Deligo Limited |
Strategic Report |
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The director presents his strategic report for the company for the year ended 31 March 2024. |
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Review of the business |
As stated in the Director's Report, the company operates as a distributor to the electrical wholesale industry. Sourcing its products both locally and globally, the company operates a distribution operation from its Midlands hub supplying the UK and Ireland. The company supplies products used in electrical installation for both domestic and commercial settings, such as hospitals, schools, and other major projects. On 19 December 2023, the company was acquired by Deligo Holdings Limited. At the same time, the company disposed of its ownership of Fastpak Hardware Limited. This allowed the company to focus entirely on its own market. |
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Results and performance |
The results of the company for the year, as set out in the Profit and Loss account, show a profit on ordinary activities before tax of £657,797 (2023 - £836,341). The shareholder's funds in the company total £2,592,451 (2023 - £2,786,490). Turnover in the year fell slightly, by 2.6%, with gross profit on goods improving by 4.5% as shipping costs maintained prior year levels for the first half of the year. Overheads remain well-controlled. Overall, the company has experienced a robust financial year, with increased margins. This positive performance is a testament to the company's strategic initiatives, operational efficiency, and the dedication of its team. The increase in margins is mainly down to the first half of the year as the final two quarters were more affected by a steep rise in shipping costs from the Far East. It is also important to note that the final six months of the year were impacted by the costs of moving to a new warehouse. |
Business environment |
The construction Industry has certainly seen a slowdown from the end of 2023. Demand for the company's products continues to be strong with some new products focusing on the renewable markets, starting to contribute to sales. However, the industry is still becoming more competitive, with new entrants and existing competitors continuing to intensify their efforts. Despite this increased competition, the company has managed to maintain its market share, demonstrating the strength of its value proposition and the effectiveness of its competitive strategies. |
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Strategy |
The company's strategic initiatives have played a crucial role in its positive performance. Although the new warehouse had a detrimental effect on the profit and loss in the short term, the long-term savings and improved service the company can offer will start to be very beneficial in the years to come. The company continues to focus on improving operational efficiency, enhancing its product and service offerings, and strengthening its customer relationships. |
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Principal risks and uncertainties |
The process of risk management is addressed through internal procedures and controls. All policies are subject to approval by the director and ongoing review by management. Compliance with regulation, legal and ethical standards is a high priority for the company. The director is responsible for satisfying himself that a proper internal control framework exists to manage financial risks and that controls operate effectively. The principal risks affecting the company are considered to relate to the market and economic environment, health and safety performance, currency fluctuations, interest rates and general shipping costs. |
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Future developments |
Although the growth in the UK is expected to be slow, the director feels the electrical sector will remain strong and the construction sector will improve slowly. With new and advanced operating systems being implemented , along with investment in people, and a new distribution centre, the company can now ensure profitability and maintain growth at the levels seen historically. Overall, in the coming year the company aims to grow turnover, whilst improving gross profit margins. At the same time it aims to be able to cut overhead costs and still increase productivity. |
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This report was approved by the board on 20 November 2024 and signed on its behalf. |
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J Elliott |
Director |
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Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations was as follows: |
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the senior statutory auditor ensured that the engagement team had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
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we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector; |
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we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including financial reporting legislation, Companies Act 2006, taxation legislation, anti-bribery, employment, and environmental and health and safety legislation; |
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we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and |
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all identified laws and regulations were communicated within the audit team and the team remained alert to instances of non-compliance throughout the audit. |
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We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
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making enquiries of management as to where they considered there was susceptibility to fraud, and their knowledge of actual, suspected or alleged fraud; |
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considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
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To address the risk of fraud through management bias and override of controls, we: |
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performed analytical procedures to identify any unusual or unexpected relationships; |
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tested journal entries to identify unusual transactions; |
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assessed whether judgements and assumptions made in determining accounting estimates were indicative of potential bias; and |
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investigated the rationale behind any significant or unusual transactions. |
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In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
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agreeing accounts disclosures to underlying supporting documentation; |
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enquiring of management as to actual and potential litigation and claims; and |
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reviewing correspondence with HMRC, relevant regulators and the company's legal advisers. |
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A further description of our responsibilities for the audit of the financial statements is available on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. |
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Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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. |
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F D Robinson |
(Senior Statutory Auditor) |
Second Floor, West Wing |
for and on behalf of |
10 Harborne Road |
Sinclair & Co. (Accountants) Limited |
Edgbaston |
Statutory Auditor |
Birmingham |
20 November 2024 |
B15 3AA |
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Motor vehicles |
25% straight line |
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Investments |
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Investments in subsidiaries, associates and joint ventures are measured at cost less any accumulated impairment losses. Listed investments are measured at fair value. Unlisted investments are measured at fair value unless the value cannot be measured reliably, in which case they are measured at cost less any accumulated impairment losses. Changes in fair value are included in the profit and loss account. |
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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2 |
Critical accounting estimates and judgements |
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In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Assumptions and estimates are reviewed on an ongoing basis and any revisions to them are recognised in the period in which they are revised. The following are those that management consider to be critical due to the level of judgement and estimation required: Provisions These are, as far as possible, estimated by reference to evidence of activity after the company's year-end. Any provision for bad and doubtful debts is created by reviewing the collectability of those debts, whist other provisions will be estimated in relation to costs charged after the year-end that relate to the year, or in relation to other identifiable losses. Depreciation The company makes an estimate as to the useful economic life of all its fixed assets, and depreciates the assets accordingly. There are regular reviews for impairments or other reductions in the carrying value of the assets, and adjustments to the carrying value are made at the time of each review, as necessary. |
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3 |
Analysis of turnover |
2024 |
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2023 |
£ |
£ |
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Sale of goods |
12,711,709 |
|
13,052,858 |
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By geographical market: |
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UK |
12,278,662 |
|
12,655,917 |
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Europe |
433,047 |
|
396,941 |
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12,711,709 |
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13,052,858 |
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4 |
Operating profit |
2024 |
|
2023 |
£ |
£ |
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This is stated after charging: |
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Depreciation of owned fixed assets |
42,500 |
|
37,627 |
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Depreciation of assets held under finance leases and hire purchase contracts |
|
46,637 |
|
11,553 |
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Operating lease rentals - plant and machinery |
6,017 |
|
3,909 |
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Operating lease rentals - land and buildings |
552,078 |
|
347,199 |
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Auditors' remuneration for audit services |
10,200 |
|
9,700 |
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Key management personnel compensation (including directors' emoluments) |
|
36,336 |
|
34,744 |
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Carrying amount of stock sold |
6,516,020 |
|
6,834,951 |
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|
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5 |
Director's emoluments |
2024 |
|
2023 |
£ |
£ |
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Emoluments |
36,336 |
|
34,744 |
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Company contributions to defined contribution pension plans |
1,090 |
|
1,042 |
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|
|
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|
37,426 |
|
35,786 |
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Number of directors to whom retirement benefits accrued: |
2024 |
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2023 |
Number |
Number |
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Defined contribution plans |
1 |
|
1 |
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|
|
|
|
|
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6 |
Staff costs |
2024 |
|
2023 |
£ |
£ |
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Wages and salaries |
1,505,166 |
|
1,343,176 |
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Social security costs |
132,736 |
|
127,441 |
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Other pension costs |
28,072 |
|
26,238 |
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|
|
|
|
|
1,665,974 |
|
1,496,855 |
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Average number of employees during the year |
Number |
Number |
|
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Administration |
11 |
|
11 |
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Distribution |
33 |
|
32 |
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Sales |
9 |
|
10 |
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|
|
|
|
|
53 |
|
53 |
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|
|
|
|
|
|
|
|
|
7 |
Interest payable |
2024 |
|
2023 |
£ |
£ |
|
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Bank loans and overdrafts |
38,750 |
|
39,219 |
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Other loans |
149,035 |
|
99,883 |
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Finance charges payable under finance leases and hire purchase contracts |
|
16,861 |
|
3,330 |
|
|
|
|
|
|
204,646 |
|
142,432 |
|
|
|
|
|
|
|
|
|
|
8 |
Taxation |
2024 |
|
2023 |
£ |
£ |
|
Analysis of charge in period |
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Current tax: |
|
UK corporation tax on profits of the period |
117,435 |
|
158,700 |
|
Adjustments in respect of previous periods |
(10) |
|
(268) |
|
|
|
|
|
|
117,425 |
|
158,432 |
|
|
|
|
|
|
|
|
|
|
Deferred tax: |
|
Origination and reversal of timing differences |
58,400 |
|
(7,800) |
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|
|
|
|
|
|
|
|
|
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Tax on profit on ordinary activities |
175,825 |
|
150,632 |
|
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|
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Factors affecting tax charge for period |
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The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
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|
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|
2024 |
|
2023 |
£ |
£ |
|
Profit on ordinary activities before tax |
657,797 |
|
836,341 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
25% |
|
19% |
|
£ |
£ |
|
(Loss)/profit on ordinary activities multiplied by the standard rate of corporation tax |
|
164,449 |
|
158,905 |
|
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Effects of: |
|
Expenses not deductible for tax purposes |
(1,660) |
|
(7,492) |
|
Capital allowances for period in excess of depreciation |
(45,354) |
|
7,287 |
|
Adjustments to tax charge in respect of previous periods |
(10) |
|
(268) |
|
|
Current tax charge for period |
117,425 |
|
158,432 |
|
|
|
|
|
|
|
|
|
|
9 |
Tangible fixed assets |
|
|
Land and buildings |
|
Plant and machinery |
|
Motor vehicles |
|
Total |
|
|
At cost |
|
At cost |
|
At cost |
£ |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 April 2023 |
- |
|
119,247 |
|
144,438 |
|
263,685 |
|
Additions |
306,696 |
|
243,892 |
|
91,657 |
|
642,245 |
|
Disposals |
- |
|
- |
|
(86,041) |
|
(86,041) |
|
At 31 March 2024 |
306,696 |
|
363,139 |
|
150,054 |
|
819,889 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 April 2023 |
- |
|
60,606 |
|
80,763 |
|
141,369 |
|
Charge for the year |
15,335 |
|
50,302 |
|
23,500 |
|
89,137 |
|
On disposals |
- |
|
- |
|
(28,681) |
|
(28,681) |
|
At 31 March 2024 |
15,335 |
|
110,908 |
|
75,582 |
|
201,825 |
|
|
|
|
|
|
|
|
|
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Carrying amount |
|
At 31 March 2024 |
291,361 |
|
252,231 |
|
74,472 |
|
618,064 |
|
At 31 March 2023 |
- |
|
58,641 |
|
63,675 |
|
122,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
£ |
£ |
|
Carrying value of plant and machinery included above held under finance leases and hire purchase contracts |
|
271,226 |
|
92,019 |
|
|
|
|
|
|
|
|
|
|
10 |
Investments |
Investments in |
subsidiary |
undertakings |
£ |
|
Cost |
|
At 1 April 2023 |
82,600 |
|
Disposals |
(100) |
|
|
At 31 March 2024 |
82,500 |
|
|
|
|
|
|
|
2024 |
|
2023 |
£ |
£ |
|
Dividends and other distributions from associates included in income |
|
18,171 |
|
50,000 |
|
|
|
|
|
|
|
|
|
|
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The company holds 20% or more of the share capital of the following companies: |
|
Capital and |
Profit (loss) |
|
Company |
Shares held |
reserves |
for the year |
|
|
Class |
% |
£ |
£ |
|
Cobra Cable Management Ltd |
Ordinary |
75 |
|
83,427 |
|
58,863 |
|
|
11 |
Stocks |
2024 |
|
2023 |
£ |
£ |
|
|
Finished goods and goods for resale |
2,847,902 |
|
3,190,803 |
|
|
|
|
|
|
|
|
|
|
12 |
Debtors |
2024 |
|
2023 |
£ |
£ |
|
|
Trade debtors |
3,288,946 |
|
3,255,496 |
|
Amounts owed by group undertakings and undertakings in which the company has a participating interest |
|
101,432 |
|
659,563 |
|
Other debtors |
341,794 |
|
178,743 |
|
|
|
|
|
|
3,732,172 |
|
4,093,802 |
|
|
|
|
|
|
|
|
|
|
13 |
Creditors: amounts falling due within one year |
2024 |
|
2023 |
£ |
£ |
|
|
Bank loans |
211,028 |
|
239,492 |
|
Obligations under finance lease and hire purchase contracts |
84,168 |
|
20,063 |
|
Trade creditors |
880,151 |
|
800,195 |
|
Amounts owed to group undertakings and undertakings in which the company has a participating interest |
|
5,500 |
|
- |
|
Corporation tax |
117,435 |
|
156,425 |
|
Other taxes and social security costs |
332,539 |
|
273,436 |
|
Other creditors |
2,816,704 |
|
2,905,159 |
|
|
|
|
|
|
4,447,525 |
|
4,394,770 |
|
|
|
|
|
|
|
|
|
|
Within other creditors, the sum of £1,608,165 (2023 - £1,870,717) is secured by way of a fixed and floating charge over all the assets of the company. |
|
|
14 |
Creditors: amounts falling due after one year |
2024 |
|
2023 |
£ |
£ |
|
|
Bank loans |
139,940 |
|
334,979 |
|
Obligations under finance lease and hire purchase contracts |
185,879 |
|
79,668 |
|
|
|
|
|
|
325,819 |
|
414,647 |
|
|
|
|
|
|
|
|
|
|
15 |
Loans |
2024 |
|
2023 |
£ |
£ |
|
Analysis of maturity of debt: |
|
Within one year or on demand |
211,028 |
|
259,555 |
|
Between one and two years |
122,482 |
|
233,896 |
|
Between two and five years |
17,458 |
|
180,751 |
|
|
|
|
|
|
350,968 |
|
674,202 |
|
|
|
|
|
|
|
|
|
|
Within loans, bank loans totalling £nil (2023 - £21,540) are secured by way of a fixed and floating charge over all the assets of the company. |
|
|
16 |
Obligations under finance leases and hire purchase |
2024 |
|
2023 |
|
contracts |
£ |
£ |
|
|
Amounts payable: |
|
Within one year |
84,168 |
|
20,063 |
|
Within two to five years |
185,879 |
|
79,668 |
|
|
|
|
|
|
270,047 |
|
99,731 |
|
|
|
|
|
|
|
|
|
|
Net obligations under finance leases and hire purchase contracts are secured on the assets concerned. |
|
|
17 |
Deferred taxation |
2024 |
|
2023 |
£ |
£ |
|
|
Accelerated capital allowances |
81,700 |
|
23,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
£ |
£ |
|
|
At 1 April |
23,300 |
|
31,100 |
|
Charged/(credited) to the profit and loss account |
58,400 |
|
(7,800) |
|
|
At 31 March |
81,700 |
|
23,300 |
|
|
|
|
|
|
|
|
|
|
|
18 |
Share capital |
Nominal |
|
2024 |
|
2024 |
|
2023 |
value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
|
|
- |
|
80 |
|
A Ordinary shares |
£1 each |
|
40 |
|
40 |
|
- |
|
B Ordinary shares |
£1 each |
|
19 |
|
19 |
|
- |
|
|
|
|
|
|
59 |
|
80 |
|
|
|
|
|
|
|
|
|
|
19 |
Capital redemption reserve |
2024 |
|
2023 |
£ |
£ |
|
|
Shares redeemed |
21 |
|
- |
|
|
At 31 March |
21 |
|
- |
|
|
|
|
|
|
|
|
|
|
20 |
Profit and loss account |
2024 |
|
2023 |
£ |
£ |
|
|
At 1 April |
2,786,410 |
|
2,200,701 |
|
Profit for the financial year |
481,972 |
|
685,709 |
|
Dividends |
(675,990) |
|
(100,000) |
|
Transfer to capital redemption reserve |
(21) |
|
- |
|
|
At 31 March |
2,592,371 |
|
2,786,410 |
|
|
|
|
|
|
|
|
|
|
21 |
Dividends |
2024 |
|
2023 |
£ |
£ |
|
|
Dividends on ordinary shares (note 20) |
675,990 |
|
100,000 |
|
|
|
|
|
|
|
|
|
|
|
22 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
£ |
£ |
£ |
£ |
|
Falling due: |
|
within one year |
- |
|
202,950 |
|
- |
|
- |
|
in over five years |
5,736,510 |
|
- |
|
- |
|
- |
|
|
5,736,510 |
|
202,950 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
23 |
Related party transactions |
|
|
The company declared dividends in favour of its new holding company, Deligo Holdings Limited, in the sum of £627,890. At the year-end, the company owed Deligo Holdings Limited £5,500. During the year, the company traded with Cobra Cable Management Limited, which is a wholly-owned subsidiary. It purchased goods and services to the value of £nil (2023 - £nil), and sold goods and services in the sum of £401,710 (2023 - £317,002). The company received a dividend of £18,172 (2023 - £nil) from Cobra Cable Management Limited. At the year-end, the company was owed £101,432 (2023 - £74,728) by Cobra Cable Management Limited. The company paid Mr J Elliott, its director, a salary of £36,336 (2023 - £34,744), and declared a dividend in his favour of £48,000 (2023 - £50,000). At the year-end, the company owed Mr J Elliott £38,100 (2023 - £35,100). The company loaned Invell Limited, a company owned by Mr J Elliott, £60,500 during the year. This loan carries interest at 5% per annum. At the year-end, Invell Limited owed the company £60,500. |
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|
24 |
Controlling party |
|
|
As from 19 December 2023, the company's holding company is Deligo Holdings Limited. The company is incorporated in England and Wales, and its principal place of business is at Unit 8, Grazebrook Industrial Estate, Dudley, West Midlands, DY2 0BE. |
|
|
25 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
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|
26 |
Legal form of entity and country of incorporation |
|
|
Deligo Limited is a private company limited by shares and incorporated in England. |
|
|
27 |
Principal place of business |
|
|
The address of the company's principal place of business and registered office is: |
|
|
Unit 8, Grazebrook Industrial Estate |
|
Dudley |
|
West Midlands |
|
DY2 0BE |
|
|
28 |
Reconciliations on adoption of FRS 102 |
|
|
Profit and loss for the year ended 31 March 2023 |
£ |
|
|
Profit under former UK GAAP |
685,709 |
|
|
Profit under FRS 102 |
685,709 |
|
|
|
|
|
|
|
|
Balance sheet at 31 March 2023 |
£ |
|
|
Equity under former UK GAAP |
2,786,490 |
|
|
Equity under FRS 102 |
2,786,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|