Company registration number 05812731 (England and Wales)
DIGILAND LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 - 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 - 21
DIGILAND LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -
The director presents the strategic report for the year ended 30 June 2023.
Review of the business
During the 2022/23 financial year the company has faced challenging market conditions leading to a 16% decrease in turnover.
The company is continually seeking new market opportunities to increase turnover and profitability.
Principal risks and uncertainties
The principal risks and uncertainties continue to be exposure to foreign markets and new product entrants to the market leading to obsolescence of existing products.
Following the UK leaving the European Union the company has continued to service and develop its overseas market, whilst also looking to develop its United Kingdom sales.
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.
Mr J D Park
Director
10 November 2023
DIGILAND LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
The director presents his annual report and financial statements for the year ended 30 June 2023.
Principal activities
The principal activity of the company continued to be that of the resale of electrical goods.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £1,460,619. The director does not recommend payment of a final dividend.
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
Auditor
In accordance with the company's articles, a resolution proposing that Thomas & Young Limited be reappointed as auditor of the company 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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr J D Park
Director
10 November 2023
DIGILAND LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 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;
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 2023 which comprise 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 significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 June 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 director's 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 director 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 director is 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 director's report 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 identified material misstatements in the strategic report or the director's 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 director
As explained more fully in the director's responsibilities statement, 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 director determines 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 intends to liquidate the company or to cease operations, or has 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.
Enquiry of management and those charged with governance concerning any actual or potential litigation and claims.
Enquiry of the entity's staff involved in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
Reviewing financial statement disclosures and testing to to supporting documentation to assess compliance with applicable laws and regulations.
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness and evaluating the business rationale of any significant transactions outside the normal course of business.
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.
DIGILAND LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGILAND LIMITED
- 6 -
Michael Vousden FCA
Senior Statutory Auditor
For and on behalf of Thomas & Young Limited
10 November 2023
Chartered Accountants
Statutory Auditor
Carleton House
266-268 Stratford Road
Shirley
Solihull
B90 3AD
DIGILAND LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 7 -
2023
2022
Notes
£
£
Revenue
3
18,627,013
22,108,739
Cost of sales
(15,992,856)
(19,263,188)
Gross profit
2,634,157
2,845,551
Administrative expenses
(1,234,022)
(1,359,231)
Operating profit
4
1,400,135
1,486,320
Investment income
6
31
316
Finance costs
7
(346)
Profit before taxation
1,400,166
1,486,290
Tax on profit
8
(305,779)
(285,207)
Profit for the financial year
1,094,387
1,201,083
The income statement has been prepared on the basis that all operations are continuing operations.
DIGILAND LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
30 June 2023
- 8 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
10
31,310
1,362,099
Current assets
Inventories
11
2,030,886
1,063,399
Trade and other receivables
12
711,671
1,190,854
Cash and cash equivalents
7,857,060
6,419,575
10,599,617
8,673,828
Current liabilities
13
(2,496,625)
(1,535,393)
Net current assets
8,102,992
7,138,435
Total assets less current liabilities
8,134,302
8,500,534
Provisions for liabilities
Deferred tax liability
14
10,170
10,170
(10,170)
(10,170)
Net assets
8,124,132
8,490,364
Equity
Called up share capital
15
100
100
Retained earnings
8,124,032
8,490,264
Total equity
8,124,132
8,490,364
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved and signed by the director and authorised for issue on 10 November 2023
Mr J D Park
Director
Company registration number 05812731 (England and Wales)
DIGILAND LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 9 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 July 2021
100
7,428,381
7,428,481
Year ended 30 June 2022:
Profit and total comprehensive income
-
1,201,083
1,201,083
Dividends
9
-
(139,200)
(139,200)
Balance at 30 June 2022
100
8,490,264
8,490,364
Year ended 30 June 2023:
Profit and total comprehensive income
-
1,094,387
1,094,387
Dividends
9
-
(1,460,619)
(1,460,619)
Balance at 30 June 2023
100
8,124,032
8,124,132
DIGILAND LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
1,856,991
822,508
Interest paid
(346)
Income taxes paid
(280,337)
(158,198)
Net cash inflow from operating activities
1,576,654
663,964
Investing activities
Purchase of property, plant and equipment
(19,995)
Proceeds from disposal of property, plant and equipment
1,321,419
5,350
Interest received
31
316
Net cash generated from/(used in) investing activities
1,321,450
(14,329)
Financing activities
Dividends paid
(1,460,619)
(139,200)
Net cash used in financing activities
(1,460,619)
(139,200)
Net increase in cash and cash equivalents
1,437,485
510,435
Cash and cash equivalents at beginning of year
6,419,575
5,909,140
Cash and cash equivalents at end of year
7,857,060
6,419,575
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 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 amounts 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
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the 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 recovered.
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.
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
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 12 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
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.
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 cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of 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.
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.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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.
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
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.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
1.12
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the 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.
3
Revenue
An analysis of the company's revenue is as follows:
2023
2022
£
£
Revenue analysed by class of business
Bulk
17,287,013
21,375,482
Retail
1,340,000
733,257
18,627,013
22,108,739
2023
2022
£
£
Revenue analysed by geographical market
UK
6,177,013
5,708,730
Middle East/Asia
1,500,000
3,400,000
Mainland Europe
10,700,000
11,000,009
Rest of the world
250,000
2,000,000
18,627,013
22,108,739
2023
2022
£
£
Other revenue
Interest income
31
316
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(21,953)
(12,243)
Fees payable to the company's auditor for the audit of the company's financial statements
6,950
6,500
Depreciation of owned property, plant and equipment
9,370
12,336
Profit on disposal of property, plant and equipment
-
(4,862)
Operating lease charges
139,664
178,690
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
27
38
6
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
31
316
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
31
316
7
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
346
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
306,000
280,500
Adjustments in respect of prior periods
(221)
Total current tax
305,779
280,500
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
8
Taxation
2023
2022
£
£
(Continued)
- 17 -
Deferred tax
Origination and reversal of timing differences
4,707
Total tax charge
305,779
285,207
The UK government announced that from 1 April 2023, the Corporation Tax main rate will be increased to 25% applying to profits over £250,000. A small profits rate (SPR) was also be introduced for companies with profits of £50,000 or less so that they will continue to pay Corporation Tax at 19%.
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
1,400,166
1,486,290
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
350,042
282,395
Tax effect of expenses that are not deductible in determining taxable profit
23,190
297
Tax effect of income not taxable in determining taxable profit
(924)
Adjustments in respect of prior years
(221)
Effect of change in corporation tax rate
(67,243)
Permanent capital allowances in excess of depreciation
(1,343)
Deferred tax adjustments
4,707
Other differences in tax provided
11
75
Taxation charge for the year
305,779
285,207
9
Dividends
2023
2022
£
£
Interim paid
1,460,619
139,200
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
10
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 2022
1,203,473
117,946
40,210
165,091
19,995
1,546,715
Disposals
(1,203,473)
(117,946)
(1,321,419)
At 30 June 2023
40,210
165,091
19,995
225,296
Depreciation and impairment
At 1 July 2022
37,350
143,267
3,999
184,616
Depreciation charged in the year
715
5,456
3,199
9,370
At 30 June 2023
38,065
148,723
7,198
193,986
Carrying amount
At 30 June 2023
2,145
16,368
12,797
31,310
At 30 June 2022
1,203,473
117,946
2,860
21,824
15,996
1,362,099
During the year, as part of the group restructure both the freehold and leasehold properties were transferred to Park & Co Group Limited by means of an in specie dividend.
The company has entered into an agreement with Park & Co Group Limited for leaseback of the freehold property at a commercial rent.
11
Inventories
2023
2022
£
£
Finished goods and goods for resale
2,030,886
1,063,399
12
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
267,143
743,621
Amounts owed by group undertakings
171,870
Other receivables
115,398
309,962
Prepayments and accrued income
157,260
137,271
711,671
1,190,854
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 19 -
13
Current liabilities
2023
2022
£
£
Trade payables
800,024
585,107
Amounts owed to group undertakings
1,388,406
578,342
Corporation tax
305,942
280,500
Other taxation and social security
64,741
Other payables
602
Accruals and deferred income
2,253
26,101
2,496,625
1,535,393
The bank has an omnibus letter of set off among the bank, Digiland Limited and Digicare Limited (a related company), in respect of any bank loan, overdraft of Digiland Limited and Digicare Limited.
14
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
10,170
10,170
There were no deferred tax movements in the year.
15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
100
96
100
96
Ordinary B share of £1 each
-
1
-
1
Ordinary C share of £1 each
-
1
-
1
Ordinary D share of £1 each
-
1
-
1
Ordinary E share of £1 each
-
1
-
1
100
100
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.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
16
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
235,138
107,620
Between two and five years
559,151
114,493
794,289
222,113
17
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
Purchases
2023
2022
£
£
Entities over which the entity has control, joint control or significant influence
4,280,009
968,510
Other related parties
10,833
-
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Entities over which the entity has control, joint control or significant influence
1,522,481
578,342
Other related parties
10,833
-
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
171,870
-
18
Directors' transactions
Dividends totalling £139,200 (2022 - £139,200) were paid in the year in respect of shares held by the company's directors.
DIGILAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
19
Ultimate controlling party
The parent company of Digiland Limited is Digiland Group Limited.
At the balance sheet date the ultimate controlling party was the director Mr J D Park. From the 18th August 2023 the ultimate controlling party is Digiland EOT Limited.
20
Events after the reporting date
As part of the group restructure and sale of the company to the Employee Ownership Trust, shortly following the year end a contribution of £3,748,000 was made in this respect.
21
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,094,387
1,201,083
Adjustments for:
Taxation charged
305,779
285,207
Finance costs
346
Investment income
(31)
(316)
Gain on disposal of property, plant and equipment
-
(4,862)
Depreciation and impairment of property, plant and equipment
9,370
12,336
Movements in working capital:
(Increase)/decrease in inventories
(967,487)
401,906
Decrease/(increase) in trade and other receivables
479,183
(727,389)
Increase/(decrease) in trade and other payables
935,790
(345,803)
Cash generated from operations
1,856,991
822,508
22
Analysis of changes in net funds
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
6,419,575
1,437,485
7,857,060
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