Company registration number 08247385 (England and Wales)
DIGITAL MOBILE SPECTRUM LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
DIGITAL MOBILE SPECTRUM LIMITED
COMPANY INFORMATION
Directors
D P Meyer
B C H Roome
A Dona
M B L Henry
S J York
L M Parker
A G Coleman
R J Jefferies
P A Rosbotham
J Gill
(Appointed 15 March 2024)
Company number
08247385
Registered office
Digital Mobile Spectrum Limited
24/25 The Shard
32 London Bridge Street
London
United Kingdom
SE1 9SG
Auditor
Blick Rothenberg Audit LLP
16 Great Queen Street
Covent Garden
London
United Kingdom
WC2B 5AH
DIGITAL MOBILE SPECTRUM LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 27
DIGITAL MOBILE SPECTRUM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

STRATEGY 

 

Digital Mobile Spectrum Limited (DMSL) is jointly owned by the UK mobile network operators (MNOs) EE Ltd., Hutchison 3G UK Ltd., Telefonica UK Ltd., and Vodafone Ltd. The company’s purpose is to support these mobile operators’ shared objectives with respect to: mitigating any impact their networks may have on the reception of digital terrestrial television; the delivery and coordination of work to deliver the Shared Rural Network (SRN) and; any other programmes its shareholders may from time to time unanimously agree should form part of its purpose.

 

The company’s strategy to meet its purpose is threefold. To be a strategic partner to its shareholders; to be the best company to work for and; to connect people to the communications and media networks they wish to access. In delivering its purpose on behalf of shareholders, the company expects its people to demonstrate its core values of collaboration, integrity, respect, commitment, leadership and empathy.

 

OBJECTIVES 

 

DMSL’s objectives are divided into three areas: to remain robust and sustainable; to support spectrum licence obligations to minimise disruption to terrestrial television; and to support the delivery of SRN.

 

To assess the extent to which the company is meeting its aim of remaining robust and sustainable the company tracks: its financial health, whether it is facilitating a positive and supportive working environment, and how effectively it implements efficiency and productivity improvements. In addition, the company considers any additional programmes of work that will not increase the risk of meeting its purpose, but are likely to reduce the cost of delivering programmes on behalf of its shareholders.

  

DMSL mitigates the risk to each mobile operator of failing to fulfil the obligation in its spectrum licence not to cause undue interference to neighbouring spectrum users. DMSL ensures the mobile operators are able to activate new mobile sites without requests from the regulator to deactivate or slow rollout due to interference with terrestrial TV services. DMSL achieves this by providing a clear programme of communication and support for viewers who see disruption to TV attributable to mobile sites. In 2023 this work involved mitigating any issues caused by new and existing sites operating in the 800 and 700 MHz spectrum bands that were previously used for terrestrial television.

 

For its work on SRN, DMSL’s key objective is to ensure operators fulfil their spectrum licence coverage obligations to deliver coverage from Total Not Spot (TNS) sites. DMSL provides programme governance, management and coordination for the TNS element of the shared rural network. It also supports MNOs with the delivery of coverage from Extended Area Service (EAS) sites built by the Home Office.

 

BUSINESS MODEL 

 

DMSL has an overarching administrative and management team and two programme delivery units: one for its TV support work, known as Restore TV, and one for SRN. It adds value by delivering services jointly to all of its shareholders that each would otherwise have to source independently. This allows the shareholders to focus on their core business as competing mobile operators, while certain shared regulatory obligations are delivered in an equitable manner, with identical risk, through DMSL as a single entity.

 

Budgets for Restore TV and SRN are prepared and agreed with its shareholders. DMSL maintains an appropriate cash balance for its ongoing operation and invoices shareholders for services in advance through the year.

 

In 2021, DMSL was asked to support the restoration of TV services in the North East of England following a fire at the Bilsdale transmitter. DMSL continued to deliver support for this programme for some of 2023. This programme of TV support is funded by UK’s provider of digital terrestrial television.

 

In 2022, DMSL was asked by the BBC to support the transition of certain TV services from standard definition to an all high definition broadcast medium, through 2023. This programme of TV support is funded by the BBC.

DIGITAL MOBILE SPECTRUM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

Both these programmes of work align with DMSL’s goal of connecting people to the networks they wish to access, enhance relationships between DMSL, Government, Ofcom and broadcasters, and reduce the cost of delivering other work on behalf of its shareholders.

 

BUSINESS ENVIRONMENT 

 

TRENDS AND FACTORS 

 

DMSL provides services to the UK mobile operators. The UK market for mobile services is mature and highly competitive. The UK government has a significant focus on ‘levelling up’ across the country, as well as on digital connectivity and innovation. Programmes such as SRN, form a part of this focus. Further efficiencies for DMSL may be achieved through the facilitation of collaboration on future connectivity, telecoms policy, technology transitions and regulatory priorities in the UK market.

 

PRINCIPAL RISKS AND UNCERTAINTIES 

 

DMSL maintains a comprehensive risk register outlining strategic risks as well as steps taken to mitigate those risks. Risks DMSL faces during the next 12 months include:

 

 

FINANCIAL RISK MANAGEMENT OBJECTIVES 

 

The company does not utilise complex financial instruments and is not exposed to foreign exchange risk. The company's financial instruments at the statement of financial position date primarily comprised cash and liquid resources. The main purpose of these financial instruments is to provide finance for its operations. The company has various other financial instruments such as trade debtors and trade creditors that arise directly from its operations. The fair value of financial instruments is not materially different from their carrying value.

 

CREDIT RISK AND CASH FLOW RISK 

 

The company had no borrowings at the period end. The company's strong cash position acts as a natural hedge against any credit risk. The company's objective is to retain a balance between continuity of funding and the flexible use of available cash reserves.

 

LIQUIDITY RISK 

 

DMSL’s viability as a going concern relies on the continued financial support of its shareholders to fund the programmes it operates on their behalf. These programmes can be considered separately.

The company’s shareholders’ agreement; and legal obligations related to SRN require DMSL’s shareholders to fund the company to fulfil its SRN obligations until at least 2040. As part of its annual budget cycle and regular business forecasts, DMSL agrees its cash requirements with its shareholders to ensure the ongoing delivery of the SRN programme.

DMSL has service agreements in place with its shareholders to ensure the continued funding of mitigation support until mid-2026.

 

DIGITAL MOBILE SPECTRUM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

BUSINESS PERFORMANCE IN 2023 

 

DMSL met the majority of its key performance targets agreed for 2023. These targets fell into three categories: its overall business administration, the restoration of TV services and the Shared Rural Network. The key outcomes are summarised below.

 

For 2023, DMSL agreed a budget of £10.6m but actual expenditure for 2023 was lower at £9.4m, split between £3.4m cost of sales and £6.0m administrative expenses. The profit before taxation decreased slightly from £1.1m in 2022 to £1.03m in 2023. The company continues to maintain a strong balance sheet with total assets of £7.2m of which cash represents £6.5m.

 

For 2023, the company reported an employee net promoter score of +58 (on a scale of -100 to +100), based on the extent to which team members would recommend DMSL as a place to work, an 8 point increase compared to 2022. In June 2023, DMSL was shortlisted in the CIPD People Management Awards in the Best flexible working initiative category. New processes, enabling existing programmes to run and report more efficiently, delivered their identified benefits within agreed timelines.

 

For the mitigation programmes, MNOs were able to activate sites without any requests from the regulator to deactivate or slow rollout as a result of undue interference on terrestrial television. Out of a representative sample of viewers who received support from DMSL, 98.7% rated its service as 8, 9 or 10 on a 10-point scale, 10 being outstanding or faultless.

 

For the Shared Rural Network programme, procurement continued in 2023, as well as the commencement of planning permission for some TNS Sites. The first Emergency Services Network site went live offering 4G connectivity from all four MNOs. An end of year Programme Stakeholder Survey (all MNOs, Home Office, BDUK/DCMS and Ofcom) showed that all parties were satisfied that DMSL was carrying out its responsibilities effectively.

 

SUSTAINABILITY 

 

In 2023 DMSL signed up to the SME Climate Commitment, which is a public promise to: 

 

• Halve its greenhouse gas emissions before 2030 

• Achieve net zero emissions before 2050 

• Disclose its progress on a yearly basis 

 

The company measures emissions annually to support employees in reducing their energy usage and identify areas where energy offset may be required.

On behalf of the board

D P Meyer
Director
20 March 2024
DIGITAL MOBILE SPECTRUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The company's principal activities are mitigating the impact of mobile telephone disruption to digital terrestrial television, and delivery and coordination of the work to deliver the shared rural network.

Results and dividends

The results for the year are set out on page 10.

The directors do not recommend payment of a final payment for the year ended 31 December 2023.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

D P Meyer
B C H Roome
A Dona
M B L Henry
S J York
L M Parker
A G Coleman
R J Jefferies
P A Rosbotham
K A Liriano
(Appointed 15 March 2023 and deceased 19 February 2024)
J Gill
(Appointed 15 March 2024)
Post reporting date events

There were no events after the reporting date that would have a material effect on the financial statements. However, the directors wish to acknowledge the contribution of Karl Liriano to the company since 2015. Karl died in February 2024 as this report was being prepared.

Going concern

The directors have a reasonable expectation that the company will have sufficient funds to continue to meet its liabilities as they fall due for the foreseeable future and therefore have prepared the financial statements on a going concern basis. Further details are given in Note 1.2 of the financial statements.

Auditor

Blick Rothenberg Audit LLP was 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

Each director in office at the date of approval of this annual report confirms that:

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

DIGITAL MOBILE SPECTRUM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
On behalf of the board
D P Meyer
Director
20 March 2024
DIGITAL MOBILE SPECTRUM LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

DIGITAL MOBILE SPECTRUM LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIGITAL MOBILE SPECTRUM LIMITED
- 7 -
Opinion

We have audited the financial statements of Digital Mobile Spectrum Limited (“the company”) for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement and Changes in Equity, 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 UK adopted international accounting standards.

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are 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. 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.

Other Companies Act 2006 reporting

In our opinion, based on the work undertaken in the course of the audit:

DIGITAL MOBILE SPECTRUM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGITAL MOBILE SPECTRUM LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

Irregularities, including fraud, are instances of non compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

DIGITAL MOBILE SPECTRUM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGITAL MOBILE SPECTRUM LIMITED
- 9 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: 

 

 

To address the risk of fraud through management bias and override of controls, we: 

 

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: 

 

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. 

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

 

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Marc Levy FCA (Senior Statutory Auditor)
For and on behalf of Blick Rothenberg Audit LLP
26 March 2024
Statutory Auditor
16 Great Queen Street
Covent Garden
London
WC2B 5AH
United Kingdom
DIGITAL MOBILE SPECTRUM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Revenue
4
10,356,459
10,299,354
Cost of sales
(3,350,034)
(3,979,409)
Gross profit
7,006,425
6,319,945
Administrative expenses
(6,065,940)
(5,246,269)
Operating profit
5
940,485
1,073,676
Finance income
8
106,852
14,365
Finance costs
9
(19,324)
(7,921)
Profit before taxation
1,028,013
1,080,120
Income tax expense
10
(244,852)
(204,964)
Profit and total comprehensive income for the year
783,161
875,156

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

DIGITAL MOBILE SPECTRUM LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
Non-current assets
Property, plant and equipment
12
124,117
126,413
Current assets
Trade and other receivables
13
572,743
581,014
Cash and cash equivalents
14
6,516,676
6,389,814
7,089,419
6,970,828
Total assets
7,213,536
7,097,241
Equity
Called up share capital
18
4
4
Retained earnings
2,691,647
1,908,486
Total equity
2,691,651
1,908,490
Current liabilities
Trade and other payables
15
4,142,249
4,852,729
Current tax liabilities
244,852
205,252
Lease liabilities
16
134,784
130,770
4,521,885
5,188,751
Total liabilities
4,521,885
5,188,751
Total equity and liabilities
7,213,536
7,097,241
The financial statements were approved by the board of directors and authorised for issue on 20 March 2024 and are signed on its behalf by:
D P Meyer
Director
Company Registration No. 08247385
DIGITAL MOBILE SPECTRUM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 January 2022
4
1,801,330
1,801,334
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
875,156
875,156
Transactions with owners in their capacity as owners:
Dividends
11
-
(768,000)
(768,000)
Balance at 31 December 2022
4
1,908,486
1,908,490
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
783,161
783,161
Balance at 31 December 2023
4
2,691,647
2,691,651
DIGITAL MOBILE SPECTRUM LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
22
360,862
(608,442)
Interest paid
(19,324)
(7,921)
Income taxes paid
(205,252)
(65,953)
Net cash inflow/(outflow) from operating activities
136,286
(682,316)
Investing activities
Interest received
106,852
14,365
Net cash generated from investing activities
106,852
14,365
Financing activities
Payment of lease liabilities
(116,276)
(79,919)
Dividends paid
-
0
(768,000)
Net cash used in financing activities
(116,276)
(847,919)
Net increase/(decrease) in cash and cash equivalents
126,862
(1,515,870)
Cash and cash equivalents at beginning of year
6,389,814
7,905,684
Cash and cash equivalents at end of year
6,516,676
6,389,814
DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

Digital Mobile Spectrum Limited is a private company limited by shares incorporated in England and Wales. The registered office is Digital Mobile Spectrum Limited, 24/25 The Shard, 32 London Bridge Street, London, United Kingdom, SE1 9SG. The company's principal activities and nature of its operations are disclosed in the directors' report.

1.1
Accounting convention

The financial statements have been prepared in accordance with UK adopted international accounting standards and in accordance with 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 prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

The directors have considered the impact of potential developments on the future viability of the company, its financial position and liquidity together with financial projections for the company over the foreseeable future and continue to take all available steps to maintain sufficient resources in order that the business can continue. true

 

The board continues to reverse stress test on the company. The purpose of the reverse stress test on the company is to assess at what point the cash reserve would be fully utilised if the assumptions in the budget are altered. The reverse stress test assumes significant adjustments to the company’s cash flows forecast which include delays to the mitigation programme, delays in shareholder funding, operational incidents (including increased mitigation activity), loss of key staff and loss of key suppliers. Should an adverse event occur, the organisation has an adequate business continuity policy to alleviate the impact on the business.

 

The results of the organisation’s reverse stress test demonstrate that Digital Mobile Spectrum has sufficient cash reserves to deliver the mitigation and Shared Rural Network programmes. Digital Mobile Spectrum did not have any borrowings at the period end. In the most extreme case, additional funding would be requested from the organisation’s shareholders as specified in the Articles of Association.

 

Consequently the directors have a reasonable expectation that the company will have sufficient funds to continue to meet its liabilities as they fall due for the foreseeable future and therefore have prepared the financial statements on a going concern basis.

1.3
Revenue

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for services supplied, stated net of value added taxes. The company recognises revenue when performance obligations have been satisfied, this is when the services have been provided to the customer. 

 

Revenue from providing services is recognised in the accounting period in which the services are rendered.  Fees charged in advance of services being provided will be shown as a current liability on the statement of financial position.

 

Fee income for DMSL's core activities provided to shareholders is charged in advance at the rate of operating costs of plus 1% margin. Project management fees charged to other customers are recognised in line with the contract.

 

Revenue from the sale of goods is recognised when the company delivers the product to the customer.

 

Interest income is recognised in profit or loss using the effective interest method.

DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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:

Offices - Right-of-use
over the length of the lease
Fixtures and fittings
over 2 years

Short lease assets, such as IT equipment, are written off in the year of acquisition.

1.5
Consumables

Filters have a limited re-sale value and are therefore expensed on purchase. In the event that unused filters are sold the income will be accounted for in accordance with the revenue recognition policy and brought into account at the point of sale.

1.6
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less.

DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.7
Financial assets

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Impairment of financial assets

Financial assets carried at amortised cost are assessed for indicators of impairment at each reporting end date.

 

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.8
Financial liabilities
Other financial liabilities

Other financial liabilities, including trade payables and other short-term monetary liabilities, are initially measured at transaction price net of costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.9
Equity

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.

Equity comprises the following:

"Share capital" represents the nominal value of equity shares.

"Retained earnings" include all current year and prior year results as disclosed in the statement of profit or loss.

1.10
Taxation

The tax expense represents the sum of the tax currently payable.

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.

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 inventories or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.12
Retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the statement of profit or loss in the period to which they relate.

DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.13
Leases

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the company's incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.

On initial recognition, the carrying value of the lease liability also includes:

 

Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease.

2
Adoption of new and revised standards and changes in accounting policies

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective and have not been adopted early by the company.

 

Management anticipates that all of the pronouncements will be adopted in the company's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the company's financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the company's financial statements.

 

There are no relevant Standards or amendments issued by the IASB that are effective for an annual period that begins on or after 1 January 2023.

DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Adoption of new and revised standards and changes in accounting policies
(Continued)
- 19 -

There are a number of standards and interpretations which have been issued by the International Accounting Standards Board that are effective for periods beginning subsequent to 31 December 2023, which the company has decided not to adopt early. There are no significant amendments which require disclosing.

 

Effective for annual periods commencing on or after 1 January 2024

Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate of Joint Venture.

Amendments to IAS 1: Classification of Liabilities as Current or Non-Current, and Non-current Liabilities with Covenants.

Amendments to IAS 7 and IFRS 7: Supplier Finance and Arrangements.

Amendments to IFRS 16: Lease Liability in a Sale and Leaseback.

3
Critical accounting estimates and judgements

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

There are no estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.

4
Revenue
2023
2022
£
£
Revenue analysed by class of business
Mitigation services
6,276,048
6,438,419
Shared rural network
3,259,911
2,888,447
Other income
820,500
972,488
10,356,459
10,299,354
2023
2022
£
£
Revenue analysed by geographical market
United Kingdom
10,356,459
10,299,354

Balances arising from contracts with customers are disclosed in note 21.

DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
5
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging:
Fees payable to the company's auditor for the audit of the company's financial statements
42,500
39,500
Depreciation - right-of-use asset (note 12)
122,586
84,276
6
Employees

The average monthly number of employees employed by the company during the year was:

2023
2022
Number
Number
Management
8
9
Administration
29
24
Total
37
33

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,707,353
3,447,915
Social security costs
459,312
444,363
Pension costs
405,536
364,940
4,572,201
4,257,218
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
434,537
422,067
Company pension contributions to defined contribution schemes
8,364
4,000
442,901
426,067
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
366,808
357,067
Company pension contributions to defined contribution schemes
8,364
4,000
DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
(Continued)
- 21 -
8
Finance income
2023
2022
£
£
Interest income
Bank deposits
106,852
14,365
9
Finance costs
2023
2022
£
£
Interest on lease liabilities
19,324
7,921
10
Income tax expense
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
244,852
205,252
Adjustments in respect of prior periods
-
0
(288)
Total UK current tax
244,852
204,964
The expense for the year can be reconciled to the profit per the income statement as follows:
2023
2022
£
£
Profit before taxation
1,028,013
1,080,120
Expected tax charge based on a corporation tax rate of 23.50% (2022: 19.00%)
241,583
205,223
Disallowable expenses
3,269
29
Adjustment in respect of prior years
-
0
(288)
Taxation charge for the year
244,852
204,964
11
Dividends
2023
2022
2023
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£
£
Ordinary
Final dividend paid
-
192,000
-
768,000
DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
12
Property, plant and equipment
Offices - Right-of-use
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2022
-
0
14,128
14,128
Additions
210,689
-
0
210,689
At 31 December 2022
210,689
14,128
224,817
Additions
120,290
-
0
120,290
At 31 December 2023
330,979
14,128
345,107
Accumulated depreciation and impairment
At 1 January 2022
-
0
14,128
14,128
Charge for the year
84,276
-
0
84,276
At 31 December 2022
84,276
14,128
98,404
Charge for the year
122,586
-
0
122,586
At 31 December 2023
206,862
14,128
220,990
Carrying amount
At 31 December 2023
124,117
-
124,117
At 31 December 2022
126,413
-
126,413

Property, plant and equipment includes right-of-use assets, as follows:

Right-of-use assets
2023
2022
£
£
Net values at the year end
Property
124,117
126,413
Total additions in the year
120,290
210,689
Depreciation charge for the year
Property
122,586
84,276
DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
13
Trade and other receivables
2023
2022
£
£
Trade receivables
143,250
405,719
VAT recoverable
270,385
18,948
Other debtors
26,427
26,427
Prepayments and accrued income
132,681
129,920
572,743
581,014
14
Cash and cash equivalents
2023
2022
£
£
Cash in hand
9
8
Bank deposit account
5,443,724
5,645,623
Bank accounts
1,072,943
744,183
6,516,676
6,389,814
15
Trade and other payables
2023
2022
£
£
Trade payables
401,757
293,701
Accruals and deferred income
3,430,397
4,042,816
Social security and other taxation
112,274
126,921
Other creditors
197,821
389,291
4,142,249
4,852,729
16
Lease liabilities

Digital Mobile Spectrum Limited entered into a lease contract with The Office Group, to use an office in the Shard for 12 months until December 2024.

Lease liabilities - maturity analysis (contractual undiscounted cash flows)
2023
2022
£
£
Within one year
139,800
135,600
Total lease liabilities as at 31 December 2023
139,800
135,600
DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Lease liabilities
(Continued)
- 24 -
Lease liabilities included in the statement of financial position at 31 December 2022
2023
2022
£
£
Within one year
134,784
130,770
Lease liabilities in the financial statements
134,784
130,770
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
19,324
7,921
2023
2022
Amounts recognised in statement of cash flows:
£
£
Cash flows from operating activities
-
-
Cash flows from financial activities
116,276
109,919
17
Retirement benefit schemes
Defined contribution schemes

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.

The total costs charged to income in respect of defined contribution plans is £405,536 (2022 - £364,940). There were no amounts outstanding at year end (2022: Nil).

18
Share capital
2023
2022
£
£
Ordinary share capital
Authorised
4 Ordinary of £1 each
4
4
Issued and fully paid
4 Ordinary of £1 each
4
4
DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
19
Financial risk management and financial instruments

The company uses various financial instruments which comprise cash balances, trade and other receivables and trade and other payables which arise directly from its operations.

 

The company's principal financial assets are cash and trade and other receivables. The main risk arising from the company's financial instruments is credit and liquidity risk.

Credit risk

The company's exposure to credit risk is limited to the carrying amount of financial assets recognised at the statement of financial position date, as summarised below:

 

 

Financial assets - carrying amounts
2023
2022
£
£
Cash and cash equivalents
6,516,676
6,389,814
Trade and other receivables
169,677
432,146
6,686,353
6,821,960
The company is mainly exposed to credit risk on its cash and cash equivalents, trade and other receivables. To mitigate risk on its cash and cash equivalents, the company only deposits funds with well established banks with high credit ratings asigned by international credit rating agencies. To mitigate risk on its trade and other receivables, customer credit limits are reveiwed regularly, including the use of external ratings and establishing purchase limits for each customer. The allowance for expected credit losses provided against trade receivables was £nil (2022: £nil).
Liquidity risk

Trade payables liquidity risk is managed by ensuring sufficient funds are available to meet amounts falling due. The company's financial liabilities are summarised below and are all due within one year.

Financial liabilities - carrying amounts
2023
2022
Notes
£
£
Trade and other payables
599,578
682,992
Lease liabilities
16
134,784
130,770
734,362
813,762

At 31 December 2023, the company had a £15,000 (2022: £15,000) credit card facility.

DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
20
Related party transactions
During the current and previous period the company issued the following invoices to its shareholders as follows:
2023
2022
£
£
Vodafone Limited
1,167,850
1,006,000
Telefonica UK Limited
2,360,050
242,000
Everything Everywhere Limited
3,221,474
2,858,000
Hutchison 3G UK Limited
1,914,850
1,006,000
8,664,224
5,112,000
At the year end the company deferred revenue from its shareholders as follows:
2023
2022
£
£
Vodafone Limited
12%
278,423
113,671
Telefonica UK Limited
23%
546,148
521,714
Everything Everywhere Limited
41%
960,283
1,595,064
Hutchison 3G UK Limited
23%
546,408
967,174
2,331,262
3,197,623

No amounts were outstanding at 31 December 2023 (2022: £nil).

 

There are no key management personnel other than the directors. Their remuneration is disclosed in note 7.

 

21
Controlling party

There is no ultimate controlling party.

DIGITAL MOBILE SPECTRUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
22
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year before income tax
1,028,013
1,080,120
Adjustments for:
Finance costs
19,324
7,921
Investment income
(106,852)
(14,365)
Depreciation and impairment of property, plant and equipment
122,586
84,276
Movements in working capital:
Decrease in trade and other receivables
8,271
3,851,213
Decrease in trade and other payables
(710,480)
(5,617,607)
Cash generated from/(absorbed by) operations
360,862
(608,442)
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