Direct Holdings Limited - Limited company accounts 23.2

REGISTERED NUMBER: 04365944 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2023

FOR

DIRECT HOLDINGS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

Directors:

M P Blackwell

H Li

Secretary:

R P Messinger

Registered office:

Dickens House

Guithavon Street

Witham

Essex

CM8 1BJ

Registered number:

04365944 (England and Wales)

Senior statutory auditor:

Steven Collins

Auditors:

Baverstocks Limited

Statutory Auditor

Chartered Certified Accountants

Dickens House

Guithavon Street

Witham

Essex

CM8 1BJ

Bankers:

Barclays Bank PLC

1 Churchill Place

Canary Wharf

London

E14 5HP

The directors present their strategic report for the year ended 31 May 2023.

Review of business

Direct Holdings Limited has continued to provide management and equipment hire support to its subsidiary company Direct Meats (Knights Farm) Ltd and has again acted as the holding company.

As in the previous year, there has been an increase in the balance sheet with equity shareholders' funds increasing to £3,350,100.

On behalf of the board:

M P Blackwell - Director

21 February 2024

The directors present their report with the financial statements of the company for the year ended 31 May 2023.

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 2023.

Directors

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

M P Blackwell

H Li

Statement of directors' responsibilities

The directors are responsible for preparing the 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 of the profit or loss of the company 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 transactions and disclose with reasonable accuracy at any time the financial position of the company 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 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 company'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 company's auditors are aware of that information.

Auditors

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

On behalf of the board:

M P Blackwell - Director

21 February 2024

Opinion

We have audited the financial statements of Direct Holdings Limited (the 'company') for the year ended 31 May 2023 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 2023 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

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 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 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 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 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 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 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, 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 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 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 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:

Our approach to assessing the risks of material misstatement due to fraud and noncompliance with laws and regulations was as follows:-

We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and determined that the most significant are those that relate to compliance with the Companies Act 2006, Financial Reporting Standard 102, relevant tax legislation and the laws and regulations.

We assessed the risks of material misstatements in respect of fraud and determined that the principal risks were related to posting of journal entries to manipulate the results for the financial year. We made enquiries of management during the audit to determine any instances of fraud, while also discussing the areas of risk in relation to audit as part of our audit team meeting.

Based upon the results of our risk assessment we designed our audit procedures to identify noncompliance with such laws and regulations identified above and also material misstatements in respect of fraud as follows:-

-

We obtained an understanding of the legal and regulatory framework in relation to the entity and how it complies with this framework. This included discussions with management and reviews of legal and professional fees.

-

We discussed with the management the entity's policies and procedures including systems and controls. Compliance with these was tested via discussion and walkthrough testing of controls.

-

We enquired of management of their policies and procedures in relation to fraud and their knowledge of any actual, suspected, or alleged fraud.

-

We ensured compliance with Pay as You Earn and Value Added Tax laws via reviewing returns and correspondence.

-

We considered the risk of fraud through management override, and, in response, we incorporated testing of manual journal entries into our audit approach. This included the testing of journal entries throughout the year as well as year end journals.

-

We agreed the financial statement disclosures to underlying supporting documentation.

-

We enquired of management if there were any potential litigation or claims.

Whilst considering how our audit work addressed the detection of irregularities, we also consider the likelihood of detection based on our approach. Irregularities from fraud are inherently more difficult to detect than those arising from error.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

Steven Collins (Senior Statutory Auditor)

for and on behalf of Baverstocks Limited

Statutory Auditor

Chartered Certified Accountants

Dickens House

Guithavon Street

Witham

Essex

CM8 1BJ

22 February 2024

Turnover

-

-

Administrative expenses

210,055

182,787

(210,055

)

(182,787

)

Other operating income

196,208

170,486

Operating loss

4

(13,847

)

(12,301

)

Interest receivable and similar income

423

26

(13,424

)

(12,275

)

Interest payable and similar expenses

5

1

-

Loss before taxation

(13,425

)

(12,275

)

Tax on loss

6

1,807

64

Loss for the financial year

(15,232

)

(12,339

)

Loss for the year

(15,232

)

(12,339

)

Other comprehensive income

-

-

Total comprehensive income for the year

(15,232

)

(12,339

)

Fixed assets

Tangible assets

7

439,986

472,906

Investments

8

2,640,000

1,140,000

3,079,986

1,612,906

Current assets

Debtors

9

1,535,310

1,529,477

Cash at bank and in hand

758,748

57,856

2,294,058

1,587,333

Creditors

Amounts falling due within one year

10

2,693,367

2,004,318

Net current liabilities

(399,309

)

(416,985

)

Total assets less current liabilities

2,680,677

1,195,921

Provisions for liabilities

11

5,784

5,796

Net assets

2,674,893

1,190,125

Capital and reserves

Called up share capital

12

3,350,100

1,850,100

Retained earnings

13

(675,207

)

(659,975

)

Shareholders' funds

2,674,893

1,190,125

The financial statements were approved by the Board of Directors and authorised for issue on 21 February 2024 and were signed on its behalf by:

M P Blackwell - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2021

1,850,100

(647,636

)

1,202,464

Changes in equity

Total comprehensive income

-

(12,339

)

(12,339

)

Balance at 31 May 2022

1,850,100

(659,975

)

1,190,125

Changes in equity

Issue of share capital

1,500,000

-

1,500,000

Total comprehensive income

-

(15,232

)

(15,232

)

Balance at 31 May 2023

3,350,100

(675,207

)

2,674,893

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

2023

2022

£

£

Wages and salaries

133,435

115,735

Social security costs

14,497

11,104

Other pension costs

4,788

1,218

152,720

128,057

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

2023

2022

Administration

5

5

2023

2022

£

£

Directors' remuneration

-

-

4.	Operating loss

The operating loss is stated after charging:

2023

2022

£

£

Depreciation - owned assets

33,336

33,804

Auditors Remuneration

3,000

2,600

5.

Interest payable and similar expenses

2023

2022

£

£

Bank Interest

1

-

6.

Taxation

Analysis of the tax charge

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

2023

2022

£

£

Current tax:

UK corporation tax

1,819

-

Deferred Taxation

(12

)

64

Tax on loss

1,807

64

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:

2023

2022

£

£

Loss before tax

(13,425

)

(12,275

)

Loss multiplied by the standard rate of corporation tax in the UK of 19% (2022 - 19%)

(2,551

)

(2,332

)

Effects of:

Expenses not deductible for tax purposes

5,266

5,311

Utilisation of group tax losses

-

(2,915

)

Group Relief

(908

)

-

Total tax charge

1,807

64

7.	Tangible fixed assets

Improvements

Freehold

to

Plant and

Property

Property

Machinery

£

£

£

Cost

At 1 June 2022

151,500

819,385

5,299

Additions

-

-

-

At 31 May 2023

151,500

819,385

5,299

Depreciation

At 1 June 2022

-

555,775

4,891

Charge for year

-

27,715

101

At 31 May 2023

-

583,490

4,992

Net book value

At 31 May 2023

151,500

235,895

307

At 31 May 2022

151,500

263,610

408

Fixtures

and

Motor

Office

Fittings

Vehicles

Equipment

Totals

£

£

£

£

Cost

At 1 June 2022

112,376

23,100

15,172

1,126,832

Additions

-

-

416

416

At 31 May 2023

112,376

23,100

15,588

1,127,248

Depreciation

At 1 June 2022

59,296

20,265

13,699

653,926

Charge for year

4,495

639

386

33,336

At 31 May 2023

63,791

20,904

14,085

687,262

Net book value

At 31 May 2023

48,585

2,196

1,503

439,986

At 31 May 2022

53,080

2,835

1,473

472,906

Included in cost of land and buildings is freehold land of £ 151,500 (2022 - £ 151,500 ) which is not depreciated.

8.	Fixed asset investments

Shares in

Group

Undertakings

£

Cost

At 1 June 2022

1,140,000

Additions

1,500,000

At 31 May 2023

2,640,000

Net book value

At 31 May 2023

2,640,000

At 31 May 2022

1,140,000

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

2023

2022

£

£

Aggregate capital and reserves

4,648,510

2,795,913

Profit for the year

352,597

277,272

9.

Debtors: amounts falling due within one year

2023

2022

£

£

Amounts owed by group undertakings

1,368,272

1,363,492

Amounts owed by participating interests

166,229

165,388

Other Debtors

597

597

Prepayments and Accrued Income

212

-

1,535,310

1,529,477

10.

Creditors: amounts falling due within one year

2023

2022

£

£

Trade Creditors

5,133

2,459

Amounts owed to group undertakings

1,994,203

564,179

Corporation Tax

1,819

-

Social Security and Other

Taxes

3,579

3,004

Other Creditors

9,280

9,612

Directors Current Accounts

674,553

1,422,564

Accruals and Deferred Income

4,800

2,500

2,693,367

2,004,318

11.	Provisions for liabilities

2023

2022

£

£

Deferred Taxation

5,784

5,796

Deferred

tax

£

Balance at 1 June 2022

5,796

Credit to Income Statement during year

(12

)

Balance at 31 May 2023

5,784

12.	Called up share capital

Allotted, issued and fully paid:

Number:

Class:

Nominal

2023

2022

value:

£

£

3,350,100

Ordinary

£1

3,350,100

1,850,100

The following shares were issued during the year for cash at par :

1,500,000 Ordinary shares of £1

13.

Reserves

Retained

earnings

£

At 1 June 2022

(659,975

)

Deficit for the year

(15,232

)

At 31 May 2023

(675,207

)

14.	Ultimate parent company

Direct Consolidated Limited is regarded by the directors 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.

15.	Contingent liabilities

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

16.	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.