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Registered number: 07962206









Vodat Communications Group (VCG) Holding Limited









Annual Report and Financial Statements

For the Year Ended 31 March 2023

 
Vodat Communications Group (VCG) Holding Limited
 
 
Company Information


Directors
R Reynolds 
T Bane 
D Preston 
R S Moss (appointed 1 December 2022)
R S Bevington 




Registered number
07962206



Registered office
Signal Point Bredbury Park Way
Bredbury

Stockport

SK6 2SN




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

Lancashire Gate

21 Tiviot Dale

Stockport

SK1 1TD





 
Vodat Communications Group (VCG) Holding Limited
 

Contents



Page
Group Strategic Report
 
1 - 2
Directors' Report
 
3 - 5
Independent Auditors' Report
 
6 - 9
Consolidated Statement of Comprehensive Income
 
10
Consolidated Balance Sheet
 
11
Company Balance Sheet
 
12
Consolidated Statement of Changes in Equity
 
13
Company Statement of Changes in Equity
 
14
Consolidated Statement of Cash Flows
 
15
Consolidated Analysis of Net Debt
 
16
Notes to the Financial Statements
 
17 - 38


 
Vodat Communications Group (VCG) Holding Limited
 
 
Group Strategic Report
For the Year Ended 31 March 2023

Introduction
 
The Directors present their Strategic Report for the year ended 31 March 2023.
The principal activities of the company during the year was a Holding Company, consolidating the  activities of two subsidiary companies, VCG Technology Services Limited, and Axonex Limited.  The principal trading activities of the Group is the provision of ICT solutions, business critical connectivity, managed networks and related services.

Business review
 
Like all businesses, the emergence from the global COVID-19 pandemic continued to impose challenges on the Group. The Group continued with it’s safe working arrangements with the majority of employees working from home at the start of the period, with a gradual return being implemented by the Board as restrictions were lifted. 
The Board launched the VCG consolidated brand in the prior financial year, consolidating to a single Trading entity, VCG Technology Services Limited, formally trading as Vodat International Limited (Registered Number 04380546). The Board are confident that the further growth of the fully integrated business can be delivered in the future. 
During the year, a number of changes were made in the Senior Leadership Team, with the appointment of a new CEO, Sales Director and other senior managers being appointed to leadership positions.  The Group went through a transitional period to ensure that it was repurposed and had clear targets and objectives to achieve current and deliver future growth.
The Board reinforced the importance of diversification in the customer base.  Towards the end of the year, a new business acquisition team was created under the leadership of the new Sales Director.  New go to market strategies and materials were created, to drive margin rich, contracted re-occurring revenue streams for the Company.  The creation of this new team, will enable the existing Enterprise team to focus on increasing our interactions with the existing customer base.
The Group debts are secured against fixed rate vehicles and are not exposed to rising interest rates in the wider economic climate.  As with most business’ in the UK, the Group has seen the prices of its products and services increase, and has been forced to pass these on to its customers.  The increasing prices also invite customers to discuss their overarching strategy with the Group where a solution can be found that both improves their technical infrastructure and gives pricing clarity for a period of time. 
For the year ended 31 March 2023, turnover was £24.42m (
2022: £24.37m), an increase of 0.2%.  After depreciation of £252k (2022: £256k), goodwill amortisation of £350k (2022: £1.061m), exceptional items of £13k (2022: £596k) and interest costs of £300k (2022: £306k), the Group made a pre-tax loss of £459k (2022: loss £1.917m).

Page 1

 
Vodat Communications Group (VCG) Holding Limited
 

Group Strategic Report (continued)
For the Year Ended 31 March 2023

Principal risks and uncertainties
 
Macro-economic factors
With most of the activity within the Group UK based, the Group is dependent on the country's economic performance however the Group is constantly developing new business opportunities in different sectors to better hedge the Groupy's performance in the future. 
Long term impact of COVID-19 pandemic
The COVID-19 global pandemic presented challenges to the Group, however due to the industry sector this has also presented opportunity. The impact of the pandemic on the Retail and Hospitality customer base resulted in some losses, early termination charges from communications providers and bad debt write-offs. However, the growth of strategic customers has resulted in significant opportunities, especially with the converged ICT propositions. The Group continues to assess new and innovative solutions to partner with customers in providing solutions to support the changing ways they work and do business. 
Supply chain issues
The Board monitored the global chip shortage and worked closely with our distributors and customers to manage the supply chain. This situation is improved from Q3 in FY23 and lead times began to significantly reduce, improving the ability of the Group to trade.

Financial key performance indicators
 
The Group's key performance indicators are revenue and profit before tax, both of which are analysed in the Business Review.


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



................................................
D Preston
Director

Date: 10 November 2023

Page 2

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Directors' Report
For the Year Ended 31 March 2023

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

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 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 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are 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;

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

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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are 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.

Results and dividends

The loss for the year, after taxation, amounted to £457,913 (2022 - loss £1,710,623).

No dividends were paid during the year (2022: £Nil). The directors do not recommend the payment of a final dividend.

Directors

The directors who served during the year were:

R Reynolds 
T Bane 
D Preston 
R S Moss (appointed 1 December 2022)
R S Bevington 
A S Peters-Smith (resigned 30 November 2022)

Future developments

The Group continues to monitor changes in it’s operating sector and regularly assess which products and services it can to the portfolio to support the growth and future success of the Group.

Page 3

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Directors' Report (continued)
For the Year Ended 31 March 2023

Financial instruments

Cash flow management and associated liqudity risk is a key factor for the business. 
The group holds a loan with an investor which attracts a fixed rate of interest. Management ensure that sufficient cash is generated by the group to service this loan within its terms. 
The group also has finance agreements in respect of some purchases, these are displayed as other loans and amounts due under hire purchase and finance agreements.
Management closely monitor cash flows and ensure that sufficient working capital is available to allow the business to operate effectively. Customers are required to adhere to credit terms and in normal conditions there are limited bad debts.

Qualifying third party indemnity provisions

Insurance policies are in place that indemnify the directors against liability when acting for VCG Technology Services Limited.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director 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 auditors are aware of that information.

Post balance sheet events and going concern

The Board integrated and launched the combined VCG brand, consolidating Axonex Limited and Vodat International Limited to one Trading entity: VCG Technology Services Limited, formally trading as Vodat International Limited, in the prior financial year. All assets, liabilities, customer and supplier contracts were transferred or novated to VCG Technology Services Limited, and the company employees transferred under TUPE.
The directors have prepared forecast scenarios for the combined business, taking key strategic factors into consideration, namely: 
•  insight of customer’s ICT investment strategies
•  market growth opportunities for our converged ICT propositions
•  synergies from consolidating to one business. 
The connectivity and managed services provided to the Group's customers are business critical and did not materially change during the year.  The creation of the business acquisition team is designed to broaden the customer base in this area.
The working capital and cash position has continued to be positive throughout the financial year and is expected to increase in line with the profit growth forecast.
After reviewing the Group's forecasts and projections, the directors are confident that the Group has adequate resources to continue trading for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements.
There have been no significant events affecting the Group since the year end.

Page 4

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Directors' Report (continued)
For the Year Ended 31 March 2023

Auditors

The auditorsHurst Accountants Limitedwere appointed during the year and will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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





................................................
D Preston
Director

Date: 10 November 2023

Page 5

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Independent Auditors' Report to the Members of Vodat Communications Group (VCG) Holding Limited
 

Opinion


We have audited the financial statements of Vodat Communications Group (VCG) Holding Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2023, 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 policiesThe 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 2023 and of the Group's loss 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 Auditors' 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


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 Group's or the parent 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 Auditors' 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.


Page 6

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Independent Auditors' Report to the Members of Vodat Communications Group (VCG) Holding Limited (continued)


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 Directors' 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 Directors' 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 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:


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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 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 directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Independent Auditors' Report to the Members of Vodat Communications Group (VCG) Holding Limited (continued)


Auditors' 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 Auditors' 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.


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:

Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud. 
Supporting documentation relating to the Company's policies and procedures for:
°Identifying, evaluating, and complying with laws and regulations
°Detecting and responding to the risks of fraud
The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption.
 
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
 
Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
Enquiring of management about any actual and potential litigation and claims.
Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
Page 8

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Independent Auditors' Report to the Members of Vodat Communications Group (VCG) Holding Limited (continued)


We have also considered the risk of fraud through management override of controls by:
 
Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify
accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error;
Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
 
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them.  Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
 


A further description of our responsibilities 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 Auditors' 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 2006Our 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 Auditors' 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.





John Glover (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
SK1 1TD

16 November 2023
Page 9

 
Vodat Communications Group (VCG) Holding Limited
 
 
Consolidated Statement of Comprehensive Income
For the Year Ended 31 March 2023

2023
2022
Note
£
£

  

Turnover
 4 
24,417,062
24,369,933

Cost of sales
  
(18,836,976)
(18,877,170)

Gross profit
  
5,580,086
5,492,763

Administrative expenses
  
(5,750,536)
(6,507,742)

Exceptional administrative expenses
 12 
(12,644)
(596,141)

Operating loss
 5 
(183,094)
(1,611,120)

Interest receivable and similar income
 9 
24,063
32

Interest payable and similar expenses
 10 
(299,694)
(305,522)

Loss before taxation
  
(458,725)
(1,916,610)

Tax on loss
 11 
812
205,987

Loss for the financial year
  
(457,913)
(1,710,623)

(Loss) for the year attributable to:
  

Owners of the parent Company
  
(457,913)
(1,710,623)

Total comprehensive income for the year attributable to:
  

Owners of the parent Company
  
(457,913)
(1,710,623)

There were no recognised gains and losses for 2023 or 2022 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 17 to 38 form part of these financial statements.

Page 10

 
Vodat Communications Group (VCG) Holding Limited
Registered number: 07962206

Consolidated Balance Sheet
As at 31 March 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
2,496,012
2,846,190

Tangible assets
 14 
504,911
310,395

  
3,000,923
3,156,585

Current assets
  

Stocks
 16 
1,257,009
1,648,750

Debtors: amounts falling due within one year
 17 
6,049,149
5,668,444

Cash at bank and in hand
 18 
3,531,329
1,274,642

  
10,837,487
8,591,836

Creditors: amounts falling due within one year
 19 
(11,066,759)
(12,073,618)

Net current liabilities
  
 
 
(229,272)
 
 
(3,481,782)

Total assets less current liabilities
  
2,771,651
(325,197)

Creditors: amounts falling due after more than one year
 20 
(3,428,207)
(24,450)

Net liabilities
  
(656,556)
(349,647)


Capital and reserves
  

Called up share capital 
 23 
255,636
253,378

Share premium account
 24 
4,619,182
4,470,436

Capital redemption reserve
 24 
29,690
29,690

Profit and loss account
 24 
(5,561,064)
(5,103,151)

Equity attributable to owners of the parent Company
  
(656,556)
(349,647)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
D Preston
Director

Date: 10 November 2023

The notes on pages 17 to 38 form part of these financial statements.

Page 11

 
Vodat Communications Group (VCG) Holding Limited
Registered number: 07962206

Company Balance Sheet
As at 31 March 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 15 
10,311,893
10,311,893

Current assets
  

Debtors: amounts falling due within one year
 17 
26,347
12,576

Creditors: amounts falling due within one year
 19 
(1,553,833)
(4,460,178)

Net current liabilities
  
 
 
(1,527,486)
 
 
(4,447,602)

Total assets less current liabilities
  
8,784,407
5,864,291

  

Creditors: amounts falling due after more than one year
 20 
(3,115,000)
-

  

Net assets
  
5,669,407
5,864,291


Capital and reserves
  

Called up share capital 
 23 
255,636
253,378

Share premium account
 24 
4,619,182
4,470,436

Capital redemption reserve
 24 
29,690
29,690

Profit and loss account brought forward
  
1,110,787
124,056

Loss/(profit) for the year
  
(345,888)
1,066,731

Other changes in the profit and loss account

  

-
(80,000)

Profit and loss account carried forward
  
764,899
1,110,787

  
5,669,407
5,864,291


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 financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


................................................
D Preston
Director

Date: 10 November 2023

The notes on pages 17 to 38 form part of these financial statements.

Page 12

 
Vodat Communications Group (VCG) Holding Limited
 

Consolidated Statement of Changes in Equity
For the Year Ended 31 March 2023


Called up share capital
Share premium account
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£
£


At 1 April 2021
249,217
4,461,283
29,690
(3,312,528)
1,427,662


Comprehensive income for the year

Loss for the year
-
-
-
(1,710,623)
(1,710,623)


Contributions by and distributions to owners

Purchase of own shares
-
-
-
(80,000)
(80,000)

Shares issued during the year
4,161
9,153
-
-
13,314



At 1 April 2022
253,378
4,470,436
29,690
(5,103,151)
(349,647)


Comprehensive income for the year

Loss for the year
-
-
-
(457,913)
(457,913)


Contributions by and distributions to owners

Shares issued during the year
2,258
148,746
-
-
151,004


At 31 March 2023
255,636
4,619,182
29,690
(5,561,064)
(656,556)


Page 13

 
Vodat Communications Group (VCG) Holding Limited
 

Company Statement of Changes in Equity
For the Year Ended 31 March 2023


Called up share capital
Share premium account
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£
£


At 1 April 2021
249,217
4,461,283
29,690
124,056
4,864,246


Comprehensive income for the year

Profit for the year
-
-
-
1,066,731
1,066,731


Contributions by and distributions to owners

Purchase of own shares
-
-
-
(80,000)
(80,000)

Shares issued during the year
4,161
9,153
-
-
13,314



At 1 April 2022
253,378
4,470,436
29,690
1,110,787
5,864,291


Comprehensive income for the year

Loss for the year
-
-
-
(345,888)
(345,888)


Contributions by and distributions to owners

Shares issued during the year
2,258
148,746
-
-
151,004


At 31 March 2023
255,636
4,619,182
29,690
764,899
5,669,407


Page 14

 
Vodat Communications Group (VCG) Holding Limited
 

Consolidated Statement of Cash Flows
For the Year Ended 31 March 2023

2023
2022
£
£

Cash flows from operating activities

Loss for the financial year
(457,913)
(1,710,623)

Adjustments for:

Amortisation of intangible assets
350,178
1,060,373

Depreciation of tangible assets
252,471
255,841

Loss on disposal of tangible assets
551
-

Interest paid
299,694
305,490

Interest received
(24,063)
-

Taxation charge
(812)
205,987

Decrease/(increase) in stocks
391,741
(1,214,875)

(Increase)/decrease in debtors
(379,884)
265,934

Increase in creditors
1,955,137
552,515

Corporation tax received/(paid)
-
(59,196)

Net cash generated from operating activities

2,387,100
(338,554)


Cash flows from investing activities

Purchase of tangible fixed assets
(212,211)
(92,903)

Interest received
24,063
-

HP interest paid
(654)
-

Net cash from investing activities

(188,802)
(92,903)

Cash flows from financing activities

Issue of ordinary shares
151,004
13,314

Other new loans
354,302
-

Repayment of other loans
(118,100)
-

Repayment of finance leases
(29,777)
(90,681)

Interest paid
(299,040)
(305,490)

Members' capital repaid
-
(80,000)

Net cash used in financing activities
58,389
(462,857)

Net increase/(decrease) in cash and cash equivalents
2,256,687
(894,314)

Cash and cash equivalents at beginning of year
1,274,642
2,168,956

Cash and cash equivalents at the end of year
3,531,329
1,274,642


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
3,531,329
1,274,642


Page 15

 
Vodat Communications Group (VCG) Holding Limited
 

Consolidated Analysis of Net Debt
For the Year Ended 31 March 2023






At 1 April 2022
Cash flows
New finance leases
Other non-cash changes
At 31 March 2023
£

£

£

£

£

Cash at bank and in hand

1,274,642

2,256,687

-

-

3,531,329

Debt due after 1 year

-

(118,101)

-

(3,115,000)

(3,233,101)

Debt due within 1 year

(3,115,000)

(118,101)

-

3,115,000

(118,101)

Finance leases

(64,651)

29,777

(235,328)

-

(270,202)


(1,905,009)
2,050,262
(235,328)
-
(90,075)

The notes on pages 17 to 38 form part of these financial statements.

Page 16

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

1.


General information

Vodat Communications Group (VCG) Holding Limited is a private company limited by shares and incorporated in England and Wales. It's registered head office is located at Signal Point, Bredbury Park Way, Bredbury, Stockport, England, SK6 2SN.
The principal activities of the company during the year was a Holding Company, consolidating the  activities of two subsidiary companies, VCG Technology Services Limited, and Axonex Limited.  The principal trading activities of the Group is the provision of ICT solutions, business critical connectivity, managed networks and related services.

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 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.

Management have reviewed the prior year financial statements, and have determined that certain items held within debtors and creditors on the comparative balance sheet were incorrectly classified. Therefore an adjustment has been made to the prior year financial statements which has resulted in the following:
  - An increase of £1,018,783 to trade debtors;
  - An increase of £3,926 to other debtors;
  - An increase of £490,642 to trade creditors, and;
  - An increase of £532,067 to accruals and deferred income.
There is no impact on previously reported net assets or net current assets.

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 2015.

Page 17

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)

 
2.3

Going concern

The Board integrated and launched the combined VCG brand, consolidating Axonex Limited and Vodat International Limited to one Trading entity: VCG Technology Services Limited, formally trading as Vodat International Limited, in the prior financial year. All assets, liabilities, customer and supplier contracts were transferred or novated to VCG Technology Services Limited, and the company employees transferred under TUPE.
The directors have prepared forecast scenarios for the combined business, taking key strategic factors into consideration, namely: 
•  insight of customer’s ICT investment strategies
•  market growth opportunities for our converged ICT propositions
•  synergies from consolidating to one business. 
The connectivity and managed services provided to the Group's customers are business critical and did not materially change during the year.  The creation of the business acquisition team is designed to broaden the customer base in this area.
The working capital and cash position has continued to be positive throughout the financial year and is expected to increase in line with the profit growth forecast.
After reviewing the Group's forecasts and projections, the directors are confident that the Group has adequate resources to continue trading for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements.

 
2.4

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.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Page 18

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)

 
2.5

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:

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.

More detail is provided below regarding specific revenue streams:
Support contracts and professional services
Revenue is typically billed upfront to a customer and initially deferred in full. It is then recognised based on usually either one of the two criteria:
-  Where the contract relates to amounts billed in advance of the time the service is to be provided,     revenue is released on a straight line basis over the period of the contract;
-  Where the customer has purchased a set amount of time for a support contract, revenue is recognised    based on the number of hours consumed at a point in time.
Licences
Revenue generated from licences is typically a re-selling of a licence from a supplier. Therefore the entire value of the contract relates entirely to the licence itself, and revenue is therefore recognised in full upon the transfer of the licence to the customer.
New installations
Revenue generated from new installations is recognised based upon the completion of agreed stages, as set out in contracts with the customer.
Often for such projects, equipment must be purchsed as part of installation. This equipment is configured for each customer such that it cannot be repurposed for resale elsewhere, and once purchased the customer is obliged to pay the group.
On occasion, the customer requests that the installation of the equipment be delayed, and therefore it is held by the group at their premesis. It is the view of management that even though the equipment has not been installed, that the criteria to recognise a sale under the provisions of UK Accounting Standards have been met, and therefore the equipment is not recognised as stock in the company's balance sheet, but instead a sale and associated cost are recognised in the Statement of Comprehensive Income. 

Page 19

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)

 
2.6

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.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

The Group has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 01 April 2021 to continue to be charged over the period to the first market rent review rather than the term of the lease.

 
2.7

Interest income

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

 
2.8

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.

 
2.9

Borrowing costs

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

 
2.10

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.

Page 20

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)

 
2.11

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;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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.

 
2.12

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

Page 21

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)

 
2.13

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.

Other 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.

Goodwill remaining relates solely to the core business of the group, and is currently being amortised over 25 years. It is the opinion of management that this is appropriate due to the ongoing service remaining broadly the same, and there is also strong retention of customers who use this service.

 
2.14

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:

Long-term leasehold property
-
Straight-line over the term of the lease
Plant and machinery
-
20-50% straight-line
Office equipment
-
33% straight-line
Computer equipment
-
33-50% 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.

 
2.15

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 22

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)

 
2.16

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 out basis. 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.

 
2.17

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.

 
2.18

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.

 
2.19

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.

 
2.20

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.

Page 23

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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.
Judgements - revenue recognition
As part of installation projects, the group purchases equipment such as routers to be installed at customer premises. This equipment is configured for each customer such that it cannot be repurposed for resale elsewhere, and once purchased the customer is obliged to pay the group.
On occasion, the customer requests that the installation of the equipment be delayed, and therefore it is held by the group at their premesis. It is the view of management that even though the equipment has not been installed, that the criteria to recognise a sale under the provisions of UK Accounting Standards have been met, and therefore the equipment is not recognised as stock in the company's balance sheet, but instead a sale and associated cost are recognised in the Statement of Comprehensive Income. 
Judgements - bad debt provision
Management closely monitor debtors and make appropriate provision where the recovery of debts is considered doubtful. At the year end, a bad debt provision of £95,746 (2022: £91,920) was recognised in the Balance sheet.


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Support Contracts
9,946,750
8,965,435

Licences
5,400,255
5,646,544

Installations and other sales
7,697,593
8,375,803

Professional Services
1,372,464
1,382,151

24,417,062
24,369,933


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
23,028,763
23,220,634

Rest of Europe
1,313,314
1,051,951

Rest of the world
74,985
97,348

24,417,062
24,369,933


Page 24

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

5.


Operating loss

The operating loss is stated after charging:

2023
2022
£
£

Exchange differences
(22,034)
(8,403)

Other operating lease rentals
307,950
138,992


6.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
48,725
50,000

All other services
3,975
33,500


Prior year audit fees were paid to the predecessor auditor.





7.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
5,587,394
5,896,900
-
-

Social security costs
655,254
651,598
-
-

Cost of defined contribution scheme
168,647
176,434
-
-

6,411,295
6,724,932
-
-


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


        2023
        2022
            No.
            No.







Employees
113
124

The Company has no employees other than the directors, who did not receive any remuneration (2022: £Nil).

Page 25

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
421,195
578,921

Group contributions to defined contribution pension schemes
8,217
11,746

Compensation for loss of office
-
60,000

429,412
650,667


During the year retirement benefits were accruing to 4 directors (2022 - 3) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £109,211 (2022 - £106,782).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,321 (2022 - £1,321).

During the year, 1 director (2022: none) received share options under the active share option scheme operated by the company. No directors (2022: 1) exercised share options during the year. Neither of the above relate to the highest paid director.


9.


Interest receivable

2023
2022
£
£


Other interest receivable
24,063
32


10.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
-
175

Other loan interest payable
299,040
302,149

Finance leases and hire purchase contracts
654
3,198

299,694
305,522

Page 26

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

11.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
53,893
(148,916)


53,893
(148,916)


Total current tax
53,893
(148,916)

Deferred tax


Origination and reversal of timing differences
(14,705)
(66,737)

Adjustments in respect of prior periods
(40,000)
(1)

Effect of tax rate change on opening balance
-
9,667

Total deferred tax
(54,705)
(57,071)


Taxation on loss on ordinary activities
(812)
(205,987)
Page 27

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Loss on ordinary activities before tax
(458,725)
(1,916,610)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
(87,158)
(364,156)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
66,534
201,471

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
17,110
29,445

Fixed asset differences
(14,135)
(4,221)

Adjustments to tax charge in respect of prior periods
53,893
(148,916)

Adjustment in respect of prior periods (deferred tax)
-
(1)

Utilisation of losses previously not recognised in deferred tax
(51,806)
-

Deferred tax not recognised
65,718
143,363

Deferred tax - prior year adjustment
(40,000)
-

Losses carried back
-
13,020

Remeasurement of deferred tax for changes in tax rates
(10,968)
(75,992)

Total tax charge for the year
(812)
(205,987)


Factors that may affect future tax charges

Corporation tax main rates was increased to 25% in the tax year commencing 1 April 2023 for companies whose profits exceed £250k. A tapered rate has been introduced for profits above £50k up to the £250k limit.

Page 28

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

12.


Exceptional items

2023
2022
£
£


Exceptional items
12,644
596,141

In the prior year, exceptional costs related to professional fees and transformation team wages and salaries associated with the restucturing to consolidate the VCG brand into a single trading entity "VCG Technology Services Ltd".
In the current year exceptional costs relate to professional fees relating to team reorganisation costs and redundancy.


13.


Intangible assets

Group





Goodwill

£



Cost


At 1 April 2022
8,694,966



At 31 March 2023

8,694,966



Amortisation


At 1 April 2022
5,848,776


Charge for the year
350,178



At 31 March 2023

6,198,954



Net book value



At 31 March 2023
2,496,012



At 31 March 2022
2,846,190



Page 29

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

14.


Tangible fixed assets

Group






Long-term leasehold property
Plant and machinery
Office equipment
Computer equipment
Total

£
£
£
£
£



Cost or valuation


At 1 April 2022
150,272
260,028
675,240
1,302,332
2,387,872


Additions
14,780
-
10,408
422,351
447,539


Disposals
-
(202,363)
(4,790)
(223,026)
(430,179)



At 31 March 2023

165,052
57,665
680,858
1,501,657
2,405,232



Depreciation


At 1 April 2022
103,920
244,373
618,089
1,111,095
2,077,477


Charge for the year
30,633
11,770
40,654
169,415
252,472


Disposals
-
(202,363)
(4,239)
(223,026)
(429,628)



At 31 March 2023

134,553
53,780
654,504
1,057,484
1,900,321



Net book value



At 31 March 2023
30,499
3,885
26,354
444,173
504,911



At 31 March 2022
46,352
15,655
57,151
191,237
310,395

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2023
2022
£
£



Computer equipment
235,328
97,144

Finance leases

Assets held as rented assets are leased out to customers under operating leases. The company retains the risk and rewards of such assets.

Page 30

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

15.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 April 2022
10,311,893



At 31 March 2023
10,311,893






Net book value



At 31 March 2023
10,311,893



At 31 March 2022
10,311,893


Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

VCG Technology Services Limited
Same as the company
Supply of managed networks
Ordinary
100%
Vodat Payment Services
Same as the company
Dormant
Ordinary
100%
Axonex Limited
Same as the company
Lease of property
Ordinary
100%


16.


Stocks

Group
Group
2023
2022
£
£

Finished goods and goods for resale
1,257,009
1,648,750


Page 31

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

17.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
4,881,667
4,655,415
-
-

Other debtors
131,466
157,813
22,279
8,933

Prepayments and accrued income
954,851
828,756
4,068
3,643

Deferred taxation
81,165
26,460
-
-

6,049,149
5,668,444
26,347
12,576


Trade debtors impairments charged to the Statement of comprehensive income during the year amounted to £Nil (2022: £93,184).
The comparative group figures have been re-stated in line with the details provided in note 2.1.


18.


Cash and cash equivalents

Group
Group
2023
2022
£
£

Cash at bank and in hand
3,531,329
1,274,642


Page 32

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

19.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Other loans
118,101
3,115,000
-
3,115,000

Trade creditors
3,613,851
1,934,788
4,065
5,222

Amounts owed to group undertakings
-
-
1,544,770
1,310,868

Other taxation and social security
487,599
573,935
-
-

Obligations under finance lease and hire purchase contracts
75,096
40,201
-
-

Other creditors
38,292
-
-
-

Accruals and deferred income
6,733,820
6,409,694
4,998
29,088

11,066,759
12,073,618
1,553,833
4,460,178


Amounts due from group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
Please see note 21 for more information on other loans.
Finance lease obligations are secured against the assets to which they relate.
The comparative group figures have been re-stated in line with the details provided in note 2.1.


20.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Other loans
3,233,101
-
3,115,000
-

Net obligations under finance leases and hire purchase contracts
195,106
24,450
-
-

3,428,207
24,450
3,115,000
-


Please see note 21 for more information on other loans.
Finance lease obligations are secured against the assets to which they relate.



Page 33

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

21.


Loans

Analysis of the maturity of loans is given below:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Amounts falling due within one year

Other loans
118,101
3,115,000
-
3,115,000

Amounts falling due 1-2 years

Other loans
118,101
-
-
-

Amounts falling due 2-5 years

Other loans
3,115,000
-
3,115,000
-


3,351,202
3,115,000
3,115,000
3,115,000


Other loans comprise the following: 
- £2,492,000 in 12% loan notes issued on 27 March 2012 by Maven Capital Partners LLP and secured over    the Group's assets. In 2012, the redemption date was extended to 2022, in December 2022 the redemption    date of loans was extended to 2027.
- £623,000 in respect of a premium payable on the above loan notes, payable upon redemption of the loan. No  interest is charged on this balance.
- £236,202 in respect of a loan from an external financier during the year repayable in three equal instalments   over three years. The first repayment was made during the year. The loan is interest free.
Security
- The loan notes and associated premium (total £3,115,000) are secured by means of a fixed and floating    charge over all property and assets of the group.
- The loan from the external financier (total £236,202) is unsecured.


22.


Deferred taxation


Group



2023


£






At beginning of year
26,460


Charged to profit or loss
54,705



At end of year
81,165

Page 34

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023
 
22.Deferred taxation (continued)

The deferred tax asset is made up as follows:

Group
Group
2023
2022
£
£

Tax losses carried forward
94,240
-

Fixed asset timing differences
(21,554)
(16,436)

Short term timing differences
8,479
42,896

81,165
26,460

Deferred tax assets arising on the group and company's taxable losses, totalling £168,412 (2022: £102,693) have not been recognised due to ongoing uncertainty as to when these will be realised. There is currently no time limit on the utilisation of these losses.


23.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



107,911,924 (2022 - 130,201,943) Ordinary A shares of £0.001000 each
107,911.924
130,201.943
27,732,343 (2022 - 36,241,730) Ordinary A (Treasury) shares of £0.001000 each
27,732.343
36,241.730
33,057,361 (2022 - ) Ordinary AX (Frozen) shares of £0.001000 each
33,057.361
-
81,737,958 (2022 - 81,737,958) Ordinary B shares of £0.001000 each
81,737.958
81,737.958
25,062,042 (2022 - 25,062,0423) Ordinary C shares of 0.000010 pence each
3.000
3.000
5,193,296 (2022 - 5,193,000) Ordinary D shares of £0.001000 each
5,193.296
5,193.000
1,406,704 (2022 - ) Ordinary E shares of £- each
-
-

255,635.882

253,377.631


Page 35

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

23.Share capital (continued)

Movements on shares during the year
During the year, the following transactions took place:
 - On 21 September 2022, the company issued 2,257,955 ordinary A shares at £0.00114 per share, upon    the exercise of share options.
 - On 16 December 2022, the company re-designated 33,057,361 A shares as AX (Frozen) shares. 
 - On 8 March 2023, the company issued 8,509,387 ordinary A shares at £0.01744 per share. These     shares were purchased out of A Treasury shares.
Rights attached to shares
A and D Ordinary Shares carry voting rights, rights to participate in a distribution of dividend and rights to participate in a distribution of capital.
AX (Frozen) Ordinary shares do not carry rights to vote or to receive dividends, but do carry rights to participate in a distribution of capital. 
B Ordinary shares carry enhanced voting rights on occasion in accordance with the Articles of association, rights to participate in a distribution of dividend and rights to participate in a distribution of capital.
C and E Ordinary Shares do not carry voting rights, but do carry rights to participate in a distribution of dividend and rights to participate in a distribution of capital.


24.


Reserves

Share premium account

Includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.

Capital redemption reserve

Where shares are redeemed or bought back, the company is required to either replenish the capital by issuing fresh shares in lieu of the redeemed or bought back shares or to transfer their funds to an account called Capital Redemption Reserve, this is non-distributable.

Profit and loss account

Includes all current and prior periods retained profits and losses.

Page 36

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

25.


Share based payments

The group has granted a number of share options to employees. The options are in the parent entity, Vodat Communications Group (VCG) Holding Limited. 
The movement in options is described below. The share based payment charge is deemed to be immaterial and is therefore not included in these financial statements.
Share options exercised are made out of treasury shares which are held by the parent company.

Weighted average exercise price (pence)
2023
Number
2023
Weighted average exercise price
(pence)
2022
Number
2022

Outstanding at the beginning of the year

0.22

8,338,384

1.14
 
45,064,588
 
Granted during the year

1.70

9,928,260

 
-
 
Forfeited during the year

1.70

(1,418,323)

1.48
 
(32,566,026)
 
Exercised during the year

0.11

(2,257,955)

0.32
 
(4,160,178)
 
Outstanding at the end of the year
1.12

14,590,366

0.22
 
8,338,384
 

2023
2022
Option pricing model used


Black Scholes

Black Scholes
 
Weighted average share price (pence)


1.12

0.22
 
Expected volatility


50%

50%
 
Risk-free interest rate


1.9%

1.9%
 

2023
2022
£
£

 
-
 
-


26.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £168,647 (2022: £176,435). Contributions totalling £33,917 (2022: £27,889) were payable to the fund at the balance sheet date and are included in creditors.

Page 37

 
Vodat Communications Group (VCG) Holding Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

27.


Commitments under operating leases

At 31 March 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2023
2022
£
£

Not later than 1 year
316,000
320,000

Later than 1 year and not later than 5 years
1,129,000
715,000

Later than 5 years
34,000
-

1,479,000
1,035,000

28.


Related party transactions

The company has taken advantage of the disclosure exemption relating to section 33.1A of the standard, with regards to the requirement of disclosing transactions with fellow group entities. Group balances are shown in note 19.
The Group and company has loan notes in issue with a nominal value of £3,115,000 to Maven Capital Partners LLP, a related party due to the private equity fund shareholding in the group. 
In addition, during the year the Group incurred interest of £296,750 (
2022: £302,149) and monitoring fees of £66,736 (2022: £61,692) to Maven Capital Partners LLP.
During the year, the company incurred fees from a company related by virtue of common significant influence of £17,500 (
2022: £Nil). This, together with Directors' remuneration, forms the total key management compensation.


29.


Controlling party

There is no overall controlling party.

 
Page 38