Company Registration No. 05812731 (England and Wales)
DIGILAND LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
DIGILAND LIMITED
COMPANY INFORMATION
Director
Mr J D Park
Secretary
Mrs H S Park
Company number
05812731
Registered office
Digiland House
Unit C
Stafford Park 12
Telford
Shropshire
TF3 3BJ
Auditor
Thomas & Young Limited
Carleton House
266-268 Stratford Road
Shirley
Solihull
B90 3AD
DIGILAND LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2
Director's responsibilities statement
3
Independent auditor's report
4 - 5
Income statement
6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
DIGILAND LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2018
- 1 -
The director presents the strategic report for the year ended 30 June 2018.
Fair review of the business
During the 2017/18 financial year the company has sought to develop new markets and consolidate existing revenue sources.
Following an increased focus on mobile phone sales during the 2016/17 financial year, the company has continued to develop this class of business during 2017/18 resulting in an increase in sales of 138% over year ended 30 June 2017.
Principal risks and uncertainties
The principal risks and uncertainties are exposure to foreign markets and new product entrants to the market leading to obsolescence of existing products.
Following the vote to leave the European Union the company has continued to develop its European market, but has also substantially increased its United Kingdom sales with an increase of 327% in UK revenue in the year ended 30 June 2018 compared with year ended 30 June 2017.
The company continues to research sourcing of new products and suppliers.
Development and performance
As noted the company continues to develop its existing markets and products range while also researching new markets both in terms of products and geographical areas.
Turnover has decreased slightly during the current financial year being 3.5% less than financial year ended 30 June 2017, however gross profit margin has improved from 11.01% in 2017 to 13.65% in 2018 with an increase in operating profit from £1,236,656 in 2017 to £1,291,926 in the current year.
Mr J D Park
Director
12 November 2018
DIGILAND LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2018
- 2 -
The director presents his annual report and financial statements for the year ended 30 June 2018.
Principal activities
The principal activity of the company continued to be that of the resale of electrical goods.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr J D Park
Results and dividends
The results for the year are set out on page 6.
Ordinary dividends were paid amounting to £172,800. The director does not recommend payment of a final dividend.
Auditor
Thomas & Young Limited were appointed as auditor to the company and in accordance with section 485 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
Mr J D Park
Director
12 November 2018
DIGILAND LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2018
- 3 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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. He is 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.
DIGILAND LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIGILAND LIMITED
- 4 -
Opinion
We have audited the financial statements of Digiland Limited (the 'company') for the year ended 30 June 2018 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 June 2018 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 director's r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
DIGILAND LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGILAND LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the director's
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of director's remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, the director is 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 director is 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 director 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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://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.
Michael Vousden FCA (Senior Statutory Auditor)
for and on behalf of Thomas & Young Limited
12 November 2018
Chartered Accountants
Statutory Auditor
Carleton House
266-268 Stratford Road
Shirley
Solihull
B90 3AD
DIGILAND LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2018
- 6 -
2018
2017
Notes
£
£
Revenue
3
13,652,458
14,148,966
Cost of sales
(11,789,438)
(12,591,101)
Gross profit
1,863,020
1,557,865
Administrative expenses
(571,094)
(321,209)
Operating profit
4
1,291,926
1,236,656
Investment income
7
232
2,919
Finance costs
8
(826)
(12,000)
Profit before taxation
1,291,332
1,227,575
Tax on profit
9
(238,026)
(245,623)
Profit for the financial year
1,053,306
981,952
The Income Statement has been prepared on the basis that all operations are continuing operations.
DIGILAND LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
- 7 -
2018
2017
£
£
Profit for the year
1,053,306
981,952
Other comprehensive income
-
-
Total comprehensive income for the year
1,053,306
981,952
DIGILAND LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
30 JUNE 2018
30 June 2018
- 8 -
2018
2017
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
11
1,356,660
1,309,195
Investments
12
325,000
25,000
1,681,660
1,334,195
Current assets
Inventories
14
516,877
408,977
Trade and other receivables
15
572,787
162,568
Cash and cash equivalents
5,399,397
6,383,765
6,489,061
6,955,310
Current liabilities
16
(1,319,162)
(1,721,257)
Net current assets
5,169,899
5,234,053
Total assets less current liabilities
6,851,559
6,568,248
Non-current liabilities
17
-
(591,395)
Provisions for liabilities
19
(5,059)
(10,859)
Net assets
6,846,500
5,965,994
Equity
Called up share capital
22
100
100
Retained earnings
6,846,400
5,965,894
Total equity
6,846,500
5,965,994
The financial statements were approved and signed by the director and authorised for issue on 12 November 2018
Mr J D Park
Director
Company Registration No. 05812731
DIGILAND LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
- 9 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 July 2016
100
5,088,342
5,088,442
Year ended 30 June 2017:
Profit and total comprehensive income for the year
-
981,952
981,952
Dividends
10
-
(104,400)
(104,400)
Balance at 30 June 2017
100
5,965,894
5,965,994
Year ended 30 June 2018:
Profit and total comprehensive income for the year
-
1,053,306
1,053,306
Dividends
10
-
(172,800)
(172,800)
Balance at 30 June 2018
100
6,846,400
6,846,500
DIGILAND LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
- 10 -
2018
2017
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
436,994
1,803,862
Interest paid
(826)
(12,000)
Income taxes paid
(237,190)
(89,051)
Net cash inflow from operating activities
198,978
1,702,811
Investing activities
Purchase of property, plant and equipment
(59,115)
(49,048)
Proceeds on disposal of property, plant and equipment
-
17,111
Proceeds on disposal of fixed asset investments
(300,000)
625,000
Interest received
232
-
Other investment income received
-
2,919
Net cash (used in)/generated from investing activities
(358,883)
595,982
Financing activities
Repayment of bank loans
(642,395)
(50,444)
Dividends paid
(172,800)
(104,400)
Net cash used in financing activities
(815,195)
(154,844)
Net (decrease)/increase in cash and cash equivalents
(975,100)
2,143,949
Cash and cash equivalents at beginning of year
6,373,557
4,229,608
Cash and cash equivalents at end of year
5,398,457
6,373,557
Relating to:
Cash at bank and in hand
5,399,397
6,383,765
Bank overdrafts included in creditors payable within one year
(940)
(10,208)
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
- 11 -
1
Accounting policies
Company information
Digiland Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Digiland House, Unit C, Stafford Park 12, Telford, Shropshire, TF3 3BJ.
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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he director has a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue 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.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
1.4
Property, plant and equipment
Property, plant and equipment
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
Nil depreciation
Leasehold land and buildings
Nil depreciation
Plant and equipment
25% reducing balance
Fixtures and fittings
25% reducing balance
Motor vehicles
20% 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
.
1.5
Impairment of non-current assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Inventories
Inventories 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 inventories to their present location and condition.
Inventories held for distribution at no or nominal consideration are measured at the lower of replacement cost and 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 inventories 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.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
1
Accounting policies
(Continued)
- 13 -
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position 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 trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
1
Accounting policies
(Continued)
- 14 -
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 trade and other payables, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade payables
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade payables are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though 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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, 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.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current 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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
1.14
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 are included in the income statement for the period.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
- 16 -
3
Revenue
An analysis of the company's revenue is as follows:
2018
2017
£
£
Revenue analysed by class of business
Bulk
8,296,095
10,630,893
Retail
704,702
883,072
Mobile phones
3,655,057
1,537,808
Other
996,604
1,097,193
13,652,458
14,148,966
2018
2017
£
£
Other significant revenue
Interest income
232
-
2018
2017
£
£
Revenue analysed by geographical market
UK
6,042,162
1,414,897
Middle East/Asia
3,049,058
9,904,276
Mainland Europe
4,128,245
2,829,793
Africa
432,993
-
13,652,458
14,148,966
4
Operating profit
2018
2017
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
27,804
(146,610)
Fees payable to the company's auditor for the audit of the company's financial statements
11,143
6,500
Depreciation of owned property, plant and equipment
11,650
5,864
(Profit)/loss on disposal of property, plant and equipment
-
3,644
Cost of inventories recognised as an expense
11,257,995
11,821,550
Operating lease charges
51,774
18,276
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £27,804 (2017 - £146,610).
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2018
2017
Number
Number
Director
1
1
Their aggregate remuneration comprised:
2018
2017
£
£
Pension costs
40,000
35,000
6
Director's remuneration
2018
2017
£
£
Company pension contributions to defined contribution schemes
40,000
35,000
7
Investment income
2018
2017
£
£
Interest income
Interest on bank deposits
232
-
Income from fixed asset investments
Income from other fixed asset investments
-
2,919
Total income
232
2,919
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
232
-
8
Finance costs
2018
2017
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
826
12,000
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
- 18 -
9
Taxation
2018
2017
£
£
Current tax
UK corporation tax on profits for the current period
243,826
237,093
Deferred tax
Origination and reversal of timing differences
(5,800)
8,530
Total tax charge
238,026
245,623
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:
2018
2017
£
£
Profit before taxation
1,291,332
1,227,575
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2017: 19.75%)
245,353
242,446
Tax effect of expenses that are not deductible in determining taxable profit
2,637
2,905
Effect of change in corporation tax rate
-
8
Permanent capital allowances in excess of depreciation
(4,164)
(8,266)
Deferred tax adjustments in respect of prior years
(5,800)
8,530
Taxation charge for the year
238,026
245,623
10
Dividends
2018
2017
£
£
Interim paid
172,800
104,400
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
- 19 -
11
Property, plant and equipment
Freehold land and buildings
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 July 2017
1,197,146
96,827
31,244
106,693
15,800
1,447,710
Additions
6,327
21,119
8,650
23,019
-
59,115
At 30 June 2018
1,203,473
117,946
39,894
129,712
15,800
1,506,825
Depreciation and impairment
At 1 July 2017
-
-
28,321
95,852
14,342
138,515
Depreciation charged in the year
-
-
2,893
8,465
292
11,650
At 30 June 2018
-
-
31,214
104,317
14,634
150,165
Carrying amount
At 30 June 2018
1,203,473
117,946
8,680
25,395
1,166
1,356,660
At 30 June 2017
1,197,146
96,827
2,923
10,841
1,458
1,309,195
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
- 20 -
12
Fixed asset investments
2018
2017
£
£
Listed investments
325,000
25,000
Listed
investments
included above:
Listed investments carrying amount
325,000
25,000
Market value if different from carrying amount
-
25,112
Movements in non-current investments
Investments other than loans
£
Cost or valuation
At 1 July 2017
25,000
Additions
300,000
At 30 June 2018
325,000
Carrying amount
At 30 June 2018
325,000
At 30 June 2017
25,000
13
Financial instruments
2018
2017
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
297,790
28,587
Equity instruments measured at cost less impairment
325,000
25,000
Carrying amount of financial liabilities
Measured at amortised cost
1,075,433
2,075,559
14
Inventories
2018
2017
£
£
Finished goods and goods for resale
516,877
408,977
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
- 21 -
15
Trade and other receivables
2018
2017
Amounts falling due within one year:
£
£
Trade receivables
276,821
27,084
Other receivables
250,324
96,310
Prepayments and accrued income
45,642
39,174
572,787
162,568
16
Current liabilities
2018
2017
Notes
£
£
Bank loans and overdrafts
18
940
61,208
Trade payables
102,847
502,742
Corporation tax
243,729
237,093
Other payables
624,394
773,770
Accruals and deferred income
347,252
146,444
1,319,162
1,721,257
17
Non-current liabilities
2018
2017
Notes
£
£
Bank loans and overdrafts
18
-
591,395
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
391,395
18
Borrowings
2018
2017
£
£
Bank loans
-
642,395
Bank overdrafts
940
10,208
940
652,603
Payable within one year
940
61,208
Payable after one year
-
591,395
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
18
Borrowings
(Continued)
- 22 -
The bank loans were secured by a legal charge over the long leasehold land and buildings, an unlimited charge and omnibus letter of set off among the bank, Digiland Limited and a related company Digicare Limited.
Included in loans and overdrafts were loans that were not wholly repayable in five years. The terms of these loans are stated below:-
Loan 1 repayable over 20 years from June 2008 and the interest rate payable is base rate plus 1% p.a.
Loan 2 repayable over 18 years from June 2008 and the interest rate payable is base rate plus 1% - 1.25% p.a.
All bank loans were paid off during the year ended 30 June 2018.
19
Provisions for liabilities
2018
2017
Notes
£
£
Deferred tax liabilities
20
5,059
10,859
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2018
2017
Balances:
£
£
Accelerated capital allowances
5,059
10,859
2018
Movements in the year:
£
Liability at 1 July 2017
10,859
Credit to profit or loss
(5,800)
Liability at 30 June 2018
5,059
The deferred tax liability set out above is expected to reverse within 3 years and relates to accelerated capital allowances that are expected to mature within the same period.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
- 23 -
21
Retirement benefit schemes
2018
2017
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
40,000
35,000
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.
22
Share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
96 Ordinary A shares of £1 each
96
96
1 Ordinary B share of £1 each
1
1
1 Ordinary C share of £1 each
1
1
1 Ordinary D share of £1 each
1
1
1 Ordinary E share of £1 each
1
1
100
100
All classes of shares shall have attached to them full voting rights and capital distribution (including on winding up) rights; they shall have the right to dividend as declared from time to time for that class of share but so that all classes of share shall not rank pari passu for the dividend entitlement purposes. All classes of shares are not redeemable.
23
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:
2018
2017
£
£
Within one year
-
6,065
Between two and five years
28,737
10,614
In over five years
598,590
-
627,327
16,679
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
- 24 -
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sale of goods
Purchase of goods
2018
2017
2018
2017
£
£
£
£
Other related parties
4,532
11,416
510,060
221,124
The following amounts were outstanding at the reporting end date:
2018
2017
Amounts owed to related parties
£
£
Other related parties
627,182
801,375
25
Directors' transactions
Dividends totalling £56,400 (2017 - £29,700) were paid in the year in respect of shares held by the company's directors.
26
Controlling party
The ultimate controlling party is Mr J D Park, who owns 51% of the issued share capital in the company.
27
Cash generated from operations
2018
2017
£
£
Profit for the year after tax
1,053,306
981,952
Adjustments for:
Taxation charged
238,026
245,623
Finance costs
826
12,000
Investment income
(232)
(2,919)
(Gain)/loss on disposal of property, plant and equipment
-
3,644
Depreciation and impairment of property, plant and equipment
11,650
5,864
Movements in working capital:
(Increase)/decrease in inventories
(107,900)
28,371
(Increase) in trade and other receivables
(275,671)
(24,192)
(Decrease)/increase in trade and other payables
(483,011)
553,519
Cash generated from operations
436,994
1,803,862
2018-06-30
2017-07-01
false
CCH Software
CCH Accounts Production 2018.300
Mr J D Park
Mrs H S Park
05812731
2017-07-01
2018-06-30
05812731
bus:Director1
2017-07-01
2018-06-30
05812731
bus:CompanySecretary1
2017-07-01
2018-06-30
05812731
bus:RegisteredOffice
2017-07-01
2018-06-30
05812731
2018-06-30
05812731
2016-07-01
2017-06-30
05812731
core:RetainedEarningsAccumulatedLosses
2017-07-01
2018-06-30
05812731
2017-06-30
05812731
core:LandBuildings
core:OwnedOrFreeholdAssets
2018-06-30
05812731
core:LandBuildings
core:LeasedAssetsHeldAsLessee
2018-06-30
05812731
core:PlantMachinery
2018-06-30
05812731
core:FurnitureFittings
2018-06-30
05812731
core:MotorVehicles
2018-06-30
05812731
core:LandBuildings
core:OwnedOrFreeholdAssets
2017-06-30
05812731
core:LandBuildings
core:LeasedAssetsHeldAsLessee
2017-06-30
05812731
core:PlantMachinery
2017-06-30
05812731
core:FurnitureFittings
2017-06-30
05812731
core:MotorVehicles
2017-06-30
05812731
core:CurrentFinancialInstruments
2018-06-30
05812731
core:CurrentFinancialInstruments
2017-06-30
05812731
core:Non-currentFinancialInstruments
2017-06-30
05812731
core:ShareCapital
2018-06-30
05812731
core:ShareCapital
2017-06-30
05812731
core:RetainedEarningsAccumulatedLosses
2018-06-30
05812731
core:RetainedEarningsAccumulatedLosses
2017-06-30
05812731
core:ShareCapitalOrdinaryShares
2018-06-30
05812731
core:ShareCapitalOrdinaryShares
2017-06-30
05812731
core:RetainedEarningsAccumulatedLosses
2016-07-01
2017-06-30
05812731
1
2016-07-01
2017-06-30
05812731
1
2017-07-01
2018-06-30
05812731
core:LandBuildings
core:OwnedOrFreeholdAssets
2017-07-01
2018-06-30
05812731
core:LandBuildings
core:LeasedAssetsHeldAsLessee
2017-07-01
2018-06-30
05812731
core:PlantMachinery
2017-07-01
2018-06-30
05812731
core:FurnitureFittings
2017-07-01
2018-06-30
05812731
core:MotorVehicles
2017-07-01
2018-06-30
05812731
core:OwnedAssets
2017-07-01
2018-06-30
05812731
core:OwnedAssets
2016-07-01
2017-06-30
05812731
core:UKTax
2017-07-01
2018-06-30
05812731
core:UKTax
2016-07-01
2017-06-30
05812731
core:LandBuildings
core:OwnedOrFreeholdAssets
2017-06-30
05812731
core:LandBuildings
core:LeasedAssetsHeldAsLessee
2017-06-30
05812731
core:PlantMachinery
2017-06-30
05812731
core:FurnitureFittings
2017-06-30
05812731
core:MotorVehicles
2017-06-30
05812731
2017-06-30
05812731
bus:OrdinaryShareClass1
2017-07-01
2018-06-30
05812731
bus:OrdinaryShareClass2
2017-07-01
2018-06-30
05812731
bus:OrdinaryShareClass3
2017-07-01
2018-06-30
05812731
bus:OrdinaryShareClass4
2017-07-01
2018-06-30
05812731
bus:OrdinaryShareClass5
2017-07-01
2018-06-30
05812731
bus:OrdinaryShareClass1
2018-06-30
05812731
bus:OrdinaryShareClass2
2018-06-30
05812731
bus:OrdinaryShareClass3
2018-06-30
05812731
bus:OrdinaryShareClass4
2018-06-30
05812731
bus:OrdinaryShareClass5
2018-06-30
05812731
bus:PrivateLimitedCompanyLtd
2017-07-01
2018-06-30
05812731
bus:FRS102
2017-07-01
2018-06-30
05812731
bus:Audited
2017-07-01
2018-06-30
05812731
bus:FullAccounts
2017-07-01
2018-06-30
xbrli:pure
xbrli:shares
iso4217:GBP