Company registration number 02860600 (England and Wales)
DNT COMPANY LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2021
DNT COMPANY LTD
COMPANY INFORMATION
Directors
Mr D Babic
Mrs R E Babic
Mrs F J Feek
Mr A S Feek
Secretary
Mr D Babic
Company number
02860600
Registered office
5 Chestnut Court
Jill Lane
Sambourne
Redditch
Worcestershire
United Kingdom
B96 6EW
Auditor
Ormerod Rutter Limited
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
DNT COMPANY LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 23
DNT COMPANY LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 1 -
The directors present the strategic report for the year ended 30 November 2021.
Fair review of the business
The principal activity of the company in the year under review was that of a stainless-steel wholesaler.
The board have continued with their strategy of growth in revenue and profit before tax. Revenue during the year was £28,899,863 (2020: £13,761,947) with PBT at £406,635 (2020: £406,153).
Net assets have risen from £1,179,591 in 2020 to £1,483,680.
During a period of increasing raw material costs and extended Mill lead times, cash was committed to increase stock throughout the year to ensure continuity of supply for customers and the lowest possible input costs.
Principal risks and uncertainties
The directors consider that the principal risks and uncertainties of the business are steel price volatility and foreign exchange rate risk coupled with uncertainty in the financial markets caused by political instability. All of these risks are monitored regularly by the Board of Directors to ensure that these risks are minimised.
The directors maintain a strong relationship with clients and are confident that high service levels will ensure the consistency of contract revenue going forward.
Key performance indicators
The directors consider turnover and gross margin levels, along with creditors and debtor days.
The directors also consider health and safety compliance at all levels. They do not believe that there any other non-financial key performance indicators that are relevant.
The directors believe that the company continue to be well positioned in the marketplace and has sufficient cash reserves to meet its future commitments.
Future Developments
A consequence of the Russia – Ukraine conflict and the sanctions being imposed has created a degree of global uncertainty, this along with increasing energy prices and the slowdown in the China economy, steel prices have been fluctuating significantly. The company will continue to monitor closely global prices, supply issues and customer demand to manage the resultant risk exposure to the company.
Mr D Babic
Director
22 November 2022
DNT COMPANY LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 2 -
The directors present their annual report and financial statements for the year ended 30 November 2021.
Principal activities
The principal activity of the company continued to be that of buying and selling steel.
Results and dividends
The company made a pre tax profit for the year of £406,635 and paid dividends of £40,000.
Ordinary dividends were paid amounting to £40,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr D Babic
Mrs R E Babic
Mrs F J Feek
Mr A S Feek
Auditor
The auditor, Ormerod Rutter Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 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 of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
DNT COMPANY LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 3 -
On behalf of the board
Mr D Babic
Director
22 November 2022
DNT COMPANY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DNT COMPANY LTD
- 4 -
Qualified opinion on financial statements
We have audited the financial statements of DNT Company Ltd (the 'company') for the year ended 30 November 2021 which comprise the profit and loss account, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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 30 November 2021 and of its 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 qualified opinion
We did not observe the counting of physical inventories at the beginning of the period. We were unable to satisfy ourselves by alternative means concerning inventory quantities held at 30 November 2021. Since opening inventories enter into the determination of the financial performance, we were unable to determine whether adjustments might have been necessary in respect of the profit for the period reported in the profit and loss account.
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 Auditor's 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
DNT COMPANY LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DNT COMPANY LTD
- 5 -
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
. We have nothing to report in respect of the following matters in relation to which 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
remuneration specified by law are not made; or
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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 is 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.
Auditor's 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 an
auditor's
report 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, we identified the principal risks of non-compliance with laws and regulations including those that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, and the extent to which non-compliance might have a material effect on the financial statements.
Audit procedures performed included discussions with management, testing of journals, designing and performing audit procedures and challenging assumptions and judgements made by management in relation to accounting estimates.
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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
DNT COMPANY LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DNT COMPANY LTD
- 6 -
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 an auditor's report 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.
Colm McGrory FCA (Senior Statutory Auditor)
For and on behalf of Ormerod Rutter Limited
22 November 2022
Chartered Accountants
Statutory Auditor
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
DNT COMPANY LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 7 -
2021
2020
Notes
£
£
Turnover
3
29,274,709
13,761,947
Cost of sales
(27,296,695)
(12,706,984)
Gross profit
1,978,014
1,054,963
Administrative expenses
(1,400,248)
(704,554)
Other operating income
81,166
Operating profit
4
577,766
431,575
Interest receivable and similar income
7
1,234
1,519
Interest payable and similar expenses
8
(173,265)
(25,200)
Gains/(losses) unrealised on investments
9
900
(1,741)
Profit before taxation
406,635
406,153
Tax on profit
10
(62,546)
(99,159)
Profit for the financial year
344,089
306,994
The profit and loss account has been prepared on the basis that all operations are continuing operations.
DNT COMPANY LTD
BALANCE SHEET
AS AT
30 NOVEMBER 2021
30 November 2021
- 8 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
12
239,627
224,144
Current assets
Stocks
13
7,902,136
1,849,378
Debtors
14
8,507,700
5,653,519
Investments
15
3,759
2,859
Cash at bank and in hand
44,895
43,987
16,458,490
7,549,743
Creditors: amounts falling due within one year
16
(14,774,273)
(6,038,028)
Net current assets
1,684,217
1,511,715
Total assets less current liabilities
1,923,844
1,735,859
Creditors: amounts falling due after more than one year
17
(435,629)
(556,268)
Provisions for liabilities
Deferred tax liability
19
4,535
(4,535)
-
Net assets
1,483,680
1,179,591
Capital and reserves
Called up share capital
21
1,100
1,100
Profit and loss reserves
22
1,482,580
1,178,491
Total equity
1,483,680
1,179,591
The financial statements were approved by the board of directors and authorised for issue on 22 November 2022 and are signed on its behalf by:
Mr D Babic
Director
Company Registration No. 02860600
DNT COMPANY LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 December 2019
1,100
911,497
912,597
Year ended 30 November 2020:
Profit and total comprehensive income for the year
-
306,994
306,994
Dividends
11
-
(40,000)
(40,000)
Balance at 30 November 2020
1,100
1,178,491
1,179,591
Year ended 30 November 2021:
Profit and total comprehensive income for the year
-
344,089
344,089
Dividends
11
-
(40,000)
(40,000)
Balance at 30 November 2021
1,100
1,482,580
1,483,680
DNT COMPANY LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 10 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
25
405,475
(896,916)
Interest paid
(173,265)
(25,200)
Income taxes paid
(99,159)
(14,998)
Net cash inflow/(outflow) from operating activities
133,051
(937,114)
Investing activities
Purchase of tangible fixed assets
(31,783)
Receipts arising from loans made
(7,713)
150,000
Interest received
1,189
1,519
Dividends received
45
Net cash (used in)/generated from investing activities
(38,262)
151,519
Financing activities
Repayment of bank loans
(34,375)
600,000
Dividends paid
(40,000)
(40,000)
Net cash (used in)/generated from financing activities
(74,375)
560,000
Net increase/(decrease) in cash and cash equivalents
20,414
(225,595)
Cash and cash equivalents at beginning of year
(145,119)
80,476
Cash and cash equivalents at end of year
(124,705)
(145,119)
Relating to:
Cash at bank and in hand
44,895
43,987
Bank overdrafts included in creditors payable within one year
(169,600)
(189,106)
DNT COMPANY LTD
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 11 -
1
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
2
Accounting policies
Company information
DNT Company Ltd is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
5 Chestnut Court, Jill Lane, Sambourne, Redditch, Worcestershire, United Kingdom, B96 6EW.
2.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The comparative year balances were unaudited.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
2.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
2.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
2.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% Straight line
Fixtures and fittings
25% Reducing balance
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2021
2
Accounting policies
(Continued)
- 12 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
2.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
2.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
2.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
2
Accounting policies
(Continued)
- 13 -
2.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
2
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
2.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
2.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
2
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
2.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
2.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
2.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
2.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
2.15
Foreign exchange
Transactions in currencies other than
pounds sterling
are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2.16
Investments are initially recognised at cost and subsequently measured at fair value. Fair value is deemed to be the value of investments on the open market at the reporting end date. Changes in fair value are recognised in profit and loss.
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 16 -
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Sales
29,274,709
13,761,947
2021
2020
£
£
Other revenue
Interest income
1,189
1,519
Dividends received
45
-
Grants received
81,166
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
31,400
(12,603)
Government grants and other coronavirus funding
(81,166)
Fees payable to the company's auditor for the audit of the company's financial statements
5,000
Depreciation of owned tangible fixed assets
16,300
9,417
Operating lease charges
763
6,958
5
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
150,000
138,000
Company pension contributions to defined contribution schemes
101,803
17,795
251,803
155,795
The remuneration for the highest paid director was £63,723. (2020: £39,293).
6
Employees
2021
2020
Number
Number
10
9
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
6
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
444,083
348,373
Social security costs
50,059
33,583
Pension costs
102,874
22,299
597,016
404,255
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Other interest income
1,189
1,519
Other income from investments
Dividends received
45
Total income
1,234
1,519
8
Interest payable and similar expenses
2021
2020
£
£
Interest on bank overdrafts and loans
4,268
25,118
Interest on invoice finance arrangements
162,196
Other interest on financial liabilities
6,801
Other interest
82
173,265
25,200
9
Amounts written off investments
2021
2020
£
£
Fair value gains/(losses) on financial instruments
Gain/(loss) on financial assets held at fair value through profit or loss
900
(1,741)
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
76,321
99,159
Adjustments in respect of prior periods
(18,310)
Total current tax
58,011
99,159
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
10
Taxation
2021
2020
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
4,535
Total tax charge
62,546
99,159
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
406,635
406,153
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
77,261
77,169
Tax effect of expenses that are not deductible in determining taxable profit
3,227
2,047
Tax effect of income not taxable in determining taxable profit
(8)
Change in unrecognised deferred tax assets
4,535
Permanent capital allowances in excess of depreciation
(7,085)
(487)
Depreciation on assets not qualifying for tax allowances
3,097
1,789
Effect of revaluations of investments
(171)
331
S.455 tax
(18,310)
18,310
Taxation charge for the year
62,546
99,159
11
Dividends
2021
2020
£
£
Interim paid
40,000
40,000
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 19 -
12
Tangible fixed assets
Freehold land and buildings
Fixtures and fittings
Total
£
£
£
Cost
At 1 December 2020
257,585
96,010
353,595
Additions
31,783
31,783
At 30 November 2021
257,585
127,793
385,378
Depreciation and impairment
At 1 December 2020
46,249
83,202
129,451
Depreciation charged in the year
5,152
11,148
16,300
At 30 November 2021
51,401
94,350
145,751
Carrying amount
At 30 November 2021
206,184
33,443
239,627
At 30 November 2020
211,336
12,808
224,144
13
Stocks
2021
2020
£
£
Finished goods and goods for resale
7,902,136
1,849,378
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
7,348,123
5,435,092
Corporation tax recoverable
18,310
Other debtors
758,826
87,129
Prepayments and accrued income
382,441
131,298
8,507,700
5,653,519
15
Current asset investments
2021
2020
£
£
Listed investments
3,759
2,859
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 20 -
16
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans and overdrafts
18
299,596
232,838
Payments received on account
4,951,569
1,645,890
Trade creditors
9,277,457
3,561,970
Corporation tax
76,321
99,159
Other taxation and social security
11,269
461,286
Other creditors
1,966
6,693
Accruals and deferred income
156,095
30,192
14,774,273
6,038,028
17
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
18
435,629
556,268
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
35,000
18
Loans and overdrafts
2021
2020
£
£
Bank loans
565,625
600,000
Bank overdrafts
169,600
189,106
735,225
789,106
Payable within one year
299,596
232,838
Payable after one year
435,629
556,268
Bank loans and overdraft are secured by a fixed and floating charge over the company's assets.
Creditors due after one year consist of two bank loans in relation to the CBILS offering by the Government. Interest on both of these loans is borne by the Government for the first 12 months.
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 21 -
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
4,535
-
2021
Movements in the year:
£
Liability at 1 December 2020
-
Charge to profit or loss
4,535
Liability at 30 November 2021
4,535
20
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
102,874
22,299
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
Ordinary B shares of £1 each
100
100
100
100
1,100
1,100
1,100
1,100
The ordinary shares have full voting rights. The ordinary B class shares have no entitlement to a vote and capital is limited to £10 on sale or liquidation.
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 22 -
22
Profit and loss reserves
2021
2020
£
£
At the beginning of the year
1,178,491
911,497
Profit for the year
344,089
306,994
Dividends declared and paid in the year
(40,000)
(40,000)
At the end of the year
1,482,580
1,178,491
24
Directors' transactions
Dividends totalling £40,000 (2020 - £40,000) were paid in the year in respect of shares held by the company's directors.
At the year end, the directors' owed the company £42,593 (2020: £34,880). Interest payable on these loans is 2.5%.
25
Cash generated from/(absorbed by) operations
2021
2020
£
£
Profit for the year after tax
344,089
306,994
Adjustments for:
Taxation charged
62,546
99,159
Finance costs
173,265
25,200
Investment income
(1,234)
(1,519)
Depreciation and impairment of tangible fixed assets
16,300
9,417
Other gains and losses
(900)
1,741
Movements in working capital:
(Increase)/decrease in stocks
(6,052,758)
478,404
Increase in debtors
(2,828,158)
(2,581,608)
Increase in creditors
8,692,325
765,296
Cash generated from/(absorbed by) operations
405,475
(896,916)
DNT COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2021
- 23 -
26
Analysis of changes in net debt
1 December 2020
Cash flows
30 November 2021
£
£
£
Cash at bank and in hand
43,987
908
44,895
Bank overdrafts
(189,106)
19,506
(169,600)
(145,119)
20,414
(124,705)
Borrowings excluding overdrafts
(600,000)
34,375
(565,625)
(745,119)
54,789
(690,330)
2021-11-30
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