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REGISTERED NUMBER: 07473429 (England and Wales)












Strategic Report, Report of the Directors and

Financial Statements

For The Year Ended 31st December 2022

for

ADS2 Limited

ADS2 Limited (Registered number: 07473429)






Contents of the Financial Statements
For The Year Ended 31st December 2022




Page

Company Information 1

Strategic Report 2

Report of the Directors 4

Statement of Directors' Responsibilities 5

Report of the Independent Auditors 6

Statement of Income and Retained Earnings 10

Balance Sheet 11

Notes to the Financial Statements 12


ADS2 Limited

Company Information
For The Year Ended 31st December 2022







DIRECTORS: M Boselli
C Colombi
U C Ferrario





REGISTERED OFFICE: Thirsk Industrial Park
York Road
Thirsk
North Yorkshire
YO7 3BX





REGISTERED NUMBER: 07473429 (England and Wales)





AUDITORS: Sargeant Partnership LLP
Chartered Accountants
and Statutory Auditors
5 White Oak Square, London Road
Swanley
Kent
BR8 7AG

ADS2 Limited (Registered number: 07473429)

Strategic Report
For The Year Ended 31st December 2022

The directors present their strategic report for the year ended 31st December 2022.

REVIEW OF BUSINESS
The company supplies tooling for plastic injection mouldings. The mouldings are subsequently produced and print is applied utilising our printing facility optimising its full capabilities.

PRINCIPAL RISKS AND UNCERTAINTIES
The policy of risk acceptance and risk management is addressed through an annual Board review process with approval and ongoing review. Compliance with regulation, legal and ethical standards is a high priority and the directors take an important oversight role in this regard.

The main risks to the business have been identified as a disproportionate reliance on sales volume from a few key customers and global competitors from low-cost environments. We continue to work on expanding our customer base, not only within the dispense industry but also with customers from different industries, we are continually looking at ways in which to vary our product range so we can engage customers from different industries. We have continued to invest in the business through IT and operating system and refining our quality control systems and processes as part of the process of managing these risks.

Currency fluctuations and changes in commodity prices are also risks that we continue to actively manage.

RESULTS AND PERFORMANCE
The results of the Company for the year show a loss on ordinary activities before tax of £0.04m (2021 loss - £0.14m). The shareholders' funds total £4.8m (2021 - £4.8m).

The underlying business performed in line with managements expectations based on the budget for the year.

BUSINESS ENVIRONMENT
Our industry remains highly competitive, with customers engaging in innovative practices and materials not only to improve efficiencies but also to become more environmentally friendly in their products. The increased utility and material prices have impacted all businesses, however manufacturing and hospitality businesses have been amongst those hardest hit, with ADS2 seeing a significant increase in its cost of goods, especially towards the end of the year. Demand for products has been strong throughout the year, however rising costs has had an impact on performance.

STRATEGY AND FUTURE DEVELOPMENTS
Growth remains the key objective for the business. We have a strategic plan to optimise the full facilities through offering a complete solution to our customers as a true design and manufacturer which has proved successful. Our strategy remains to continue to diversify into different industries by utilising our capabilities to develop new products for alternative industries.

As customers' needs and expectations change, we plan to align our strategies to be able to meet their changing needs. Customers are becoming more interested in sustainable methods and materials used in production. We continue to develop our strategy in developing products and parts from more sustainable materials, and we continue to invest time and resources in recyclable materials.

Since the result of the Brexit referendum in 2016 the overseas sales of the business have benefitted from the fall in the value of Sterling, but this has also impacted the cost of importing raw materials which the company continues to actively manage. We continue to assess the potential impact on both our business and on our customers as events move forward. We have managed the transition well and have aligned with all our key suppliers and customers so that no supply was disrupted and all the appropriate documentation was completed with the new guidelines after the UK's exit from the European Union.


ADS2 Limited (Registered number: 07473429)

Strategic Report
For The Year Ended 31st December 2022

KEY PERFORMANCE INDICATORS (KPI'S)
Year Year
Ended Ended
31.12.22 31.12.21

Sales growth/(decline) 6.7% 42.2%

Sales exported 5.68% 7.97%

Return on capital employed (0.80%) (2.83%)

Employee retention 55.0% 59.1%


The effect of the COVID-19 pandemic on the hospitality industry in 2020, and therefore the company's main customers, explains the sales growth in 2021, as activity returned to near normal levels.

ON BEHALF OF THE BOARD:





U C Ferrario - Director


19th October 2023

ADS2 Limited (Registered number: 07473429)

Report of the Directors
For The Year Ended 31st December 2022

The directors present their report with the financial statements of the company for the year ended 31st December 2022.

DIVIDENDS
No dividends will be distributed for the year ended 31st December 2022.

DIRECTORS
The directors who have held office during the period from 1st January 2022 to the date of this report are as follows:

A Fresolone - resigned 12th September 2022
M Boselli - appointed 12th September 2022

C Colombi and U C Ferrario were appointed as directors after 31st December 2022 but prior to the date of this report.

N Farrar , M Gallavotti and V Marchi ceased to be directors after 31st December 2022 but prior to the date of this report.

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, Sargeant Partnership LLP, were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

ON BEHALF OF THE BOARD:





U C Ferrario - Director


19th October 2023

ADS2 Limited (Registered number: 07473429)

Statement of Directors' Responsibilities
For The Year Ended 31st December 2022

The directors are responsible for preparing the Strategic Report, the Directors' Report 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 they have elected to prepare the financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 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 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;

- assess the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

- use the going concern basis of accounting unless they either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.

Report of the Independent Auditors to the Members of
ADS2 Limited

Opinion
We have audited the financial statements of ADS2 Limited (the 'company') for the year ended 31st December 2022 which comprise the Statement of Income and Retained Earnings, Balance Sheet and 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 31st December 2022 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
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, the Report of the Directors and the Statement of Directors' Responsibilities, 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.

Report of the Independent Auditors to the Members of
ADS2 Limited


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; or
- the directors were not entitled to prepare the financial statements in accordance with the small companies
regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in
preparing the Report of the Directors.

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

Report of the Independent Auditors to the Members of
ADS2 Limited


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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Explanation as to to what extent the audit was considered capable of detecting, irregularities, including fraud

The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISA's (UK).

In identifying and assessing risks of material misstatement in respect of irregularities including, fraud and non-compliance with laws and regulations, our procedures included the following:

- We obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in which they operate. We determined that the following laws and regulations were most significant: the Companies Act 2006, and UK corporate taxation laws.

-We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making inquiries to the management and directors. We corroborated our inquiries through our review of board minutes and papers provided to the audit engagement team.

-We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the audit engagement team included:

a) Identifying and assessing the design effectiveness of controls management has put in place to prevent and detect fraud;

b) Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;

c) Challenging assumptions and judgements made by management in its significant accounting estimates;

d) Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations: and

e) Assessing the extent of compliance with the relevant laws and regulations.'

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.

Report of the Independent Auditors to the Members of
ADS2 Limited


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.




Gary Sargeant (Senior Statutory Auditor)
for and on behalf of Sargeant Partnership LLP
Chartered Accountants
and Statutory Auditors
5 White Oak Square, London Road
Swanley
Kent
BR8 7AG

25th October 2023

ADS2 Limited (Registered number: 07473429)

Statement of Income and
Retained Earnings
For The Year Ended 31st December 2022

31.12.22 31.12.21
Notes £    £   

TURNOVER 3 2,402,291 2,251,936

Cost of sales 1,780,278 1,872,781
GROSS PROFIT 622,013 379,155

Administrative expenses 660,674 574,835
(38,661 ) (195,680 )

Other operating income - 58,583
OPERATING LOSS 5 (38,661 ) (137,097 )


Interest payable and similar expenses 6 14 254
LOSS BEFORE TAXATION (38,675 ) (137,351 )

Tax on loss 7 5,648 (16,703 )
LOSS FOR THE FINANCIAL YEAR (44,323 ) (120,648 )

Retained earnings at beginning of year 4,772,379 4,893,027

RETAINED EARNINGS AT END OF
YEAR

4,728,056

4,772,379

ADS2 Limited (Registered number: 07473429)

Balance Sheet
31st December 2022

31.12.22 31.12.21
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 8 577,848 693,266
Tangible assets 9 353,561 459,344
931,409 1,152,610

CURRENT ASSETS
Stocks 10 313,025 396,595
Debtors 11 4,979,882 4,862,534
Cash at bank and in hand 12 39,864 52,432
5,332,771 5,311,561
CREDITORS
Amounts falling due within one year 13 1,449,379 1,612,649
NET CURRENT ASSETS 3,883,392 3,698,912
TOTAL ASSETS LESS CURRENT
LIABILITIES

4,814,801

4,851,522

PROVISIONS FOR LIABILITIES 15 36,745 29,143
NET ASSETS 4,778,056 4,822,379

CAPITAL AND RESERVES
Called up share capital 16 50,000 50,000
Retained earnings 17 4,728,056 4,772,379
SHAREHOLDERS' FUNDS 4,778,056 4,822,379

The financial statements were approved by the Board of Directors and authorised for issue on 19th October 2023 and were signed on its behalf by:





U C Ferrario - Director


ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements
For The Year Ended 31st December 2022

1. STATUTORY INFORMATION

ADS2 Limited ("the company") is a private company, limited by shares, incorporated, domiciled and registered in England and Wales. The company's registered number and registered office address are:

Registered number: 07473429

Registered office: Thirsk Industrial Park
York Road
Thirsk
North Yorkshire
YO7 3BX

The Company is exempt by virtue of section 400 of the Companies Act 2006 from the requirement to prepare group financial statements. These financial statements present information about the Company as an individual undertaking and not about its group.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements were prepared in accordance with Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland ("FRS 102"). The financial statements have been prepared under the historical cost convention.

These financial statements report the results for the year from 1 January 2022. The comparative period relates to the year from 1 January 2021.

The company's parent undertaking, Celli S.p.a. includes the company in its consolidated financial statements. The consolidated financial statements of Celli S.p.a. are available to the public and may be obtained from Via Casino Albini,605, 47842 San Giovanni in Marignano (RN), Italy. In these financial statements, the company is considered to be a qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 102 in respect of the following disclosures:

- Reconciliation of the number of shares outstanding from the beginning to end of the period;

- Cash Flow Statement and related notes; and

- Key Management Personnel compensation.

As the consolidated financial statements of Celli S.p.a. include the equivalent disclosures, the company has also taken the exemptions under FRS 102 available in respect of the following disclosures:

- The disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in respect of financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1.

The company proposes to continue to adopt the reduced disclosure framework of FRS 102 in its next financial statements.

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

2. ACCOUNTING POLICIES - continued

Related exemption
The company has taken advantage of exemption, under the terms of FRS 102, not to disclose related party transactions with wholly owned subsidiaries within the group.

Critical accounting judgements and key sources of estimation uncertainty
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

There are no estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities in these accounts.

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

2. ACCOUNTING POLICIES - continued

Going concern
The Company's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report on page 2.

In making their assessment regarding the going concern status of the Company, the Directors have considered the impact of the current COVID-19 pandemic on the forecast performance of the Company and specifically on the demand for the existing product offering. The Directors have also considered the Company's available financial resources and the commitment of the wider Celli group towards operations in the United Kingdom. The financial statements are prepared on a going concern basis not withstanding a loss of £38,675 within the financial year to 31 December 2022.

The current economic environment has had a significant impact on the manufacturing and hospitality industry, with raising material and utility prices and consumers limiting their spending. This then limits the demand for new products into the market, we have seen a slight shift towards customers wanting to get the most out of their products. As a result of this, the UK Group have diversified its offering as has focused on the Asset Management arm of the business, of which the main focus is on maintenance and refurbishment of existing capital equipment.

The Directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements. Due to the inherent uncertainty impacting the hospitality industry, the Directors have renewed focus on the budgeting process of the Company and have led a stringent process to ensure that all assumptions have been thoroughly challenged. The Directors have confidence in the budgets produced and are comfortable that all areas of the business have set realistic targets for each revenue stream.

Having assessed the combination of these factors, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least the next 12 months from the date of the approval of the financial statements. In forming this conclusion, the Directors have made judgements in respect of the forecast sales to be generated within the going concern period. If the budgeted levels of revenue in the severe but plausible downside scenario are not achieved the Company will need to secure additional funding within the going concern period. Celli S.p.a has indicated its intention to make available such funds as are needed by the company for the period covered by the forecasts. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.

The directors acknowledge that the ability of Celli S.p.a to provide this support is dependent on the ability of the wider Celli Group to achieve forecasts which are subject to similar judgements about the global hospitality industry and performance of the new Asset Management business.

In summary, despite this uncertainty impacting the industry as a whole, the Directors remain confident in their robust and transparent budgeting process which has been developed following consultation with key customers.

Functional and presentational currency
These financial statements are presented in Great British Pounds, which is the company's functional currency. All financial information presented in Great British Pounds has been rounded to the nearest thousand.

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

2. ACCOUNTING POLICIES - continued

Turnover
Turnover represents sales of goods and is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Revenue is recognised on the despatch of goods.

Foreign currency
Transactions in foreign currencies are translated to the company's functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. Foreign exchange differences arising on translation are recognised in the profit and loss account.

Operating lease
Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit and loss account on a straight-line basis over the term of the lease unless the payments to the lessor are structured to increase in line with expected general inflation; in which case the payments related to the structured increases are recognised as incurred. Lease incentives received are recognised in profit and loss over the term of the lease as an integral part of the total lease expense.

Finance lease
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability using the rate implicit in the lease. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in the periods in which they are incurred.

Interest receivable and Interest payable
Interest payable and similar charges include interest payable, finance charges on shares classified as liabilities and finance leases recognised in profit or loss using the effective interest method, unwinding of the discount on provisions, and net foreign exchange losses that are recognised in the profit and loss account (see foreign currency accounting policy).

Other interest receivable and similar income include interest receivable on funds invested and net foreign exchange gains.

Interest income and interest payable are recognised in profit or loss as they accrue, using the effective interest method. Dividend income is recognised in the profit and loss account on the date the company's right to receive payments is established. Foreign currency gains and losses are reported on a net basis

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 three years. Goodwill is being amortised over it's useful life of ten years

Research expenditure is charged to profit and loss as incurred.

Development phase expenditure is capitalised as an intangible asset when the company can demonstrate that all of the following conditions has been met, the technical feasibility of completing the intangible asset so that it will be available for use or sale, the intention to complete the intangible asset and use or sell it, the ability to use or sell the intangible asset, that the intangible asset will generate future economic benefits, the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, the ability to measure reliably the expenditure attributable to the intangible asset during its development.


ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

2. ACCOUNTING POLICIES - continued
Investments in subsidiaries
Investments in subsidiary undertakings are carried at cost less impairment

Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets, for example land is treated separately from buildings.

Leases in which the company assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. All other leases are classified as operating leases. Leased assets acquired by way of finance lease are stated on initial recognition at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, including any incremental costs directly attributable to negotiating and arranging the lease. At initial recognition a finance lease liability is recognised equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The present value of the minimum lease payments is calculated using the interest rate implicit in the lease.

The company assesses at each reporting date whether tangible fixed assets (including those leased under a finance lease) are impaired.

Depreciation is charged to the profit and loss account basis over the estimated useful lives of each part of an item of tangible fixed assets. Leased assets are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated. The estimated useful lives are as follows:

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Short leasehold - Straight line basis over estimated life
Plant and machinery - 25% on reducing balance
Fixtures and Fittings - 33% on reducing balance
Motor vehicles - 25% straight line
Computer equipment - 33% Straight line

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since last annual reporting date in the pattern by which the company expects to consume an asset's future economic benefits

Stocks
Stocks 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 bring stocks to their present location and condition.

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

2. ACCOUNTING POLICIES - continued

Basic financial instruments
Trade and other debtors / creditors

Trade and other debtors are recognised initially at transaction price less attributable transaction costs. Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.

Interest-bearing borrowings classified as basic financial instruments

Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.

Classification of financial instruments issued by the company

In accordance with FRS 102.22, financial instruments issued by the Company are treated as equity only to the extent that they meet the following two conditions:

(a) they include no contractual obligations upon the Company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the company: and
(b) where the instrument will or may be settled in the company's own equity instruments, it is either a non-derivative that includes no obligation to delivery a variable number of the company's own equity instruments or is a derivative that will be settled by the company's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the company's own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.

Impairment excluding stocks
Financial assets (including trade and other debtors)

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. For financial instruments measured at cost less impairment an impairment is calculated as the difference between its carrying amount and the best estimate of the amount that the Company would receive for the asset if it were to be sold at the reporting date. Interest on the impaired asset continues to be recognised through the unwinding of the discount. Impairment losses are recognised in profit or loss. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.








ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

2. ACCOUNTING POLICIES - continued
Non-financial assets
The carrying amounts of the company's non-financial assets, other than stocks and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). The goodwill acquired in a business combination, for the purpose of impairment testing is allocated to cash-generating units, or ("CGU") that are expected to benefit from the synergies of the combination. For the purpose of goodwill impairment testing, if goodwill cannot be allocated to individual CGUs or groups of CGUs on a non-arbitrary basis, the impairment of goodwill is determined using the recoverable amount of the acquired entity in its entirety, or if it has been integrated then the entire entity into which it has been integrated.

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Provisions
A provision is recognised in the balance sheet when the company has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the amount required to settle the obligation at the reporting date.

Where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group, the company treats the guarantee contract as a contingent liability until such time as it becomes probable that the company will be required to make a payment under the guarantee.

Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. The following timing differences are not provided for: differences between accumulated depreciation and tax allowances for the cost of a fixed asset if and when all conditions for retaining the tax allowances have been met. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense.

Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that is it probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

2. ACCOUNTING POLICIES - continued

Defined contribution plans and other long term employee 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 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.

A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay any further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees.

Invoice factoring
Factored debts and the associated factor liabilities are separately disclosed within the financial statements and are cleared via either the fulfilment of the factored debt or the cancellation of of the factored debt and the repayment by the company of the factor liability

Cash & cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, on-demand deposits with banks and other short-term highly liquid investments.

3. TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

31.12.22 31.12.21
£    £   
Sale of goods 2,402,291 2,251,936
2,402,291 2,251,936

An analysis of turnover by geographical market is given below:

31.12.22 31.12.21
£    £   
United Kingdom 2,265,888 2,072,276
Europe 113,400 179,660
Asia 23,003 -
2,402,291 2,251,936

4. EMPLOYEES AND DIRECTORS
31.12.22 31.12.21
£    £   
Wages and salaries 491,569 551,346
Social security costs 41,523 52,304
Other pension costs 13,905 16,180
546,997 619,830

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

4. EMPLOYEES AND DIRECTORS - continued

The average number of employees during the year was as follows:
31.12.22 31.12.21

Administration 1 1
Production 18 19
19 20

31.12.22 31.12.21
£    £   
Directors' remuneration - -

There were four directors (2021:4) during the year. The company did not make any pension contributions or provide other retirement benefits to any of the directors (2021:£nil)

5. OPERATING LOSS

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

31.12.22 31.12.21
£    £   
Hire of plant and machinery 7,890 10,218
Depreciation - owned assets 119,653 130,857
Depreciation - assets on hire purchase contracts or finance leases - 3,279
Profit on disposal of fixed assets (4,042 ) -
Goodwill amortisation 88,085 88,084
Development costs amortisation 27,333 16,244
Auditors' remuneration 24,000 24,000
Foreign exchange differences 1,240 (60 )

6. INTEREST PAYABLE AND SIMILAR EXPENSES
31.12.22 31.12.21
£    £   
Bank interest 14 -
Hire purchase - 254
14 254

7. TAXATION

Analysis of the tax charge/(credit)
The tax charge/(credit) on the loss for the year was as follows:
31.12.22 31.12.21
£    £   
Current tax:
UK corporation tax (1,954 ) -

Deferred tax 7,602 (16,703 )
Tax on loss 5,648 (16,703 )

UK corporation tax has been charged at 19% (2021 - 19%).

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

7. TAXATION - continued

Reconciliation of total tax charge/(credit) included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

31.12.22 31.12.21
£    £   
Loss before tax (38,675 ) (137,351 )
Loss multiplied by the standard rate of corporation tax in the UK of 19%
(2021 - 19%)

(7,348

)

(26,097

)

Effects of:
Expenses not deductible for tax purposes 16,821 16,865
Depreciation in excess of capital allowances 17,627 18,283
Movement in accelerated capital allowances 7,602 (16,703 )
Adjustments in respect of prior periods (1,954 ) -
Group relief received (27,100 ) (9,051 )

Total tax charge/(credit) 5,648 (16,703 )

UK corporation tax has been charged at 19% (2021 - 19%).

The Finance Act 2021 set the corporation tax rate at 25% with effect from 1 April 2023. It is expected that this will increase the company's future current tax charge accordingly, and increase the UK deferred tax liability.

8. INTANGIBLE FIXED ASSETS
Development
Goodwill costs Totals
£    £    £   
COST
At 1st January 2022
and 31st December 2022 880,846 82,007 962,853
AMORTISATION
At 1st January 2022 242,569 27,018 269,587
Amortisation for year 88,085 27,333 115,418
At 31st December 2022 330,654 54,351 385,005
NET BOOK VALUE
At 31st December 2022 550,192 27,656 577,848
At 31st December 2021 638,277 54,989 693,266

Assessing indicators of impairment
The Directors have performed value in use analysis over the goodwill balance in response to the challenging trading conditions following the COVID-19 pandemic which is considered an impairment indicator. The Company's weighted average cost of capital of 8% takes account of current market conditions as well as risks specific to the Company and is impacted by estimates of interest rates, equity returns and market specific risks.

Sensitivities have been applied to cash flow forecasts to eliminate all anticipated cash inflows until December 2027 and furthermore, reducing the forecast terminal cash flow by 50%. After these severe sensitivities have been applied, there remains sufficient headroom over the book value such that no impairment is required.

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

9. TANGIBLE FIXED ASSETS
Fixtures
Short Plant and and
leasehold machinery fittings
£    £    £   
COST
At 1st January 2022 321,388 872,776 4,546
Additions - 13,870 -
Disposals - - -
At 31st December 2022 321,388 886,646 4,546
DEPRECIATION
At 1st January 2022 121,817 622,977 2,841
Charge for year 48,931 64,557 852
Eliminated on disposal - - -
At 31st December 2022 170,748 687,534 3,693
NET BOOK VALUE
At 31st December 2022 150,640 199,112 853
At 31st December 2021 199,571 249,799 1,705

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 1st January 2022 29,451 105,068 1,333,229
Additions - - 13,870
Disposals (29,451 ) - (29,451 )
At 31st December 2022 - 105,068 1,317,648
DEPRECIATION
At 1st January 2022 29,451 96,799 873,885
Charge for year - 5,313 119,653
Eliminated on disposal (29,451 ) - (29,451 )
At 31st December 2022 - 102,112 964,087
NET BOOK VALUE
At 31st December 2022 - 2,956 353,561
At 31st December 2021 - 8,269 459,344

The net book value of tangible fixed assets includes £Nil (2021: £nil) in respect of assets held under hire purchase contracts.

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

10. STOCKS
31.12.22 31.12.21
£    £   
Raw materials 60,934 269,613
Work in progress 191,596 100,576
Finished goods 60,495 26,406
313,025 396,595

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.22 31.12.21
£    £   
Trade debtors 982,237 1,042,351
Amounts due from other group undertakings 3,889,711 3,705,254
Corporation Tax 26,392 24,438
VAT Debtor 47,188 62,854
Prepayments 34,354 27,637
4,979,882 4,862,534

12. CASH AT BANK AND IN HAND
31.12.22 31.12.21
£    £   
Cash at bank - Sterling 39,445 51,417
Cash at bank - Euro 398 1,006
Cash in hand 21 9
39,864 52,432

13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.22 31.12.21
£    £   
Trade creditors 701,229 830,525
Social security and other taxes 8,969 11,221
Other creditors 84,442 206
Amounts due to parent undertakings 477,130 474,066
Amounts due to subsidiary Undertakings 77,937 78,573
Accruals and deferred income 99,672 218,058
1,449,379 1,612,649

14. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
31.12.22 31.12.21
£    £   
Within one year 100,000 100,000
Between one and five years 400,000 400,000
In more than five years 575,000 675,000
1,075,000 1,175,000

ADS2 Limited (Registered number: 07473429)

Notes to the Financial Statements - continued
For The Year Ended 31st December 2022

15. PROVISIONS FOR LIABILITIES
31.12.22 31.12.21
£    £   
Deferred tax 36,745 29,143

Deferred
tax
£   
Balance at 1st January 2022 29,143
Charge to Income Statement during year 7,602
Accelerated capital allowances
Balance at 31st December 2022 36,745

16. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31.12.22 31.12.21
value: £    £   
50,000 Ordinary £1 50,000 50,000

17. RESERVES
Retained
earnings
£   

At 1st January 2022 4,772,379
Deficit for the year (44,323 )
At 31st December 2022 4,728,056

18. PENSION COMMITMENTS

The company operates a defined contribution pension plan for its employees. The amount recognised as expense in the period was £13,905 (2021 - £16,180)

An amount of £NIL (2021 - £Nil) is outstanding in respect of defined contribution pension schemes.

19. ULTIMATE PARENT COMPANY

The controlling party is Celli International Limited

Celli S.p.a. (incorporated in Italy) is regarded by the directors as being the Company's ultimate parent company.

Copies of the group's financial statements can be obtained form Company Secretary of Celli S.pa. at:

Via Casino Albini, 605
47842 San Giovanni in Marignano (RN)
Italy