Direct Holdings Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04365944 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2020

FOR

DIRECT HOLDINGS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

4

Income Statement

6

Other Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTOR:

M P Blackwell

SECRETARY:

R P Messinger

REGISTERED OFFICE:

Dickens House

Guithavon Street

Witham

Essex

CM8 1BJ

REGISTERED NUMBER:

04365944 (England and Wales)

SENIOR STATUTORY AUDITOR:

Philip Lawrence

AUDITORS:

Baverstocks

Statutory Auditor

Chartered Accountants

Dickens House

Guithavon Street

Witham

Essex

CM8 1BJ

BANKERS:

Barclays Bank PLC

1 Churchill Place

Canary Wharf

London

E14 5HP

The director presents his strategic report for the year ended 31 May 2020.

REVIEW OF BUSINESS

Direct Holdings Limited has continued to provide management and equipment hire support to its subsidiary companies and again acted as a holding company.

In the past the company has generated a profit for the financial years due to dividends received from its subsidiary companies. This year however due to the COVID pandemic no dividends were paid and therefore there has been a reduction in the balance sheet with equity shareholders' funds reducing from £244,008 to £193,811.

In April 2021, the shareholders voted on a capitalisation of £1,000,000.

ON BEHALF OF THE BOARD:

M P Blackwell - Director

28 May 2021

The director presents his report with the financial statements of the company for the year ended 31 May 2020.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a holding company providing management and consultancy services associated with group activity.

DIVIDENDS

No dividends will be distributed for the year ended 31 May 2020.

EVENTS SINCE THE END OF THE YEAR

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

DIRECTOR

M P Blackwell held office during the whole of the period from 1 June 2019 to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the 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). 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 of the profit or loss of the company 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;

-	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 transactions and disclose with reasonable accuracy at any time the financial position of the company 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 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 company'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 company's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

M P Blackwell - Director

28 May 2021

Opinion

We have audited the financial statements of Direct Holdings Limited (the 'company') for the year ended 31 May 2020 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity 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).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 May 2020 and of its loss 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 company 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 company'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 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 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or

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

-	certain disclosures of 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 three, 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 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 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.

Philip Lawrence (Senior Statutory Auditor)

for and on behalf of Baverstocks

Statutory Auditor

Chartered Accountants

Dickens House

Guithavon Street

Witham

Essex

CM8 1BJ

28 May 2021

TURNOVER

-

-

Administrative expenses

276,528

254,705

(276,528

)

(254,705

)

Other operating income

226,852

212,352

OPERATING LOSS

4

(49,676

)

(42,353

)

Write off of group company

loan balance

5

-

10,169

(49,676

)

(32,184

)

Income from shares in group undertakings

-

50,000

Interest receivable and similar income

57

3

57

50,003

(49,619

)

17,819

Interest payable and similar expenses

6

76

203

(LOSS)/PROFIT BEFORE TAXATION

(49,695

)

17,616

Tax on (loss)/profit

7

502

758

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(50,197

)

16,858

(LOSS)/PROFIT FOR THE YEAR

(50,197

)

16,858

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(50,197

)

16,858

FIXED ASSETS

Tangible assets

8

543,589

580,929

Investments

9

160,001

160,001

703,590

740,930

CURRENT ASSETS

Debtors

10

1,561,809

1,471,583

Cash at bank and in hand

33,767

50,836

1,595,576

1,522,419

CREDITORS

Amounts falling due within one year

11

2,099,881

2,014,369

NET CURRENT LIABILITIES

(504,305

)

(491,950

)

TOTAL ASSETS LESS CURRENT LIABILITIES

199,285

248,980

PROVISIONS FOR LIABILITIES

12

5,474

4,972

NET ASSETS

193,811

244,008

CAPITAL AND RESERVES

Called up share capital

13

850,100

850,100

Retained earnings

14

(656,289

)

(606,092

)

SHAREHOLDERS' FUNDS

193,811

244,008

The financial statements were approved by the director and authorised for issue on 28 May 2021 and were signed by:

M P Blackwell - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2018

850,100

(622,950

)

227,150

Changes in equity

Total comprehensive income

-

16,858

16,858

Balance at 31 May 2019

850,100

(606,092

)

244,008

Changes in equity

Total comprehensive income

-

(50,197

)

(50,197

)

Balance at 31 May 2020

850,100

(656,289

)

193,811

1.	STATUTORY INFORMATION

Direct Holdings 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 Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

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 company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d);

•

the requirement of paragraph 33.7.

Preparation of consolidated financial statements

The financial statements contain information about Direct Holdings Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its parent, Direct Consolidated Limited, Dickens House, Guithavon Street, Witham, Essex, CM8 1BJ.

Critical accounting judgements and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

There are no estimates and assumptions that have a significant risk of causing material adjustment in the financial statements.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to Property

-

4% on cost and 2% on cost

Plant and Machinery

-

25% on monthly reducing balance and 15% on monthly reducing balance

Fixtures and Fittings

-

15% on monthly reducing balance and 4% on cost

Motor Vehicles

-

25% on monthly reducing balance

Office Equipment

-

25% on monthly reducing balance

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Pension costs and other post-retirement benefits

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

Impairment

Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset's cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.

Going concern

As at the year end the Company had net current liabilities of £504,305. The Company made a loss during the period which has been funded via the subsidiary trading Companies in order to meet its liabilities as they fall due.

Since the year end 50% of the group has been acquired by new investors and there has been a significant cash injection of £1m, as a result the Directors are satisfied that the Company has sufficient resources and liquidity available to continue in operational existence for at least one year from the approval of these financial statements and hence the Company continues to adopt the going concern basis in preparing their financial statements.

3.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

207,871

184,956

Social security costs

13,915

13,594

Other pension costs

3,350

2,385

225,136

200,935

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

2020

2019

Administration

7

5

2020

2019

£

£

Director's remuneration

-

-

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

4.	OPERATING LOSS

The operating loss is stated after charging:

2020

2019

£

£

Depreciation - owned assets

37,340

38,133

Auditors Remuneration

2,400

3,000

5.	EXCEPTIONAL ITEMS

2020

2019

£

£

Write off of group company

loan balance

-

10,169

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2020

2019

£

£

Hire Purchase Interest

76

203

7.

TAXATION

Analysis of the tax charge

The tax charge on the loss for the year was as follows:

2020

2019

£

£

Deferred Taxation

502

758

Tax on (loss)/profit

502

758

Reconciliation of total tax charge included in profit and loss

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

2020

2019

£

£

(Loss)/profit before tax

(49,695

)

17,616

(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

(9,442

)

3,347

Effects of:

Expenses not deductible for tax purposes

5,855

5,846

Income not taxable for tax purposes

-

(11,432

)

Utilisation of group tax losses

4,031

2,997

Losses carried forward

58

-

Total tax charge

502

758

8.	TANGIBLE FIXED ASSETS

Improvements

Freehold

to

Plant and

Property

Property

Machinery

£

£

£

COST

At 1 June 2019

and 31 May 2020

151,500

819,385

5,299

DEPRECIATION

At 1 June 2019

-

466,550

4,462

Charge for year

-

30,636

158

At 31 May 2020

-

497,186

4,620

NET BOOK VALUE

At 31 May 2020

151,500

322,199

679

At 31 May 2019

151,500

352,835

837

Fixtures

and

Motor

Office

Fittings

Vehicles

Equipment

Totals

£

£

£

£

COST

At 1 June 2019

and 31 May 2020

112,376

23,100

15,172

1,126,832

DEPRECIATION

At 1 June 2019

45,811

17,051

12,029

545,903

Charge for year

4,495

1,350

701

37,340

At 31 May 2020

50,306

18,401

12,730

583,243

NET BOOK VALUE

At 31 May 2020

62,070

4,699

2,442

543,589

At 31 May 2019

66,565

6,049

3,143

580,929

Included in cost of land and buildings is freehold land of £ 151,500 (2019 - £ 151,500 ) which is not depreciated.

9.	FIXED ASSET INVESTMENTS

Shares in

Group

Undertakings

£

COST

At 1 June 2019

and 31 May 2020

160,001

NET BOOK VALUE

At 31 May 2020

160,001

At 31 May 2019

160,001

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

Direct Meats (Knight Farms) Limited

Registered office:

Nature of business: Wholesale and retail meat distribution

%

Class of shares:

holding

Ordinary

100.00

2020

2019

£

£

Aggregate capital and reserves

2,101,131

2,221,963

Profit for the year

1,704

443,438

Direct Transportation Limited

Registered office:

Nature of business: Motor Vehicle Hire

%

Class of shares:

holding

Ordinary

100.00

2020

2019

£

£

Aggregate capital and reserves

212,943

191,604

Profit for the year

21,339

133,100

10.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Amounts owed by group undertakings

1,500,823

1,463,791

Amounts owed by participating interests

56,779

-

Other Debtors

4,104

7,594

Prepayments and Accrued Income

103

198

1,561,809

1,471,583

11.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

£

£

Trade Creditors

1,006

5,010

Amounts owed to group undertakings

1,985,182

1,705,239

Social Security and Other

Taxes

6,165

3,565

Other Creditors

9,534

6,374

Directors Current Accounts

95,279

291,291

Accruals and Deferred Income

2,715

2,890

2,099,881

2,014,369

12.	PROVISIONS FOR LIABILITIES

2020

2019

£

£

Deferred Taxation

5,474

4,972

Deferred

tax

£

Balance at 1 June 2019

4,972

Charge to Income Statement during year

502

Balance at 31 May 2020

5,474

13.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2020

2019

value:

£

£

849,950

Ordinary

£1

849,950

849,950

20

'A' Ordinary

£1

20

20

30

Premier Ordinary

£1

30

30

100

B

£1

100

100

850,100

850,100

All shares are to be equal in all respects except that the 'A' Ordinary shares have the rights to 49 times the dividend distribution rights of the Ordinary shares unless specifically stated to the contrary in the resolution proposing the distribution and Premier Ordinary shares shall have no voting rights.

14.

RESERVES

Retained

earnings

£

At 1 June 2019

(606,092

)

Deficit for the year

(50,197

)

At 31 May 2020

(656,289

)

15.	ULTIMATE PARENT COMPANY

Direct Consolidated Limited is regarded by the director as being the company's ultimate parent company.

Copies of the group financial statements of Direct Consolidated Limited can be obtained from the registered office, Dickens House, Guithavon Street, Witham, Essex, CM8 1BJ.

16.	CONTINGENT LIABILITIES

There is a cross guarantee in place between Direct Meats (Knights Farm) Limited, Direct Transportation Limited, Direct Consolidated Limited and Direct Holdings Limited.

17.	RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Other related parties

2020

2019

£

£

Amount due from related party

56,779

-

18.	POST BALANCE SHEET EVENTS

On 21st October 2020, 50% of the ordinary share capital of the ultimate parent company, Direct Consolidated Limited were acquired by Wufangzhai Group Co. Limited.