D.I.P.T. Holdings Limited - Limited company accounts 23.2

REGISTERED NUMBER: 05642536 (England and Wales)

GROUP STRATEGIC REPORT, DIRECTORS' REPORT AND

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

FOR

D.I.P.T. HOLDINGS LIMITED

Page

Company Information

1

Group Strategic Report

2

Directors' Report

4

Report of the Independent Auditors

5

Consolidated Statement of Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

15

DIRECTORS:

R B Sanders

C K Sanders

SECRETARY:

I Sanders

REGISTERED OFFICE:

Sidney Robinson Business Park

Ascot Drive

Derby

DE24 8EH

REGISTERED NUMBER:

05642536 (England and Wales)

SENIOR STATUTORY AUDITOR:

Paul Orton FCA FCCA

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 year ended 31 December 2022.

REVIEW OF BUSINESS

Further to a thorough evaluation of the company's performance for the year the directors are pleased to report positive results, this in consideration of the increased levels of reinvestment in products and services alongside the effects of high inflation experienced during the period.

Sales growth was delivered continuing the group's upwards trend and we continue to target future growth whilst progressing our value-added business strategy. We expect to accelerate growth and reinvestment over the coming years however, remain ever mindful of the extremely competitive marketplace we operate within.

To support our offering, we remain committed to presenting all stakeholders with considered and proven solutions alongside a mutually beneficial relationship. Our skilled and trusted team, systems and processes remain well respected and supported by a considered network of customers, suppliers, and consultants, ensuring we retain the expertise to deliver on our promises.

Consolidated turnover increased from £13.45m in 2021 to £15m in 2022. Gross Margins held at acceptable levels which protected the liquidity of the business and allowed for significant further investment in desired stock levels. This ensured the effects of market price inflation were controlled and that product availability remained consistently high. Distribution costs reduced during the period and administrative expenses were reasonably well contained, once payroll increases and the need to support reinvestment are factored. We continue to work hard to control all other business costs.

The health and safety of our team and customers remains a key consideration alongside the high service levels delivered in all areas. Key operational performance indicators remained at consistently high levels indicating an excellent performance in this respect throughout the year.

Our investments in research and development have enabled us to design and engineer bespoke solutions to satisfy future demands whilst also benefitting from tax credits resulting from R&D expenditure. We intend to phase the delivery of this investment over coming years bringing improved levels of analysis, decision making and service levels.

The group has been recognised by the County and City Council for its commitment and contribution in reducing carbon emissions and our aspirations to significantly reduce emissions further over the coming years remain. We continue to recognise that our overall contribution made to reducing global emissions will be key to protecting not only the environment of the future but also the marketplace we rely upon.

Our strategy remains in place and unchanged - We strive to excel at satisfying our customers' needs and expectations and are motivated by ensuring the economic, social, and environmental sustainability of the group alongside delivery of controlled growth in a safe manner. Our annual strategic objectives remain aligned to this strategy with the accountability/responsibility for the delivery of key improvement projects remaining with individual board members.

PRINCIPAL RISKS AND UNCERTAINTIES

The team has successfully overcome all obstacles related to external factors. The impact of challenges presented by ongoing Brexit related matters and the conflict in Ukraine, have been minimised. We look forward to the future when we yield the benefit from our continued commitment to reinvestment in the business.

KEY PERFORMANCE INDICATORS

Sales/ profits over the last few years have been as follows:

2019

2020

2021

2022

(£m)

(£m)

(£m)

(£m)

Sales

10.986

11.218

13.484

15.054

Profit before tax

0.819

1.122

1.237

1.281

Shareholders funds

4.189

4.792

5.629

6.027

We consider that our top-level key financial performance indicators are those that accurately communicate the financial performance and strength of the company. Specifically, turnover, gross margin, operating profit and return on capital employed.

During the year a satisfactory return on capital employed of 16% (2021 - 17%) was achieved. The calculation is based on profit after tax and non-controlling interests share as a percentage of net assets before non-controlling interests share.

SUMMARY

A year which demonstrated the remarkable resilience of the business and its subsidiaries. A positive trading result delivered alongside considered reinvestment.

ON BEHALF OF THE BOARD:

R B Sanders - Director

21 September 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2022.

PRINCIPAL ACTIVITY

The principal activity of the group in the year 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 year ended 31 December 2022 will be £ 214,327 .

FUTURE DEVELOPMENTS

Information regarding future developments is included in the Strategic Report of the consolidated financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

R B Sanders

C K Sanders

FINANCIAL INSTRUMENTS

Information regarding financial instruments is included in the Strategic Report of the consolidated financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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 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, Magma Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

R B Sanders - Director

21 September 2023

Opinion

We have audited the financial statements of D.I.P.T. Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 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 2022 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

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Directors' Report, 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 this gives rise to a material misstatement in the financial statements themselves. 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

In the light of 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 Directors' Report.

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company and industry, we identified the principal risks of non-compliance with laws and regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates. Audit procedures performed included:

-

discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

-

challenging assumptions made by management in their significant accounting estimates, in particular in relation to the stock valuation and judgements formed;

-

identifying and testing journal entries, in particular any journal entries posted with unusual account combinations, journal entries crediting cash and journal entries with specific defined descriptions.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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 FCA 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 September 2023

TURNOVER

4

15,054,718

13,484,121

Cost of sales

(10,419,273

)

(9,260,150

)

GROSS PROFIT

4,635,445

4,223,971

Distribution costs

(346,763

)

(352,499

)

Administrative expenses

(3,097,692

)

(2,774,792

)

1,190,990

1,096,680

Other operating income

5

36,496

73,190

OPERATING PROFIT

7

1,227,486

1,169,870

Interest receivable and similar income

54,582

67,433

1,282,068

1,237,303

Interest payable and similar expenses

8

(221

)

(39

)

PROFIT BEFORE TAXATION

1,281,847

1,237,264

Tax on profit

9

(213,329

)

(249,246

)

PROFIT FOR THE FINANCIAL YEAR

1,068,518

988,018

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,068,518

988,018

Profit attributable to:

Owners of the parent

1,048,293

944,419

Non-controlling interests

20,225

43,599

1,068,518

988,018

Total comprehensive income attributable to:

Owners of the parent

1,048,293

944,419

Non-controlling interests

20,225

43,599

1,068,518

988,018

FIXED ASSETS

Intangible assets

12

356,839

-

Tangible assets

13

127,932

135,915

Investments

14

-

-

484,771

135,915

CURRENT ASSETS

Stocks

15

3,900,019

3,381,268

Debtors

16

3,249,475

2,693,745

Cash at bank

980,666

1,460,460

8,130,160

7,535,473

CREDITORS

Amounts falling due within one year

17

(2,102,185

)

(2,010,739

)

NET CURRENT ASSETS

6,027,975

5,524,734

TOTAL ASSETS LESS CURRENT LIABILITIES

6,512,746

5,660,649

PROVISIONS FOR LIABILITIES

21

(29,600

)

(31,694

)

NET ASSETS

6,483,146

5,628,955

CAPITAL AND RESERVES

Called up share capital

22

131,480

131,480

Share premium

23

207,933

207,933

Retained earnings

23

6,018,899

5,184,933

SHAREHOLDERS' FUNDS

6,358,312

5,524,346

NON-CONTROLLING INTERESTS

124,834

104,609

TOTAL EQUITY

6,483,146

5,628,955

The financial statements were approved by the Board of Directors and authorised for issue on 21 September 2023 and were signed on its behalf by:

R B Sanders - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

-

-

Investments

14

339,413

339,413

339,413

339,413

CURRENT ASSETS

Debtors

16

868,719

818,165

Cash at bank

82,692

97,990

951,411

916,155

CREDITORS

Amounts falling due within one year

17

(14,062

)

(19,609

)

NET CURRENT ASSETS

937,349

896,546

TOTAL ASSETS LESS CURRENT LIABILITIES

1,276,762

1,235,959

CAPITAL AND RESERVES

Called up share capital

22

131,480

131,480

Share premium

207,933

207,933

Retained earnings

937,349

896,546

SHAREHOLDERS' FUNDS

1,276,762

1,235,959

Company's profit for the financial year

201,773

222,107

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 21 September 2023 and were signed on its behalf by:

R B Sanders - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2021

131,480

4,452,664

207,933

Changes in equity

Dividends

-

(240,712

)

-

Total comprehensive income

-

944,419

-

Acquisition of non-controlling interest

-

28,562

-

Balance at 31 December 2021

131,480

5,184,933

207,933

Changes in equity

Dividends

-

(214,327

)

-

Total comprehensive income

-

1,048,293

-

Balance at 31 December 2022

131,480

6,018,899

207,933

Non-controlling

Total

Total

interests

equity

£

£

£

Balance at 1 January 2021

4,792,077

543,224

5,335,301

Changes in equity

Dividends

(240,712

)

-

(240,712

)

Total comprehensive income

944,419

43,599

988,018

Acquisition of non-controlling interest

28,562

(482,214

)

(453,652

)

Balance at 31 December 2021

5,524,346

104,609

5,628,955

Changes in equity

Dividends

(214,327

)

-

(214,327

)

Total comprehensive income

1,048,293

20,225

1,068,518

Balance at 31 December 2022

6,358,312

124,834

6,483,146

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2021

131,480

828,913

207,933

1,168,326

Changes in equity

Dividends

-

(154,474

)

-

(154,474

)

Total comprehensive income

-

222,107

-

222,107

Balance at 31 December 2021

131,480

896,546

207,933

1,235,959

Changes in equity

Dividends

-

(160,970

)

-

(160,970

)

Total comprehensive income

-

201,773

-

201,773

Balance at 31 December 2022

131,480

937,349

207,933

1,276,762

Cash flows from operating activities

Cash generated from operations

1

272,907

441,318

Interest paid

(221

)

(39

)

Tax paid

(258,689

)

(202,408

)

Net cash from operating activities

13,997

238,871

Cash flows from investing activities

Purchase of intangible fixed assets

(356,839

)

-

Purchase of tangible fixed assets

(40,595

)

(91,184

)

Sale of tangible fixed assets

529

-

Acquisition of non-controlling interest

-

(453,652

)

Interest received

54,582

67,433

Net cash from investing activities

(342,323

)

(477,403

)

Cash flows from financing activities

Loan repayments in year

-

(250,000

)

Amount introduced by directors

-

(7,000

)

Amount withdrawn by directors

(8,787

)

6,313

Equity dividends paid

(214,327

)

(240,712

)

Net cash from financing activities

(223,114

)

(491,399

)

Decrease in cash and cash equivalents

(551,440

)

(729,931

)

Cash and cash equivalents at beginning of year

2

1,088,532

1,818,463

Cash and cash equivalents at end of year

2

537,092

1,088,532

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

2022

2021

£

£

Profit before taxation

1,281,847

1,237,264

Depreciation charges

48,270

60,384

(Profit)/loss on disposal of fixed assets

(221

)

557

Finance costs

221

39

Finance income

(54,582

)

(67,433

)

1,275,535

1,230,811

Increase in stocks

(518,751

)

(821,579

)

(Increase)/decrease in trade and other debtors

(546,943

)

382,675

Increase/(decrease) in trade and other creditors

63,066

(350,589

)

Cash generated from operations

272,907

441,318

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:

Year ended 31 December 2022

31/12/22

1/1/22

£

£

Cash and cash equivalents

980,666

1,460,460

Bank overdrafts

(443,574

)

(371,928

)

537,092

1,088,532

Year ended 31 December 2021

31/12/21

1/1/21

£

£

Cash and cash equivalents

1,460,460

2,216,596

Bank overdrafts

(371,928

)

(398,133

)

1,088,532

1,818,463

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/1/22

Cash flow

At 31/12/22

£

£

£

Net cash

Cash at bank

1,460,460

(479,794

)

980,666

Bank overdrafts

(371,928

)

(71,646

)

(443,574

)

1,088,532

(551,440

)

537,092

Total

1,088,532

(551,440

)

537,092

1.	STATUTORY INFORMATION

D.I.P.T. Holdings 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 05642536.

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. 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 D.I.P.T. Holdings 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.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

The computer software is currently being developed and at the year end was not in use. The software will be amortised over its estimated useful life once the software is in use.