Diversity Network Holdings Ltd - Limited company accounts 23.2

REGISTERED NUMBER: 08865895 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD 30 JANUARY 2022 TO 28 JANUARY 2023

FOR

DIVERSITY NETWORK HOLDINGS LTD

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Statement of Income and Retained Earnings

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Cash Flow Statement

11

Notes to the Consolidated Cash Flow Statement

12

Notes to the Consolidated Financial Statements

13

DIRECTORS:

M Roberts

N S Pritchard

REGISTERED OFFICE:

Coptic House

Mount Stuart Square

Cardiff

CF10 5EE

REGISTERED NUMBER:

08865895 (England and Wales)

AUDITORS:

Xeinadin Audit Limited

(Statutory Auditor)

8th Floor Becket House

36 Old Jewry

London

EC2R 8DD

The directors present their strategic report of the company and the group for the period 30 January 2022 to 28 January 2023.

REVIEW OF BUSINESS

The group's principal activity during the year continued to be for the Installation of Energy Efficiency Measures and Renewable Technologies. The installation of Smart Meters has expanded in the recent years and will continue to grow in the future.

The group has secured several large scale retrofit schemes across numerous Local Authorities in both England and Wales and secured several new direct contracts with utilities to add to its existing client base.

As part of the group's activities and future growth, the research and development of new innovative renewable and insulation products has become a focus point to bring to market. The group will also continue to invest in new emerging technologies and installation companies. Another area of growth in the coming years will be to expand its property portfolio and start developing already acquired building sites.

Having secured new partnerships in various new ventures over the last several years it has put the group and its network in a very strong position to face the economic uncertainties currently being faced by many companies throughout the UK.

Our mission will continue to do our utmost to tackle fuel poverty and support our local authority partners to achieve net zero.

PRINCIPAL RISKS AND UNCERTAINTIES

The group is exposed to low levels of price, credit, liquidity and cash flow risk. The group manages these risks by financing its operations through retained profits, and working capital.

The management objectives are to retain sufficient liquid funds to enable it to meet its day to day requirements, minimise the company's exposure to fluctuating customer cash flow, and manage the use of working capital with the future cash flows expected to arise from the company's trading activities.

The company makes little use of financial instruments other than an operational bank account so its exposure to price risk, credit risk, liquidity risk and cash flow risk is not material for the assessment of the assets, liabilities, financial position and profit or loss of the company.

FINANCIAL KEY PERFORMANCE INDICATORS

The Directors consider that the group's business key performance indicators are reflected within the financial statements which are detailed below:

2023

2022

2021

£

£

£

Turnover

102,338,946

52,643,161

30,412,749

Turnover growth

94.4%

73.1%

37.8%

Gross profit percentage

26.0%

17.3%

17.1%

Profit before tax

23,423,701

8,337,297

5,119,511

ON BEHALF OF THE BOARD:

M Roberts - Director

22 January 2024

The directors present their report with the financial statements of the company and the group for the period 30 January 2022 to 28 January 2023.

DIVIDENDS

No interim dividend was paid during the period. The directors recommend a final dividend of £3,200 per share.

The total distribution of dividends for the period ended 28 January 2023 will be £ 320,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 30 January 2022 to the date of this report.

M Roberts

N S Pritchard

POLITICAL DONATIONS AND EXPENDITURE

The group made charitable donations of £7,965 during the period. No donations were made to political parties.

DISCLOSURE IN THE STRATEGIC REPORT

Items required under Schedule 7 are set out in the strategic report in accordance with s.414C(11) Companies Act 2006.

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, Xeinadin Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M Roberts - Director

22 January 2024

Opinion

We have audited the financial statements of Diversity Network Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the period ended 28 January 2023 which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Balance Sheet, Company Balance Sheet, 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 28 January 2023 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

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 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 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 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 three, 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:

The audit was planned on the basis that the testing undertaken and procedures carried out would have a reasonable expectation of detecting any instances of irregularity including fraud. The plan involved assessing the risk of the financial statements containing material misstatements taking into account various factors such as; the control systems in place, the standard of record keeping, an assessment of the influence and role of the staff and stakeholders involved. The audit plan was followed and benefitted from the audit teams knowledge of the client. Where appropriate during the audit process they considered how fraud may occur and as a result where the financial statements may be susceptible to error.

Suitable transaction sample testing was carried out on the relevant areas of the financial statements and control systems where fraud was more likely to be found. Enquiries were made of the key staff running the company systems and of the company directors for information and explanations during the course of the audit. Any contentious areas were investigated to ensure that sufficient audit evidence was obtained to ensure that where possible material fraud could be identified..

The procedures and testing undertaken as a result of our risk assessments were deemed sufficient to identify material errors for which adjustment was then made in the financial statements. There is however no guarantee that all errors, including those that may be related to fraud, would be identified as part of the audit.

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.

Jon Payne ACA (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited

(Statutory Auditor)

8th Floor Becket House

36 Old Jewry

London

EC2R 8DD

22 January 2024

TURNOVER

3

102,338,946

52,643,161

Cost of sales

75,682,890

43,559,302

GROSS PROFIT

26,656,056

9,083,859

Administrative expenses

1,931,253

871,031

24,724,803

8,212,828

Other operating income

17,782

152,573

OPERATING PROFIT

5

24,742,585

8,365,401

Income from fixed asset investments

2,483

460

Interest receivable and similar income

25,963

2,110

28,446

2,570

24,771,031

8,367,971

Amounts written off investments

6

1,316,571

30,001

23,454,460

8,337,970

Interest payable and similar expenses

7

30,759

673

PROFIT BEFORE TAXATION

23,423,701

8,337,297

Tax on profit

8

4,697,560

1,665,888

PROFIT FOR THE FINANCIAL PERIOD

18,726,141

6,671,409

Retained earnings at beginning of period

10,964,873

4,721,464

Dividends

10

(320,000

)

(428,000

)

RETAINED EARNINGS FOR THE GROUP AT END OF PERIOD

29,371,014

10,964,873

Profit attributable to:

Owners of the parent

18,726,141

6,671,409

FIXED ASSETS

Tangible assets

11

338,070

358,686

Investments

12

Interest in associate

1,110,039

160,011

Other investments

2,602,283

290,432

4,050,392

809,129

CURRENT ASSETS

Debtors

13

12,656,489

6,849,117

Cash at bank and in hand

19,968,408

6,917,765

32,624,897

13,766,882

CREDITORS

Amounts falling due within one year

14

7,301,836

3,605,149

NET CURRENT ASSETS

25,323,061

10,161,733

TOTAL ASSETS LESS CURRENT LIABILITIES

29,373,453

10,970,862

PROVISIONS FOR LIABILITIES

15

2,339

5,889

NET ASSETS

29,371,114

10,964,973

CAPITAL AND RESERVES

Called up share capital

16

100

100

Retained earnings

29,371,014

10,964,873

SHAREHOLDERS' FUNDS

29,371,114

10,964,973

The financial statements were approved by the Board of Directors and authorised for issue on 22 January 2024 and were signed on its behalf by:

M Roberts - Director

FIXED ASSETS

Tangible assets

11

-

-

Investments

12

1,136,137

186,009

1,136,137

186,009

CURRENT ASSETS

Debtors

13

4,295,447

752,488

Cash at bank and in hand

100

20,309

4,295,547

772,797

CREDITORS

Amounts falling due within one year

14

1,431,296

445,397

NET CURRENT ASSETS

2,864,251

327,400

TOTAL ASSETS LESS CURRENT LIABILITIES

4,000,388

513,409

CAPITAL AND RESERVES

Called up share capital

16

100

100

Retained earnings

4,000,288

513,309

SHAREHOLDERS' FUNDS

4,000,388

513,409

Company's profit for the financial year

3,806,979

393,995

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 22 January 2024 and were signed on its behalf by:

M Roberts - Director

Cash flows from operating activities

Cash generated from operations

1

21,879,997

6,028,945

Interest paid

(30,759

)

(673

)

Tax paid

(1,602,833

)

(901,655

)

Net cash from operating activities

20,246,405

5,126,617

Cash flows from investing activities

Purchase of tangible fixed assets

-

(295,475

)

Purchase of fixed asset investments

(5,423,746

)

(374,191

)

Sale of fixed asset investments

742,988

57,019

Interest received

25,963

2,110

Dividends received

2,483

460

Net cash from investing activities

(4,652,312

)

(610,077

)

Cash flows from financing activities

Amount introduced by directors

626,500

268,047

Amount withdrawn by directors

(2,849,950

)

(422,660

)

Equity dividends paid

(320,000

)

(428,000

)

Net cash from financing activities

(2,543,450

)

(582,613

)

Increase in cash and cash equivalents

13,050,643

3,933,927

Cash and cash equivalents at beginning of period

2

6,917,765

2,983,838

Cash and cash equivalents at end of period

2

19,968,408

6,917,765

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

Period

Period

30.1.22

31.1.21

to

to

28.1.23

29.1.22

£

£

Profit before taxation

23,423,701

8,337,297

Depreciation charges

20,615

25,568

Loss/(profit) on disposal of fixed assets

102,308

(3,261

)

Increase in amounts owed by associates

(1,117,700

)

(1,543,248

)

Government grants

(17,782

)

(152,573

)

Finance costs

30,759

673

Finance income

(28,446

)

(2,570

)

22,413,455

6,661,886

Increase in trade and other debtors

(2,317,124

)

(1,771,063

)

Increase in trade and other creditors

1,783,666

1,138,122

Cash generated from operations

21,879,997

6,028,945

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 28 January 2023

28.1.23

30.1.22

£

£

Cash and cash equivalents

19,968,408

6,917,765

Period ended 29 January 2022

29.1.22

31.1.21

£

£

Cash and cash equivalents

6,917,765

2,983,838

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 30.1.22

Cash flow

At 28.1.23

£

£

£

Net cash

Cash at bank and in hand

6,917,765

13,050,643

19,968,408

6,917,765

13,050,643

19,968,408

Total

6,917,765

13,050,643

19,968,408

1.	STATUTORY INFORMATION

Diversity Network Holdings Ltd 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 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 as modified by the revaluation of certain assets.

The financial statements cover a group of entities headed by the holding company Diversity Network Holdings Ltd.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The directors are of the opinion that actual outcomes are not materially different from those estimates and have not had a significant effect on amounts recognised in the financial statements.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Revenue is recognised in accordance with the date of the request for invoice for installations.

Tangible fixed assets

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

Motor vehicles

-

20% on cost and are not depreciated

Investments in associates

Investments in associate undertakings are recognised at cost.

Financial instruments

The group deals in basic financial assets and liabilities and these are initially measured at their transaction price. Subsequent measurement depends on the nature of the instrument but generally they are measured at amortised cost.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, 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 period 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.

Hire purchase and leasing commitments

Rentals paid 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.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the group.

All turnover is incurred in the United Kingdom.

4.	EMPLOYEES AND DIRECTORS

Period

Period

30.1.22

31.1.21

to

to

28.1.23

29.1.22

£

£

Wages and salaries

4,374,757

3,281,755

Social security costs

471,532

342,784

Other pension costs

76,373

68,116

4,922,662

3,692,655

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

Period

Period

30.1.22

31.1.21

to

to

28.1.23

29.1.22

Directors

2

2

Administration

15

12

Direct

92

78

109

92

The average number of employees by undertakings that were proportionately consolidated during the period was NIL (2022 - NIL).

Period

Period

30.1.22

31.1.21

to

to

28.1.23

29.1.22

£

£

Directors' remuneration

177,912

100,276

Directors' pension contributions to money purchase schemes

2,632

2,634

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

Money purchase schemes

2

2

5.	OPERATING PROFIT

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

Period

Period

30.1.22

31.1.21

to

to

28.1.23

29.1.22

£

£

Other operating leases

32,554

28,668

Depreciation - owned assets

20,616

25,568

Loss/(profit) on disposal of fixed assets

102,308

(3,261

)

Auditors' remuneration

6,300

6,000

Auditors' remuneration for non audit work

17,080

15,956

Foreign exchange differences

66

-

6.

AMOUNTS WRITTEN OFF INVESTMENTS

Period

Period

30.1.22

31.1.21

to

to

28.1.23

29.1.22

£

£

Amounts written off

investments

1,316,571

30,001

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

Period

30.1.22

31.1.21

to

to

28.1.23

29.1.22

£

£

Bank loan interest

-

326

Interest on overdue tax

30,759

347

30,759

673