Company Registration No. 10887434 (England and Wales)
AQL Holdings Limited
Annual report and
group financial statements
for the year ended 31 December 2022
AQL Holdings Limited
Company information
Director
Professor Adam Beaumont
Company number
10887434
Registered office
13-15 Hunslet Road
Leeds
West Yorkshire
LS10 1JQ
Independent auditor
Saffery LLP
Mitre House
North Park Road
Harrogate
North Yorkshire
HG1 5RX
AQL Holdings Limited
Contents
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 8
Group statement of comprehensive income
9
Group statement of financial position
10
Company statement of financial position
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 29
AQL Holdings Limited
Strategic report
For the year ended 31 December 2022
1

The directors present their strategic report for the year ended 31 December 2022 for AQL Holdings Limited (the “Company”).

The strategic report provides a review of the business for the financial year and describes how the directors manage risks and opportunities.

The consolidated accounts include all wholly owned subsidiaries of the Company, namely (i) (aq) Limited, and (ii) BlueWave Communications Limited (which collectively with the Company represent the "Group").

The report outlines the development and performance of the Group during the financial year, the position at the end of the year and discusses the main trends and factors that could affect the future.

The comparative results for 2021 are for the year ended 31 December 2021.

Principal activities and business review

The Company is an ultimate holding Company and did not trade during the year.

The consolidated results of AQL Holdings Limited for 2022 consolidate all subsidiaries results for the entire year.

This report represents a consolidated set of accounts for the Group, incorporating:

(i) AQL Holdings Limited, which is not a trading entity in its own right;

(ii) (aq) Limited, which is an Ofcom regulated Telecommunications Operator providing wholesale integrated communications services including, mobile messaging, IP telephony, secure co-location datacentre services, fibre and wireless tested line services and also machine-to-machine (m2m) services for the growing demand of the Internet of Things (IoT) marketplace; and

(iii) Bluewave Communication Limited, an Isle of Man incorporated entity who are a supplier of mobile network, telecommunications and connectivity services .

The results of the Group show a turnover of £18,722,737 (2021: £18,966,988) representing a 1.3% decrease in revenue year on year and loss before tax of £1,097,770 (2021: loss of £257,687). At 31 December 2022, the Group had net assets of £2,590,285 (2021: £3,085,848).

Business strategy and objectives

Through its operating entity (aq) Ltd, the Group continues to focus on its traditional markets and key revenue lines including Messaging, VOIP, Connectivity and Co-location Data Centre services. The Group continues its expansion in wholesale services capable of supporting exponential growth in communications software partners. Its focus on scalable technology solutions, including 5G network as a service, remains a key tenant of the Company’s approach. This strategy is now bearing fruit following the successful delivery of a number of Government funded projects.

During the year there has been continued investment in the team and infrastructure in order to facilitate the planned growth.

Outlook

The group has been assessing its operation, products and customer proposition for the future and remains focussed on growth in scalable telecommunications services. At the same time the Group continues to be a diverse innovation business and intends to reinvest in research and development of unique products, services and solutions.

AQL Holdings Limited
Strategic report (continued)
For the year ended 31 December 2022
2
Key performance indicators

2022 2021

£000 £000

Turnover 18,722,737 18,966,988

Gross profit 3,926,389 4,088,303

Gross profit percentage % 21 21.6

Administrative expenses 5,024,159 4,345,790

Administrative expenses/turnover % 26.8 22.9

Principal risks and uncertainties

The Group has loans in place with related parties, the entirety of which are disclosed within the notes to this report. As a result of our growing revenue trends, lack of long-term debt obligations and clear strategic focus the Group has a favourable view of its ability to meet its current and long term financial obligations.

The Group has limited exposure to market fluctuations in relation to Brexit, as a result of its trading activities relying on services rather than imports and exports.

The key risks within the business are maintaining ongoing regulatory compliance, the Group has a longstanding track record of compliance and has dedicated team to manage and mitigate this risk.

Another significant risk factor is the cost of power, which is mitigated by granular automated analysis and onwards billing to end customers.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The directors have prepared detailed medium-term forecasts which show the group to remain cash positive over the period. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

On behalf of the board

Professor Adam Beaumont
Director
7 February 2024
AQL Holdings Limited
Director's report
For the year ended 31 December 2022
3

The director presents his annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company continued to be that of an ultimate holding company and did not trade in the year. The principal activity of entities incorporated into the group are supplying mobile networks, telecommunication and connectivity services. Additionally providing wholesale integrated communications services including mobile messaging, IP telephony, secure co-location datacentre services, fibre and wireless leased line services and machine-to-machine (m2m) services for the growing demand of the Internet of Things (IoT) marketplace.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The director does not recommend payment of a further dividend.

Director

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

Professor Adam Beaumont
Auditor

Saffery LLP have expressed their willingness to continue in office.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
Professor Adam Beaumont
Director
7 February 2024
AQL Holdings Limited
Director's responsibilities statement
For the year ended 31 December 2022
4

The director is responsible for preparing the Annual Report and the 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

 

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

 

 

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

AQL Holdings Limited
Independent auditor's report
To the members of AQL Holdings Limited
5
Opinion

We have audited the financial statements of AQL Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's 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 and 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 director with respect to going concern are described in the relevant sections of this report.

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.

 

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.

AQL Holdings Limited
Independent auditor's report (continued)
To the members of AQL Holdings Limited
6

Opinions on other matters prescribed by the Companies Act 2006

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

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 their environment obtained in the course of the audit, we have not identified material misstatements in the 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:

 

Responsibilities of director

As explained more fully in the director's responsibilities statement, 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 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 parent company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

AQL Holdings Limited
Independent auditor's report (continued)
To the members of AQL Holdings Limited
7

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the director, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with director and by updating our understanding of the sector in which the group and parent company operates.

 

Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.

 

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the parent 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 parent 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

AQL Holdings Limited
Independent auditor's report (continued)
To the members of AQL Holdings Limited
8
Jonathan Davis (Senior Statutory Auditor)
For and on behalf of Saffery LLP
8 February 2024
Chartered Accountants
Statutory Auditors
Mitre House
North Park Road
Harrogate
North Yorkshire
HG1 5RX
AQL Holdings Limited
Group statement of comprehensive income
For the year ended 31 December 2022
9
2022
2021
Notes
£
£
Turnover
3
18,722,737
18,966,988
Cost of sales
(14,796,348)
(14,878,685)
Gross profit
3,926,389
4,088,303
Administrative expenses
(5,024,159)
(4,345,790)
Operating loss
4
(1,097,770)
(257,487)
Interest payable and similar expenses
7
-
0
(200)
Loss before taxation
(1,097,770)
(257,687)
Tax on loss
8
602,207
(91,584)
Loss for the financial year
(495,563)
(349,271)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.

The income statement has been prepared on the basis that all operations are continuing operations. There are no recognised gains or losses other than those stated above and therefore no separate statement of other comprehensive income has been prepared.

AQL Holdings Limited
Group statement of financial position
As at 31 December 2022
10
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
9
40,900
56,731
Tangible assets
10
537,697
693,090
578,597
749,821
Current assets
Debtors
14
13,086,775
12,312,615
Cash at bank and in hand
381,299
124,184
13,468,074
12,436,799
Creditors: amounts falling due within one year
15
(11,384,293)
(10,028,679)
Net current assets
2,083,781
2,408,120
Total assets less current liabilities
2,662,378
3,157,941
Provisions for liabilities
Deferred tax liability
16
72,093
72,093
(72,093)
(72,093)
Net assets
2,590,285
3,085,848
Capital and reserves
Called up share capital
18
12
12
Profit and loss reserves
2,590,273
3,085,836
Total equity
2,590,285
3,085,848
The financial statements were approved and signed by the director and authorised for issue on 7 February 2024.
07 February 2024
Professor Adam Beaumont
Director
Company Registration No. 10887434 (England and Wales)
AQL Holdings Limited
Company statement of financial position
As at 31 December 2022
31 December 2022
11
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
11
5,175,924
5,175,924
Current assets
Debtors
14
1
1
Creditors: amounts falling due within one year
15
(100)
(100)
Net current liabilities
(99)
(99)
Net assets
5,175,825
5,175,825
Capital and reserves
Called up share capital
18
12
12
Other reserves
5,175,813
5,175,813
Total equity
5,175,825
5,175,825

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2021 - £0 profit).

The financial statements were approved and signed by the director and authorised for issue on 7 February 2024..
07 February 2024
Professor Adam Beaumont
Director
Company Registration No. 10887434 (England and Wales)
AQL Holdings Limited
Group statement of changes in equity
For the year ended 31 December 2022
12
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2021
12
3,435,107
3,435,119
Year ended 31 December 2021:
Loss and total comprehensive income
-
(349,271)
(349,271)
Balance at 31 December 2021
12
3,085,836
3,085,848
Year ended 31 December 2022:
Loss and total comprehensive income
-
(495,563)
(495,563)
Balance at 31 December 2022
12
2,590,273
2,590,285
AQL Holdings Limited
Company statement of changes in equity
For the year ended 31 December 2022
13
Share capital
Merger reserve
Total
£
£
£
Balance at 1 January 2021
12
5,175,813
5,175,825
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
-
0
Balance at 31 December 2021
12
5,175,813
5,175,825
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
0
Balance at 31 December 2022
12
5,175,813
5,175,825
AQL Holdings Limited
Group statement of cash flows
For the year ended 31 December 2022
14
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
804,364
1,033,697
Interest paid
-
0
(200)
Income taxes refunded/(paid)
21,981
(105,318)
Net cash inflow from operating activities
826,345
928,179
Investing activities
Purchase of tangible fixed assets
(161,929)
(551,466)
Proceeds on disposal of tangible fixed assets
24,022
-
Proceeds on disposal of investments
-
(100)
Other investments and loans made
(431,323)
(388,704)
Net cash used in investing activities
(569,230)
(940,270)
Net increase/(decrease) in cash and cash equivalents
257,115
(12,091)
Cash and cash equivalents at beginning of year
124,184
136,275
Cash and cash equivalents at end of year
381,299
124,184
AQL Holdings Limited
Notes to the group financial statements
For the year ended 31 December 2022
15
1
Accounting policies
Company information

AQL Holdings Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is 13-15 Hunslet Road, Leeds, West Yorkshire, LS10 1JQ.

 

The group consists of AQL Holdings Limited and all of its subsidiaries.

1.1
Accounting convention

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

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

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

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

 

AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
16
1.2
Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to 31 December 2022. A subsidiary is an entity that is controlled by the parent. The results of subsidiary undertakings are included in the consolidated profit and loss account from the date that control commences until the date that control ceases. Control is established when the Company has the power to govern the operating and financial policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.

 

On 31 August 2017 the Company acquired 100% of the issued share capital of (aq) Limited in a direct share for share exchange. The transaction was not an acquisition of a business but a group restructure whereby the former shareholder of (aq) Limited maintained the same interest in AQL Holdings Limited as they bad previously held in (aq) Limited. Therefore, the financial statements of AQL Holdings Limited represent a continuation of the activities and operations of the group previously headed by (aq) Limited. Accordingly, merger accounting has been used to account for this transaction as it meets the criteria for such accounting under Financial Reporting Standard 102 and the Companies Act 2006. For the consolidated accounts the adoption of merger accounting presents AQL Holdings Limited as if it had always been the parent of (aq) Limited.

 

Under Section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own profit and loss account.

1.3
Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have prepared detailed medium-term forecasts which show the company to remain cash positive over the period. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Turnover consist primarily of recurring monthly fees from hosting services which is recognised as the services are provided. Hosting service contracts range from one month to five years. Payment receive and billing in advance of providing services are deferred until services are provided. Unbilled revenue for service provided are accrued at the end of each period.

1.5
Intangible fixed assets - goodwill

Goodwill arising on the acquisition of subsidiary undertakings represents the excess of the fair value of the consideration over the fair value of the identifiable assets and liabilities acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is estimated to be 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
17

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

Plant and equipment
33% on cost
Fixtures and fittings
between 10 and 25% on cost
Computers
33% on cost
Motor vehicles
20% on cost
Other assets
between 10 and 25% on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since last annual reporting date in the pattern by which the company expects to consume an asset's future economic benefits.

1.7
Fixed asset investments

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

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

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
18
1.10
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
19
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.12
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
20
1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

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

 

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

1.14
Retirement benefits

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

1.15
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.16
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Critical accounting judgements and key sources of estimation uncertainty

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

 

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

3
Turnover

In the directors' opinion a geographical analysis of the turnover before tax would not enhance the company's commercial interests.

4
Operating loss
2022
2021
£
£
Operating loss for the year is stated after charging/(crediting):
Exchange losses/(gains)
1,033
(8,230)
Depreciation of owned tangible fixed assets
293,300
194,906
Amortisation of intangible assets
15,831
15,831
Operating lease charges
3,981
4,382
AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
4
Operating loss (continued)
21

Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £1,033 (2021 - £8,229).

5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
25,900
20,000
25,900
20,000
For other services
Taxation compliance services
3,650
3,850
6
Employees

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

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Management
11
16
1
1
Administration
66
69
-
-
Total
77
85
1
1

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
2,542,053
2,553,393
-
0
-
0
Social security costs
285,161
244,946
-
0
-
0
Pension costs
85,364
80,220
-
0
-
0
2,912,578
2,878,559
-
0
-
0
7
Interest payable and similar expenses
2022
2021
£
£
Other interest
-
200
AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
22
8
Taxation
2022
2021
£
£
Current tax
Adjustments in respect of prior periods
(126,326)
-
0
Benefit arising from a previously unrecognised tax loss or credit
(475,881)
-
0
Total current tax
(602,207)
-
0
Deferred tax
Origination and reversal of timing differences
-
0
91,584
Total tax (credit)/charge
(602,207)
91,584

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

2022
2021
£
£
Loss before taxation
(1,097,770)
(257,687)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(208,576)
(48,961)
Tax effect of expenses that are not deductible in determining taxable profit
3,008
8,750
Tax effect of utilisation of tax losses not previously recognised
-
0
(105,190)
Change in unrecognised deferred tax assets
-
0
324,574
Adjustments in respect of prior years
(126,326)
-
0
Research and development tax credit
(475,881)
-
0
Deferred tax adjustments in respect of prior years
-
0
(6,155)
Difference in CT rate versus DT rate
-
0
(54,441)
Deferred tax not recognised
-
0
(26,993)
Other effects
205,568
-
0
Taxation (credit)/charge
(602,207)
91,584
AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
23
9
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2022 and 31 December 2022
158,314
Amortisation and impairment
At 1 January 2022
101,583
Amortisation charged for the year
15,831
At 31 December 2022
117,414
Carrying amount
At 31 December 2022
40,900
At 31 December 2021
56,731
The company had no intangible fixed assets at 31 December 2022 or 31 December 2021.
AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
24
10
Tangible fixed assets
Group
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Other assets
Total
£
£
£
£
£
£
Cost
At 1 January 2022
56,200
1,049,360
2,139,158
85,685
223,408
3,553,811
Additions
132,093
9,199
20,637
-
0
-
0
161,929
Transfers
(24,022)
-
0
-
0
-
0
-
0
(24,022)
At 31 December 2022
164,271
1,058,559
2,159,795
85,685
223,408
3,691,718
Depreciation and impairment
At 1 January 2022
7,072
992,360
1,655,634
60,464
145,191
2,860,721
Depreciation charged in the year
30,259
29,685
203,014
8,001
22,341
293,300
At 31 December 2022
37,331
1,022,045
1,858,648
68,465
167,532
3,154,021
Carrying amount
At 31 December 2022
126,940
36,514
301,147
17,220
55,876
537,697
At 31 December 2021
49,128
57,000
483,524
25,221
78,217
693,090
The company had no tangible fixed assets at 31 December 2022 or 31 December 2021.
11
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
12
-
0
-
0
5,175,924
5,175,924
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022 and 31 December 2022
5,175,924
Carrying amount
At 31 December 2022
5,175,924
At 31 December 2021
5,175,924
AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
25
12
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
(aq) Limited
UK
Ordinary
100.00
0
Bluewave Communications Limited
Isle of Man
Ordinary
100.00
0

The investments in subsidiaries are all stated at cost.

Subsidiary undertakings:

 

100% ownership of Bluewave Communication Limited (Tower House, Castle Street, Douglas, Isle of Man). Bluewave Communications Limited is registered in the Isle of Man, with a company number 1195998C. The principal activity of the company is that of telecom supplies and the provision of media services.

 

100% ownership of (aq) Limited (13-1 Huslet Road, Leeds, LS10 1JQ). (aq) Limited is registered in the United Kingdom with company number 03663860. The principal activity of the company is that of wholesale integrated communication services.

13
Financial instruments
Group
Company
2022
2021
2022
2021
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
11,569,702
11,340,239
n/a
n/a
Carrying amount of financial liabilities
Measured at amortised cost
10,038,151
8,729,253
n/a
n/a

As permitted by the reduced disclosure framework within FRS 102, the company has taken advantage of the exemption from disclosing the carrying amount of certain classes of financial instruments, denoted by 'n/a' above.

14
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,741,531
3,455,589
-
0
-
0
Corporation tax recoverable
1,279,127
679,655
-
0
-
0
Other debtors
8,554,802
7,377,110
1
1
Prepayments and accrued income
511,315
800,261
-
0
-
0
13,086,775
12,312,615
1
1
AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
14
Debtors (continued)
26

Included within other debtors is Directors loan account balances of £2,769,498 (2021: £2,338,175). See note 21 for more details.

 

Other debtors also include amounts owed to the company from non-group companies under common control of £5,767,674 (2021: £5,039,021). These amounts are receivable on demand and no interest is charged on outstanding balances. Whilst technically repayable on demand, the Directors consider these balances to be longer term in nature with recovery not anticipated in the next 12 months.

15
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Trade creditors
1,989,843
1,735,671
-
0
-
0
Amounts owed to group undertakings
-
-
100
100
Corporation tax payable
276,719
257,473
-
0
-
0
Other taxation and social security
1,069,423
1,041,953
-
-
Other creditors
5,221,276
4,289,096
-
0
-
0
Accruals and deferred income
2,827,032
2,704,486
-
0
-
0
11,384,293
10,028,679
100
100
16
Deferred taxation

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

Liabilities
Liabilities
2022
2021
Group
£
£
Accelerated capital allowances
75,466
75,466
Short term timing differences
(3,373)
(3,373)
72,093
72,093
The company has no deferred tax assets or liabilities.
There were no deferred tax movements in the year.

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
27
17
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
85,364
80,220

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

18
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
12
12
12
12
19
Operating lease commitments
Lessee

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

Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
2,856
4,284
-
-
Between two and five years
-
2,856
-
-
2,856
7,140
-
-
20
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Recharges
2022
2021
£
£
Group
Entities relating to key managment personnel of the company
1,416,000
1,542,000
AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
20
Related party transactions (continued)
28

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2022
2021
£
£
Group
Entities relating to key managment personnel of the company
6,353,795
5,276,886

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2022
2021
Balance
Balance
£
£
Group
Entities relating to key managment personnel of the company
5,767,674
5,039,021
21
Directors' transactions

Interest free loans have been granted to the company director as follows:

Description
% Rate
Opening balance
Amounts advanced
Closing balance
£
£
£
Professor Adam Beaumont -
-
2,338,175
431,324
2,769,499
2,338,175
431,324
2,769,499
22
Cash generated from group operations
2022
2021
£
£
Loss for the year after tax
(495,563)
(349,271)
Adjustments for:
Taxation (credited)/charged
(602,207)
91,584
Finance costs
-
0
200
Amortisation and impairment of intangible assets
15,831
15,990
Depreciation and impairment of tangible fixed assets
293,300
194,906
Movements in working capital:
Decrease/(increase) in debtors
256,635
(2,412,329)
Increase in creditors
1,336,368
3,492,617
Cash generated from operations
804,364
1,033,697
AQL Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2022
29
23
Analysis of changes in net funds - group
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
124,184
257,115
381,299
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