Company registration number 04047374 (England and Wales)
DIVERSITECH INTERNATIONAL LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
DIVERSITECH INTERNATIONAL LTD
COMPANY INFORMATION
Directors
N K Kroner
A C Kelly
(Appointed 8 August 2023)
D A Bass
(Appointed 1 December 2023)
Company number
04047374
Registered office
C/O Dentons UKMEA LLP
The Pinnacle
Midsummer Boulevard
Milton Keynes
Buckinghamshire
MK9 1FE
Auditor
Taylor Dawson Plumb Limited
22 Regent Street
Nottingham
NG1 5BQ
Business address
Glaisdale Drive East
Nottingham
United Kingdom
NG8 4LY
DIVERSITECH INTERNATIONAL LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 20
DIVERSITECH INTERNATIONAL LTD
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 principal activity continues to be the supply of pumps and ancillary equipment to the heating, ventilation and air conditioning industries.
The Directors consider that the financial key performance indicators for the business are: Turnover, Gross Profit Margin, Net Profit before Taxation and Net Assets.
Supported by the US group, Diversitech Corporation, the company continues to trade in the European market and has continued its growth resulting in an increase in turnover of £2.34m (10.1%) in 2023 (2022: increase £3.14m (15.7%).
Despite continued pressure on costs, management were still able to maintain Gross Profit margins, which increased to 39.1% in the current year from 38.4% in 2022.
Overall Administrative Expenditure increased from £3,569,167 to £3,868,837, but remained comparable with turnover at 15.1% (2022: 15.4%).
Operating profit compared to the previous year was higher at £6,118,433 (2022: £5,357,745). Profit before taxation includes interest received on loans provided to a group company and overall there was a 21.7% increase in profit before taxation compared to 2022.
The balance sheet continues to show a strong position, with the company retaining £5.2m profit for the year resulting in continued growth in net assets from £17.5m to £22.7m, as no dividends were distributed in the year ending 31 December 2023.
Even though there continues to be unforeseen challenges due to the conflict in Ukraine and global economic pressures, such as inflation, the Directors still anticipate that there will be continued growth in turnover in the forthcoming year, though pressure on margins remains and this suggests a similar net profit retained in the business.
Principal risks and uncertainties
We consider the key risks and uncertainties affecting the company to be the continued uncertainty in the global economy and competition in the market. We also recognise the impact which the conflict in Ukraine continues to have on the supply chain of the business and our service delivery.
In order to mitigate the risks and uncertainties, we continue to focus on customer service and, by listening to feedback, create new products which facilitate year on year growth and a successful expansion of the business. During the year there continues to be further investment in a new ERP system has helped deliver further improvements to customer service.
The company, with support from the group, continues to be acquisitive in order to grow and develop the Diversitech brand in the UK, Europe and beyond.
D A Bass
Director
19 September 2024
DIVERSITECH INTERNATIONAL LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be the supply of pumps and ancillary equipment to the heating ventilation and air conditioning industries.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. 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:
D A Bass
(Resigned 8 August 2023)
P J Greengrass
(Resigned 8 August 2023)
N K Kroner
R E Sjogren
(Resigned 8 August 2023)
A C Kelly
(Appointed 8 August 2023)
D A Bass
(Appointed 1 December 2023)
J Schraa
(Appointed 30 August 2023 and resigned 7 November 2023)
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
DIVERSITECH INTERNATIONAL LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
D A Bass
Director
19 September 2024
DIVERSITECH INTERNATIONAL LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIVERSITECH INTERNATIONAL LTD
- 4 -
Opinion
We have audited the financial statements of DiversiTech International Ltd (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, 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 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.
DIVERSITECH INTERNATIONAL LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIVERSITECH INTERNATIONAL LTD (CONTINUED)
- 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 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.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the application of the Financial Reporting Standard 102 and the Companies Act 2006 together with compliance with UK tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the
financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.
We assessed the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, by considering the following:
The nature of the industry and the business performance.
Discussions with Directors and management and consideration of their policies and procedures for identifying non-compliance or detecting and responding to the risks of fraud.
Communication throughout the audit team to remain alert to indications of non-compliance throughout the audit.
Based on the results of our risk assessment we designed our audit procedures to identify fraud and non compliance with such laws and regulations identified above.
We reviewed the disclosures in the financial statements and tested to supporting documentation.
We considered the risk of fraud through management override of controls and, in response, we incorporated testing of manual journals throughout our audit approach and assessed whether judgements made in making accounting estimates were indicative of potential bias.
We performed analytical procedures to identify any unusual or unexpected trends or relationships that may indicate risks of material misstatement due to fraud.
We made enquiries into management of any actual and potential litigation and claims.
DIVERSITECH INTERNATIONAL LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIVERSITECH INTERNATIONAL LTD (CONTINUED)
- 6 -
There are inherent limitations in the audit procedures described above and therefore 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. Where instances of non-compliance with laws and regulations are not closely linked to events and transactions within the financial statements, then we are less likely to become aware of these. In addition, the risk is increased regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, omission or misrepresentation.
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.
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.
Sara Dawson
Senior Statutory Auditor
For and on behalf of Taylor Dawson Plumb Limited
19 September 2024
Chartered Accountants
Statutory Auditor
22 Regent Street
Nottingham
NG1 5BQ
DIVERSITECH INTERNATIONAL LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
25,538,822
23,193,352
Cost of sales
(15,563,282)
(14,288,236)
Gross profit
9,975,540
8,905,116
Administrative expenses
(3,871,711)
(3,569,167)
Other operating income
11,730
21,796
Operating profit
5
6,115,559
5,357,745
Interest receivable and similar income
8
662,504
212,482
Profit before taxation
6,778,063
5,570,227
Tax on profit
9
(1,636,822)
(1,127,205)
Profit for the financial year
5,141,241
4,443,022
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 11 to 20 form part of these financial statements.
DIVERSITECH INTERNATIONAL LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
210,000
294,000
Tangible assets
11
322,009
332,895
532,009
626,895
Current assets
Stocks
12
4,077,702
4,307,950
Debtors
13
20,997,890
11,029,670
Cash at bank and in hand
1,756,894
6,281,599
26,832,486
21,619,219
Creditors: amounts falling due within one year
14
(4,520,374)
(4,578,703)
Net current assets
22,312,112
17,040,516
Total assets less current liabilities
22,844,121
17,667,411
Provisions for liabilities
Deferred tax liability
15
80,502
83,224
(80,502)
(83,224)
Net assets
22,763,619
17,584,187
Capital and reserves
Called up share capital
17
1,111
1,111
Share premium account
499,889
499,889
Profit and loss reserves
22,262,619
17,083,187
Total equity
22,763,619
17,584,187
The notes on pages 11 to 20 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 19 September 2024 and are signed on its behalf by:
D A Bass
Director
Company registration number 04047374 (England and Wales)
DIVERSITECH INTERNATIONAL LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
1,111
499,889
12,606,924
13,107,924
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
4,443,022
4,443,022
Credit to equity for equity settled share-based payments
-
-
33,241
33,241
Balance at 31 December 2022
1,111
499,889
17,083,187
17,584,187
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
5,141,241
5,141,241
Credit to equity for equity settled share-based payments
-
-
38,191
38,191
Balance at 31 December 2023
1,111
499,889
22,262,619
22,763,619
The notes on pages 11 to 20 form part of these financial statements.
DIVERSITECH INTERNATIONAL LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
8,182,276
3,132,236
Income taxes paid
(1,183,345)
(542,821)
Net cash inflow from operating activities
6,998,931
2,589,415
Investing activities
Purchase of tangible fixed assets
(93,863)
(162,968)
Proceeds from disposal of tangible fixed assets
6,250
Loans made to other entities
(12,136,718)
(1,636,286)
Interest received
662,504
212,482
Net cash used in investing activities
(11,561,827)
(1,586,772)
Financing activities
Repayment of derivatives
38,191
33,241
Net cash generated from financing activities
38,191
33,241
Net (decrease)/increase in cash and cash equivalents
(4,524,705)
1,035,884
Cash and cash equivalents at beginning of year
6,281,599
5,245,715
Cash and cash equivalents at end of year
1,756,894
6,281,599
The notes on pages 11 to 20 form part of these financial statements.
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
DiversiTech International Ltd is a private company limited by shares incorporated in England and Wales. The registered office is C/O Dentons UKMEA LLP, The Pinnacle, Midsummer Boulevard, Milton Keynes, Buckinghamshire, MK9 1FE. The principal place of business is Glaisdale Drive East, Nottingham, United Kingdom, NG8 4LY.
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 under the historical cost convention. The principal accounting policies adopted are set out below.
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 comprises revenue recognised by the company in respect of goods and services supplied, exclusive of Value Added Tax and trade discount. Revenue is recognised when the significant risks and rewards of ownership have passed to the buyer, usually on dispatch of the goods.
1.4
Intangible fixed assets - goodwill
Goodwill, being the amount paid in connection with the acquisition of a business in 2021, is being amortised evenly over its estimated useful life of five years.
1.5
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:
Leasehold improvements
10% on cost
Fixtures and plant
20% on cost
Fixtures, office and computer equipment
25% on cost and 15% on cost
Motor vehicles
25% on reducing balance
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.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.
Cost is calculated using the average pricing method.
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.7
Financial instruments
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.
1.8
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.
1.9
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.10
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.11
Foreign exchange
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at an average rate of exchange for the period. Exchange differences are taken into account in arriving at the operating result.
1.12
Share-based payments (equity-settled transactions)
The cost of equity-settled transactions with employees are measured by reference to the fair value of
the equity instruments granted at the date at which they are granted, and are recognised as an
expense over the vesting period, which ends on the date on which the relevant employees become
fully entitled to the awards.
Fair value is determined by an external valuer using an appropriate pricing model. In valuing
equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked
to the price of the shares of the company (market conditions) and non-vesting conditions.
Options were granted during the year ended 31 December 2023 and all options remained outstanding at the year end.
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
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 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Carrying value of stock:
When calculating the stock provision, management considers the nature and condition of the stock, as well as applying assumptions around anticipated future sales of goods for resale and usage of consumables. The net carrying amount of the stocks is £4,077,702.
Customer rebates:
When calculating rebates due to customers management consider the contract terms in place with the customer for any rebates earned and provision is made where management expect a claim in the future from on going customer relationships. Customer rebates accrued are included within Accruals and Deferred Income in Note 14.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
21,112,726
18,174,910
Europe
3,462,729
3,978,835
Rest of the world
963,367
1,039,607
25,538,822
23,193,352
2023
2022
£
£
Other revenue
Interest income
662,504
212,482
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional item
-
22,770
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Exceptional item
(Continued)
- 14 -
During the year ended 31 December 2021 the company settled the cost in respect of share options exercised by certain key employees in the holding company, Icebox Holdings Inc. Together with additional bonuses for employees not in the share scheme, these costs were paid through the Diversitech International Limited payroll accounting for tax and national insurance.
Included in the figure above were £Nil (2022 : £22,770) cost of share options exercised.
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(2,655)
(370,691)
Fees payable to the company's auditor for the audit of the company's financial statements
6,500
5,400
Depreciation of owned tangible fixed assets
102,309
165,995
Profit on disposal of tangible fixed assets
(3,810)
-
Amortisation of intangible assets
84,000
84,000
Operating lease charges
146,250
146,249
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Management
5
7
Sales
14
12
Administrative
8
8
Distribution
23
19
Total
50
46
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,134,574
1,914,763
Social security costs
214,041
230,219
Pension costs
38,422
34,404
2,387,037
2,179,386
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
246,098
345,735
Company pension contributions to defined contribution schemes
1,223
2,373
247,321
348,108
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
205,886
232,437
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
8,832
7,983
Other interest income
653,672
204,499
Total income
662,504
212,482
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
662,504
208,892
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,626,671
1,077,472
Adjustments in respect of prior periods
12,873
(14,277)
Total current tax
1,639,544
1,063,195
Deferred tax
Origination and reversal of timing differences
(2,722)
64,010
Total tax charge
1,636,822
1,127,205
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 16 -
The main rate of corporation tax increased from 19% to 25% from 1 April 2023. The company was therefore subject to a hybrid rate of 23.52% for the year ended 31 December 2023.
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
6,778,063
5,570,227
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
1,594,238
1,058,343
Tax effect of expenses that are not deductible in determining taxable profit
6,290
4,845
Under/(over) provided in prior years
12,873
(14,277)
Depreciation in excess of capital allowances
26,143
14,284
Deferred taxation
(2,722)
64,010
Taxation charge for the year
1,636,822
1,127,205
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
420,000
Amortisation and impairment
At 1 January 2023
126,000
Amortisation charged for the year
84,000
At 31 December 2023
210,000
Carrying amount
At 31 December 2023
210,000
At 31 December 2022
294,000
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
11
Tangible fixed assets
Leasehold improvements
Fixtures and plant
Fixtures, office and computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
299,225
252,111
495,903
285,880
1,333,119
Additions
7,948
4,682
47,989
33,244
93,863
Disposals
(28,330)
(28,330)
At 31 December 2023
307,173
256,793
543,892
290,794
1,398,652
Depreciation and impairment
At 1 January 2023
283,147
241,457
280,085
195,535
1,000,224
Depreciation charged in the year
2,626
6,185
70,285
23,213
102,309
Eliminated in respect of disposals
(25,890)
(25,890)
At 31 December 2023
285,773
247,642
350,370
192,858
1,076,643
Carrying amount
At 31 December 2023
21,400
9,151
193,522
97,936
322,009
At 31 December 2022
16,078
10,654
215,818
90,345
332,895
12
Stocks
2023
2022
£
£
Goods for resale
4,077,702
4,307,950
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,212,963
4,837,893
Payments on account
158,088
1,761,702
Amounts owed by group undertakings
16,352,556
4,215,838
Other debtors
179,764
179,764
Prepayments and accrued income
94,519
34,473
20,997,890
11,029,670
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,249,803
778,230
Corporation tax
982,380
526,181
Other taxation and social security
489,874
174,702
Accruals and deferred income
1,798,317
3,099,590
4,520,374
4,578,703
15
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
80,502
83,224
2023
Movements in the year:
£
Liability at 1 January 2023
83,224
Credit to profit or loss
(2,722)
Liability at 31 December 2023
80,502
The deferred tax liability set out above is expected to reverse and relates to accelerated capital allowances that are expected to mature within the same period.
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
38,422
34,404
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.
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Odrinary of £1 each
1,111
1,111
1,111
1,111
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
146,250
146,250
Between two and five years
71,313
217,563
217,563
363,813
19
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
754,684
720,772
This included settlement of share options exercised during the year of £Nil (2022: - £22,770) in the US holding company, Icebox Holdings Inc.
During the year the company rented premises from an entity in which one of the directors held an interest. Rent payable in the year was under a commercial arrangement and totalled £146,250 (2022: £146,250). No amounts were outstanding at the year ended 31 December 2022 or 31 December 2023.
20
Ultimate controlling party
The ultimate parent company is DiversiTech Holdings Inc, a company registered in USA. DiversiTech Holdings Inc is controlled by Partners Group, a global investment company.
The immediate parent company is DiversiTech UK Holdings Limited. A copy of the parent company's financial statements can be obtained from Companies House, Crown Way, Maindy, Cardiff CF4 3UZ.
DIVERSITECH INTERNATIONAL LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
21
Share-based payments (equity-settled transactions)
On 22 December 2021 the parent company, Icebox Parent GP, LLC established the 2021 Equity Incentive Plan (“2021 Plan”) to award Class B units to certain employees, consultants, officers, directors and other service providers across the group. Under the 2021 Plan, units granted relating to continued employment with the Company have a 5 year term for vesting and being exercisable; units granted relating to performance shall vest and be exercisable on the first anniversary date and in equal instalments on each of the subsequent sixteen quarterly anniversaries of the date of grant. All time-based units that are outstanding and unvested as of immediately prior to the defined liquidity event in the 2021 Plan shall vest in full.
Under the 2021 Plan 101 (2022: 2,382) options were granted during the year at a weighted average grant date value of $90.66 per unit. The units were comprised of 955 (2022: 916) time vesting units and 1,528 (2022: 1,466) performance vesting units. As at 31 December 2023 no time-vesting units have vested and no units have been exercised or forfeited.
For the units granted, the parent company used an independent third-party valuation group to determine the estimated fair value for purposes of determining the expense related to these granted units in accordance with FRS 102. The estimated fair value of the time vested units was determined to be $170.02 per share. The estimated fair value of the performance vested units ranged from $18.32 to $54.71 per share based on the specific characteristics of the units. Total expense recorded by the Company in relation to the 2021 Plan for the year ended 31 December 2023 was £38,191 (2022: £33,241).
22
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
5,141,241
4,443,022
Adjustments for:
Taxation charged
1,636,822
1,127,205
Investment income
(662,504)
(212,482)
Gain on disposal of tangible fixed assets
(3,810)
-
Amortisation and impairment of intangible assets
84,000
84,000
Depreciation and impairment of tangible fixed assets
102,309
165,995
Movements in working capital:
Decrease/(increase) in stocks
230,248
(708,683)
Decrease/(increase) in debtors
2,168,498
(342,161)
Decrease in creditors
(514,528)
(1,424,660)
Cash generated from operations
8,182,276
3,132,236
23
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
6,281,599
(4,524,705)
1,756,894
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