Amounts falling due after more than one year

13

(1,363,916

)

(160,211

)

PROVISIONS FOR LIABILITIES

16

(27,980

)

(27,980

)

NET ASSETS

2,199,513

2,907,304

CAPITAL AND RESERVES

Called up share capital

17

5,271

5,271

Share premium

18

247,588

247,588

Retained earnings

18

1,946,654

2,654,445

SHAREHOLDERS' FUNDS

2,199,513

2,907,304

The financial statements were approved by the Board of Directors and authorised for issue on 1 April 2021 and were signed on its behalf by:

I G F Wilson - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 31 May 2018

5,271

2,768,431

247,588

3,021,290

Changes in equity

Total comprehensive loss

-

(113,986

)

-

(113,986

)

Balance at 29 May 2019

5,271

2,654,445

247,588

2,907,304

Changes in equity

Total comprehensive loss

-

(707,791

)

-

(707,791

)

Balance at 29 May 2020

5,271

1,946,654

247,588

2,199,513

Cash flows from operating activities

Cash generated from operations

1

241,510

1,389,172

Interest paid

(61,273

)

(102,488

)

Interest element of hire purchase payments paid

(8,756

)

(9,632

)

Tax paid

272,787

42,458

Net cash from operating activities

444,268

1,319,510

Cash flows from investing activities

Purchase of intangible fixed assets

(25,430

)

(110,889

)

Purchase of tangible fixed assets

(28,227

)

(50,043

)

Sale of tangible fixed assets

46,125

25,600

Net cash from investing activities

(7,532

)

(135,332

)

Cash flows from financing activities

New loans in year

2,020,504

500,000

Loan repayments in year

(624,075

)

(123,921

)

Movement in intercompany balances

(613,894

)

(781,370

)

Capital repayments in year

(71,944

)

(46,764

)

Net cash from financing activities

710,591

(452,055

)

Increase in cash and cash equivalents

1,147,327

732,123

Cash and cash equivalents at beginning of year

2

(3,197,856

)

(3,929,979

)

Cash and cash equivalents at end of year

2

(2,050,529

)

(3,197,856

)

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

31.5.18

Year Ended

to

29.5.20

29.5.19

£

£

Loss before taxation

(727,791

)

(120,993

)

Depreciation charges

144,436

160,218

(Profit)/loss on disposal of fixed assets

(6,764

)

9,431

Government grants

(13,214

)

-

Finance costs

151,517

112,120

(451,816

)

160,776

Decrease in stocks

442,882

800,694

(Increase)/decrease in trade and other debtors

(35,338

)

538,577

Increase/(decrease) in trade and other creditors

285,782

(110,875

)

Cash generated from operations

241,510

1,389,172

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 29 May 2020

29.5.20

30.5.19

£

£

Cash and cash equivalents

(2,501

)

34,704

Bank overdrafts

(2,048,028

)

(3,232,560

)

(2,050,529

)

(3,197,856

)

Period ended 29 May 2019

29.5.19

31.5.18

£

£

Cash and cash equivalents

34,704

17,755

Bank overdrafts

(3,232,560

)

(3,947,734

)

(3,197,856

)

(3,929,979

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 30.5.19

Cash flow

At 29.5.20

£

£

£

Net cash

Cash at bank and in hand

34,704

(37,205

)

(2,501

)

Bank overdrafts

(3,232,560

)

1,184,532

(2,048,028

)

(3,197,856

)

1,147,327

(2,050,529

)

Debt

Finance leases

(221,678

)

124,123

(97,555

)

Debts falling due within 1 year

(585,449

)

(170,168

)

(755,617

)

Debts falling due after 1 year

-

(1,346,714

)

(1,346,714

)

(807,127

)

(1,392,759

)

(2,199,886

)

Total

(4,004,983

)

(245,432

)

(4,250,415

)

1.	STATUTORY INFORMATION

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

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

Critical accounting judgements and key sources of estimation uncertainty

No significant judgements have had to be made by management in preparing these financial statements.

There were no key assumptions made concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are being amortised evenly over their estimated useful life of ten years.

Website development is being amortised evenly over its estimated useful life of ten years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

-

25% on reducing balance

Fixtures and fittings

-

33% on cost and 25% on reducing balance

Motor vehicles

-

25% on reducing balance

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure

on tangible fixed assets are credited to the profit and loss account at the same rate as the depreciation on

the assets to which the grant relates. The deferred element of grants is included in creditors as deferred

income.

Grants of a revenue nature are recognised in "other income" within profit or loss in the same period as the

related expenditure. The group has not directly benefited from any other forms of government assistance.

Stocks

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

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

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 accounts receivable and payable, loans from banks and other third parties, and loans to related parties.

Debt instruments that are payable or receivable within one year, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received; other debt instruments are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method.

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 profit or loss.

Financial assets and liabilities are offset and the net amount reported in the balance sheet only 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 year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, 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 year 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.

Foreign currencies

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

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

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.

3.	EMPLOYEES AND DIRECTORS

Period

31.5.18

Year Ended

to

29.5.20

29.5.19

£

£

Wages and salaries

802,890

1,289,645

Social security costs

82,924

141,606

Other pension costs

16,225

22,477

902,039

1,453,728

The average number of employees during the year was as follows:

Period

31.5.18

Year Ended

to

29.5.20

29.5.19

Sales

6

6

Warehouse and distribution

9

12

Office and management

12

20

27

38

Period

31.5.18

Year Ended

to

29.5.20

29.5.19

£

£

Directors' remuneration

247,295

457,393

Information regarding the highest paid director is as follows:

Period

31.5.18

Year Ended

to

29.5.20

29.5.19

£

£

Emoluments etc

156,295

299,000

4.	OPERATING (LOSS)/PROFIT

The operating loss (2019 - operating profit) is stated after charging/(crediting):

Period

31.5.18

Year Ended

to

29.5.20

29.5.19

£

£

Other operating leases

184,730

201,644

Depreciation - owned assets

41,718

80,792

Depreciation - assets on hire purchase contracts

40,415

37,360

(Profit)/loss on disposal of fixed assets

(6,764

)

9,431

Development costs amortisation

30,983

30,983

Website development amortisation

31,320

11,082

Auditors' remuneration

25,920

35,000

Foreign exchange differences

(86,065

)

(109,375

)

5.	EXCEPTIONAL ITEMS

Period

31.5.18

Year Ended

to

29.5.20

29.5.19

£

£

Exceptional items

(14,123

)

-

Provision for amounts recovera

ble

-

(30,000

)

(14,123

)

(30,000

)

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

31.5.18

Year Ended

to

29.5.20

29.5.19

£

£

Bank interest

81,488

91,907

Bank loan interest

54,201

10,581

Other finance charges

7,072

-

Hire purchase

8,756

9,632

151,517

112,120