Company Registration No. 09041398 (England and Wales)
IRL DIGITAL LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
PAGES FOR FILING WITH REGISTRAR
IRL DIGITAL LIMITED
COMPANY INFORMATION
FOR THE YEAR ENDED 31 MAY 2020
Directors
D Howell
P Lester
M Lester
Company number
09041398
Registered office
88/90 Baker Street
London
W1U 6TQ
Accountants
Dales Evans & Co Limited
Chartered Accountants
88/90 Baker Street
London
W1U 6TQ
IRL DIGITAL LIMITED
CONTENTS
FOR THE YEAR ENDED 31 MAY 2020
Page
Accountants' report
1
Balance sheet
2 - 3
Notes to the financial statements
4 - 8
IRL DIGITAL LIMITED
ACCOUNTANTS' REPORT TO THE BOARD OF DIRECTORS ON THE PREPARATION OF THE UNAUDITED STATUTORY FINANCIAL STATEMENTS OF IRL DIGITAL LIMITED FOR THE YEAR ENDED 31 MAY 2020
- 1 -
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of IRL Digital Limited for the year ended 31 May 2020 which comprise
the Balance Sheet and related notes
from the company’s accounting records and from information and explanations you have given us.
As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at http://www.icaew.com/en/members/regulations-standards-and-guidance
.
This report is made solely to the Board of Directors of IRL Digital Limited, as a body, in accordance with the terms of our engagement letter dated 22 February 2018. Our work has been undertaken solely to prepare for your approval the financial statements of IRL Digital Limited
and state those matters that we have agreed to state to the Board of Directors of IRL Digital Limited, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than IRL Digital Limited and its Board of Directors as a body, for
our work or for this report.
It is your duty to ensure that IRL Digital Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets,
liabilities, financial position and loss
of IRL Digital Limited. You consider that IRL Digital Limited is exempt from the statutory audit
requirement for the year.
We have not been instructed to carry out an audit or a review of the financial statements of IRL Digital Limited. For this reason, we have not verified the accuracy or completeness of the
accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.
...............................................
31 May 2021
Dales Evans & Co Limited
Date
Chartered Accountants
88-90 Baker Street
London
W1U 6TQ
IRL DIGITAL LIMITED
BALANCE SHEET
AS AT 31 MAY 2020
2020-05-31
- 2 -
2020
2019
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
3
3,323
2,199
Current assets
Stocks
165,945
269,896
Debtors
272,644
336,163
Cash at bank and in hand
669,058
1,019,382
1,107,647
1,625,441
Creditors: amounts falling due within one year
(54,001)
(271,775)
Net current assets
1,053,646
1,353,666
Total assets less current liabilities
1,056,969
1,355,865
Provisions for liabilities
(631)
(418)
Net assets
1,056,338
1,355,447
Capital and reserves
Called up share capital
4
300
300
Profit and loss reserves
1,056,038
1,355,147
Total equity
1,056,338
1,355,447
In accordance with section 444 of the Companies Act 2006 all
of
the members of the company have consented to the
preparation of abridged financial statements pursuant to paragraph 1A of Schedule 1 to the Small Companies and Groups (Accounts and Directors’ Report) Regulations (S.I. 2008/409)(b).
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
For the financial year ended 31 May 2020 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
IRL DIGITAL LIMITED
BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2020
31 May 2020
- 3 -
The financial statements were approved by the board of directors and authorised for issue on 28 May 2021 and are signed on its behalf by:
M Lester
Director
Company Registration No. 09041398
IRL DIGITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
- 4 -
1
Accounting policies
Company information
IRL Digital Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
88/90 Baker Street, London, W1U 6TQ.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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
pound
.
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
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
true
The directors have considered the potential impact of the COVID-19 pandemic
and Brexit
on the
c
ompany, and are satisfied that the
c
ompany has adequate facilities to meet its liabilities as they fall due for at least twelve months from the date of the approval of the financial statements.
1.3
Turnover
Revenue is measured at the fair value of the consideration received or receivable and represents amounts for goods and services provided net of discounts and VAT.
Income from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer and the amount of revenue can be measured reliably.
Royalties are recognised on receipt or as rights are utilised on an accruals basis where sufficient reliable information is available.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost
,
net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their
estimated
residual values over their useful lives on the following bases:
Plant and equipment
25% straight line
1.5
Impairment of fixed 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.
IRL DIGITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2020
1
Accounting policies
(Continued)
- 5 -
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of 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 stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
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 creditors
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 creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.8
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.
IRL DIGITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2020
1
Accounting policies
(Continued)
- 6 -
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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 lease
s
asset are consumed.
1.13
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
IRL DIGITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2020
1
Accounting policies
(Continued)
- 7 -
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 profit and loss account for the period.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 2 (2019 - 2
).
3
Tangible fixed assets
Total
£
Cost
At 1 June 2019
5,917
Additions
3,466
At 31 May 2020
9,383
Depreciation and impairment
At 1 June 2019
3,718
Depreciation charged in the year
2,342
At 31 May 2020
6,060
Carrying amount
At 31 May 2020
3,323
At 31 May 2019
2,199
4
Called up share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary A Shares of £1 each
100
100
100 Ordinary B Shares of £1 each
100
100
100 Ordinary C Shares of £1 each
100
100
300
300
IRL DIGITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2020
- 8 -
5
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2020
2019
£
£
6,000
40,941
6
Events after the reporting date
The worldwide outbreak of the COVID-19 virus represents a significant event since the end of the financial period. In light of the impact of the virus upon the global economy, the company has reviewed its cash flow forecasts and considered the impact on going concern, concluding that the going concern basis remains an appropriate basis of preparation for these financial statements given the likely cash flow impact of operations 12 months from the date of signing this report. Please refer to note 1.2 for further details on the company's going concern basis of preparation.
COVID-19 is considered to be a non-adjusting post balance sheet event and therefore has not been taken into account in preparing the Balance Sheet as at 31 May 2020.
7
Directors' transactions
Dividends totalling £190,000 (2019 - £63,466) were paid in the year in respect of shares held by the company's directors.
The below loan was interest free and repayable on demand.
Description
% Rate
Opening balance
Amounts repaid
Closing balance
£
£
£
M Lester
-
9,809
(9,809)
-
9,809
(9,809)
-
8
Prior period adjustment
Stock of £270,820 purchased on behalf of a related party had previously been recognised as an expense instead of a debtor in the 2018 financial statements. This has now been reclassified as a debtor. Additionally a corporation tax liability of £51,456 has been recognised on this adjustment. Both of these transactions have been adjusted for in the opening balances of the comparative figures.
The impact of making these corrections was an increase in current assets by £270,820, an increase in creditors amounts falling due within one year by £51,456, and an increase in profit and loss reserves by £219,364.