Company registration number 02819044 (England and Wales)
DIGITAL ID LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
DIGITAL ID LIMITED
CONTENTS
- 1 -
Page
Company information
2
Strategic report
3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of income and retained earnings
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 26
DIGITAL ID LIMITED
COMPANY INFORMATION
- 2 -
Directors
Mr D Hinchcliffe
Mr D Nettesheim
Mr A Learned
Mr S Dodd
Company number
02819044
Registered office
Riverside House
Kings Reach Business Park
Yew Street
Stockport
Cheshire
SK4 2HD
Auditor
Xeinadin Audit Limited
Riverside House, Kings Reach Business Park
Yew Street
Stockport
Cheshire
United Kingdom
SK4 2HD
Bankers
Natwest
10 Underbank
Stockport
Cheshire
SK1 1LL
DIGITAL ID LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Fair Review of the Business

After a year of exceptional revenue growth in 2022, driven by the effects of the post-COVID bounce back in demand for ID products, the business saw a return to demand stability in 2023. Revenue for the year totalled £38.7m, which represented a decline of 0.3% on the previous year.

 

Whilst Brexit continues to cause minor delays and additional paperwork for the company in trading with EU suppliers and customers, the directors have taken steps to mitigate the impact. A long-planned acquisition of Identbase GmbH by the company’s parent company was completed in March 2023. This will ensure the group can continue to prove the best service to European customers, with minimal disruption.

 

The company continued to invest in its long-term future in the UK, moving its head office to new facilities with additional space for future expansion. This will provide a platform for greater growth capacity in the coming years.

 

Principal Risks and Uncertainties

The supply chain difficulties experienced in recent years have receded, as global shortages in the semi-conductor market have abated. Lead times returned to normal levels in 2023, as did price stability in the cost of products sold more broadly.

 

Additionally, the acquisition of Identbase GmbH has reduced the risk of lost business as a consequence of Brexit, and sales to EU customers returned to growth in 2023.

 

Looking to the future, the directors are monitoring political uncertainties, specifically with regards to the risk of additional tariffs and other barriers to trade between China, the USA and the UK.

Key Performance Indicators

The company's key financial and other performance indicators during the year were as follows:

 

 

Unit

2023

2022

Turnover

£'000

38,685

38,809

Gross margin

%

25.76

28.92

Profit/(loss) before tax

£'000

5,724

1,227

On behalf of the board

Mr D Hinchcliffe
Director
18 September 2024
DIGITAL ID 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 principal activity of the company continued to be that of the supply of ID cards, ID card printers and associated consumables.

Results and dividends

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

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

Mr J Fell
(Resigned 3 January 2023)
Mr D Hinchcliffe
Mr D Nettesheim
Mr A Learned
Mr S Dodd
Financial instruments
Price risk, credit risk, liquidity risk and cash flow risk

The group does not follow any specific code of practice other than to settle supplier payments in line with agreed terms.

Objectives and policies

The group holds or issues financial instruments in order to achieve three main objectives, being:

 

i) to finance its operations;

 

ii) to manage its exposure to interest, credit and liquidity risks arising from its operations and from its sources of finance; and

 

iii) for trading purposes,

 

In addition various financial instruments (e.g. trade debtors, trade creditors, accruals and prepayments) arise directly from the group's operations.

 

Transactions in financial instruments result in the group assuming or transferring to another party one or more of the financial risks described above.

Auditor

Xeinadin Audit Limited offer themselves for re-appointment as Auditors.

Energy and carbon report

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

DIGITAL ID LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
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.

 

Promoting the success of the company

In promoting the interests of the company, the directors seek to balance the interests of all key stakeholders, including investors, customers and employees. Due regard is given to short-term and long-term objectives, to promote growth that is both sustainable and compliant with legal and regulatory frameworks. The directors also recognise the importance of maintaining the company’s public reputation and put social, environmental and ethical considerations at the heart of decision making.

 

Future Developments & Post-Balance Sheet Events

The directors are not aware of any significant events which have occurred after the balance sheet date which would significantly alter the company’s financial position or future plans for the business.

On behalf of the board
Mr D Hinchcliffe
Director
18 September 2024
DIGITAL ID 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 ID LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIGITAL ID LIMITED
- 7 -
Opinion

We have audited the financial statements of Digital ID Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the statement of comprehensive income, the balance sheet 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 ID LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGITAL ID 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 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.

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.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

DIGITAL ID LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DIGITAL ID 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 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.

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.

Nichola Coles (FCCA) (Senior Statutory Auditor)
For and on behalf of Xeinadin Audit Limited, Statutory Auditor
Riverside House, Kings Reach Business Park
Yew Street
Stockport
SK4 2HD
Cheshire
20 September 2024
DIGITAL ID LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
38,685,045
38,808,827
Cost of sales
(28,719,580)
(27,583,714)
Gross profit
9,965,465
11,225,113
Administrative expenses
(4,322,175)
(9,906,394)
Operating profit
4
5,643,290
1,318,719
Interest receivable and similar income
9
344
3,529
Interest payable and similar expenses
8
80,099
(94,991)
Profit before taxation
5,723,733
1,227,257
Tax on profit
11
(1,365,857)
(44,645)
Profit for the financial year
4,357,876
1,182,612
Retained earnings brought forward
14,784,360
13,601,748
Retained earnings carried forward
19,142,236
14,784,360

The profit and loss account has been prepared on the basis that all operations are continuing operations.

DIGITAL ID LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
£
£
Profit for the year
4,357,876
1,182,612
Other comprehensive income
-
-
Total comprehensive income for the year
4,357,876
1,182,612
DIGITAL ID LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
12
175,732
207,683
Other intangible assets
12
143,771
88,691
Total intangible assets
319,503
296,374
Tangible assets
13
1,334,952
976,892
1,654,455
1,273,266
Current assets
Stocks
14
6,117,147
7,359,562
Debtors
15
19,763,357
17,203,386
Cash at bank and in hand
3,035,853
738,754
28,916,357
25,301,702
Creditors: amounts falling due within one year
16
(5,503,028)
(10,188,886)
Net current assets
23,413,329
15,112,816
Total assets less current liabilities
25,067,784
16,386,082
Creditors: amounts falling due after more than one year
17
(5,727,977)
(1,449,968)
Provisions for liabilities
Deferred tax liability
21
197,471
151,654
(197,471)
(151,654)
Net assets
19,142,336
14,784,460
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
19,142,236
14,784,360
Total equity
19,142,336
14,784,460
The financial statements were approved by the board of directors and authorised for issue on 18 September 2024 and are signed on its behalf by:
Mr D Hinchcliffe
Director
Company Registration No. 02819044
DIGITAL ID LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
100
13,601,748
13,601,848
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,182,612
1,182,612
Balance at 31 December 2022
100
14,784,360
14,784,460
Year ended 31 December 2023:
Profit and total comprehensive income
-
4,357,876
4,357,876
Balance at 31 December 2023
100
19,142,236
19,142,336
DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

Digital ID Limited is a private company limited by shares incorporated in England and Wales. The registered office is Riverside House, Kings Reach Business Park, Yew Street, Stockport, Cheshire, SK4 2HD.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

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

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Levata Limited . These consolidated financial statements are available from its registered office, Riverside House, Kings Reach Business Park, Yew Street, Stockport, Cheshire, SK4 2HD.

1.2
Going concern

Atruet 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.

 

In concluding the company is a going concern, the directors have made the following considerations:

 

The directors have reviewed a 2 year cashflow forecast and statement of profit and loss forecast for a period

ending 31st December 2025, which was prepared by management. The results of the forecasts led management to conclude the company could continue to exist for a period of at least 12 months from the date of the audit report.

1.3
Turnover

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

 

The company recognises revenue when:

The amount of revenue can be reliably measured;

it is probable that future economic benefits will flow to the entity;

and specific criteria have been met for each of the company's activities.

 

1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

1.6
Intangible fixed assets other than goodwill

Costs incurred in the development of the website through which the company transacts business are shown at historical cost, less any subsequent accumulated amortisation.

Amortisation 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:

Website development
25% straight line
Other intangibles
20% straight line
Goodwill
10% straight line
1.7
Tangible fixed assets

Tangible fixed assets 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:

Property improvements
20% straight line
Plant and equipment
15% reducing balance
Fixtures and fittings
15% reducing balance
Computers
25% reducing balance
Motor vehicles
20% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.8
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.

1.9
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.

Cost is determined using the average cost (AVCO) method.

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.

DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.10
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.

1.11
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.

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 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 creditors 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

1.12
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.

DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.13
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.

1.14
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.

1.15
Retirement benefits

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

1.16
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

1.17
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.

DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
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.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
38,280,432
38,376,698
Carriage
404,613
432,129
38,685,045
38,808,827
2023
2022
£
£
Turnover analysed by geographical market
UK
32,234,786
33,105,151
RoW
6,450,259
5,703,676
38,685,045
38,808,827
2023
2022
£
£
Other significant revenue
Interest income
344
3,529
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of tangible fixed assets
306,444
204,012
Impairment of tangible fixed assets
-
0
15,080
Profit on disposal of tangible fixed assets
(17,898)
(1,014)
Amortisation of intangible assets
76,120
63,744
DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
45,375
18,433
For other services
All other non-audit services
24,168
10,544
6
Employees

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

2023
2022
Number
Number
Administration and support
44
45
Directors
4
5
Cost of sales
65
53
Total
113
103

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,077,265
9,470,992
Social security costs
402,707
388,047
Pension costs
303,551
244,242
Other employee expense
7,804
8,320
4,791,327
10,111,601
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
532,887
6,307,190
Company pension contributions to defined contribution schemes
27,250
31,250
560,137
6,338,440

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 20 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
227,974
256,298
Accrued bonus
-
1,500,000
8
Interest payable and similar expenses
2023
2022
£
£
Other interest on financial liabilities
4,277
3,889
Interest on finance leases and hire purchase contracts
5,747
-
Exchange differences on financing transactions
(90,123)
91,102
(80,099)
94,991
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
112
-
0
Other interest income
232
3,529
Total income
344
3,529
10
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Property, plant and equipment
13
-
0
15,080
Recognised in:
Administrative expenses
-
15,080
DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,311,960
-
0
Adjustments in respect of prior periods
8,079
(15,471)
Total current tax
1,320,039
(15,471)
Deferred tax
Origination and reversal of timing differences
45,818
60,116
Total tax charge
1,365,857
44,645

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
5,723,733
1,227,256
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
1,346,253
233,179
Group relief
-
0
(185,727)
Permanent capital allowances in excess of depreciation
(21,531)
(72,407)
Other permanent differences
(12,762)
24,955
Under/(over) provided in prior years
8,079
(15,471)
Under/(over) provided in current year
45,818
60,116
Taxation charge for the year
1,365,857
44,645

In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate would increase to 25%. This new law was substantively enacted on 24 May 2021. Deferred tax balances have been remeasured to either 19% or 25% depending on when the Directors expect these timing differences to reverse. The impact of the change in tax rate has been recognised in tax expense in profit or loss, except to the extent that it relates to items previously recognised outside profit or loss.

DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
12
Intangible fixed assets
Goodwill
Website development
Other intangibles
Total
£
£
£
£
Cost
At 1 January 2023
319,512
17,308
126,496
463,316
Additions
-
0
-
0
99,249
99,249
At 31 December 2023
319,512
17,308
225,745
562,565
Amortisation and impairment
At 1 January 2023
111,829
16,888
38,225
166,942
Amortisation charged for the year
31,951
(980)
45,149
76,120
At 31 December 2023
143,780
15,908
83,374
243,062
Carrying amount
At 31 December 2023
175,732
1,400
142,371
319,503
At 31 December 2022
207,683
420
88,271
296,374

 

13
Tangible fixed assets
Property improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
131,220
164,751
195,995
426,652
771,183
1,689,801
Additions
174,285
6,574
169,185
139,705
224,046
713,795
Disposals
(94,721)
-
0
(5,777)
(4,622)
(73,325)
(178,445)
At 31 December 2023
210,784
171,325
359,403
561,735
921,904
2,225,151
Depreciation and impairment
At 1 January 2023
101,871
69,360
93,747
224,619
223,312
712,909
Depreciation charged in the year
45,137
15,057
33,687
72,016
140,547
306,444
Eliminated in respect of disposals
(82,738)
-
0
(1,043)
(1,430)
(43,943)
(129,154)
At 31 December 2023
64,270
84,417
126,391
295,205
319,916
890,199
Carrying amount
At 31 December 2023
146,514
86,908
233,012
266,530
601,988
1,334,952
At 31 December 2022
29,349
95,391
102,248
202,033
547,871
976,892
DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Tangible fixed assets
(Continued)
- 23 -

Included within the net book value of tangible fixed assets above is £95,861 (2022- £Nil) in respect of assets held under finance leases and similar hire purchase contracts. Depreciation for the year on these assets was £20,723.

 

14
Stocks
2023
2022
£
£
Stock
6,117,147
7,359,562
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,766,606
4,626,238
Corporation tax recoverable
-
0
208,775
Amounts owed by related parties
858,372
147,662
Other debtors
153,979
-
0
Prepayments and accrued income
509,282
779,514
6,288,239
5,762,189
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by related parties
13,475,118
11,441,197
Total debtors
19,763,357
17,203,386
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under hire purchases
18
24,419
-
0
Trade creditors
1,885,749
2,447,538
Amounts owed to related parties
432,663
321,552
Corporation tax
631,107
-
0
Other taxation and social security
466,890
456,211
Other creditors
423,370
482,581
Accruals and deferred income
1,638,830
6,481,004
5,503,028
10,188,886
DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under hire purchases
18
42,853
-
0
Amounts owed to related parties
5,685,124
1,449,968
5,727,977
1,449,968

Included within amounts due to related parties due after one year is an amount of £5,685,124 (2022: £1,449,968) owed to the parent company. The balance is interest free and repayable with notice of one year and one day on a rolling basis.

18
Hire purchase obligations
2023
2022
Future minimum lease payments due under hire purchases:
£
£
Within one year
24,419
-
0
In two to five years
42,853
-
0
67,272
-
0
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
303,551
244,242

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.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
197,471
151,654
2023
Liability at 1 January 2023
151,654
Charge to profit or loss
45,817
Liability at 31 December 2023
197,471

 

In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate would increase to 25%. This new law was substantively enacted on 24 May 2021. Deferred tax balances have been remeasured to either 19% or 25% depending on when the Directors expect these timing differences to reverse. The impact of the change in tax rate has been recognised in tax expense in profit or loss, except to the extent that it relates to items previously recognised outside profit or loss.

22
Operating lease commitments
Lessee

The amount of non-cancellable operating lease payments recognised as an expense during the year was £219,032 (2022: £165,441).

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
212,913
115,200
Between two and five years
546,589
124,933
759,502
240,133
DIGITAL ID LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
23
Related party transactions

Summary of transactions with parent

 

The immediate parent of Digital ID Limited is Easybadge Limited (previously known as Digital ID Group Limited). Easybadge is a wholly owned subsidiary of Levata Limited.

 

At the balance sheet date the amount owed to Easybadge Limited was £432,663 (2022: £321,552). This amount is interest free and repayable on demand.

 

At the balance sheet date the amount owed from Levata Limited (previously known as Digital ID UK Limited) was £13,475,118 (2022: £11,441,197). The balance is interest free and repayable with notice of one year and one day on a rolling basis.

 

Summary of transactions with other related parties

During the period the company transacted with various related parties.

 

Sales to related parties totalled £1,984,408 (2022: £309,683).

 

Purchases from related parties totalled £2,239,357 (2022: £87,702).

 

At the balance sheet date the amount owed from other related parties totalled £858,372 (2022: £147,662).

 

At the balance sheet date the amount owed to other related parties totalled £5,685,124 (2022: £1,449,968).

 

The Digital ID Group SIPP

A Director is a trustee of The Digital ID Group SIPP. During the year, Digital ID Limited paid rent of £80,000 (2022: £80,000) in accordance with a commercial lease. The term of the lease expires in July 2025.

24
Ultimate controlling party

The company's immediate parent undertaking is Easybadge Limited (previously known as Digital ID Group Limited), a company registered and incorporated in the United Kingdom.

 

The ultimate parent is Odyssey Investment Partners Fund V (F&F) LP and Odyssey Investment Partners Fund LP and lenders and management, incorporated in the United States of America.

 

The largest group in which the results of the company are consolidated is headed by Barcodes Acquisition Inc, a company registered in the United States of America. Copies of the financial statements are available from 200 W. Monroe St, Suite 2300, Chicago, Illinois, 60606.

 

The smallest group in which they are consolidated is headed by Levata Limited (previously known as Digital ID UK Limited). Copies of the financial statements of Digital ID UK Limited are available from Riverside House, Kings Reach Business Park, Stockport, Cheshire, SK4 2HD.

 

At the balance sheet date, in the opinion of the directors there is no ultimate controlling party as no shareholder holds an overall majority.

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