ACCOUNTS - Final Accounts

Operating profit

The operating profit is stated after charging:

DRAGONFLY VENTURE GROUP LTD - Company Information

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Registered number: 07746818

DRAGONFLY VENTURE GROUP LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

DRAGONFLY VENTURE GROUP LIMITED

COMPANY INFORMATION

Director	C Maughan


Registered number	07746818


Registered office	32 Portland Terrace
	Newcastle upon Tyne
	NE2 1QP


Independent auditor	Ryecroft Glenton
	Chartered Accountants & Statutory Auditor
	32 Portland Terrace
	Newcastle upon Tyne
	NE2 1QP


Bankers	HSBC
	31 Chequer Street
	St Albans
	Hertfordshire
	AL1 3YN

DRAGONFLY VENTURE GROUP LIMITED

CONTENTS

	Page
Group Strategic Report	1 - 2
Director's Report	3 - 4
Independent Auditor's Report	5 - 7
Consolidated Statement of Comprehensive Income	8
Consolidated Balance Sheet	9 - 10
Company Balance Sheet	11
Consolidated Statement of Changes in Equity	12
Company Statement of Changes in Equity	13
Consolidated Statement of Cash Flows	14 - 15
Analysis of Net Debt	16
Notes to the Financial Statements	17 - 37

DRAGONFLY VENTURE GROUP LIMITED

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 MARCH 2020

Introduction

The principal activities of the Group are the design, manufacture and sale of footwear, outdoor accessories, and workwear.

Business review

During the period the Group saw turnover, gross profit and profit before taxation decrease. These movements were principally the result of the initial impact of the COVID-19 pandemic and pressure from the strengthening dollar. During the period the Group continued with its strategic move away from low margin/high volume sales and continued to develop new markets and new products. The Group continues to adopt this approach in an attempt to grow its turnover and maintain its gross profit going forward.

Principal risks and uncertainties

Competitive risk
The Group's core markets remain highly competitive. It is difficult to see any improvement in the Group's trading conditions in its largest single market, the UK, in the current period. The Group continues to face price pressures from both customers and suppliers. This means that the Group is likely to continue to face competitive pressures for some time to come.
Legislative risk
The Group holds a number of licences with a number of different licensors. The Group takes care so as to ensure that it is able to meet the requirements of these licences such that it is not in breach of them. Any loss of these licences would have a significant impact upon the Group's ability to generate income.
The Group is governed by a wide range of other legislation. The Group takes great care to keep up to date with all new legislation and regulations to ensure that it can maintain its position within the industry.
Financial risk
The Group's main area of financial risk is foreign currency risk. It also faces credit and liquidity risk.
The Group makes the majority of its purchases in dollars while a significant proportion of its sales are in sterling. A strengthening dollar therefore leads to an erosion in the Group's profit margins. The Group aims to mitigate foreign currency risk by holding sufficient dollars to meet its day to day needs and by growing sales in dollars.
The Group's policy is to minimise credit risk by ensuring that credit terms are only granted to customers who demonstrate an appropriate history and credit position.
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities. The Group aims to mitigate liquidity risk by managing cash generation from its activities on a regular basis.
COVID-19
The COVID-19 pandemic has had a significant impact on the Group. Continued worldwide restrictions are expected to have a materially adverse impact on turnover and margins in the short term. The Group has looked to mitigate this by working closely with customers and suppliers throughout the post-year end lockdown periods to ensure that the Group can continue to meet the demand for its products and minimise the risk of bad debts and potential impairment. The Group has also utilised UK government support schemes where relevant.
Due to a number of factors the Group continues to face a challenging trading environment at the year end, but it believes it has sufficient resources to meet these challenges.

Page 1

DRAGONFLY VENTURE GROUP LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2020

Financial key performance indicators

The Group's key performance indicators for the period were turnover and gross profit. The group's turnover for the period decreased by 6.7% to £72,093,023. The Group's gross profit for the period decreased by £1,495,743 to £20,615,086.

Other key performance indicators

The Group uses a number of non-financial performance indicators in order to measure performance, including the number of new products. During the current period the Group introduced more new products than during the previous period.

Section 172 statement

This statement sets out how the director has met his responsibilities under section 172 Companies Act 2006. The director believes, in good faith, that he has acted in a way that has promoted the success of the Group as a whole.
Long-term consequences of decisions
The director has consistently managed the strategy of the business with a view to long-term financial stability and sustainable growth. This is evidenced by the strength of the Group's own brands, the strength of the brands that the Group partners with via licencing agreements, and the positive financial position of the Group at the year end.
Employees and culture
The director supports internal employee development across the Group and a strong culture ensures that all employees are engaged and actively contribute to the Group's long-term success.
Business relationships
The director actively seeks to establish and maintain long-term relationships with suppliers, customers and licence holders that are both financially and non-financially mutually beneficial to all parties involved. This is evidenced by the maintenance of licence agreements with licence holders for more than the last 15 years.
Business conduct
The director sets high expectations on business conduct and must continuously meet these standards to protect the Group's key stakeholder relationships, including key suppliers, customers and licence holders.

This report was approved by the board on 29 March 2021 and signed on its behalf.

................................................

C Maughan

Director

Page 2

DRAGONFLY VENTURE GROUP LIMITED

DIRECTOR'S REPORT

FOR THE YEAR ENDED 31 MARCH 2020

The director presents his report and the financial statements for the year ended 31 March 2020.

Director

The director who served during the year was:

C Maughan

Results and dividends

The profit for the year, after taxation, amounted to £13,828,600 (2019 - £16,380,528).

The director proposes a dividend of £14,500 be paid to all A ordinary shareholders (2019 - £Nil).

Future developments

Since the period end the Group has continued to find the trading environment challenging as a result of the COVID-19 pandemic. Brexit has also increased the uncertainty regarding the economic outlook for the UK and the EU as a whole, although at present it is too early to predict what impact this will have on the Group's business.

Director's responsibilities statement

The director is responsible for preparing the Group Strategic Report, the Director's Report and the consolidated financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

In preparing these financial statements, the director is required to:

∙select suitable accounting policies for the Group's financial statements and then apply them consistently;

∙make judgements and accounting estimates that are reasonable and prudent;

∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The director is responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Director's Reports may differ from legislation in other jurisdictions.

Page 3

DRAGONFLY VENTURE GROUP LIMITED

DIRECTOR'S REPORT (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2020

Disclosure of information to auditor

The director at the time when this Director's Report is approved has confirmed that:

∙so far as he is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and

∙he has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.

Post balance sheet events

The COVID-19 pandemic continues to have a significant impact on the Group's operations. The Group continues to review stock lines and debtor balances to monitor the risk of impairment, though there have been no significant impairments recognised post-year end.
The director continues to review the Group's profitability and working capital position and is satisfied that there is sufficient headroom within existing facilities to continue to trade.

Auditor

The auditor, Ryecroft Glenton, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 29 March 2021 and signed on its behalf.

................................................

C Maughan

Director

Page 4

DRAGONFLY VENTURE GROUP LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS, AS A BODY, OF DRAGONFLY VENTURE GROUP LIMITED

Opinion

We have audited the financial statements of Dragonfly Venture Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2020, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 March 2020 and of the Group's profit for the year then ended;

∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

∙have been prepared in accordance with the requirements of the Companies Act 2006.

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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

∙the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

∙the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Page 5

DRAGONFLY VENTURE GROUP LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS, AS A BODY, OF DRAGONFLY VENTURE GROUP LIMITED (CONTINUED)

Other information

The director is 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matters prescribed by the Companies Act 2006

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

∙the information given in the Group Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

∙the Group Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Director's Report.

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

∙adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

∙the parent Company financial statements are not in agreement with the accounting records and returns; or

∙certain disclosures of director's remuneration specified by law are not made; or

∙we have not received all the information and explanations we require for our audit.

Page 6

DRAGONFLY VENTURE GROUP LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS, AS A BODY, OF DRAGONFLY VENTURE GROUP LIMITED (CONTINUED)

Responsibilities of directors

As explained more fully in the Director's Responsibilities Statement set out on page 3, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the Group or the parent 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 Group financial statements.

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.

Deborah Graham (Senior Statutory Auditor)

for and on behalf of

Ryecroft Glenton

Chartered Accountants

Statutory Auditor

32 Portland Terrace

Newcastle upon Tyne

NE2 1QP

29 March 2021

Page 7

DRAGONFLY VENTURE GROUP LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2020

	2020	2019
Note	£	£


Turnover	4	72,093,023	77,283,163
Cost of sales		(51,477,937)	(55,172,334)
Gross profit		20,615,086	22,110,829
Distribution costs		(3,085,075)	(3,049,494)
Administrative expenses		(1,278,366)	(45,736)
Fair value movements		(435,550)	109,112
Operating profit	5	15,816,095	19,124,711
Income from fixed assets investments		66,182	63,966
Interest receivable and similar income	10	1,384,708	1,151,503
Interest payable and expenses	11	(2,372)	(237)
Profit before tax		17,264,613	20,339,943
Tax on profit	12	(3,436,013)	(3,959,415)
Profit for the year		13,828,600	16,380,528

Profit for the year attributable to:
Owners of the parent company	13,828,600	16,380,528
	13,828,600	16,380,528

There were no recognised gains and losses for 2020 or 2019 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for 2020 (2019:£Nil).

The notes on pages 17 to 37 form part of these financial statements.

Page 8

DRAGONFLY VENTURE GROUP LIMITED

REGISTERED NUMBER: 07746818

CONSOLIDATED BALANCE SHEET

AS AT 31 MARCH 2020

	2020	2020	2019	2019
Note	£	£	£	£

Fixed assets
Tangible assets	16		41,550		-
Investments	17		4,688,471		5,021,907
			4,730,021		5,021,907
Current assets
Stocks	18	5,213,739		3,890,578
Debtors: amounts falling due within one year	19	10,764,451		9,468,630
Cash at bank and in hand	20	81,041,766		69,888,287
		97,019,956		83,247,495
Creditors: amounts falling due within one year	21	(45,638,053)		(11,952,974)
Net current assets			51,381,903		71,294,521
Total assets less current liabilities			56,111,924		76,316,428
Provisions for liabilities
Deferred taxation	23	(124,241)		(143,495)
			(124,241)		(143,495)
Net assets			55,987,683		76,172,933

Page 9

DRAGONFLY VENTURE GROUP LIMITED

REGISTERED NUMBER: 07746818

CONSOLIDATED BALANCE SHEET (CONTINUED)

AS AT 31 MARCH 2020

	2020	2019
Note	£	£

Capital and reserves
Called up share capital	24	10,000	207
Capital redemption reserve	25	206	206
Profit and loss account	25	55,977,477	76,172,520
Equity attributable to owners of the parent Company		55,987,683	76,172,933
		55,987,683	76,172,933

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 March 2021.

................................................

C Maughan

Director

The notes on pages 17 to 37 form part of these financial statements.

Page 10

DRAGONFLY VENTURE GROUP LIMITED

REGISTERED NUMBER: 07746818

COMPANY BALANCE SHEET

AS AT 31 MARCH 2020

	2020	2020	2019	2019
Note	£	£	£	£

Fixed assets
Investments	17		4,685,374		5,018,810
			4,685,374		5,018,810
Current assets
Debtors: amounts falling due within one year	19	1,218,318		10,282,070
Cash at bank and in hand	20	75,738,241		61,948,183
		76,956,559		72,230,253
Creditors: amounts falling due within one year	21	(36,744,699)		(13,974,788)
Net current assets			40,211,860		58,255,465
Total assets less current liabilities			44,897,234		63,274,275


Net assets			44,897,234		63,274,275

Capital and reserves
Called up share capital	24	10,000	207
Capital redemption reserve	25	206	206
Profit and loss account	25	44,887,028	63,273,862
		44,897,234	63,274,275

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 March 2021.

................................................

C Maughan

Director

The notes on pages 17 to 37 form part of these financial statements.

Page 11

DRAGONFLY VENTURE GROUP LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2020

	Called up share capital	Capital redemption reserve	Profit and loss account	Equity attributable to owners of parent Company	Total equity
	£	£	£	£	£
At 1 April 2018	207	206	59,791,992	59,792,405	59,792,405

Profit for the year	-	-	16,380,528	16,380,528	16,380,528

At 1 April 2019	207	206	76,172,520	76,172,933	76,172,933

Profit for the year	-	-	13,828,600	13,828,600	13,828,600
Dividends: Equity capital	-	-	(34,013,850)	(34,013,850)	(34,013,850)
Bonus issue	-	-	(9,793)	(9,793)	(9,793)
Shares issued during the year	9,793	-	-	9,793	9,793
At 31 March 2020	10,000	206	55,977,477	55,987,683	55,987,683

The notes on pages 17 to 37 form part of these financial statements.

Page 12

DRAGONFLY VENTURE GROUP LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2020

	Called up share capital	Capital redemption reserve	Profit and loss account	Total equity
	£	£	£	£
At 1 April 2018	207	206	52,401,797	52,402,210

Profit for the year	-	-	10,872,065	10,872,065

At 1 April 2019	207	206	63,273,862	63,274,275

Profit for the year	-	-	15,636,809	15,636,809
Contributions by and distributions to owners
Dividends: Equity capital	-	-	(34,013,850)	(34,013,850)
Bonus issue	-	-	(9,793)	(9,793)
Shares issued during the year	9,793	-	-	9,793
At 31 March 2020	10,000	206	44,887,028	44,897,234

The notes on pages 17 to 37 form part of these financial statements.

Page 13

DRAGONFLY VENTURE GROUP LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2020

			2020	2019
			£	£

Cash flows from operating activities
Profit for the financial year	13,828,600	16,380,528
Adjustments for:
Amortisation of intangible assets	-	35,520
Depreciation of tangible assets	10,990	-
Interest paid	2,372	237
Interest received	(1,450,890)	(1,215,469)
Taxation charge	3,436,013	3,959,415
(Increase) in stocks	(1,323,161)	(1,148,706)
(Increase) in debtors	(1,232,986)	(531,562)
Increase in creditors	33,351,141	1,898,991
Net fair value losses/(gains) recognised in P&L	435,768	(108,249)
Corporation tax (paid)	(3,184,238)	(3,264,203)
Derivatives	-	3,164,953
Net cash generated from operating activities	43,873,609	19,171,455

Cash flows from investing activities
Purchase of tangible fixed assets	(52,540)	-
Purchase of unlisted and other investments	(142,401)	(142,090)
Sale of unlisted and other investments	40,069	38,237
Interest received	1,384,708	1,151,503
Dividends received	66,182	63,966
Net cash from investing activities	1,296,018	1,111,616

Page 14

DRAGONFLY VENTURE GROUP LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2020

		2020	2019
		£	£


Cash flows from financing activities
Dividends paid	(34,013,850)	-
Interest paid	(2,372)	(237)
Net cash used in financing activities	(34,016,222)	(237)
Net increase in cash and cash equivalents	11,153,405	20,282,834
Cash and cash equivalents at beginning of year	69,888,287	49,605,453
Cash and cash equivalents at the end of year	81,041,692	69,888,287

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	81,041,766	69,888,287
Bank overdrafts	(74)	-
	81,041,692	69,888,287

The notes on pages 17 to 37 form part of these financial statements.

Page 15

DRAGONFLY VENTURE GROUP LIMITED

CONSOLIDATED ANALYSIS OF NET DEBT

FOR THE YEAR ENDED 31 MARCH 2020


At 1 April 2019	Cash flows	At 31 March 2020
£	£	£

Cash at bank and in hand	69,888,287	11,153,479	81,041,766
Bank overdrafts	-	(74)	(74)
Debt due within 1 year	(3,159,576)	894,792	(2,264,784)
	66,728,711	12,048,197	78,776,908

The notes on pages 17 to 37 form part of these financial statements.

Page 16

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

1.	General information

Dragonfly Venture Group Limited (Company no: 07746818) is a private company limited by shares, which is incorporated and registered in England and Wales. The Company and Group's principal place of business is 3A Holywell Hill, St Albans, Hertfordshire, AL1 1ER.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

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

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 April 2014.

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DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

2.Accounting policies (continued)

2.3

Going concern

The Group meets its working capital requirements through its internal cash resources.
A review of the Group's business activities is provided within the strategic report. In addition, the strategic report also discloses the Group's principal risks and uncertainties, including exposures to competitive, legislative and financial risk.
The COVID-19 pandemic has had a significant impact on the Group’s operations and, at the present time, it is not clear how long the current circumstances are likely to last and what the long term impact will be.
The economic conditions around the COVID-19 pandemic created uncertainty over the level of demand for the Group’s products due to restrictions over retail outlets and travel. This uncertainty has continued post-year end.
The director has been in contact with the Group’s bank and has also taken steps to utilise the various support mechanisms instigated by the UK government. The Group has not had to seek out any external finance as a result of the pandemic and continues to have sufficient cash reserves to allow it to trade for the foreseeable future.
Having regard to the above, the director believes it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

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DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

2.Accounting policies (continued)

2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

∙the Group has transferred the significant risks and rewards of ownership to the buyer;

∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of revenue can be measured reliably;

∙it is probable that the Group will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

∙the amount of revenue can be measured reliably;

∙it is probable that the Group will receive the consideration due under the contract;

∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and

∙the costs incurred and the costs to complete the contract can be measured reliably.

2.5

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Amortisation is provided on the following bases:

Brands

20%

straight line

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DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

2.Accounting policies (continued)

2.6

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

				Motor vehicles	-	25%	straight line
				Fixtures & fittings	-	33%	straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

2.7

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each Balance Sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.

2.8

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

2.9

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

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DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

2.Accounting policies (continued)

2.10

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

2.11

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

2.12

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.13

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

On consolidation, the results of overseas operations are translated into British Pounds Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

2.14

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

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DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

2.Accounting policies (continued)

2.15

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

2.16

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.

2.17

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.

2.18

Interest income

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

2.19

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

2.20

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

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DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

2.Accounting policies (continued)

2.21

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

3.	Judgements in applying accounting policies and key sources of estimation uncertainty

Tangible fixed assets are depreciated over their useful lives taking into account residual values where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing the asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual values consider such things as future market conditions, the remaining life of the asset and projected disposal.
Stock is valued at the lower of cost or net realisable value, which is determined with reference to the expected selling prices for the goods in question.

Page 23

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

Turnover

The whole of the turnover is attributable to the Group's principal activities, that of design, manufacture and sale of footwear, accessories and workwear.

Analysis of turnover by country of destination:

					2020	2019
					£	£

United Kingdom	22,696,650	23,599,178
Rest of the world	49,396,373	53,683,986
	72,093,023	77,283,164

Depreciation of tangible fixed assets	10,990	-
Amortisation of intangible assets, including goodwill	-	35,520
Exchange differences	(1,703,402)	(2,898,003)
Defined contribution pension cost	52,118	47,195

6.	Auditor's remuneration
		2020	2019
		£	£

Fees payable to the Group's auditor and its associates for the audit of the Group's annual accounts	15,000	12,500
	15,000	12,500
Fees payable to the Group's auditor and its associates in respect of:
The auditing of accounts of associates of the Group pursuant to legislation	53,175	52,300
Taxation compliance services	6,000	6,000
All other non-audit services not included above	39,097	68,057
	98,272	126,357

Page 24

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

7.	Employees
	Staff costs were as follows:

Group	Group	Company	Company
2020	2019	2020	2019
£	£	£	£


Wages and salaries	1,228,545	1,075,368	-	-
Social security costs	94,878	79,614	-	-
Cost of defined contribution scheme	52,118	47,195	-	-
	1,375,541	1,202,177	-	-

The average monthly number of employees, including the director, during the year was as follows:

	2020	2019
	No.	No.

Sales and administration	15	13
Distribution	1	1

	16	14

The Company has no employees other than the director, who did not receive any remuneration (2019 - £NIL)

8.	Director's remuneration
		2020	2019
		£	£

Company contributions to defined contribution pension schemes	40,000	40,000
	40,000	40,000

During the year retirement benefits were accruing to 1 director (2019 - 1) in respect of defined contribution pension schemes.

Page 25

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

9.	Income from investments
		2020	2019
		£	£

Dividends received from listed investments	66,182	63,966
	66,182	63,966

10.	Interest receivable
		2020	2019
		£	£

	Other interest receivable	1,384,708	1,151,503
		1,384,708	1,151,503

11.	Interest payable and similar expenses
		2020	2019
		£	£

Bank interest payable	-	10
Other interest payable	2,372	227
	2,372	237

Page 26

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

Corporation tax
Current tax on profits for the year	3,447,958	3,884,540
Adjustments in respect of previous periods	-	92,541
Foreign tax
Foreign tax on income for the year	7,309	13,333
	7,309	13,333
Total current tax	3,455,267	3,990,414

Deferred tax
Origination and reversal of timing differences	(19,254)	(30,999)
Total deferred tax	(19,254)	(30,999)


	Taxation on profit on ordinary activities	3,436,013	3,959,415

Page 27

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

12.Taxation (continued)

Profit on ordinary activities before tax

17,264,613

20,339,943

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)	3,280,276	3,864,589
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	55,572	52,836
Capital allowances for year in excess of depreciation	1,489	-
Utilisation of tax losses	(14,069)	13,333
Adjustments to tax charge in respect of prior periods	-	92,541
Other timing differences leading to an increase (decrease) in taxation	34,640	-
Book loss/(profit) on chargeable assets	82,755	(20,731)
Capital gains	27,179	-
Dividends from UK companies	(12,575)	(12,154)
Deferred tax charge/(credit) for year	(19,254)	(30,999)
Total tax charge for the year	3,436,013	3,959,415

Factors that may affect future tax charges

The Group carries forward a provision for staff commission and bonuses, which is allowable for tax
purposes upon payment. There are no other factors affecting future tax charges.

Page 28

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

13.	Dividends
		2020	2019
		£	£

	Dividends paid on equity capital	34,013,850	-
		34,013,850	-

14.	Parent company profit for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was £15,636,809 (2019 - £10,872,065).

Page 29

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

15.	Intangible assets
	Group

		Brands
		£
	Cost
	At 1 April 2019	177,600
	At 31 March 2020	177,600
	Amortisation
	At 1 April 2019	177,600
	At 31 March 2020	177,600
	Net book value
	At 31 March 2020	-
	At 31 March 2019	-

Company
The Company had no intangible assets at 31 March 2019 or 31 March 2020, or at any point in either year.

Page 30

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

16.	Tangible fixed assets
	Group

	Motor vehicles	Fixtures and fittings	Total
	£	£	£
Cost or valuation
At 1 April 2019	-	29,478	29,478
Additions	52,540	-	52,540
At 31 March 2020	52,540	29,478	82,018
Depreciation
At 1 April 2019	-	29,478	29,478
Charge for the year on owned assets	10,990	-	10,990
At 31 March 2020	10,990	29,478	40,468
Net book value
At 31 March 2020	41,550	-	41,550
At 31 March 2019	-	-	-

17.	Fixed asset investments
	Group

		Listed investments
		£
	Valuation
	At 1 April 2019	5,021,907
	Additions	142,401
	Disposals	(40,069)
	Revaluations	(435,768)
	At 31 March 2020	4,688,471

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DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

	Company

	Investments in subsidiary companies	Listed investments	Total
	£	£	£
Cost or valuation
At 1 April 2019	903	5,017,907	5,018,810
Additions	-	142,401	142,401
Disposals	-	(40,069)	(40,069)
Revaluations	-	(435,768)	(435,768)
At 31 March 2020	903	4,684,471	4,685,374

Subsidiary undertakings
The following were subsidiary undertakings of the Company:
Name	Class of shares	Holding

W.I.P. (Work In Progress) Limited	Ordinary	100%
W.I.P. (Workwear) Limited	Ordinary	100%
Dragonfly Venture (UK) Limited	Ordinary	100%
Dragonfly Venture (Trading) Limited	Ordinary	100%
WIP Inc	Class A	100%
Golden Dragon Footwear Limited	Ordinary	100%

18.	Stocks
		Group	Group
		2020	2019
		£	£

Finished goods and goods for resale	5,213,739	3,890,578
	5,213,739	3,890,578

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DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

19.

Debtors

Group	Group	Company	Company
2020	2019	2020	2019
£	£	£	£


Trade debtors	10,018,845	8,439,241	-	-
Amounts owed by group undertakings	-	-	933,290	9,695,210
Other debtors	680,250	839,030	285,028	586,860
Prepayments and accrued income	65,356	190,359	-	-
	10,764,451	9,468,630	1,218,318	10,282,070

20.	Cash and cash equivalents
		Group	Group	Company	Company
		2020	2019	2020	2019
		£	£	£	£

Cash at bank and in hand	81,041,766	69,888,287	75,738,241	61,948,183
Less: bank overdrafts	(74)	-	-	-
	81,041,692	69,888,287	75,738,241	61,948,183

21.	Creditors: Amounts falling due within one year
		Group	Group	Company	Company
		2020	2019	2020	2019
		£	£	£	£

Bank overdrafts	74	-	-	-
Trade creditors	2,462,154	3,299,819	-	-
Amounts owed to group undertakings	-	-	159,011	10,881,852
Corporation tax	1,729,260	1,395,397	32,550	-
Other taxation and social security	517,132	310,144	203,315	-
Other creditors	36,724,634	3,310,322	36,302,791	3,071,936
Accruals and deferred income	4,204,799	3,637,292	47,032	21,000
	45,638,053	11,952,974	36,744,699	13,974,788

The Company's bank holds a fixed and floating charge over all the assets of the Company. No borrowings are outstanding over which this charge could be enforced.

Page 33

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

22.	Financial instruments
		Group	Group	Company	Company
		2020	2019	2020	2019
		£	£	£	£

Financial assets
Financial assets measured at fair value through profit or loss	85,730,237	74,910,194	80,422,712	66,966,090
Financial assets that are debt instruments measured at amortised cost	10,601,111	9,021,343	1,218,316	10,031,000
	96,331,348	83,931,537	81,641,028	76,997,090

	Financial liabilities
	Financial liabilities measured at amortised cost	(41,126,876)	(7,087,856)	(2,227,384)	(10,902,852)

	Financial assets measured at fair value through profit or loss comprise listed investments, cash at bank and cash equivalents, including those held in foreign currencies.
	Financial assets measured at amortised cost comprise trade debtors, other debtors and amounts owed by group undertakings.
	Financial liabilities measured at amortised cost comprise trade creditors, other creditors (excluding director's loans), amounts owed to group undertakings and accruals.

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DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

23.	Deferred taxation
	Group

	2020	2019
	£	£

At beginning of year	(143,495)	(174,494)
Charged to profit or loss	19,254	30,999
At end of year	(124,241)	(143,495)

		Group	Group
		2020	2019
		£	£

	Other timing differences	(124,241)	(143,495)
		(124,241)	(143,495)

24.	Share capital
		2020	2019
		£	£

Allotted, called up and fully paid

2,600 A Ordinary shares of £1.00 each	2,600	-
2,510 B Ordinary shares of £1.00 each	2,510	207
3,890 C Ordinary shares of £1.00 each	3,890	-
500 D Ordinary shares of £1.00 each	500	-
500 E Ordinary shares of £1.00 each	500	-

	10,000	207

During the year the company issued 9,793 Ordinary shares of £1.00 each at par.

Page 35

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

25.

Reserves

Capital redemption reserve

This reserve represents the nominal value of share capital cancelled during the current and prior periods. The movement is detailed in the Consolidated Statement of Changes in Equity.

Profit and loss account

This reserve represents retained profits/(losses) of current and prior periods. The movement is detailed in the Consolidated Statement of Changes in Equity.

26.	Contingent liabilities

The Company has made an unlimited multilateral guarantee along with its subsidiaries. No amounts are owed under this guarantee at present and the Company has not been called on to make any payments as a result of this in the past.

27.	Commitments under operating leases

The Group and the Company had no commitments under non-cancellable operating leases at the balance sheet date.

Page 36

DRAGONFLY VENTURE GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

28.

Related party transactions

Included within other creditors is £2,021,341 (2019 - £3,071,934) due to C Maughan, the Company's director. These amounts are not interest bearing.
Included within other debtors is an amount due from Dragonfly Sourcing Company (HK) Limited of £209,529 (2019 - £209,280). Included within other creditors is an amount due to Dragonfly Sourcing Company (HK) Limited of £177,334 (2019 - £150,646). During the year £301,980 (2019 - £257,437) was debited to the profit and loss account in relation to sourcing and other services provided to the Group by Dragonfly Sourcing Company (HK) Limited.
Dragonfly Sourcing Company (HK) Limited is a company incorporated in Hong Kong and owned by C Maughan.
Included within other creditors is an amount of £34,000,000 (2019 - £Nil) due to Radlett Holdings Limited. Radlett Holdings Limited is a company controlled by C Maughan.
Included within trade creditors is an amount of £6,495 (2019 - £6,495) due to Golden Dragon Properties Limited. At the year end the Group also owed £281,449 (2019 - £83,942) to Golden Dragon Properties Limited. During the period the Group was charged rent and service charges of £46,673 (2019 - £46,673). Golden Dragon Properties Limited is a company controlled by C Maughan.
Key management personnel
All directors and senior employees who have authority and responsibility for planning, directing and controlling the activities of the group are considered to be key management personnel, in accordance with Financial Reporting Standard 102.
Total remuneration in respect of these individuals is £40,000 (2019 - £40,000). This figure excludes Employer's National Insurance.

29.	Controlling party

C Maughan is the group's controlling party by virtue of his direct and indirect ownership of the majority of the issued share capital of Dragonfly Venture Group Limited.

Page 37