Project Greenline Limited - Limited company accounts 20.1

REGISTERED NUMBER: 11979450 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD 3 MAY 2019 TO 31 DECEMBER 2019

FOR

PROJECT GREENLINE LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Statement of Comprehensive Income

7

Consolidated Balance Sheet

8

Company Balance Sheet

9

Consolidated Statement of Changes in Equity

10

Company Statement of Changes in Equity

11

Consolidated Cash Flow Statement

12

Notes to the Consolidated Cash Flow Statement

13

Notes to the Consolidated Financial Statements

14

DIRECTORS:

S L Bradshaw

R B Sanders

C K Sanders

A M Blount

SECRETARY:

I Sanders

REGISTERED OFFICE:

Sidney Robinson Business Park

Ascot Drive

Derby

DE24 8EH

REGISTERED NUMBER:

11979450 (England and Wales)

AUDITORS:

Magma Audit LLP

Chartered Accountants

Statutory Auditor

Unit 2, Charnwood Edge Business Park

Syston Road

Leicestershire

LE7 4UZ

The directors present their strategic report of the company and the group for the period 3 May 2019 to 31 December 2019.

REVIEW OF BUSINESS

2019 saw a year of relative stability across the group in relation to overall sales however the Directors recognise the business has not yet seen benefits of earlier investments and thus did not achieve the desired growth targets for the year. During the period the Directors continued to drive delivery of a complete business review which considered the necessary actions alongside investment required to achieve growth during the following 5 years in an economically, socially and environmentally sustainable way. Regardless of the current difficulties presented by the COVID-19 virus, the resulting benefit of agreed actions and investments are still (as originally planned) to be delivered over the following 4/5 year period with the Directors choosing to continue investing (when possible) during 2020, whilst dealing with the uncertainty presented by the virus outbreak. Of note is the fact that in preparation for a potentially difficult trading period during 2020 the group was successful in securing a £250k CBILs loan. Due to a better than forecast year to date, we fully expect to settle this facility during 2021 and prior to incurring any loan interest.

During July of 2019, the group underwent a planned reorganisation whereby a new holdings company was incorporated to acquire the share capital of the group. The new holdings company, Project Greenline Ltd, now possesses significant control of the group through majority ownership of shares and voting rights. The result of the reorganisation is not considered to be of concern to customers/creditors as the ultimate party with significant control of the group is unchanged and D.I.P.T. Holdings Directors have been appointed as Directors of Project Greenline Ltd. This activity has ensured the Directors have prepared the group for the foreseeable future.

The groups strategy continues to be supported by our 'Best Value No Messin' proposition and we are now better placed than ever to target sustained growth, new markets and a carefully considered yet diverse product range. Key to developments over future years will be the integration of I.T. solutions and the training of our team to use said solutions to extract the benefits on offer meaning we can react quicker, plan better and grow in an economically efficient manner.

We recognise the competitive market conditions however take pride in the fact our proposition differs significantly from others. Our proposition, processes and systems support quantifiable results which are willingly shared with customers and further support the understanding of the value on offer.

On a daily basis we search for improvements to the functioning of the group and continue to invest in our people, their development and their ideas in a responsible manner.

Regardless of costs associated with the previously mentioned reorganisation of the group, the cash/asset position of the group remains strong. We retain our ability to invest in products and services and will continually support our valued team in their delivery of future growth.

PRINCIPAL RISKS AND UNCERTAINTIES

We entered 2020 experiencing significant growth in various areas of the business and regardless of the COVID-19 outbreak consider ourselves to be in a strong position which will allow us to deal with the current uncertainty this situation brings. Investments during 2019 in I.T. and online platforms have significantly influenced our ability to perform better than forecast during this difficult period however we have also been very well supported by the continued positive attitude of our team, a healthy stock profile and strong supplier relationships.

We are now implementing plans to mitigate any negative effects caused by outcomes related to the Brexit situation. The unpredictability of current negotiations has driven a review of our purchasing procedures and suppliers, we move forward with confidence that measures taken will provide a strong footing for growth.

KEY PERFORMANCE INDICATORS

Amongst our key financial performance indicators are those that communicate the financial performance and strength of the group as a whole, these being turnover, gross margin, operating profit and return on capital employed.

The group turnover this year represents six months of trade on a consolidated basis. Further details in regards to the key financial performance indicators can be found in the consolidated D.I.P.T. Holdings Limited accounts filed at Companies House which consist of trading performance for the whole year to 31 December 2019 along with the comparative year.

SUMMARY

The board have welcomed the reorganisation of the group and look forward to experiencing the next phase of our growth.

ON BEHALF OF THE BOARD:

C K Sanders - Director

20 October 2020

The directors present their report with the financial statements of the company and the group for the period 3 May 2019 to 31 December 2019.

INCORPORATION

The group was incorporated on 3 May 2019 and commenced trading on 8 July 2019.

PRINCIPAL ACTIVITY

The principal activity of the group in the period under review was that of the sale, hire and servicing of industrial power tools and ancillary equipment.

DIVIDENDS

The total distribution of dividends for the period ended 31 December 2019 will be £ 62,212 .

EVENTS SINCE THE END OF THE PERIOD

Information relating to events since the end of the period is given in the notes to the financial statements.

DIRECTORS

The directors who have held office during the period from 3 May 2019 to the date of this report are as follows:

S L Bradshaw - appointed 3 May 2019

R B Sanders - appointed 3 May 2019

C K Sanders - appointed 3 May 2019

A M Blount - appointed 3 May 2019

All the directors who are eligible offer themselves for election at the forthcoming first Annual General Meeting.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 the group 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 then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Magma Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

C K Sanders - Director

20 October 2020

Opinion

We have audited the financial statements of Project Greenline Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2019 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2019 and of the group's profit for the period then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept 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 four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the 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.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Orton ACA FCCA (Senior Statutory Auditor)

for and on behalf of Magma Audit LLP

Chartered Accountants

Statutory Auditor

Unit 2, Charnwood Edge Business Park

Syston Road

Leicestershire

LE7 4UZ

21 October 2020

TURNOVER

5,455,648

Cost of sales

(3,633,914

)

GROSS PROFIT

1,821,734

Distribution costs

(180,636

)

Administrative expenses

(14,551

)

1,626,547

Other operating income

32,929

OPERATING PROFIT

5

1,659,476

Interest receivable and similar income

38,314

1,697,790

Interest payable and similar expenses

6

(505

)

PROFIT BEFORE TAXATION

1,697,285

Tax on profit

7

(83,807

)

PROFIT FOR THE FINANCIAL PERIOD

1,613,478

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME FOR

THE PERIOD

1,613,478

Profit attributable to:

Owners of the parent

1,575,116

Non-controlling interests

38,362

1,613,478

Total comprehensive income attributable to:

Owners of the parent

1,575,116

Non-controlling interests

38,362

1,613,478

FIXED ASSETS

Intangible assets

10

(500,352

)

Tangible assets

11

131,276

Investments

12

-

(369,076

)

CURRENT ASSETS

Stocks

13

2,640,010

Debtors

14

2,924,324

Cash at bank

754,134

6,318,468

CREDITORS

Amounts falling due within one year

15

(1,710,523

)

NET CURRENT ASSETS

4,607,945

TOTAL ASSETS LESS CURRENT

LIABILITIES

4,238,869

CREDITORS

Amounts falling due after more than one

year

16

(300,000

)

PROVISIONS FOR LIABILITIES

20

(21,800

)

NET ASSETS

3,917,069

CAPITAL AND RESERVES

Called up share capital

21

125

Merger reserve

22

2,365,678

Retained earnings

22

1,512,904

SHAREHOLDERS' FUNDS

3,878,707

NON-CONTROLLING INTERESTS

38,362

TOTAL EQUITY

3,917,069

The financial statements were approved by the Board of Directors and authorised for issue on 20 October 2020 and were signed on its behalf by:

C K Sanders - Director

FIXED ASSETS

Intangible assets

10

-

Tangible assets

11

-

Investments

12

3,365,803

CURRENT ASSETS

Cash at bank

7

CREDITORS

Amounts falling due within one year

15

(100,007

)

NET CURRENT LIABILITIES

(100,000

)

TOTAL ASSETS LESS CURRENT

LIABILITIES

3,265,803

CREDITORS

Amounts falling due after more than one

year

16

(300,000

)

NET ASSETS

2,965,803

CAPITAL AND RESERVES

Called up share capital

21

125

Merger reserve

2,365,678

Retained earnings

600,000

SHAREHOLDERS' FUNDS

2,965,803

Company's profit for the financial year

600,000

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 20 October 2020 and were signed on its behalf by:

C K Sanders - Director

Called up

share

Retained

Merger

capital

earnings

reserve

£

Changes in equity

Issue of share capital

125

-

2,365,678

Dividends

-

(62,212

)

-

Total comprehensive income

-

1,575,116

-

Balance at 31 December 2019

125

1,512,904

2,365,678

Non-controlling

Total

interests

equity

£

Changes in equity

Issue of share capital

2,365,803

-

2,365,803

Dividends

(62,212

)

-

(62,212

)

Total comprehensive income

1,575,116

38,362

1,613,478

Balance at 31 December 2019

3,878,707

38,362

3,917,069

Called up

share

Retained

Merger

Total

capital

earnings

reserve

equity

£

Changes in equity

Issue of share capital

125

-

2,365,678

2,365,803

Total comprehensive income

-

600,000

-

600,000

Balance at 31 December 2019

125

600,000

2,365,678

2,965,803

Cash flows from operating activities

Cash generated from operations

1

607,847

Interest paid

(505

)

Tax received

35,331

Net cash from operating activities

642,673

Cash flows from investing activities

Purchase of tangible fixed assets

(58,940

)

Interest received

38,314

Net cash from investing activities

(20,626

)

Cash flows from financing activities

Amount introduced by directors

6,478

Amount withdrawn by directors

(5,347

)

Equity dividends paid

(62,212

)

Net cash from financing activities

(61,081

)

Increase in cash and cash equivalents

560,966

Cash and cash equivalents at beginning

of period

2

-

Cash and cash equivalents at end of

period

2

560,966

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

£

Profit before taxation

1,697,285

Depreciation charges

31,852

Amortisation of negative goodwill

(1,013,821

)

Acquisition of subsidiary

3,775,791

Finance costs

505

Finance income

(38,314

)

4,453,298

Increase in stocks

(2,640,010

)

Increase in trade and other debtors

(2,918,980

)

Increase in trade and other creditors

1,713,539

Cash generated from operations

607,847

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Period ended 31 December 2019

31.12.19

3.5.19

£

Cash and cash equivalents

754,134

-

Bank overdrafts

(193,168

)

-

560,966

-

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 3.5.19

Cash flow

At 31.12.19

£

Net cash

Cash at bank

-

754,134

Bank overdrafts

-

(193,168

)

(193,168

)

-

560,966

Total

-

560,966

1.	STATUTORY INFORMATION

Project Greenline Limited is a private limited company and group, registered in England and Wales. Its registered office address is Sidney Robinson Business Park, Ascot Drive, Derby, DE24 8EH and the registered number is 11979450.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future despite the global pandemic which occurred after the year end. The directors have prepared financial forecasts which incorporate the impact of COVID-19 as far as possible, including cashflow forecasts. These demonstrate that the group has sufficient resources to meet its liabilities for at least twelve months from signing these financial statements. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Basis of consolidation

The consolidated financial statements incorporate those of Project Greenline Limited and all of its subsidiaries (i.e. entities that the Group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the acquisition method of accounting. The results are incorporated from the date control passes. All financial statements are made up to 31 December.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.

Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Revenue is recognised on the date that goods are despatched.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Goodwill

Goodwill represents the shortfall of the cost of the business acquisition, compared to the fair value of the net assets acquired. It is initially recognised at cost and subsequently measured at cost less any accumulated amortisation and impairment.

Negative goodwill is credited to Statement of Comprehensive Income as the underlying assets are realised (stock and tangible fixed assets).

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Long leasehold land & buildings

Over remaining period of lease

Plant and machinery

10% to 33% straight line

Fixtures and fittings

15% to 20% straight line

Computer equipment

25% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Stocks

Stocks are stated at the lower of cost and 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 balance sheet date, stocks are assessed for impairment. If stock 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.

Financial instruments

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.

(i) Financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

(ii) Financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Taxation

The tax expense for the year comprises current and deferred tax.

Tax is recognised in profit or loss except that a change 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.

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.

Both current and deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Foreign currencies

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Operating leases

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

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Judgements and key sources of estimation uncertainty

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

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

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

(i) Depreciation of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual value of the assets. The useful lives and the residual are reassessed annually. They are amended where necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 11 for the carrying amount of the assets and note 2 for the useful economic lives for each class of asset.

(ii) Stock provisioning

The group's products are subject to changing consumer demands. As a result it is necessary to consider the recoverability of the cost of the stock and the associated provisioning required. When calculating the stock provision, management considers the nature, age and condition of the stock, as well as applying assumptions around the saleability of the stock.

(iii) Impairment of debtors

The group makes an estimate of the recoverable value of trade debtors. When assessing impairment of trade debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 14 for the net carrying amount of trade debtors.

4.	EMPLOYEES AND DIRECTORS

£

Wages and salaries

801,805

Other pension costs

24,974

826,779

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

Sales

33

Administration

13

Production

18

64

The average number of employees by undertakings that were proportionately consolidated during the period was 64 .

£

Directors' remuneration

12,000

Directors' pension contributions to money purchase schemes

4,870

5.	OPERATING PROFIT

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

£

Hire of plant and machinery

20,272

Other operating leases

102,953

Depreciation - owned assets

31,850

Goodwill amortisation

(1,013,821

)

Auditors' remuneration

3,000

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

£

Bank interest

284

Other interest

221

505

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the period was as follows:

£

Current tax:

UK corporation tax

79,839

Deferred tax

3,968

Tax on profit

83,807

Reconciliation of total tax charge included in profit and loss

The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The difference is explained below:

£

Profit before tax

1,697,285

Profit multiplied by the standard rate of corporation tax in the UK of 19 %

322,484

Effects of:

Expenses not deductible for tax purposes

(44,467

)

Depreciation in excess of capital allowances

1,836

Amortisation of negative goodwill

(196,046

)

Total tax charge

83,807

8.	INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

9.

DIVIDENDS

£

Ordinary shares of 1p each

Interim

62,212

10.	INTANGIBLE FIXED ASSETS

Group

Goodwill

£

COST

Additions

(1,514,173

)

At 31 December 2019

(1,514,173

)

AMORTISATION

Amortisation for period

(1,013,821

)

At 31 December 2019

(1,013,821

)

NET BOOK VALUE

At 31 December 2019

(500,352

)

11.	TANGIBLE FIXED ASSETS

Group

Long

leasehold

Fixtures

land &

Plant and

and

Computer

buildings

machinery

fittings

equipment

Totals

£

COST

Additions

-

27,209

29,406

2,325

58,940

On acquisition

93,299

235,200

328,958

109,420

766,877

At 31 December 2019

93,299

262,409

358,364

111,745

825,817

DEPRECIATION

Charge for period

3,347

7,728

12,945

7,830

31,850

On acquisition

86,354

220,146

272,589

83,602

662,691

At 31 December 2019

89,701

227,874

285,534

91,432

694,541

NET BOOK VALUE

At 31 December 2019

3,598

34,535

72,830

20,313

131,276

12.	FIXED ASSET INVESTMENTS

Company

Shares in

group

undertakings

£

COST

Additions

3,365,803

At 31 December 2019

3,365,803

NET BOOK VALUE

At 31 December 2019

3,365,803

The group or the company's investments at the Balance Sheet date in the share capital of companies include the following:

Subsidiaries

D.I.P.T. Holdings Limited

Registered office: Sidney Robinson Business Park, Ascot Drive, Derby, DE24 8EH

Nature of business: Management services to subsidiaries

%

Class of shares:

holding

Ordinary

100.00

D.I.P.T. Limited

Registered office: Sidney Robinson Business Park, Ascot Drive, Derby, DE24 8EH

Nature of business: Management services to subsidiaries

%

Class of shares:

holding

Ordinary

100.00

Metal Fabrication Supplies Limited

Registered office: Sidney Robinson Business Park, Ascot Drive, Derby, DE24 8EH

Nature of business: Sales of industrial power tools and related goods

%

Class of shares:

holding

Ordinary

80.00

Protrade Ltd

Registered office: Sidney Robinson Business Park, Ascot Drive, Derby, DE24 8EH

Nature of business: Sales, hire and servicing of industrial power tools

%

Class of shares:

holding

Ordinary

81.27

Joinery Fit-Out Supplies Limited

Registered office: Sidney Robinson Business Park, Ascot Drive, Derby, DE24 8EH

Nature of business: Non trading company

%

Class of shares:

holding

Ordinary

81.27

13.

STOCKS

Group

£

Stocks

2,640,010

14.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

£

Trade debtors

1,938,265

Other debtors

794,515

Directors' loan accounts

5,347

VAT

8,539

Prepayments

177,658

2,924,324

15.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

£

Bank loans and overdrafts (see note 17)

193,168

-

Trade creditors

1,061,147

-

Tax

97,338

-

Social security and other taxes

177,104

-

Other creditors

39,915

-

Loan notes

100,000

Directors' current accounts

6,478

-

Accruals and deferred income

35,373

7

1,710,523

100,007

16.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group

Company

£

Loan notes

300,000

17.

LOANS

An analysis of the maturity of loans is given below:

Group

£

Amounts falling due within one year or on

demand:

Bank overdrafts

193,168

18.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group

Non-

cancellable

operating

leases

£

Within one year

256,496

Between one and five years

320,585

In more than five years

85,840

662,921

Operating lease payments represent rentals payable by the group for buildings, equipment and motor vehicles. Leases are negotiated for various periods depending on the assets concerned.

19.	SECURED DEBTS

The following secured debts are included within creditors:

Group

£

Bank overdraft

193,168

The bank borrowings are secured by a debenture and cross guarantees between group companies.

20.	PROVISIONS FOR LIABILITIES

Group

£

Deferred tax

21,800

Group

Deferred

tax

£

On acquisition

17,832

Provided during period

3,968

Balance at 31 December 2019

21,800

The movement in deferred tax for the following period, based on current rates and information, is estimated to be a reduction of £11,150.This relates to the reversal of timing differences on capital allowances.

21.	CALLED UP SHARE CAPITAL

There are 12,500 £0.01 shares in issue, these are split as follows; 6,375 Ordinary, 625 Ordinary A, 625 Ordinary B, 1,625 Ordinary C, 1,625 Ordinary D, 1,625 Ordinary E.

All shares have full rights attached to them, in respect of voting, dividends and distributions. The Ordinary shares have priority to any capital distribution on a winding up.

22.

RESERVES

Retained earnings

Retained earnings represent accumulated comprehensive income for the year less dividends paid.

Merger reserve

The merger reserve represents the difference between the parent company's cost of investment and the subsidiary's share capital and share premium.

23.	PENSION COMMITMENTS

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £24,974 were paid in the period in respect of the defined contribution scheme.

24.	ULTIMATE CONTROLLING PARTY

The group is under the control of the Sanders family by virtue of The Sanders Family Settlement Trust's majority holding in the ordinary shares of the company.

25.	OTHER FINANCIAL COMMITMENTS

D.I.P.T. Holdings Limited has guaranteed the debts of all of its subsidiary companies to 31 December 2015.

26.	DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to a director subsisted during the period ended 31 December 2019:

£

C K Sanders

Balance outstanding at start of period

-

Amounts advanced

5,347

Amounts repaid

-

Amounts written off

-

Amounts waived

-

Balance outstanding at end of period

5,347

Dividends totalling £62,212 were paid in the year in respect of shares in group companies held by the company's directors.

At the reporting date there were amounts due from related parties of £5,347 and amounts due to related parties of £6,478 in respect of directors' current accounts.

27.	RELATED PARTY DISCLOSURES

Entities over which the entity has significant influence

£

Interest receivable

36,209

Management charge receivable

12,500

Amount due from related party

665,510

During the year, a total of key management personnel compensation of £16,870 was paid.

28.	POST BALANCE SHEET EVENTS

Since the balance sheet date the world has suffered a COVID-19 outbreak, and volatility in the economy as a result. The directors have considered the effect this may have on the group and although unclear what impact this will have in the longer term they are informed by the Government's guidance that the issue will be time limited. This will continue to be a developing situation and as such a reasonable estimate of the financial effect of this outbreak on the company cannot feasibly be made. The directors have assessed the above and consider the company to be a going concern.

29.	GROUP REORGANISATION

During the year, on 8 July 2019, the Group underwent a reorganisation whereby a new holdings company was incorporated to acquire the share capital of D.I.P.T. Holdings Limited. A number of the shareholders entered into a share for share exchange transferring their shareholdings in D.I.P.T. Holdings Limited for shares in Project Greenline Limited. Two shareholders of D.I.P.T. Holdings Limited took the opportunity to sell 39% of the issued share capital to Project Greenline Limited for a consideration of £1,000,000, of which £400,000 was deferred and will be paid in equal instalments over a period of 4 years.