Redruth Eden Ltd - Accounts
The Shareholders' Agreement (8.2) requires the Company (Redruth Eden Ltd) to issue annual accounts to the Shareholders. This never happened. However, the filleted accounts were submitted annually to Companies House and are therefore public domain. The figures presented here are those lodged with Companies House.
The 2019 fixed assets figure, £1,577,340 appears to be the total acquisition cost comprising purchase price, professional fees and stamp duty. As professional fees and stamp duty are non-returnable expenses, it is unclear why they are classed as fixed assets. The true purchase price of £1,475,000 might have made more sense here.
The 2019 current assets figure, £660,867, is the sum remaining after acquisition. (I had calculated it to be £661,750, accurate to 0.12%!) This is the portion of investment capital that was transferred from Redruth Eden Ltd. to Eden Land Planning Ltd. without the investors' knowledge. As the transfer occurred on completion of purchase (27 July 2018) it should not show up as Redruth Eden current assets in accounts dated 30 July 2019. The correct figure should be £0.00.
In 2020 and subsequent years, the fixed assets are shown as zero. It is not clear why, as the land is unsold and is still the property of Redruth Eden Ltd.
It appears that while the 2019 column describes real money (investment capital, acquisition costs, residual sum), from 2020 onwards the columns are derived from the original total share capital and the profit & loss account.
The problem with this is that from the moment the £661k is transferred to Eden Land Planning Ltd, it is no longer valid to claim that the 2,240,000 Redruth Eden Ltd. shares are still worth £1 each, as the only tangible asset left in the Redruth Eden company is the land purchased for £1,475,000. The figures shown in the accounts from 2020 onwards simply do not reflect reality.
It is hard to avoid the inference that the Redruth Eden accounts lodged with Companies House are an attempt to conceal the covert transfer of £661k from Redruth Eden Ltd. to Eden Land Planning Ltd.
The Directors of ELP and Redruth Eden are the same people. I invited them to correct any errors I might have made in my analysis of the accounts. They have not responded, from which I conclude that the accounts submitted to Companies House are indeed 'tailored' to conceal the transfer of 30% of the investment capital from Redruth Eden Ltd. to Eden Land Planning Ltd.
FKGB Ltd. is the accountancy firm that produces the accounts for Redruth Eden Ltd. FKGB was not instructed to carry out an audit or a review of the accounts. Thus they were not required to verify the accuracy or completeness of the accounting records or information and explanations provided by Redruth Eden Ltd. Their report includes a comprehensive disclaimer to this effect.
Note also that columns 2021 and 2022 are identical. Redruth Eden Ltd. apparently did not trade in the year to July 2022.