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 PERIOD 30 MAY 2020 TO 31 DECEMBER 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

9

Balance Sheet

10

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

16

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 period 30 May 2020 to 31 December 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

During this period, Management was pleased to see the benefits of its modernisation and investment coming to fruition with strong sales growth and return to profit. The business had made much investment in technology and product development; as well as having taken the strategic decision to streamline the product portfolio in order to focus on its core brands. These strategies are being seen to work well and Management sees that the business is now well established for the modern future and Management is of the view that the recent sales growth will be sustained for the future with stronger growth to come over the coming years.

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 period 30 May 2020 to 31 December 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 31 December 2020 was £nil.

DIRECTORS

The directors shown below have held office during the whole of the period from 30 May 2020 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 period ended 31 December 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 31 December 2020 and of its profit for the period 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

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Prior to engagement the following audit procedures are considered:

- Identification of laws and regulations being significant in the context of the entity;

- Understanding the entity's current activities, the scope of its authorisation and the effectiveness of its control environment where the entity is a regulated entity;

- Determining any key audit matters that require further explanation;

- In the case of a group, how the auditor addressed these matters at both at the group and component levels;

- communications with the engagement team and, where relevant, component auditors regarding non-compliance with laws and regulations and fraud.

Audit procedures performed by the engagement team to detect irregularities, including fraud from instances of non-compliance with laws and regulations included:

- Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;

- Reading key correspondence from regulatory bodies;

- Challenging assumptions and judgements made by management in it's significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. We focused on the valuation of provisions against stock and debtors, and the assessment of impairment of intangible and tangible assets;

- Consideration of recent correspondence with the companies legal advisors to ensure that it aligned with the conclusions drawn on obligations recognised in respect of uncertain legal matters;

- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or those posted by unexpected users; and

- Testing all material consolidation adjustments to ensure these were appropriate in nature and magnitude;

- Communicating with component auditors any matters which arise, and disclosing any instances of non-compliance or fraud, in addition to testing inter-group transactions and amounts owed by/(to) any group companies;

- Reviewing relevant meeting minutes including those of the board of directors

- Testing transactions entered into that are outside of the normal course of the Company's business

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors and other management (as required by auditing standards), and from inspection of the group's regulatory and legal correspondence and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit.

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

8,610,035

10,693,368

Cost of sales

(6,648,250

)

(8,715,208

)

GROSS PROFIT

1,961,785

1,978,160

Distribution costs

(735,268

)

(1,087,531

)

Administrative expenses

(906,398

)

(1,480,117

)

320,119

(589,488

)

Other operating income

-

13,214

OPERATING PROFIT/(LOSS)

4

320,119

(576,274

)

Interest payable and similar expenses

6

(83,458

)

(151,517

)

PROFIT/(LOSS) BEFORE TAXATION

236,661

(727,791

)

Tax on profit/(loss)

7

-

20,000

PROFIT/(LOSS) FOR THE FINANCIAL PERIOD

236,661

(707,791

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD

236,661

(707,791

)

FIXED ASSETS

Intangible assets

8

507,937

544,084

Tangible assets

9

263,258

214,639

771,195

758,723

CURRENT ASSETS

Stocks

10

1,498,246

1,530,867

Debtors

11

6,702,733

6,410,268

Cash at bank and in hand

70,451

(2,501

)

8,271,430

7,938,634

CREDITORS

Amounts falling due within one year

12

(5,175,281

)

(5,105,948

)

NET CURRENT ASSETS

3,096,149

2,832,686

TOTAL ASSETS LESS CURRENT LIABILITIES

3,867,344

3,591,409

CREDITORS

Amounts falling due after more than one year

13

(1,403,190

)

(1,363,916

)

PROVISIONS FOR LIABILITIES

16

(27,980

)

(27,980

)

NET ASSETS

2,436,174

2,199,513

CAPITAL AND RESERVES

Called up share capital

17

5,271

5,271

Share premium

18

247,588

247,588

Retained earnings

18

2,183,315

1,946,654

SHAREHOLDERS' FUNDS

2,436,174

2,199,513

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 30 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

Changes in equity

Total comprehensive income

-

236,661

-

236,661

Balance at 31 December 2020

5,271

2,183,315

247,588

2,436,174

Cash flows from operating activities

Cash generated from operations

1

(101,321

)

241,510

Interest paid

(47,788

)

(61,273

)

Interest element of hire purchase payments paid

(5,057

)

(8,756

)

Tax paid

262,842

272,787

Net cash from operating activities

108,676

444,268

Cash flows from investing activities

Purchase of intangible fixed assets

(1,680

)

(25,430

)

Purchase of tangible fixed assets

(94,378

)

(28,227

)

Sale of tangible fixed assets

-

46,125

Net cash from investing activities

(96,058

)

(7,532

)

Cash flows from financing activities

New loans in year

-

2,020,504

Loan repayments in year

(260,649

)

(624,075

)

Movement in intercompany balances

(213,330

)

(613,894

)

New hire purchase in the year

87,190

-

Capital repayments in year

(30,128

)

(71,944

)

Net cash from financing activities

(416,917

)

710,591

(Decrease)/increase in cash and cash equivalents

(404,299

)

1,147,327

Cash and cash equivalents at beginning of period

2

(2,050,529

)

(3,197,856

)

Cash and cash equivalents at end of period

2

(2,454,828

)

(2,050,529

)

1.	RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

30.5.20

to

Year Ended

31.12.20

29.5.20

£

£

Profit/(loss) before taxation

236,661

(727,791

)

Depreciation charges

83,586

144,436

Profit on disposal of fixed assets

-

(6,764

)

Government grants

-

(13,214

)

Finance costs

83,458

151,517

403,705

(451,816

)

Decrease in stocks

32,621

442,882

Increase in trade and other debtors

(79,135

)

(35,338

)

(Decrease)/increase in trade and other creditors

(458,512

)

285,782

Cash generated from operations

(101,321

)

241,510

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:

Period ended 31 December 2020

31.12.20

30.5.20

£

£

Cash and cash equivalents

70,451

(2,501

)

Bank overdrafts

(2,525,279

)

(2,048,028

)

(2,454,828

)

(2,050,529

)

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

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 30.5.20

Cash flow

At 31.12.20

£

£

£

Net cash

Cash at bank and in hand

(2,501

)

72,952

70,451

Bank overdrafts

(2,048,028

)

(477,251

)

(2,525,279

)

(2,050,529

)

(404,299

)

(2,454,828

)

Debt

Finance leases

(97,555

)

(62,128

)

(159,683

)

Debts falling due within 1 year

(755,617

)

195,279

(560,338

)

Debts falling due after 1 year

(1,346,714

)

19,537

(1,327,177

)

(2,199,886

)

152,688

(2,047,198

)

Total

(4,250,415

)

(251,611

)

(4,502,026

)

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

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 period 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 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.

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

30.5.20

to

Year Ended

31.12.20

29.5.20

£

£

Wages and salaries

529,244

802,890

Social security costs

66,229

82,924

Other pension costs

8,708

16,225

604,181

902,039

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

Period

30.5.20

to

Year Ended

31.12.20

29.5.20

Sales

4

6

Warehouse and distribution

9

9

Office and management

7

12

20

27

Period

30.5.20

to

Year Ended

31.12.20

29.5.20

£

£

Directors' remuneration

229,014

247,295

Information regarding the highest paid director is as follows:

Period

30.5.20

to

Year Ended

31.12.20

29.5.20

£

£

Emoluments etc

130,132

156,295

4.	OPERATING PROFIT/(LOSS)

The operating profit (2020 - operating loss) is stated after charging/(crediting):

Period

30.5.20

to

Year Ended

31.12.20

29.5.20

£

£

Other operating leases

101,410

184,730

Depreciation - owned assets

19,908

41,718

Depreciation - assets on hire purchase contracts

25,851

40,415

Profit on disposal of fixed assets

-

(6,764

)

Development costs amortisation

18,073

30,983

Website development amortisation

19,754

31,320

Auditors' remuneration

17,060

25,920

Foreign exchange differences

112,915

(86,065

)

5.	EXCEPTIONAL ITEMS

Period

30.5.20

to

Year Ended

31.12.20

29.5.20

£

£

Exceptional items

-

(14,123

)

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

30.5.20

to

Year Ended

31.12.20

29.5.20

£

£

Bank interest

30,613

81,488

Bank loan interest

43,895

54,201

Other finance charges

3,893

7,072

Hire purchase

5,057

8,756

83,458

151,517