Kelta Limited - Limited company accounts 20.1

REGISTERED NUMBER: 09231573 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019

FOR

KELTA LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

5

Consolidated Income Statement

7

Consolidated Other Comprehensive Income

8

Consolidated Statement of Financial Position

9

Company Statement of Financial Position

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Statement of Cash Flows

13

Notes to the Consolidated Statement of Cash Flows

14

Notes to the Consolidated Financial Statements

15

DIRECTOR:

P Mehta

REGISTERED OFFICE:

Eagle House

28 Billing Road

Northampton

Northamptonshire

NN1 5AJ

REGISTERED NUMBER:

09231573 (England and Wales)

AUDITORS:

DNG Dove Naish LLP, Statutory Auditor

Eagle House

28 Billing Road

Northampton

Northamptonshire

NN1 5AJ

The director presents his strategic report of the company and the group for the year ended 31 December 2019.

The trading results for the year and the group's financial position at the end of the year are shown in the attached financial statements.

REVIEW OF BUSINESS

Group turnover has decreased by $11.14m (17%) on the prior year to $53.45m.

Gross profit margin has reduced from 49.2% to 39.8% as a result of reduction in turnover and unfavorable product mix.

The group has reported a net profit before tax of $28.03m compared to $21.90 in the prior period.

Total shareholders funds decreased from $91.80m to $37.26m.

The group continues to work with its customers on the development of new products and service offerings to house new and evolving technologies. The group continues to invest and expand its operations, premises, manpower and machinery.

PRINCIPAL RISKS AND UNCERTAINTIES

Risk is a key element of the group's strategic management, whereby it addresses the risks attached to each of its activities. This is reflected in the group's Business Continuity plan, which incorporates Risk Tolerance Matrices, Business Impact Analyses and Action Plans.

Regular reviews of the group's Business Continuity plan, policies, quality control and health and safety procedures are undertaken as part of the group's risk management process.

In common with many manufacturing businesses the group continues to be exposed to the effects of global competition but focuses on providing quality products and solutions for its customers.

The group's activities expose it to a number of financial risks including liquidity risk and currency risk. The group does not use derivative financial instruments for speculative purposes.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for on-going operations and future developments, the group uses a mixture of long-term and short-term debt finance and equity funding and inter-company treasury management.

Currency risk

The group undertakes trading transactions in currencies other than US Dollars and has funding instruments denominated in foreign currency. The foreign exchange risk is managed by holding cash resources in foreign currency.

SECTION 172(1) STATEMENT

Stakeholder Engagement

We have a legal responsibility under section 172 of the Companies Act 2006 to act in the way we consider, in good faith, would be most likely to promote the company's success for the benefit of its members as a whole, and to have regard to the long-term effect of our decisions on the company and its stakeholders. This statement addresses the ways in which we as a Board outwork this responsibility.

Promoting the company's success for its members

We continue to explore possibilities to maximise the company's ability to grow profits and market share whilst returning the highest possible value to the shareholders.

Engaging with stakeholders

Our key stakeholders, and the ways in which we engage with them, are as follows:

Our employees

Our employees We rely on an experienced, global work-force to successfully compete in a dynamic market segment. Recruitment and retention of staff is a critical business activity. In addition, Safety of our employees is always a number one concern above and beyond anything else

Our customers and suppliers

We make the necessary investment so that we can continue to offer customers the best quality products. Our business model prioritises overall value

Our community

We are a privately owned company and have invested in our community by various initiatives.

Our planet

We dispose of all waste responsibly and exceed minimum regulatory standards.

KEY PERFORMANCE INDICATORS

The group operates with a range of key performance indicators, the principal measures fall within the following categories; profitability, sales & customer service, resource & cost effectiveness. These are reviewed at regularly.

SIGNED BY ORDER OF THE DIRECTORS:

P Mehta - Director

20 October 2020

The director presents his report with the financial statements of the company and the group for the year ended 31 December 2019.

PRINCIPAL ACTIVITIES

The principal activities of the group in the year under review were those of design, manufacture and sale of engineered products and the holding of investments.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2019 will be $ 78,362,820 .

DIRECTOR

P Mehta held office during the whole of the period from 1 January 2019 to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is 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 director is required to:

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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 director is 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 he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, DNG Dove Naish LLP, Statutory Auditor, will be proposed for re-appointment at the forthcoming Annual General Meeting.

SIGNED BY ORDER OF THE DIRECTORS:

P Mehta - Director

20 October 2020

Opinion

We have audited the financial statements of Kelta Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2019 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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 director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has 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 director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, 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 Director 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 Director 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 Director.

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 director's remuneration specified by law are not made; or

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

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is 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 director determines 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 director is 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 director either intends to liquidate the group or the parent company or to cease operations, or has 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.

Andrew Clifford (Senior Statutory Auditor)

for and on behalf of DNG Dove Naish LLP, Statutory Auditor

Eagle House

28 Billing Road

Northampton

Northamptonshire

NN1 5AJ

22 October 2020

TURNOVER

3

53,450,241

64,594,516

Cost of sales

32,180,706

32,811,171

GROSS PROFIT

21,269,535

31,783,345

Administrative expenses

6,117,605

4,761,317

15,151,930

27,022,028

Other operating income

1,958,901

79,909

OPERATING PROFIT

5

17,110,831

27,101,937

Gain on sale of investments

6

9,704,802

857,280

26,815,633

27,959,217

Income from fixed asset investments

507,589

1,286,205

Interest receivable and similar income

1,345,742

1,316,399

1,853,331

2,602,604

28,668,964

30,561,821

Amounts written off investments

7

609,860

323,239

Gain/loss on revaluation of investments

-

8,310,185

609,860

8,633,424

28,059,104

21,928,397

Interest payable and similar expenses

8

29,532

30,393

PROFIT BEFORE TAXATION

28,029,572

21,898,004

Tax on profit

9

3,324,052

778,634

PROFIT FOR THE FINANCIAL YEAR

24,705,520

21,119,370

Profit attributable to:

Owners of the parent

24,705,520

21,119,370

PROFIT FOR THE YEAR

24,705,520

21,119,370

OTHER COMPREHENSIVE LOSS

Currency translation differences

104,562

(635,479

)

Other reserve movements

(984,393

)

-

Income tax relating to components of other comprehensive loss

-

-

OTHER COMPREHENSIVE LOSS FOR THE YEAR, NET OF INCOME TAX

(879,831

)

(635,479

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

23,825,689

20,483,891

Total comprehensive income attributable to:

Owners of the parent

23,825,689

20,483,891

FIXED ASSETS

Intangible assets

12

741,092

905,206

Tangible assets

13

3,911,391

6,358,316

Investments

14

Interest in associate

4,788,171

5,398,031

Other investments

9,018,000

64,301,880

18,458,654

76,963,433

CURRENT ASSETS

Stocks

15

4,556,802

9,426,858

Debtors

16

7,999,581

5,453,150

Cash at bank and in hand

16,217,795

11,948,311

28,774,178

26,828,319

CREDITORS

Amounts falling due within one year

17

9,717,996

11,743,974

NET CURRENT ASSETS

19,056,182

15,084,345

TOTAL ASSETS LESS CURRENT LIABILITIES

37,514,836

92,047,778

PROVISIONS FOR LIABILITIES

19

252,631

248,442

NET ASSETS

37,262,205

91,799,336

CAPITAL AND RESERVES

Called up share capital

20

1,555

1,555

Translation reserve

21

(1,474,499

)

(1,846,379

)

Surplus reserve

21

542,633

581,002

Retained earnings

21

38,192,516

93,063,158

SHAREHOLDERS' FUNDS

37,262,205

91,799,336

The financial statements were approved by the director and authorised for issue on 20 October 2020 and were signed by:

P Mehta - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

-

-

Investments

14

38,811,834

89,944,580

38,811,834

89,944,580

CURRENT ASSETS

Cash at bank

1,137,820

2,000,812

CREDITORS

Amounts falling due within one year

17

2,687,452

146,053

NET CURRENT (LIABILITIES)/ASSETS

(1,549,632

)

1,854,759

TOTAL ASSETS LESS CURRENT LIABILITIES

37,262,202

91,799,339

CAPITAL AND RESERVES

Called up share capital

20

1,555

1,555

Retained earnings

21

37,260,647

91,797,784

SHAREHOLDERS' FUNDS

37,262,202

91,799,339

Company's profit for the financial year

23,825,683

20,483,894

The financial statements were approved by the director and authorised for issue on 20 October 2020 and were signed by:

P Mehta - Director

Called up

share

Retained

Translation

Surplus

Total

capital

earnings

reserve

reserve

equity

$

$

$

$

$

Balance at 1 January 2018

1,555

181,044,615

(1,210,900

)

535,387

180,370,657

Changes in equity

Dividends

-

(109,055,212

)

-

-

(109,055,212

)

Total comprehensive income

-

21,073,755

(635,479

)

45,615

20,483,891

Balance at 31 December 2018

1,555

93,063,158

(1,846,379

)

581,002

91,799,336

Changes in equity

Dividends

-

(78,362,820

)

-

-

(78,362,820

)

Total comprehensive income

-

23,492,178

371,880

(38,369

)

23,825,689

Balance at 31 December 2019

1,555

38,192,516

(1,474,499

)

542,633

37,262,205

Called up

share

Retained

Total

capital

earnings

equity

$

$

$

Balance at 1 January 2018

1,555

180,369,102

180,370,657

Changes in equity

Dividends

-

(109,055,212

)

(109,055,212

)

Total comprehensive income

-

20,483,894

20,483,894

Balance at 31 December 2018

1,555

91,797,784

91,799,339

Changes in equity

Dividends

-

(78,362,820

)

(78,362,820

)

Total comprehensive income

-

23,825,683

23,825,683

Balance at 31 December 2019

1,555

37,260,647

37,262,202

Cash flows from operating activities

Cash generated from operations

1

28,922,939

28,840,772

Interest paid

(29,532

)

(30,393

)

Tax paid

(800,095

)

(847,167

)

Net cash from operating activities

28,093,312

27,963,212

Cash flows from investing activities

Purchase of tangible fixed assets

(595,796

)

(925,105

)

Purchase of fixed asset investments

-

(28,454,009

)

Sale of tangible fixed assets

2,210,221

44,518

Sale of fixed asset investments

53,763,275

79,623,120

Interest received

1,345,742

1,316,399

Dividends received

507,589

1,286,205

Net cash from investing activities

57,231,031

52,891,128

Cash flows from financing activities

Loans from group

(2,692,039

)

3,905,247

Equity dividends paid

(78,362,820

)

(109,055,212

)

Net cash from financing activities

(81,054,859

)

(105,149,965

)

Increase/(decrease) in cash and cash equivalents

4,269,484

(24,295,625

)

Cash and cash equivalents at beginning of year

2

11,948,311

36,243,936

Cash and cash equivalents at end of year

2

16,217,795

11,948,311

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

2019

2018

$

$

Profit before taxation

28,029,572

21,898,004

Depreciation charges

1,223,037

1,067,346

Loss on disposal of fixed assets

1,528,890

14,236

Loss on revaluation of fixed assets

-

8,310,185

Translation differences

(128,278

)

(418,903

)

Amounts written off investments

609,860

323,239

Other reserve movements

(984,393

)

-

Finance costs

29,532

30,393

Finance income

(1,853,331

)

(2,602,604

)

28,454,889

28,621,896

Decrease in stocks

4,870,056

904,553

(Increase)/decrease in trade and other debtors

(2,545,813

)

762,191

Decrease in trade and other creditors

(1,856,193

)

(1,447,868

)

Cash generated from operations

28,922,939

28,840,772

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2019

31/12/19

1/1/19

$

$

Cash and cash equivalents

16,217,795

11,948,311

Year ended 31 December 2018

31/12/18

1/1/18

$

$

Cash and cash equivalents

11,948,311

36,243,936

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/1/19

Cash flow

At 31/12/19

$

$

$

Net cash

Cash at bank and in hand

11,948,311

4,269,484

16,217,795

11,948,311

4,269,484

16,217,795

Total

11,948,311

4,269,484

16,217,795

1.	STATUTORY INFORMATION

Kelta Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the US Dollar ($).

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 as modified by the revaluation of certain assets.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and entities controlled by the company (its subsidiaries an joint ventures) made up to 31 December each period. 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.

Subsidiaries

Subsidiaries are fully consolidated from the date on which control is transferred to the group and de-consolidated from the date that control ceases.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

The consolidated financial statements incorporate the assets, liabilities and results of the following entities in accordance with the accounting policy described above:

Name of entity

Registered office

Country of incorporation

Class ofshares held

Equity holding %

Tii Technologies Limited

As Kelta Limited

UK

Ordinary

100

Eurocraft Technologies Limited

Cinderbank, Dudley DY2 9AE

UK

Ordinary

100

Kelta Hong Kong Ltd

Rooms 2702-3, 27th Floor, Harbour View Centre, 56 Gloucester Road, Wan Chai, Hong Kong

Hong Kong

Ordinary

100

Ping Xiang Tii Technologies Company Limited

As Kelta Hong Kong Ltd

China

Ordinary

-

Dongguan Kelta Electro Mechanical Products Co Ltd

As Kelta Hong Kong Ltd

China

Ordinary

100

Tii Porta Tech SA de CV

Mexico

Ordinary

100

Tii Tecnologia Ltda

Brazil

Ordinary

100

Significant judgements and estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed within the individual accounting policies below.