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Registration number: 10633614

Nella Holdings Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2023

 

Nella Holdings Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 9

Consolidated Profit and Loss Account

10

Consolidated Balance Sheet

11

Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the Financial Statements

16 to 34

 

Nella Holdings Limited

Company Information

Directors

Mr M P P Nella

Mr S Nella

Mr M F Nella

Mrs C F Nella

Registered office

Murray House
Murray Road
Orpington
Kent
BR5 3QY

Auditors

McBrides Accountants LLP
Nexus House
Cray Road
Sidcup
Kent
DA14 5DA

 

Nella Holdings Limited

Strategic Report for the Year Ended 31 December 2023

The directors present their strategic report for the year ended 31 December 2023.

Principal activity

The company is a non-trading holding company, the principal activity of the subsidiary Nella Limited is property rental, and the principal activity of the subsidiary Nella Cutlery South Limited and Nella France is the provision of knife sharpening services.

Fair review of the business

The group continued to operate from its head office in South East London and via its branch network in the UK.

Capital expenditure continues as an active part of that growth strategy and there are no plans to reduce ongoing investment.

The group's key financial and other performance indicators during the year were as follow:

(i) Profit for the period was £1.43m compared to £1.37m in the period to 31 December 2022.

(ii) The balance sheet shows that net assets at the year end have increased from £4.36m to £5.65m.

Then within different operational and sales sectors within the business there are appropriate measures in place to target performance and profitability, including:

- Sales staff are set new customer targets. and reviewed quarterly.

- All other staff are set departmental incentivisation targets with a view to sharing in the company's increased productivity and profitability.

- Each location has its own bespoke financial and non-financial KPls to measure against overall company performance.

The group had net assets at the year-end of £5.65m and cash reserves of £1.13m, the cash reserves having increased upon the position at December 2022. When measuring performance of the group against the key performance indicators the Directors consider that both the results for the year and the group’s position as at the year-end are satisfactory.

 

Nella Holdings Limited

Strategic Report for the Year Ended 31 December 2023

Principal risks and uncertainties

The Directors regularly consider the implications of risk to the group and are confident that with regard to that exposure to risk there are sufficient internal procedures in place to identify and minimise that exposure.

The group maintains adequate insurance cover where relevant for commercial risks that are insurable, and these are regularly reviewed and kept up to date.

The Directors consider that there are identifiable risks or uncertainties. However, they continue to monitor the following in order to have flexibility in planning:

- Manual labour staffing requirements, employment regulations, and ongoing recruitment within cost budgets.

- External pressures on the hospitality and catering sectors and how that might impact the group’s business.

The directors remain confident that our business can continue to be successfully managed through any business challenges and we remain vigilant in our responses.

Approved by the Board on 2 October 2024 and signed on its behalf by:


Mr M F Nella
Director

 

Nella Holdings Limited

Directors' Report for the Year Ended 31 December 2023

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

Directors of the group

The directors who held office during the year were as follows:

Mr M P P Nella

Mr S Nella

Mr M F Nella

Mrs C F Nella

Financial instruments

Objectives and policies

The group's principal financial instruments include bank overdrafts and loans, the main purpose of which is to raise finance for its operations. In addition, the group has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from operations.

Price risk, credit risk, liquidity risk and cash flow risk

The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring it has sufficient liquid resources to meet the operating needs of the business.

Investments of cash surpluses and borrowings are made through banks and institutions which must fulfill credit rating criteria approved by the Board. All customers who wish to trade on credit terms are subject to credit verification procedures and trade debtors are reviewed on a regular basis and provision is made for doubtful debts when necessary.

Future developments

The group has a strong commitment to all its customers and, as detailed in the Strategic Report, the group is expected to continue to seek new opportunities to maintain its strong position in the market.

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Approved by the Board on 2 October 2024 and signed on its behalf by:


Mr M F Nella
Director

 

Nella Holdings Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Nella Holdings Limited

Independent Auditor's Report to the Members of Nella Holdings Limited

Opinion

We have audited the financial statements of Nella Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, 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).

Opinion on the financial statements

In our opinion the financial statements:

give a true and fair view of the state of the group's and the company's affairs as at 31 December 2023 and of the group's profit 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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 entity'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 included in the annual report, other than the financial statements and our auditor’s report 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.

 

Nella Holdings Limited

Independent Auditor's Report to the Members of Nella Holdings Limited

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and 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 our 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 and the Directors' Report.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities (set out on page 5), 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 group’s and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

 

Nella Holdings Limited

Independent Auditor's Report to the Members of Nella Holdings Limited

Auditor’s 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 auditor’s 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:

Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:

those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.

it is considered that non-compliance with health and safety laws and regulations may be fundamental to the operating aspects of the business.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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 auditor's report.

 

Nella Holdings Limited

Independent Auditor's Report to the Members of Nella Holdings 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 an auditor’s 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.





Andrew Warren (Senior Statutory Auditor)
For and on behalf of McBrides Accountants LLP, Statutory Auditor

Nexus House
Cray Road
Sidcup
Kent
DA14 5DA

3 October 2024

 

Nella Holdings Limited

Consolidated Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

16,671,685

14,494,211

Cost of sales

 

(8,740,190)

(8,376,521)

Gross profit

 

7,931,495

6,117,690

Administrative expenses

 

(5,951,269)

(4,077,503)

Operating profit

4

1,980,226

2,040,187

Gain on financial assets at fair value through profit and loss account

 

458,018

-

Other interest receivable and similar income

2,680

10,426

Interest payable and similar expenses

5

(177,121)

(194,396)

Profit before tax

 

2,263,803

1,856,217

Taxation

9

(830,975)

(484,705)

Profit for the financial year

 

1,432,828

1,371,512

No Statement of Comprehensive Income has been presented as there is no movement through other comprehensive income for the year.

 

Nella Holdings Limited

(Registration number: 10633614)
Consolidated Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

10

1,885,279

2,719,376

Tangible assets

11

8,057,679

6,422,087

 

9,942,958

9,141,463

Current assets

 

Stocks

13

1,176,750

1,602,038

Debtors

14

2,534,116

1,977,191

Cash at bank and in hand

 

1,132,774

844,460

 

4,843,640

4,423,689

Creditors: Amounts falling due within one year

16

(4,580,707)

(4,408,681)

Net current assets

 

262,933

15,008

Total assets less current liabilities

 

10,205,891

9,156,471

Creditors: Amounts falling due after more than one year

16

(3,042,509)

(3,651,397)

Provisions for liabilities

18

(1,516,358)

(1,140,878)

Net assets

 

5,647,024

4,364,196

Capital and reserves

 

Called up share capital

20

1,100

1,100

Share premium reserve

21

2,976,425

2,976,425

Profit and loss account

21

2,669,499

1,386,671

Total equity

 

5,647,024

4,364,196

Approved and authorised by the Board on 2 October 2024 and signed on its behalf by:




 

Mr M F Nella

Director

 

Nella Holdings Limited

(Registration number: 10633614)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Investments

12

9,006,025

9,006,025

Current assets

 

Debtors

14

1,061

1,061

Cash at bank and in hand

 

143

139

 

1,204

1,200

Creditors: Amounts falling due within one year

16

(380,000)

(2,117,829)

Net current liabilities

 

(378,796)

(2,116,629)

Total assets less current liabilities

 

8,627,229

6,889,396

Creditors: Amounts falling due after more than one year

16

(2,420,721)

(2,723,143)

Net assets

 

6,206,508

4,166,253

Capital and reserves

 

Called up share capital

20

1,100

1,100

Profit and loss account

6,205,408

4,165,153

Total equity

 

6,206,508

4,166,253

The company made a profit after tax for the financial year of £2,190,255.

Approved and authorised by the Board on 2 October 2024 and signed on its behalf by:
 




 

Mr M F Nella

Director

 

Nella Holdings Limited

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023
 

Share capital
£

Share premium
£

Profit and loss account
£

Total
£

At 1 January 2023

1,100

2,976,425

1,386,671

4,364,196

Profit for the year

-

-

1,432,828

1,432,828

Total comprehensive income

-

-

1,432,828

1,432,828

Dividends

-

-

(150,000)

(150,000)

At 31 December 2023

1,100

2,976,425

2,669,499

5,647,024

Share capital
£

Share premium
£

Profit and loss account
£

Total
£

At 1 January 2022

1,100

2,976,425

155,159

3,132,684

Profit for the year

-

-

1,371,512

1,371,512

Total comprehensive income

-

-

1,371,512

1,371,512

Dividends

-

-

(140,000)

(140,000)

At 31 December 2022

1,100

2,976,425

1,386,671

4,364,196

 

Nella Holdings Limited

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Retained earnings
£

Total
£

At 1 January 2023

1,100

4,165,153

4,166,253

Profit for the year

-

2,190,255

2,190,255

Dividends

-

(150,000)

(150,000)

At 31 December 2023

1,100

6,205,408

6,206,508

Share capital
£

Retained earnings
£

Total
£

At 1 January 2022

1,100

3,670,117

3,671,217

Profit for the year

-

635,036

635,036

Dividends

-

(140,000)

(140,000)

At 31 December 2022

1,100

4,165,153

4,166,253

 

Nella Holdings Limited

Consolidated Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

1,432,828

1,371,512

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

4

1,607,374

1,641,188

Changes in fair value of investment property

(458,018)

-

Loss/(profit) on disposal of tangible assets

72,797

(46,716)

Finance income

(2,680)

(10,426)

Finance costs

5

177,121

194,396

Corporation tax expense

9

830,975

484,705

 

3,660,397

3,634,659

Working capital adjustments

 

Decrease/(increase) in stocks

13

425,288

(456,308)

Increase in trade debtors

14

(556,925)

(547,917)

Increase in trade creditors

16

918,793

72,609

Cash generated from operations

 

4,447,553

2,703,043

Corporation taxes paid

9

(410,793)

(167,512)

Net cash flow from operating activities

 

4,036,760

2,535,531

Cash flows from investing activities

 

Interest received

2,680

10,426

Acquisitions of tangible assets

(2,805,786)

(1,364,601)

Proceeds from sale of tangible assets

 

804,085

154,991

Acquisitions of intangible fixed assets

10

(21,947)

-

Net cash flows from investing activities

 

(2,020,968)

(1,199,184)

Cash flows from financing activities

 

Interest paid

5

(177,121)

(194,396)

Repayment of bank borrowing

 

(1,127,084)

(949,103)

Repayment of other borrowing

 

(302,422)

(295,045)

Dividends paid

(150,000)

(140,000)

Net cash flows from financing activities

 

(1,756,627)

(1,578,544)

Net increase/(decrease) in cash and cash equivalents

 

259,165

(242,197)

Cash and cash equivalents at 1 January

 

844,460

1,086,657

Cash and cash equivalents at 31 December

 

1,103,625

844,460

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England.

The principal activity of the individual company and group is disclosed in the Strategic Report.

The address of its registered office and principal place of business is:
Murray House
Murray Road
Orpington
Kent
BR5 3QY

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These financial statements have been prepared in accordance with applicable United Kingdom accounting standards, Financial Reporting Standard 102 - 'The Financial Reporting standard applicable in the United Kingdom and Republic of Ireland' ('FRS 102'), and with the Companies Act 2006.

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2023.

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

No profit and loss account is presented for the company as permitted by Section 408 of the Companies Act 2006.

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 and the Directors' Report together with a summary of the key business risks the company faces. Following the business recovery in the prior years which has continued into 2023 the directors believe that the company is well placed to manage its business risks successfully, and to maintain positive cash flows for the foreseeable future. After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Critical accounting judgements and key sources of estimation uncertainty

In the application of the group's accounting policies management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historic experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Specifically, judgements and estimates are required in determining the useful economic lives of tangible and intangible fixed assets, the recoverability of trade debtors and the valuation of stock.

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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the group's activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The group recognises revenue when:
- the amount of revenue can be reliably measured;
- it is probable that future economic benefits will flow to the entity;
- and specific criteria have been met for each of the group's activities.

Government grants

The group has adopted the accrual model for accounting for government grants. Grants relating to revenue are recognised in income on a systematic basis over the same period as the related costs for which the grant is intended to compensate. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

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

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

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Deferred corporation tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the group. Deferred corporation tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Freehold land and buildings is carried at fair value, derived from the current market prices for comparable real estate determined annually by external valuers/the directors. The valuers use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss.

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold improvements

10% straight line

Plant and machinery

25% reducing balance / 2 years

Fixtures and fittings

25% reducing balance

Computer equipment

25% reducing balance

Motor vehicles

25% reducing balance

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

10% straight line

Investments

Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Dividends on equity securities are recognised in income when receivable.

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Financial instruments

Classification
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Financial assets are classified as financial assets at fair value through profit or loss, loans and debtors, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The group determines the classification of its financial assets at initial recognition.

Financial liabilities are classified as financial liabilities at fair value through profit and loss, loans and borrowings, trade and other creditors, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The group determines the classification of its financial liabilities at initial recognition.

 Recognition and measurement
All financial instruments are recognised initially at fair value plus transaction costs. Thereafter financial instruments are stated at amortised cost using the effective interest rate method (less impairment where appropriate) unless the effect of discounting would be immaterial in which case they are stated at cost (less impairment where appropriate). The exception to this are those financial instruments where it is a requirement to continue recording them at fair value through profit and loss.


 Impairment
Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the asset have been affected.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade and other debtors

Trade and other debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. In such cases debtors are stated at transaction price less impairment losses. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the transaction.

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

The cost of finished goods comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.

Trade and other creditors

Trade and other creditors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, except where the effect of discounting would be immaterial. In such cases creditors are stated at transaction price.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Provisions

Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group's shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

3

Turnover

The analysis of the group's revenue for the year from continuing operations is as follows:

2023
£

2022
£

Hire of goods and sale of equipment

16,671,685

14,494,211

The analysis of the group's turnover for the year by market is as follows:

2023
£

2022
£

UK

15,825,434

13,874,471

Europe

846,251

619,740

16,671,685

14,494,211

4

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

751,330

786,020

Amortisation expense

856,044

855,168

Operating lease expense - plant and machinery

2,347

2,234

Loss/(profit) on disposal of property, plant and equipment

72,797

(46,716)

5

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

39,984

43,791

Interest expense on other finance liabilities

137,137

150,605

177,121

194,396

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

6

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

6,911,467

6,543,661

Social security costs

618,350

632,956

Pension costs, defined contribution scheme

120,387

113,407

Other employee expense

13,447

5,574

7,663,651

7,295,598

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Production

73

103

Administration and support

48

51

Other departments

86

93

207

247

7

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

91,100

93,826

Directors' pension contribution

1,630

-

92,730

93,826

8

Auditors' remuneration

2023
£

2022
£

Audit of these financial statements

1,155

1,100


 

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

9

Taxation

Tax charged/(credited) in the consolidated profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

455,495

410,467

Deferred taxation

Arising from origination and reversal of timing differences

375,480

74,238

Tax expense in the income statement

830,975

484,705

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - higher than the standard rate of corporation tax in the UK) of 23.5% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

2,263,803

1,856,217

Corporation tax at standard rate

532,524

352,681

Effect of property revaluation not taxable

(107,740)

-

Effect of expense not deductible in determining taxable profit (tax loss)

19,891

997

Effect of foreign tax rates

25,682

12,720

Deferred tax expense

375,480

74,238

Tax (decrease)/increase from effect of capital allowances and depreciation

(27,914)

43,970

Tax (decrease)/increase from other short-term timing differences

(3,887)

432

Other tax effects for reconciliation between accounting profit and tax expense (income)

16,939

(333)

Total tax charge

830,975

484,705

Based on current capital investment plans the group expects future timing differences between depreciation and capital allowances to remain at a similar level to the current year.

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Deferred tax

Group

Deferred tax assets and liabilities

2023

Liability
£

Difference between accumulated depreciation and amortisation and capital allowances

607,756

Revaluation of investment properties

783,602

1,391,358

2022

Liability
£

Difference between accumulated depreciation and amortisation and capital allowances

346,781

Revaluation of investment properties

948,725

1,295,506

Based on current capital investment plans the company expects to continue to claim capital allowances in excess of depreciation in future years at a slightly lower level than in the current year.

The main rate of corporation tax increased to 25% from 1 April 2023.

The deferred tax balance is measured at 25% (2022:25%).

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

10

Intangible assets

Group

Goodwill
 £

Total
£

Cost or valuation

At 1 January 2023

7,618,345

7,618,345

Additions

21,947

21,947

At 31 December 2023

7,640,292

7,640,292

Amortisation

At 1 January 2023

4,898,969

4,898,969

Amortisation charge

856,044

856,044

At 31 December 2023

5,755,013

5,755,013

Carrying amount

At 31 December 2023

1,885,279

1,885,279

At 31 December 2022

2,719,376

2,719,376

The amortisation expense for the year is included in administration expenses. The remaining amortisation period is 0.9 years, 4 years and 5 years.

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

11

Tangible assets

Group

Freehold property
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Other property, plant and equipment
 £

Total
£

Cost or valuation

At 1 January 2023

5,294,843

177,209

1,341,565

1,496,569

8,310,186

Revaluations

458,018

-

-

-

458,018

Additions

7,874

18,018

1,651,417

1,128,477

2,805,786

Disposals

-

-

(1,049,342)

(952,855)

(2,002,197)

At 31 December 2023

5,760,735

195,227

1,943,640

1,672,191

9,571,793

Depreciation

At 1 January 2023

266,684

154,360

456,189

1,010,866

1,888,099

Charge for the year

35,527

8,160

340,895

366,748

751,330

Eliminated on disposal

-

-

(479,717)

(645,598)

(1,125,315)

At 31 December 2023

302,211

162,520

317,367

732,016

1,514,114

Carrying amount

At 31 December 2023

5,458,524

32,707

1,626,273

940,175

8,057,679

At 31 December 2022

5,028,159

22,849

885,376

485,703

6,422,087

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

12

Investments

Company

2023
£

2022
£

Investments in subsidiaries

9,006,025

9,006,025

Subsidiaries

£

Cost or valuation

At 1 January 2023

9,006,025

Carrying amount

At 31 December 2023

9,006,025

At 31 December 2022

9,006,025

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Nella Cutlery South Limited

Ordinary

100%

100%

 

England

     

Nella Limited

Ordinary

100%

100%

 

England

     

SAS Nella France

34 Bd des Italiens
75009 Paris

Ordinary

100%

100%

 

France

     

Subsidiary undertakings

Nella Cutlery South Limited

The principal activity of Nella Cutlery South Limited is the provision of knife sharpening services. The profit for the financial period of Nella Cutlery South Limited was £1,669,834 and the aggregate amount of Capital and reserves at the end of the period was £3,265,322.

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Nella Limited

The principal activity of Nella Limited is property rental. The profit for the financial period of Nella Limited was £463,261 and the aggregate amount of Capital and reserves at the end of the period was £4,978,760.

SAS Nella France

The principal activity of SAS Nella France is provision of knife sharpening services. The shares of SAS Nella France are held by Nella Cutlery South Limited. Its financial period end is 31 March. The loss for the financial period of SAS Nella France was £109,177 and the aggregate amount of Capital and reserves at the end of the period was £(154,318).

13

Stocks

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Other inventories

1,176,750

1,602,038

-

-

14

Debtors

 

Group

Company

Current

2023
£

2022
£

2023
£

2022
£

Trade debtors

1,776,792

1,365,973

-

-

Other debtors

404,520

273,762

1,061

1,061

Prepayments and accrued income

352,804

337,456

-

-

 

2,534,116

1,977,191

1,061

1,061

15

Cash and cash equivalents

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Cash on hand

143

139

143

139

Cash at bank

1,132,631

844,321

-

-

1,132,774

844,460

143

139

Bank overdrafts

(29,149)

-

-

-

Cash and cash equivalents in statement of cash flows

1,103,625

844,460

143

139

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

16

Creditors

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Due within one year

Loans and borrowings

463,008

1,283,626

380,000

380,000

Trade creditors

1,006,876

529,063

-

-

Amounts due to group undertakings

-

-

-

1,737,829

Social security and other taxes

757,984

698,834

-

-

Other creditors

766,513

539,896

-

-

Accruals and deferred income

1,131,912

947,550

-

-

Corporation tax

454,414

409,712

-

-

4,580,707

4,408,681

380,000

2,117,829

Due after one year

Loans and borrowings

3,042,509

3,651,397

2,420,721

2,723,143

17

Loans and borrowings

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

621,788

928,254

-

-

Other borrowings

2,420,721

2,723,143

2,420,721

2,723,143

3,042,509

3,651,397

2,420,721

2,723,143

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Current loans and borrowings

Bank borrowings

53,859

903,626

-

-

Bank overdrafts

29,149

-

-

-

Other borrowings

380,000

380,000

380,000

380,000

463,008

1,283,626

380,000

380,000

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Group

Bank borrowings

Bank loans and overdrafts are denominated in Sterling with a nominal interest rate of 2.4%, and the final instalment was due on 18 September 2023. The carrying amount at the year end is £Nil (2022 - £840,370). The loan was repaid during the year.

The bank loans and overdrafts are secured by a guarantee from other group members, a debenture and a first legal charge over the group's properties.

Further bank loans and overdrafts are denominated in Sterling with a nominal interest rate of 2.65% over base rate, and the final instalments on the loans are due between 8 November 2024 and 25 November 2035. The carrying amount at the year end is £675,647 (2022 - £991,510).

The bank loans and overdrafts are secured by a debenture dated 25 April 2012 incorporating fixed and floating charges over the undertaking and all property and assets present and future and legal charges over the group’s freehold properties including all rents receivable from any leases granted dated, 28 May 2014; 8 July 2014; 22 August 2014 and 22 October 2019.
 

Other borrowings

A loan has been provided with a carrying amount of £2,800,721 (2022: £3,103,143) and is denominated in Sterling with no interest charged. A discount rate of 2.5% has been used to determine the amortised cost. The final instalment is due on 4 April 2032.

The loan is unsecured.

Capital repayments are made monthly.

Included in the loans and borrowings are the following amounts due after more than five years:

2023
£

2022
£

After more than five years by instalments

1,279,806

1,641,864

Company

Other borrowings

A loan has been provided with a carrying amount of £2,800,721 (2022: £3,103,143) and is denominated in Sterling with no interest charged. A discount rate of 2.5% has been used to determine the amortised cost. The final instalment is due on 4 April 2032.

The loan is unsecured.

Capital repayments are made monthly.
 

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

18

Deferred tax and other provisions

Group

Deferred tax
£

Other provisions
£

Total
£

At 1 January 2023

1,015,878

125,000

1,140,878

Additional provisions

375,480

-

375,480

At 31 December 2023

1,391,358

125,000

1,516,358

Other provisions relates to essential building works required under the group’s operating leases.

19

Pension and other schemes

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £120,387 (2022 - £113,407).

20

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary of £1 each

625

625

625

625

Ordinary A of £1 each

165

165

100

100

Ordinary D of £1 each

165

165

100

100

Ordinary E of £1 each

145

145

275

275

 

1,100

1,100

1,100

1,100

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:
The holders of Ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. All Ordinary shares rank equally with regard to the company's residual assets.

21

Reserves

The profit and loss account includes £1,254,859 (2022 - £910,862) of non-distributable reserves relating to the revaluation of investment properties.

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

22

Dividends

Interim dividends paid

 

2023
£

2022
£

Interim dividend of £800 (2022 - £700) per each Ordinary A share

80,000

70,000

Interim dividend of £700 per each Ordinary D share

70,000

70,000

 

150,000

140,000

23

Analysis of changes in net debt

Group

At 1 January 2023
£

Financing cash flows
£

At 31 December 2023
£

Cash and cash equivalents

Cash

844,460

288,314

1,132,774

Borrowings

Long term borrowings

(4,935,023)

1,429,506

(3,505,517)

 

(4,090,563)

1,717,820

(2,372,743)

24

Related party transactions

Group

Transactions with directors

2023

At 1 January 2023
£

Advances to director
£

Repayments by director
£

At 31 December 2023
£

Directors' loan accounts

36,195

134,462

(150,000)

20,657

         
       

 

2022

At 1 January 2022
£

Advances to director
£

Repayments by director
£

At 31 December 2022
£

Directors' loan accounts

(205)

176,400

(140,000)

36,195

         
       

 

 

Nella Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Director loans are provided interest free and without security.

Summary of transactions with other related parties

The company has taken advantage of the exemption in FRS 102 33.1A "Related Party Disclosures" from disclosing transactions with other members of the group.
 

Expenditure with and payables to related parties

2023

Other related parties
£

Rendering of services

2,822,930

2022

Other related parties
£

Rendering of services

1,224,861

Loans from related parties

2023

Other related parties
£

At start of period

464,845

Advanced

11,404

Repaid

(50,332)

At end of period

425,917

2022

Other related parties
£

At start of period

319,371

Advanced

200,000

Repaid

(54,526)

At end of period

464,845

25

Control

The ultimate controlling party is Mr M P P Nella.