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Registered number: 02179210










SOILMEC LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
SOILMEC LIMITED
 

CONTENTS



Page
Company information
1
Strategic report
4 - 5
Directors' report
2 - 3
Independent auditors' report
6 - 9
Statement of income and retained earnings
10
Balance sheet
11 - 12
Statement of cash flows
13
Analysis of net debt
14
Notes to the financial statements
15 - 31


 
SOILMEC LIMITED
 
 
COMPANY INFORMATION


DIRECTORS
F Bassi 
L Iannace (appointed 11 June 2024)




REGISTERED NUMBER
02179210



REGISTERED OFFICE
1 Vincent Square

London

SW1P 2PN




TRADING ADDRESS
New Lodge
Polebrook

Oundle

Peterborough

PE8 5LL






INDEPENDENT AUDITORS
Wellers
Accountants & Statutory Auditors

1 Vincent Square

London

SW1P 2PN




Page 1

 
SOILMEC LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

DIRECTORS' RESPONSIBILITIES STATEMENT

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 the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union. 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 for the company's financial statements and then apply them consistently;

make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the selling, renting and servicing of drilling and foundation equipment.

DIVIDENDS

The profit for the year, after taxation, amounted to £925,138 (2022: £2,780,757).

DIRECTORS

The directors who served during the year were:

J M Nelson (resigned 30 April 2024)
F Bassi 

FUTURE DEVELOPMENTS

Soilmec continually improve and upgrade equipment with new model introductions and adaptations in line with ever more stringent European emission controls and Health and Safety requirements.

QUALIFYING THIRD PARTY INDEMNITY PROVISIONS

A qualifying third party indemnity provision has been in place for one or more directors of the company during the year under review.

Page 2

 
SOILMEC LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

DISCLOSURE OF INFORMATION TO AUDITORS

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditorsWellerswill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





................................................
F Bassi
Director

Date: 26 September 2024

Page 3

 
SOILMEC LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
Soilmec Limited is registered in England and Wales and domiciled in the UK. The company operates from its main facility near Peterborough, supplying drilling and foundation equipment, as well as spares and servicing to the UK and Southern Ireland. The directors consider that the principal key performance indicators relating to the company are the gross and net profit levels included within these financial statements.

Principal risks and uncertainties
 
Competitive risk          
The company manages competitive trading risk by providing added value services to its customers, having fast response times, not only in supplying products, but also in handling all customer queries and, additionally, by maintaining strong relationships with customers.
            
Market risk           
The company depends, to a large extent, on the state of the market in the construction sector. The company manages its risk by maintaining a wide customer base, offering innovative solutions to customers and exploring other markets across a range of geographical locations.
Currency risk           
The company purchases a significant proportion of its equipment in Euros and has a large loan denominated in Euros. In order to manage the resultant currency risk the company utilises forward contracts. The majority of the company's sales are denominated in Sterling.
            
Liquidity risk           
The liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest. It is ensured that sufficient funds are available to meet amounts due and by negotiating extended credit terms with suppliers where necessary.   
            
The company protects its liquidity by ensuring there are adequate funds available to meet repayments.  
            
Credit risk           
Credit risk is managed by agreeing payment terms in advance. Appropriate credit control procedures are followed to manage perceived credit risk.
Trade receivables are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
            
Financial Instruments          
Financial assets and liabilities are recognised on the date at which the company becomes party to the contractual provisions of the instrument giving rise to the asset or liability. The company's principal financial instruments comprise bank balances, bank overdrafts, trade receivables, trade payables, forward contracts and loans to the company. 
            
Forward contracts are obtained in order to reduce the company's exposure to exchange rate fluctuations, and are stated at fair value on initial recognition and at subsequent statement of financial position dates. 

Financial key performance indicators
 
The directors consider that the principal key performance indicators relating to the company are the gross profit levels included within these financial statements.
The results of the company as set out on page 11 show sales of £9.818m (2022: £20.406m) and profit before tax of £1.279m (2022: £3.442m). 

Page 4

 
SOILMEC LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

GOING CONCERN STATUS
 
The ultimate  controlling  party is  Trevi  Finanziaria Industriale SpA, which is based in Italy. The associated Trevi group has agreed a debt restructuring deal with the financial institution. 
The directors have considered this along with the ability for the parent company to continue to provide support and accordingly, have prepared the financial statements on a going concern basis. 
Accordingly,  no  adjustments  have  been  made  to  these  financial  statements  relating  to  the  recoverability  and classification of the asset carrying amounts or the amount and classification of liabilities that might be necessary should the company not continue as a going concern. 
At this time, the directors are of the opinion that no asset is likely to be realised for an amount less than the amount at which it is recorded in the financial statements as at 31 December 2023.


This report was approved by the board and signed on its behalf.



................................................
F Bassi
Director

Date: 26 September 2024

Page 5

 
SOILMEC LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOILMEC LIMITED
 

OPINION


We have audited the financial statements of Soilmec Limited (the 'company') for the year ended 31 December 2023, which comprise the Statement of income and retained earnings, the Balance sheet, the Statement of cash flows and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. 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 2023 and of its profit for the year then ended;
have been properly prepared in accordance with IFRSs as adopted by the European Union; and 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 United Kingdom, including the Financial Reporting Council'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.


Page 6

 
SOILMEC LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOILMEC LIMITED (CONTINUED)


OTHER INFORMATION


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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. 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 course of 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.


OPINION 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 Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors' report 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 Directors' report.


We have nothing to report in respect of the following matters in relation to which 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 Directors' responsibilities statement set out on page 2, 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 is 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.


Page 7

 
SOILMEC LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOILMEC LIMITED (CONTINUED)


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 an Auditors' report 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:

We obtained an understanding of the key laws and regulations that are applicable to the company. We determined that the most significant laws and regulations in the context of the financial statements included but were not limited to the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice and relevant tax legislation.
We also assessed which areas of the financial statements are more susceptible to misstatement. We considered the opportunities and incentives that may exist within the organisation for fraud, and identified the greatest potential for fraud in revenue recognition, particularly in respect of any manual adjustments made to revenue outside of the day to day recording of transaction and also the potential for off balance sheet items to be considered on balance sheet. We are also mandated to perform specific procedures under ISAs (UK) to respond to the risk of management override.
The primary responsibility for the prevention and detection of fraud and irregularities rests with those charged with governance of the company and management. We are not responsible for preventing irregularities. Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
• The engagement partner ensured that the engagement team collectively had the appropriate 
 competence, capabilities and skills to identify or recognise non-compliance with applicable laws and 
 regulations;
• We identified the laws and regulations applicable to the company through discussion with directors and 
 other management, and from our commercial knowledge and experience;
• Identified laws and regulations were communicated within the audit team regularly and the team
 remained alert to instances of non-compliance throughout the audit;
• We assessed the susceptibility of the company’s financial statements to material misstatement,  
 including obtaining an understanding of how fraud might occur, by:
• Making enquiries of management regarding any instances of known or suspected fraud or non-
 compliance with laws and regulations, as well as any actual or potential litigation and claims;
• Gaining an understanding of the design and implementation of the processes and controls in place within  the company which are designed to prevent, detect or correct fraud or error within the financial 
 statements.
 
Page 8

 
SOILMEC LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOILMEC LIMITED (CONTINUED)


To address the risk of fraud through management bias and override of controls, we:
• Reviewed correspondence with legal and regulatory bodies where applicable;
• Performed analytical procedures to identify any unusual or unexpected relationships;
• Reviewed the detail of certain nominal accounts for indications of management override;
• Challenged the accounting treatment applied in respect of revenue recognised during the year, in  
 particular in relation to manual adjustments made to revenue;
• Identified and tested journal entries which we considered to be unusual and may be indicative of bias on 
 the part of management or those charged with governance, investigating the rationale behind significant 
 or unusual transactions;
• Reviewed the minutes of meetings of management and those charged with governance;
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures 
which included, but were not limited to:
• We agreed the financial statements disclosures to underlying supporting documentation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including compliance  with  a  law  or  regulation  is  removed  from  the  events  and  transactions  reflected  in  the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding  irregularities  occurring  due  to  fraud  rather  than  error,  as  fraud  involves  intentional concealment, forgery, collusion, omission or misrepresentation.


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 Auditors' report.


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 2006Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Stuart Peter Crook (Senior statutory auditor)
for and on behalf of
Wellers
Accountants
Statutory Auditors
1 Vincent Square
London
SW1P 2PN

26 September 2024
Page 9

 
SOILMEC LIMITED
 
 
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
  
9,817,838
20,406,447

Cost of sales
  
(7,555,000)
(15,618,891)

Gross profit
  
2,262,838
4,787,556

Administrative expenses
  
(1,212,001)
(1,601,004)

Operating profit
 5 
1,050,837
3,186,552

Interest receivable and similar income
 9 
227,778
255,027

Profit before tax
  
1,278,615
3,441,579

Tax on profit
 10 
(353,477)
(660,822)

Profit after tax
  
925,138
2,780,757

  

  

Retained earnings at the beginning of the year
  
11,442,366
12,161,609

  
11,442,366
12,161,609

Profit for the year
  
925,138
2,780,757

Dividends declared and paid
  
-
(3,500,000)

Retained earnings at the end of the year
  
12,367,504
11,442,366
The notes on pages 15 to 31 form part of these financial statements.

Page 10

 
SOILMEC LIMITED
REGISTERED NUMBER: 02179210

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

ASSETS
  

Property, plant and equipment
  
1,118,235
1,208,543

Debtors due after more than 1 year

  

8,077,238
9,774,589

CURRENT ASSETS
  

Inventories
  
3,242,665
3,027,066

Debtors due within 1 year
  
2,124,322
1,140,710

Cash and short-term deposits
 14 
984,998
1,954,405


  

6,351,985
6,122,181

  

TOTAL ASSETS

  

15,547,458
17,105,313

EQUITY
  

Called up share capital
 20 
120,000
120,000

Share capital redemption reserve
  
30,000
30,000

Retained Earnings
  
12,367,504
11,442,366

TOTAL EQUITY

  

12,517,504
11,592,366

LIABILITIES
  

Interest bearing loans and borrowings

  

-
-

CURRENT LIABILITIES
  

Trade and other payables
  
2,780,911
5,046,336

Provisions
  
102,095
140,512

Tax payable
  
146,948
326,099


  

3,029,954
5,512,947

  

TOTAL LIABILITIES

  

3,029,954
5,512,947

  

TOTAL EQUITY AND LIABILITIES
  
15,547,458
17,105,313


Page 11

 
SOILMEC LIMITED
REGISTERED NUMBER: 02179210
    
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
L Iannace
................................................
F Bassi
Director
Director


Date: 26 September 2024

The company's board and shareholders have the power to amend the financial statements after issue.
The notes on pages 15 to 31 form part of these financial statements.


Page 12

 
SOILMEC LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
925,138
2,780,757

Adjustments for:

Depreciation of tangible assets
90,239
79,927

Loss on disposal of tangible assets
(67,005)
-

Interest received
(227,778)
(255,027)

Taxation charge
353,478
660,822

(Increase)/decrease in stocks
(215,599)
4,499,641

(Increase)/decrease in debtors
(495,166)
7,441

Decrease/(increase) in amounts owed by groups
1,208,904
(1,652,669)

(Decrease)/increase in creditors
(1,043,090)
573,135

(Decrease) in amounts owed to groups
(1,220,056)
(1,474,762)

(Decrease)/increase in provisions
(38,417)
33,607

Corporation tax (paid)
(534,838)
(553,958)

Net cash generated from operating activities

(1,264,190)
4,698,914


Cash flows from investing activities

Purchase of tangible fixed assets
-
(232,880)

Sale of tangible fixed assets
67,005
-

Interest received
227,778
255,027

Net cash from investing activities

294,783
22,147

Cash flows from financing activities

Dividends paid
-
(3,500,000)

Net cash used in financing activities
-
(3,500,000)

Net (decrease)/increase in cash and cash equivalents
(969,407)
1,221,061

Cash and cash equivalents at beginning of year
1,954,405
733,344

Cash and cash equivalents at the end of year
984,998
1,954,405


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
984,998
1,954,405

984,998
1,954,405


Page 13

 
SOILMEC LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Other non-cash changes
At 31 December 2023
£

£

£

Cash at bank and in hand

1,954,405

(969,407)

984,998

Debt due within 1 year

-

(4,632)

(4,632)


1,954,405
(974,039)
980,366

The notes on pages 15 to 31 form part of these financial statements.

Page 14

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

The company is a private limited company, limited by shares, which is incorporated and domiciled in the UK. The address of its principal place of business is New Lodge, Polebrook, UK.

2.Accounting policies

  
2.1
Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) adopted by the European Union and in accordance with the Companies Act 2006. The company has adopted the single statement approach to present comprehensive income.

  
2.2
Changes in accounting policies

Financial information has been drawn up on the basis of accounting policies consistent with those applied in the financial statements for the year to 31 December 2023.

The International Accounting Standards Board and International Financial Reporting Interpretations Committee (IFRIC) have issued the following standards and interpretations which could impact the company, with an effective date after the date of these financial statements.

Standards and interpretations not yet endorsed by the European Union. 
- "IFRS 18: Presentation and Disclosure in Financial Statements (effective 01/01/2027)
- "IFRS 19: Subsidiaries without Public Accountability: Disclosures (effective 01/01/2027)
* The effective dates stated are those given in the original IASB standards. As the company prepares its financial statements in accordance with IFRS as adopted by the European Union, the application of new standards and interpretations will be subject to their having been endorsed for use in the EU via the EU endorsement mechanism.                                                                                                                    
The directors do not anticipate that the adoption of the standards will have a material impact on the company's financial statements in the period of initial application.

 
2.3

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).

The following principal accounting policies have been applied:

Page 15

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Going concern

The ultimate  controlling  party is  Trevi  Finanziaria Industriale SpA, which is based in Italy. The associated Trevi group has agreed a debt restructuring deal with the financial institution. 
The directors have considered this along with the ability for the parent company to continue to provide support and accordingly, have prepared the financial statements on a going concern basis. 
Accordingly,  no  adjustments  have  been  made  to  these  financial  statements  relating  to  the  recoverability  and classification of the asset carrying amounts or the amount and classification of liabilities that might be necessary should the company not continue as a going concern. 
At this time, the directors are of the opinion that no asset is likely to be realised for an amount less than the amount at which it is recorded in the financial statements as at 31 December 2023.

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the company has transferred the significant risks and rewards of ownership to the buyer;
the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Page 16

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.6

Property, plant and equipment

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
2%
to 25% on cost
Plant & machinery
-
20%
to 25% on cost
Motor vehicles
-
25%
on cost

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.7

Operating leases: the company as lessee

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

 
2.8

Operating leases: the company as lessor

Rental income from operating leases is credited to profit or loss on a straight-line basis over the lease term.

 
2.9

Inventories

Inventories are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, inventories are assessed for impairment. If inventory is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Page 17

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Trade and other receivables

Short term trade and other receivables are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.11

Cash and short-term deposits

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the statement of cash flows, cash and short-term deposits are shown net of bank overdrafts that are repayable on demand and form an integral part of the company's cash management.

 
2.12

Financial instruments

The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the company's Balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

 
2.13

Trade and other payables

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 18

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.14

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. 

 
2.15

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.

 
2.16

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.17

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 19

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.18

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

  
2.19
Foreign currencies

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the Statement of Financial Position 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.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of Financial Position date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. On this background, the members consider there to be judgments applied on depreciation policy of the fixed assets and the depreciation rates are based upon the expected useful life of the assets. The carrying value of the assets as at the end of the reporting period on these assets total £1,118,235 (2022: £1,208,543).
There is also judgement applied on the warranty provision. The warranty is calculated as a percentage of sales, in accordance with the directors' estimates of probable outflows and is based upon historic information and current knowledge of the products and market. Any future outflows relating to this provision are expected to occur within twelve months of the Statement of Financial Position date. The carrying value of the provision as at the end of the reporting period is £102,095 (2022: £140,512). 

Page 20

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Analysis of revenue

Analysis of turnover by country of destination:

2023
2022
£
£
United Kingdom

8,411,419

19,564,703
 
Europe

1,399,919

830,161
 
Rest of the world

-

11,583
 
9,811,338

20,406,447
 


5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation of tangible assets
93,348
79,927

Exchange differences
39,605
(545,134)

Fees payable to the company's auditor and its associates for the audit of
the company's annual financial statements
14,250
14,250


6.


Auditors' remuneration

During the year, the company obtained the following services from the company's auditors:


2023
2022
£
£

Fees payable to the company's auditors for the audit of the company's financial statements
14,250
14,250

Page 21

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
822,046
901,328

Social security costs
91,294
115,644

Cost of defined contribution scheme
24,407
29,582

937,747
1,046,554


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Engineering
6
6



Sales
2
2



Administrative and management
10
10

18
18

The company paid staff members £7,200 in benefits during the year (2022: £7,000).


8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
159,438
303,172

Directors' pension costs
2,050
12,056

161,488
315,228


During the year retirement benefits were accruing to no directors (2022 - 1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £179,412 (2022 - £338,092).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2022 - £12,056).

The company paid the directors £3,600 in benefits during the year (2022: £3,500).

Page 22

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Interest receivable

2023
2022
£
£


Other interest receivable
227,778
255,027

227,778
255,027


10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
355,756
636,213


355,756
636,213


Total current tax
355,756
636,213

Deferred tax


Origination and reversal of timing differences
(2,279)
24,609

Total deferred tax
(2,279)
24,609


Taxation on profit on ordinary activities
353,477
660,822
Page 23

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,278,615
3,441,579


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
242,937
653,900

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
45,475
16,248

Capital allowances for year in excess of depreciation
(1,031)
(33,411)

Short-term timing difference leading to an increase (decrease) in taxation
(2,279)
24,085

Other timing differences leading to an increase (decrease) in taxation
68,375
-

Total tax charge for the year
353,477
660,822


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 24

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Property, plant and equipment





Freehold property
Plant & machinery
Motor vehicles
Total

£
£
£
£



Cost or valuation


At 1 January 2023
1,613,920
643,485
272,257
2,529,662


Disposals
-
(44,204)
(24,225)
(68,429)



At 31 December 2023

1,613,920
599,281
248,032
2,461,233



Depreciation


At 1 January 2023
681,147
471,677
168,295
1,321,119


Charge for the year on owned assets
35,698
13,328
41,281
90,307


Disposals
-
(44,204)
(24,225)
(68,429)



At 31 December 2023

716,845
440,801
185,351
1,342,997



Net book value



At 31 December 2023
897,075
158,480
62,681
1,118,236



At 31 December 2022
932,773
171,808
103,962
1,208,543




The net book value of land and buildings may be further analysed as follows:


2023
2022
£
£

Freehold
897,075
932,773

897,075
932,773


Page 25

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

 
12.
 

Inventories
 
2023
2022
£
£


Finished Goods
3,242,665
3,027,066

3,242,665
3,027,066



An impairment loss of £435,934 (2022: £1,184,284) was recognised in cost of sales against inventory during the year due to writing down equipment on Hire Option to Purchase agreements.
The total value of inventory items sold in the period was £7,268,073 (2022: £9,450,177).


13.


Trade & Other Receivables

2023
2022
£
£

Due after more than one year

Amounts owed by group undertakings
8,077,238
9,774,589

8,077,238
9,774,589

Due within one year

Trade debtors
1,287,395
846,706

Amounts owed by group undertakings
625,757
137,310

Other debtors
189,595
116,705

Prepayments and accrued income
21,575
39,989

10,201,560
10,915,299


Trade receivables are non-interest bearing and are generally on 30-60 days terms and are shown net of a provision for impairment. At 31 December 2023, trade receivables with a carrying value of £25,637 (2022: £Nil) were determined to be fully impaired.


14.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
984,998
1,954,405

984,998
1,954,405


Page 26

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

 
15.
 

Trade & Other Payables: Amounts due within one year
 
2023
2022
£
£


Accruals & deferred income
20,000
541,251

Trade payables
96,402
115,641

Tax due to Inland Revenue & Customs
22,620
531,145

Amounts owed to group companies
2,603,498
3,823,554

Other payables (incl directors loans)
5,925
-

Deferred tax
32,466
34,745

2,780,911
5,046,336








 
16.
 

Financial Liabilities
 

An explanation of the company's financial instrument risk management objectives, policies and strategies is set out in the Strategic Report.
The carrying value of each of the financial instruments approximates to fair value.
Fair value hierarchy
The company uses the following valuation hierarchy to determine the carrying value of financial instruments that are measured at fair value:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data.
Financial liabilities at fair value through profit and loss are classified as Level 2.

Page 27

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets measured at fair value through profit or loss
984,998
1,954,405

Financial assets that are debt instruments measured at amortised cost
9,990,990
10,875,310

10,975,988
12,829,715


Financial liabilities


Financial liabilities measured at amortised cost
(2,721,193)
(4,480,446)


18.


Deferred taxation




2023
2022


£

£






At beginning of year
(34,745)
(10,136)


Charged to profit or loss
2,278
(24,609)



At end of year
(32,467)
(34,745)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(32,466)
(34,745)

(32,466)
(34,745)

Page 28

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.


Provisions

Warranty provision
        £

At 1 January 2022

140,512

Warranty cost incurred in current year

(52,503)

Reversal of unused provision bought forward

(88,009)

Provision in current year

102,095


102,095



Provisions relate to warranties issued with the sale of equipment, by Soilmec Limited. The warranty is calculated as a percentage of sales, in accordance with the directors' estimates of probable outflows and is based upon historic information and current knowledge of the products and market. Any future outflows relating to this provision are expected to occur within twelve months of the Statement of Financial Position date.

Page 29

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



120,000 (2022 - 120,000) Ordinary shares of £1.00 each
120,000
120,000


The capital and reserves of the company is the total equity on the company's Statement of Financial Position. The objective of the company's capital management is to grow its business and deliver improving returns for its parent company. The management of the company's capital is performed by the Board of Directors. There are no externally imposed capital requirements. 


21.


Contingent liabilities

Buyback clauses to which Soilmec Limited are bound were secured over equipment sold to third parties during the year and remained live at the statement of financial position date. In the event of a default by third parties prior to the final purchase date, Soilmec Limited will be required to re-purchase the equipment at a cost of £310,000 (2022: £530,000).


22.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £2,221 (2022: £29,582). There were no contributions payable to the fund at the statement of financial position date.


23.


Related party transactions

Soilmec Limited is part of a large international group and trades extensively with other group companies. Transactions within the group throughout the current period are as follows;
There is interest accruing on the Soilmec SPA Loan but no interest accruing on the other outstanding intercompany balances and no strict repayment terms attached.
 


2023
2022
£
£

Soilmec SPA Sales & purchases
(1,383,594)
(4,089,790)
Soilmec SPA Creditor
(1,982,766)
(3,611,994)
Soilmec SPA Loan
8,077,238
9,744,589

Page 30

 
SOILMEC LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.


Controlling party

The parent company is Soilmec SpA, a company incorporated in Italy. Copies of accounts are available at the company HQ.
The  largest  and  smallest  groups  within  which  the  Soilmec  Limited  financial  statements  will  be
consolidated are Trevi Finanziaria Industriale SpA and Soilmec SpA. Both companies are incorporated in
Italy.
The ultimate controlling party, with significant influence over the entire group, is Trevi Finanziaria Industriale SpA.

 
Page 31