Company registration number 01049663 (England and Wales)
DT (AUTOMOTIVES) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
DT (AUTOMOTIVES) LIMITED
COMPANY INFORMATION
Directors
J G Minshaw
K W Hayes
J Smith
C R Turner
J L Minshaw
(Appointed 28 February 2023)
Secretary
J Smith
Company number
01049663
Registered office
75 Ash Road South
Wrexham Industrial Estate
Wrexham
LL13 9UG
Auditor
Afford Bond Holdings Limited
31 Wellington Road
Nantwich
Cheshire
CW5 7ED
Bankers
Royal Bank of Scotland
Leeds City Office
8 Park Row
Leeds
LS1 1QS
DT (AUTOMOTIVES) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
4
Directors' responsibilities statement
3
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 21
DT (AUTOMOTIVES) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The company's business is primarily derived from four key sales channels - motorsport, road performance and styling, motorcycles and cycles. Motorsport is historically the company's core activity and has provided the basic platform upon which the other sales channels have been developed.
The key routes to market for each sales channel are through a comprehensive catalogue generating both mail order and telephone sales. This is backed up by a website which is focused on developing internet sales. The company also generates sales via the ebay selling outlet and Amazon.
Principal risks and uncertainties
Across the broad range of products offered via the catalogue and the website, the company has few direct competitors. However, there are numerous smaller catalogue, internet companies and retail outlets which specialise in specific segments of the business. Management of this risk is by way of sales channel optimisation and customer retention initiatives discussed below.
The company continues to buy a major proportion of its stock from Europe, The Far East and the United States; consequently there is an ongoing exposure to both exchange gains and losses. The company has processes in place to manage the risk: there is no speculative buying of foreign currency and exchange rates are reviewed frequently.
Development and performance
The main objective for both the motorsport and the motorcycles sales channels are to look for initiatives which continue to grow this aspect of our business in terms of both turnover and gross margin. All divisions are expected to continue to show growth with the improved prominence on the internet.
The key strategies for growing the business are to have focused resource for each of the sales channels and to grow awareness through the continual development of the website and the implementation of e-retailing initiatives. The company will then couple this with the development of customer retention through enhanced customer service and loyalty schemes.
Key performance indicators
The key performance indicators by which the directors manage and measure the business are turnover, gross profit and adjusted net profit before interest, tax, depreciation and amortisation. All three measures have been satisfactory in the period.
DT (AUTOMOTIVES) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Promoting the success of the company
The directors consider, both individually and collectively, that they have acted in ways that they believe in good faith to be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and other matters set out in S172(1) if the Act) in the decisions they made during the period ended 31 December 2023.
We recognise our colleagues as a key asset and aim to be a responsible employer in our approach to the pay and benefits our employees receive. The health, safety and wellbeing of our colleagues are of the highest importance and ensuring this is maintained is a key consideration in how we do business.
Our customers are fundamental to the success of our business and we endeavour to serve them to the very best of our ability. We are committed to providing quality products at competitive prices, together with a swift and positive purchasing experience, and a responsive after sales service should the need arise.
We also aim to act responsibly and fairly in our engagement with suppliers, regulators, bankers, insurers and other stakeholders. We respond quickly and fully to queries from regulators, bankers, insurers if queries arise.
As the board of directors, our intention is always to behave responsibly and to ensure that the business operates in a responsible manner, adhering to high standards of business conduct and good governance. We recognise that the maintenance of our good reputation, founded on responsible behaviour, is fundamental to our continuing ability to achieve profitable growth for the benefit of our stakeholders in the future.
J G Minshaw
Director
22 March 2024
DT (AUTOMOTIVES) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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.
DT (AUTOMOTIVES) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company for the year was the retailing of motor parts and accessories. A review of the business is included within the strategic report.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,400,000. 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:
J G Minshaw
K W Hayes
J Smith
C R Turner
J L Minshaw
(Appointed 28 February 2023)
Auditor
Afford Bond Holdings Limitedwere appointed auditors to the company and in accordance with section 487(2) of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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.
On behalf of the board
J G Minshaw
Director
22 March 2024
DT (AUTOMOTIVES) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DT (AUTOMOTIVES) LIMITED
- 5 -
Opinion
We have audited the financial statements of DT (Automotives) Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet 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 31 December 2023 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.
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' report 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.
DT (AUTOMOTIVES) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DT (AUTOMOTIVES) LIMITED
- 6 -
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 directors' report.
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
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Our procedures are developed based on risks identified from our knowledge of the entity, its environment, the significant laws and regulations governing its activities and of the related parties and service organisations connected with it. We also consider how the systems and controls the entity has put in place over its activities might mitigate risks identified.
Audit response to risks identified
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we undertook procedures which included, but were not limited to:
- Enquiry of management, those charged with governance around actual and potential litigation and claims.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
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.
DT (AUTOMOTIVES) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DT (AUTOMOTIVES) LIMITED
- 7 -
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.
Paul Edwards FCCA CTA
Senior Statutory Auditor
For and on behalf of Afford Bond Holdings Limited
22 March 2024
Chartered Accountants
Statutory Auditor
31 Wellington Road
Nantwich
Cheshire
CW5 7ED
DT (AUTOMOTIVES) LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
44,801,730
42,981,992
Cost of sales
(35,259,365)
(33,691,434)
Gross profit
9,542,365
9,290,558
Administrative expenses
(7,411,746)
(7,981,385)
Other operating income
105,000
405,000
Operating profit
4
2,235,619
1,714,173
Interest receivable and similar income
7
28,137
2,547
Profit before taxation
2,263,756
1,716,720
Tax on profit
8
(739,381)
(319,517)
Profit for the financial year
1,524,375
1,397,203
Retained earnings brought forward
4,899,264
4,902,061
Dividends
9
(1,400,000)
(1,400,000)
Retained earnings carried forward
5,023,639
4,899,264
The profit and loss account has been prepared on the basis that all operations are continuing operations.
DT (AUTOMOTIVES) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
25,712
27,174
Tangible assets
11
13,117,932
8,125,464
13,143,644
8,152,638
Current assets
Stocks
12
6,356,773
7,265,316
Debtors
13
841,122
775,341
Cash at bank and in hand
344,564
2,201,556
7,542,459
10,242,213
Creditors: amounts falling due within one year
14
(5,222,511)
(5,021,005)
Net current assets
2,319,948
5,221,208
Total assets less current liabilities
15,463,592
13,373,846
Creditors: amounts falling due after more than one year
15
(9,269,114)
(7,848,978)
Provisions for liabilities
Deferred tax liability
18
1,150,839
605,604
(1,150,839)
(605,604)
Net assets
5,043,639
4,919,264
Capital and reserves
Called up share capital
19
20,000
20,000
Profit and loss reserves
20
5,023,639
4,899,264
Total equity
5,043,639
4,919,264
The financial statements were approved by the board of directors and authorised for issue on 22 March 2024 and are signed on its behalf by:
J G Minshaw
Director
Company registration number 01049663 (England and Wales)
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
DT (Automotives) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 75 Ash Road South, Wrexham Industrial Estate, Wrexham, LL13 9UG.
1.1
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 financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Demon Tweeks Limited. These consolidated financial statements are available from its registered office.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Development Costs
10 years straight line
1.6
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:
Plant and machinery
15% straight line
Computer equipment
25% straight line
Motor vehicles
0 - 25% straight line
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.
1.7
Impairment of fixed assets
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.
1.8
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.
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.9
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.
1.10
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.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
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.
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
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 payments 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. Amounts 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 subsequently 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 through 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.
1.11
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.
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.12
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.13
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.
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.
1.14
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.
The company operates an employee share ownership plan (ESOP) trust and has de facto control of the shares held by the trust and bears their benefits and risks. The company records assets and liabilities of the trust as its own. Consideration paid by the ESOP scheme for shares of the company is deducted from equity. Finance costs and administrative expenses incurred by the company in relation to the ESOP are recognised on an accruals basis.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.16
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 leases asset are consumed.
1.17
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
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
44,801,730
42,981,992
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
37,302,245
35,082,766
Europe
1,733,254
1,374,173
Rest of the world
5,766,231
6,525,053
44,801,730
42,981,992
2023
2022
£
£
Other revenue
Interest income
28,137
2,547
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
13,750
13,750
Depreciation of owned tangible fixed assets
356,273
330,210
Profit on disposal of tangible fixed assets
(154,488)
-
Amortisation of intangible assets
1,462
2,488
Operating lease charges
648,972
655,779
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales
29
30
Administration
88
90
Management
25
27
Total
142
147
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,320,990
4,507,258
Social security costs
397,117
421,980
Pension costs
90,350
92,824
4,808,457
5,022,062
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
336,462
330,285
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
108,920
147,308
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
18,753
2,547
Other interest income
9,384
Total income
28,137
2,547
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
194,146
187,708
Deferred tax
Origination and reversal of timing differences
545,235
131,809
Total tax charge
739,381
319,517
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:
2023
2022
£
£
Profit before taxation
2,263,756
1,716,720
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
565,939
326,177
Tax effect of expenses that are not deductible in determining taxable profit
199
282
Effect of change in corporation tax rate
180,606
Permanent capital allowances in excess of depreciation
(414)
(6,942)
Other differences
(6,949)
Taxation charge for the year
739,381
319,517
9
Dividends
2023
2022
£
£
Interim paid
1,400,000
1,400,000
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
10
Intangible fixed assets
Development Costs
£
Cost
At 1 January 2023 and 31 December 2023
40,588
Amortisation and impairment
At 1 January 2023
13,414
Amortisation charged for the year
1,462
At 31 December 2023
14,876
Carrying amount
At 31 December 2023
25,712
At 31 December 2022
27,174
11
Tangible fixed assets
Plant and machinery
Computer equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
2,013,824
2,653,033
7,211,364
11,878,221
Additions
55,961
260,132
6,540,810
6,856,903
Disposals
(52,665)
(1,561,955)
(1,614,620)
At 31 December 2023
2,017,120
2,913,165
12,190,219
17,120,504
Depreciation and impairment
At 1 January 2023
1,768,426
1,932,344
51,987
3,752,757
Depreciation charged in the year
67,748
280,880
7,645
356,273
Eliminated in respect of disposals
(52,628)
(53,830)
(106,458)
At 31 December 2023
1,783,546
2,213,224
5,802
4,002,572
Carrying amount
At 31 December 2023
233,574
699,941
12,184,417
13,117,932
At 31 December 2022
245,398
720,689
7,159,377
8,125,464
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
6,356,773
7,265,316
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
171,445
158,401
Corporation tax recoverable
211,461
97,472
Other debtors
101,188
18,180
Prepayments and accrued income
357,028
501,288
841,122
775,341
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
4,030,413
4,196,349
Taxation and social security
668,579
525,409
Other creditors
427,193
183,857
Accruals and deferred income
96,326
115,390
5,222,511
5,021,005
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Other borrowings
16
9,269,114
7,848,978
16
Loans and overdrafts
2023
2022
£
£
Loans from group undertakings
9,269,114
7,848,978
Payable after one year
9,269,114
7,848,978
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
90,350
92,824
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.
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,150,839
605,604
2023
Movements in the year:
£
Liability at 1 January 2023
605,604
Charge to profit or loss
545,235
Liability at 31 December 2023
1,150,839
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
20,000
20,000
20,000
20,000
20
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
4,899,264
4,902,061
Profit for the year
1,524,375
1,397,203
Dividends declared and paid in the year
(1,400,000)
(1,400,000)
At the end of the year
5,023,639
4,899,264
21
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Rent of premises
Rent of premises
2023
2022
£
£
Other related parties
633,000
633,000
DT (AUTOMOTIVES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Related party transactions
(Continued)
- 21 -
Purchase of tangible assets
Sale of tangible assets
2023
2022
2023
2022
£
£
£
£
Key management personnel
3,030,000
-
1,225,000
-
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Key management personnel
277,079
77,192
Other information
The company has taken advantage of the exemption available to not disclose transactions with group companies.
22
Ultimate controlling party
The company's immediate and ultimate parent company is Demon Tweeks Limited The registered office of Demon Tweeks Limited is 75 Ash Road, Wrexham Industrial Estate, Wrexham, Clwyd, LL13 9UG and copies of the group accounts can be obtained from Companies House.
The ultimate controlling party is J G Minshaw by virtue of his interest in Demon Tweeks Limited.
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