Company registration number 12914233 (England and Wales)
DIGITAL FUTURES GROUP LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
DIGITAL FUTURES GROUP LTD
COMPANY INFORMATION
Directors
S Vincent
S Zimdahl
S Smithson-Biggs
S Benisty
F Walker
Company number
12914233
Registered office
The Frames
1 Phipp St
London
EC2A 4PS
Auditor
BKL Audit LLP
Chartered Accountants
35 Ballards Lane
London
N3 1XW
DIGITAL FUTURES GROUP LTD
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 5
Income statement
6
Statement of financial position
7
Statement of changes in equity
8
Notes to the financial statements
9 - 17
DIGITAL FUTURES GROUP LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Principal activities and review of the business

Digital Futures is a leading technology services and training company operating within the UK Hire, Train, Deploy (HTD) market.

 

Established to address inequality in the labour market, Digital Futures prioritises individuals from minority groups, and low socio-economic backgrounds acquire the necessary skills in technology to achieve sustainable employment through the Digital Futures Academy programme.

 

In its third year of trading, the Company experienced strong growth, despite challenging market conditions, resulting from its ability to attract highly diverse applicants, quality of training, and resilience of its institutional client base.

 

Over the course of 2023 Digital Futures was selected as the preferred partner by multiple organisations as it continues to consolidate its position as one of the leading providers of HTD services in the UK.

 

In addition to a strong trading performance, Digital Futures maintained a 100% client satisfaction score and 100% offer of employment rate for its consultants at the end of their industry placement.

Looking forward to 2024, Digital Futures expects strong demand for services across its growing client base and is strategically positioned to support organisations response to the need for greater workforce diversity and digital skills.

The key financial performance metrics in the year are:
2023
2022
£m
£m
Turnover
5.1
2.9
Gross profit
2.3
1.1
EBITDA
(0.1)
(1.0)
Operating profit
(0.4)
(1.3)
Average number of employees
112
80
Directors

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

S Vincent
S Zimdahl
S Smithson-Biggs
S Benisty
F Walker
Auditor

Following Wilson Wright LLP's merger with BKL on 2 April 2024, the audit appointment was transferred to BKL Audit LLP. BKL Audit LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

DIGITAL FUTURES GROUP LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Statement of directors' responsibilities

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.

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.

Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

On behalf of the board
S Benisty
Director
19 April 2024
DIGITAL FUTURES GROUP LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIGITAL FUTURES GROUP LTD
- 3 -
Opinion

We have audited the financial statements of Digital Futures Group Ltd (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity 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:

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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are 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:

DIGITAL FUTURES GROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGITAL FUTURES GROUP LTD
- 4 -
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 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 directors' responsibilities statement, 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to the failure to comply with employment law, tax regulations, anti-bribery and anti-corruption laws, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and accounting standards. We evaluated management's incentives and opportunities for fraud manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates.

Audit procedures performed by the auditors included:

 

There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

DIGITAL FUTURES GROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGITAL FUTURES GROUP LTD
- 5 -

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.

Jeremy Asher FCA (Senior Statutory Auditor)
For and on behalf of BKL Audit LLP
19 April 2024
2024-04-19
Chartered Accountants and Statutory Auditor
35 Ballards Lane
London
N3 1XW
DIGITAL FUTURES GROUP LTD
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
2023
2022
£
£
Revenue
5,059,463
2,889,386
Cost of sales
(2,802,311)
(1,801,702)
Gross profit
2,257,152
1,087,684
Administrative expenses
(2,679,478)
(2,339,397)
Operating loss
(422,326)
(1,251,713)
Finance costs
(258,277)
(239,356)
Loss before taxation
(680,603)
(1,491,069)
Tax on loss
124,523
241,504
Loss for the financial year
(556,080)
(1,249,565)
DIGITAL FUTURES GROUP LTD
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 7 -
2023
2022
Notes
£
£
£
£
Non-current assets
Intangible assets
4
929,111
889,067
Property, plant and equipment
5
58,127
6,670
987,238
895,737
Current assets
Trade and other receivables
6
763,814
889,133
Cash and cash equivalents
919,714
1,055,726
1,683,528
1,944,859
Current liabilities
7
(642,205)
(514,098)
Net current assets
1,041,323
1,430,761
Total assets less current liabilities
2,028,561
2,326,498
Non-current liabilities
8
(4,144,508)
(3,886,365)
Net liabilities
(2,115,947)
(1,559,867)
Equity
Called up share capital
9
20
20
Other reserves
905,077
1,163,219
Retained earnings
(3,021,044)
(2,723,106)
Total equity
(2,115,947)
(1,559,867)

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 19 April 2024 and are signed on its behalf by:
S Benisty
Director
Company registration number 12914233 (England and Wales)
DIGITAL FUTURES GROUP LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Share capital
Capital contribution
Retained earnings
Total
£
£
£
£
Balance at 1 January 2022
20
1,402,240
(1,712,562)
(310,302)
Year ended 31 December 2022:
Loss and total comprehensive income
-
-
(1,249,565)
(1,249,565)
Transfers
-
(239,021)
239,021
-
Balance at 31 December 2022
20
1,163,219
(2,723,106)
(1,559,867)
Year ended 31 December 2023:
Loss and total comprehensive income
-
-
(556,080)
(556,080)
Transfers
-
(258,142)
258,142
-
Balance at 31 December 2023
20
905,077
(3,021,044)
(2,115,947)
DIGITAL FUTURES GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
1
Accounting policies
Company information

Digital Futures Group Ltd is a private company limited by shares incorporated in England and Wales. The registered office is The Frames, 1 Phipp St, London, EC2A 4PS.

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 amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

The Company continues to make significant progress in all areas of its operations to ensure it is in a position to scale and deliver on the promises to clients and our engineers. New client acquisition and current client penetration continues to drive forward demand.true

 

The Company continues to invest in internal headcount by employing new cohorts to meet demand. The Company is projecting a profit for the year ended 31 December 2024.

 

Notwithstanding the loss in the year, the company is in a net current asset position at the end of the period and as per note 8 the shareholders have also confirmed that they will not seek repayment of the amounts due if it will prevent the company from meeting liabilities as they fall due for a period of more than 12 months from approval of the financial statements. So at the time of approving these financial statements the directors have a reasonable expectation that adequate resources exist to continue in operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis of accounting when preparing the financial statements.

1.3
Revenue

Revenue is recognised at the fair value of the consideration received or receivable for 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.

 

Revenue arising from temporary placements is recognised over the period that temporary staff are provided. Revenue arising from the placement of permanent candidates is recognised in the month the candidate commences full time employment.

1.4
Intangible fixed assets other than goodwill

In accordance with FRS 102, costs of designing and producing prototype software for specific projects up to the stage of commercial application are capitalised. The resultant fixed asset is amortised over its estimated useful life in proportion to the projected income from the licensing of the software at the below rates. Research expenditure is written off against profits in the year in which it is incurred.

Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Development costs - Platform
25% straight line
Development costs - Academy
25% straight line
DIGITAL FUTURES GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 10 -
1.5
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Leasehold improvements
Over the term of the lease
Computers
25% straight line

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 the statement of income.

1.6
Impairment of non-current assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
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.

DIGITAL FUTURES GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
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.

Impairment of financial assets

Financial assets, other than those held at fair value through the statement of income, 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 the statement of income.

 

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 the statement of income.

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 and loans from related parties, 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.

 

Loans which are basic financial instruments are initially recorded at fair value net of transaction costs incurred and are measured subsequently at amortised cost using the effective interest method. The fair value of loans that do not bear a market rate of interest is determined as the present value of future payments discounted at a market rate of interest for a similar loan. Loans that are payable within one year are not discounted.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

DIGITAL FUTURES GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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. Capital contribution comprises the discounted portion of the loans from related parties.

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.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

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

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

DIGITAL FUTURES GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.13
Share-based payments

The company has granted share options to certain employees.

 

The fair value of equity-settled share based payments to employees is determined at the date of grant and is accounted for on a straight-line basis over the vesting period based on the company's estimate of shares or options that will eventually vest.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.14
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.

1.15
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 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 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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Capitalisation of wages costs

Wages costs have been capitalised as a percentage of staff time spent on development of the DFX Platform and the DFG Academy. The percentage capitalised requires judgement, based on an estimate of the time spent during the financial year on improvements and future revenue generating activities.

DIGITAL FUTURES GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
3
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Total
112
80

The comparative number has been adjusted to exclude those directors who are not employed under contracts of service.

4
Intangible fixed assets
Development costs - Platform
Development costs - Academy
Total
£
£
£
Cost
At 1 January 2023
1,191,124
-
0
1,191,124
Additions
238,886
142,655
381,541
At 31 December 2023
1,430,010
142,655
1,572,665
Amortisation and impairment
At 1 January 2023
302,057
-
0
302,057
Amortisation charged for the year
330,632
10,865
341,497
At 31 December 2023
632,689
10,865
643,554
Carrying amount
At 31 December 2023
797,321
131,790
929,111
At 31 December 2022
889,067
-
0
889,067
DIGITAL FUTURES GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
5
Property, plant and equipment
Leasehold improvements
Computers
Total
£
£
£
Cost
At 1 January 2023
-
0
10,114
10,114
Additions
47,806
14,660
62,466
At 31 December 2023
47,806
24,774
72,580
Depreciation and impairment
At 1 January 2023
-
0
3,444
3,444
Depreciation charged in the year
7,158
3,851
11,009
At 31 December 2023
7,158
7,295
14,453
Carrying amount
At 31 December 2023
40,648
17,479
58,127
At 31 December 2022
-
0
6,670
6,670
6
Trade and other receivables
2023
2022
£
£
Amounts falling due within one year:
Trade receivables
482,230
646,278
Other receivables
252,252
242,855
734,482
889,133
2023
2022
£
£
Amounts falling due after more than one year:
Other receivables
29,332
-
0
Total debtors
763,814
889,133
7
Current liabilities
2023
2022
£
£
Trade payables
96,100
35,456
Taxation and social security
378,630
283,477
Other payables
167,475
195,165
642,205
514,098
DIGITAL FUTURES GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
8
Non-current liabilities
2023
2022
£
£
Other payables
4,144,508
3,886,365

Included in the above is a loan from the director and shareholder, S Vincent, of £659,584 (2022: £659,584) that is unsecured and interest free. The company considers that this is a long term loan and consequently has taken advantage of the exemption in FRS 102 section 11.13A to account for this loan at transaction price. The director has confirmed he will not seek repayment of the amount due if it will prevent the company from meeting its liabilities as they fall due for a period of at least 12 months from approval of these financial statements.

 

Included in the above is an amount of £2,381,497 (2022 - £2,205,090) due to a shareholder, S Mulryan. The loan has a face value of £3,000,000 and is unsecured and interest free. It is repayable upon an exit event or earlier at the discretion of the board. The company has presented this loan at the present value of future payments discounted at a market rate of interest for a similar debt interest in accordance with FRS 102 Section 11.13. The effective interest rate is considered to be 8% and the repayment term to be 5 years. This shareholder has confirmed he will not seek repayment of the amount due if it will prevent the company from meeting its liabilities as they fall due for a period of at least 12 months from approval of these financial statements.

 

Also included in other payables is a loan of £1,103,426 (2022 - £1,021,691) due to a shareholder, Renown Capital Limited. The loan has a face value of £1,390,000 and is unsecured and interest free. The company has presented this loan at the present value of future payments discounted at a market rate of interest for a similar debt interest in accordance with FRS 102 Section 11.13. The effective interest rate is considered to be 8% and the repayment term to be 5 years. Renown Capital Limited has confirmed it will not seek repayment of the amount due if it will prevent the company from meeting its liabilities as they fall due for a period of at least 12 months from approval of these financial statements.

 

9
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A class shares of 0.0001p each
200,000
200,000
20
20
10
Equity settled share-based payment transactions

The company granted options during the current and prior year to certain employees to subscribe for ordinary shares in the company under the terms of an approved Enterprise Management Incentive Scheme. In the absence of observable market prices and market data, share options granted were valued at the fair value on the grant date using the Black Scholes valuation model. The share options were shown to have no value under this model and consequently no share based payment charge has been recognised in respect of these options.

 

The options vest immediately and may only be exercised on a change in control of the company.

 

During the current year 2,750 (2022: 32,250) options were granted and 875 (2022: 2,500) were forfeited, leaving 31,625 outstanding and exercisable at 31 December 2023 (2022: 29,750). The weighted average exercise price of the shares granted, forfeited, and outstanding at year end was £0.0001 (2022: £0.0001). All options granted to date have a contractual life of 10 years before they expire.

DIGITAL FUTURES GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
11
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:

2023
2022
£
£
230,353
30,579
12
Directors' transactions

During the year, £34,360 (2022: £Nil) of office fit out costs were provided to Digital Futures Group Limited by a company in which one of the directors is a shareholder and director. No amounts are outstanding at the year end date in respect of the services rendered.

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