REGISTERED NUMBER: 10034084 (England and Wales) |
GROUP STRATEGIC REPORT, DIRECTOR'S REPORT AND |
AUDITED CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST MARCH 2023 |
FOR |
THE AVERTEC GROUP LIMITED |
REGISTERED NUMBER: 10034084 (England and Wales) |
GROUP STRATEGIC REPORT, DIRECTOR'S REPORT AND |
AUDITED CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST MARCH 2023 |
FOR |
THE AVERTEC GROUP LIMITED |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST MARCH 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Director's Report | 4 |
Report of the Independent Auditors | 6 |
Consolidated Income Statement | 10 |
Consolidated Other Comprehensive Income | 11 |
Consolidated Statement of Financial Position | 12 |
Company Statement of Financial Position | 13 |
Consolidated Statement of Changes in Equity | 14 |
Company Statement of Changes in Equity | 15 |
Consolidated Statement of Cash Flows | 16 |
Notes to the Consolidated Statement of Cash Flows | 17 |
Notes to the Consolidated Financial Statements | 18 |
THE AVERTEC GROUP LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31ST MARCH 2023 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
INDEPENDENT AUDITORS: |
109 Coleman Road |
Leicester |
Leicestershire |
LE5 4LE |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31ST MARCH 2023 |
The director presents his strategic report of the Company and the Group for the year ended 31st March 2023. |
REVIEW OF BUSINESS |
The Group turnover during the year increased to £20.9 million (2022: £20 million) with gross profit increasing to £5.5m (2022: £5.1m). The loss before tax was £912,647 (2022: profit before tax of £24,961). The loss was primarily due to impairments during the year. The business is financed through cash generated from operating activities and there is limited reliance on external sources of finance. Cash on the balance sheet is £5.3m (2022: £4.7m) at the year end. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The directors consider the key risks to the business through a framework of policies, procedures and internal controls. All policies are subject to board approval and ongoing review by management. Compliance with regulations, legal and ethical standards is a high priority for the Group and the finance department takes on an important oversight role in this regard, to ensure that a proper internal control framework exists to manage financial risks and that the controls operate effectively. |
The key business risks and uncertainties affecting the Group essentially relate to the extent to which it is reliant upon the franchisor, O2. As mentioned in the notes to the financial statements, there are planned closures of stores as a result of an O2 retail structure. |
Interest rate risk |
The Group predominantly finances its operations through retained profit. Management periodically reviews its funding structures to ensure an optimal structure is in place, bearing in mind the commercial needs of the wider group and relevant legislation. |
Liquidity risk |
The Group seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. |
Human Resources |
The Group's employees are its most important resource. It is essential to the future success of the business that a skilled and motivated workforce is retained. |
FINANCIAL KEY PERFORMANCE INDICATORS |
Given the nature of the business, the director has determined certain key performance indicators to help him to both understand and manage the growing store network, and with it, the increasing subscriber base. These are monitored closely on at least a monthly basis and take into account relevant demographic information when comparing financial performance of stores relative to other stores in the same area or those based in other parts of the UK. |
Turnover and gross profit are seen as key performance indicators, as margins for these businesses need to be |
healthy due to significant staff costs and other overheads. These have been disclosed above. |
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES |
The director ensures wherever possible that the business objectives are aligned with risk management. The director is responsible for maintaining robust systems of internal control that provide reasonable assurance that the group will not be hindered in achieving its business objectives by circumstances that are not foreseen. |
No major risks have been identified other than those relating to the uncertainties and challenges set out above. In this respect, the director has built up a strong team of staff with whom they work closely on a regular basis to ensure these risks are mitigated effectively. |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31ST MARCH 2023 |
FUTURE DEVELOPMENTS |
There are planned closures of stores as a result of an O2 retail structure as explained in the notes to the financial statements. |
ON BEHALF OF THE BOARD: |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
DIRECTOR'S REPORT |
FOR THE YEAR ENDED 31ST MARCH 2023 |
The director presents his report with the financial statements of the Company and the Group for the year ended 31st March 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the Group in the year under review was that of mobile phone franchise stores. |
DIVIDENDS |
The total distribution of dividends for the year ended 31st March 2023 will be £ 2,000 . |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTOR |
GOING CONCERN |
The director's assessment of going concern is presented in note 2. |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Group Strategic Report, the Director's 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. In preparing these financial statements, the director is required to: |
- | select suitable accounting policies 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 Company will continue in business. |
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's and the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Group's auditors are aware of that information. |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
DIRECTOR'S REPORT |
FOR THE YEAR ENDED 31ST MARCH 2023 |
AUDITORS |
The auditors, Watergates Ltd (Statutory Auditor), will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
THE AVERTEC GROUP LIMITED |
Opinion |
We have audited the financial statements of The Avertec Group Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31st March 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the Group's and of the Parent Company affairs as at 31st 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 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 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 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 in the Group Strategic Report and the Director's Report, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
THE AVERTEC GROUP LIMITED |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Director's Report. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the Parent Company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the director is responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. |
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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
The extent to which the audit was considered capable of detecting irregularities including fraud |
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
THE AVERTEC GROUP LIMITED |
- we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the sector, we also considered the nature of the group's industry and it's control environment; |
- we focused on laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006 and taxation legislation; as well as laws and regulations which do not have a direct effect on the financial statements but compliance with which may be fundamental to the group's ability to operate or avoid a material penalty. These included GDPR and health & safety legislation; |
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and |
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
- considering and testing of the key internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations, as well as substantive procedures. |
To address the risk of fraud through management bias and override of controls, we performed analytical procedures to identify any unusual or unexpected relationships; tested journal entries to identify unusual transactions; assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; |
- reading the minutes of meetings of those charged with governance; |
- enquiring of management as to actual and potential litigation and claims; and |
- reviewing correspondence with HMRC, relevant regulators and the group's legal advisors. |
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 Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
THE AVERTEC GROUP LIMITED |
Use of our report |
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in a Report of the Auditors 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. |
for and on behalf of |
109 Coleman Road |
Leicester |
Leicestershire |
LE5 4LE |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
CONSOLIDATED |
INCOME STATEMENT |
FOR THE YEAR ENDED 31ST MARCH 2023 |
31/3/23 | 31/3/22 |
Notes | £ | £ |
TURNOVER | 4 | 20,870,849 | 19,990,021 |
Cost of sales | (15,344,503 | ) | (14,879,914 | ) |
GROSS PROFIT | 5,526,346 | 5,110,107 |
Administrative expenses | (6,811,178 | ) | (5,681,182 | ) |
(1,284,832 | ) | (571,075 | ) |
Other operating income | 254,506 | 478,867 |
OPERATING LOSS | 6 | (1,030,326 | ) | (92,208 | ) |
Interest receivable and similar income | 122,399 | 118,412 |
(907,927 | ) | 26,204 |
Interest payable and similar expenses | 7 | (4,720 | ) | (1,243 | ) |
(LOSS)/PROFIT BEFORE TAXATION | (912,647 | ) | 24,961 |
Tax on (loss)/profit | 8 | (145,657 | ) | (94,109 | ) |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
Loss attributable to: |
Owners of the parent | (1,058,304 | ) | (69,148 | ) |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
CONSOLIDATED |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31ST MARCH 2023 |
31/3/23 | 31/3/22 |
Notes | £ | £ |
LOSS FOR THE YEAR | (1,058,304 | ) | (69,148 | ) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE LOSS FOR THE YEAR |
(1,058,304 |
) |
(69,148 |
) |
Total comprehensive loss attributable to: |
Owners of the parent | (1,058,304 | ) | (69,148 | ) |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
31ST MARCH 2023 |
31/3/23 | 31/3/22 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 11 | - | 1,638,695 |
Tangible assets | 12 | - | 109,654 |
Investments | 13 | - | - |
- | 1,748,349 |
CURRENT ASSETS |
Stocks | 14 | 746,642 | 1,130,307 |
Debtors | 15 | 5,033,494 | 6,608,563 |
Cash at bank and in hand | 5,271,193 | 4,667,607 |
11,051,329 | 12,406,477 |
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
16 |
(3,717,079 |
) |
(5,618,272 |
) |
NET CURRENT ASSETS | 7,334,250 | 6,788,205 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
7,334,250 |
8,536,554 |
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
17 |
- |
(130,231 |
) |
PROVISIONS FOR LIABILITIES | 19 | (7,185 | ) | (18,954 | ) |
NET ASSETS | 7,327,065 | 8,387,369 |
CAPITAL AND RESERVES |
Called up share capital | 20 | 101 | 101 |
Retained earnings | 21 | 7,326,964 | 8,387,268 |
SHAREHOLDERS' FUNDS | 7,327,065 | 8,387,369 |
The financial statements were approved by the director and authorised for issue on 15th March 2024 and were signed by: |
Mr M Menair - Director |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
COMPANY STATEMENT OF FINANCIAL POSITION |
31ST MARCH 2023 |
31/3/23 | 31/3/22 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 11 |
Tangible assets | 12 |
Investments | 13 |
CURRENT ASSETS |
Debtors | 15 |
Cash at bank and in hand |
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
16 |
( |
) |
( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Retained earnings |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 2,151,821 | 109,361 |
The financial statements were approved by the director and authorised for issue on |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31ST MARCH 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1st April 2021 | 101 | 8,456,416 | 8,456,517 |
Changes in equity |
Total comprehensive loss | - | (69,148 | ) | (69,148 | ) |
Balance at 31st March 2022 | 101 | 8,387,268 | 8,387,369 |
Changes in equity |
Dividends | - | (2,000 | ) | (2,000 | ) |
Total comprehensive loss | - | (1,058,304 | ) | (1,058,304 | ) |
Balance at 31st March 2023 | 101 | 7,326,964 | 7,327,065 |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31ST MARCH 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1st April 2021 |
Changes in equity |
Total comprehensive income | - |
Balance at 31st March 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31st March 2023 |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
CONSOLIDATED STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31ST MARCH 2023 |
31/3/23 | 31/3/22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | (750,908 | ) | 629,155 |
Interest paid | (4,720 | ) | (1,243 | ) |
Tax paid | 4,720 | (571,961 | ) |
Net cash from operating activities | (750,908 | ) | 55,951 |
Cash flows from investing activities |
Purchase of tangible fixed assets | - | (14,870 | ) |
Sale of intangible fixed assets | 1,161,330 | - |
Impairment of tangible fixed assets | 73,396 | - |
Interest received | 122,399 | 118,412 |
Net cash from investing activities | 1,357,125 | 103,542 |
Cash flows from financing activities |
Amount withdrawn by directors | (631 | ) | (406 | ) |
Equity dividends paid | (2,000 | ) | - |
Net cash from financing activities | (2,631 | ) | (406 | ) |
Increase in cash and cash equivalents | 603,586 | 159,087 |
Cash and cash equivalents at beginning of year |
2 |
4,667,607 |
4,508,520 |
Cash and cash equivalents at end of year |
2 |
5,271,193 |
4,667,607 |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31ST MARCH 2023 |
1. | RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31/3/23 | 31/3/22 |
£ | £ |
(Loss)/profit before taxation | (912,647 | ) | 24,961 |
Depreciation charges | 513,623 | 514,335 |
Finance costs | 4,720 | 1,243 |
Finance income | (122,399 | ) | (118,412 | ) |
(516,703 | ) | 422,127 |
Decrease/(increase) in stocks | 383,665 | (976,849 | ) |
Decrease/(increase) in trade and other debtors | 1,575,069 | (1,734,955 | ) |
(Decrease)/increase in trade and other creditors | (2,192,939 | ) | 2,918,832 |
Cash generated from operations | (750,908 | ) | 629,155 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31st March 2023 |
31.3.23 | 1.4.22 |
£ | £ |
Cash and cash equivalents | 5,271,193 | 4,667,607 |
Year ended 31st March 2022 |
31.3.22 | 1.4.21 |
£ | £ |
Cash and cash equivalents | 4,667,607 | 4,508,520 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.4.22 | Cash flow | At 31.3.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 4,667,607 | 603,586 | 5,271,193 |
4,667,607 | 603,586 | 5,271,193 |
Total | 4,667,607 | 603,586 | 5,271,193 |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST MARCH 2023 |
1. | STATUTORY INFORMATION |
The Avertec Group Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
BASIS OF PREPARING THE FINANCIAL STATEMENTS |
The group financial statements consolidate the financial statements of The Avertec Group Limited and all its subsidiary undertakings drawn up to 31 March each year. |
BASIS OF CONSOLIDATION |
The consolidated financial statements incorporate the financial statements of the company and entities controlled by the group (its subsidiaries). Control is achieved where the group has the power to govern the financial and operating policies of an entity; generally conferred by holding a majority of voting rights. |
The financial statements of a subsidiary are recognised in the consolidated financial statements according to the full consolidation method from the date on which control is obtained until the date on which that control no longer exists. Pursuant to the full consolidation method, 100% of the assets, liabilities, income and expenses from subsidiaries are recognised in the consolidated financial statements. |
Avertec Limited, Be More Mobile Limited, JLMCOM Limited and Omicron 2 Ltd have been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the result and cash flows of the previously mentioned subsidiaries. |
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. |
GOING CONCERN |
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the strategic report. The strategic report further describes the financial position of the Group; its cash flows and liquidity position; the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; and its exposure to credit risk and liquidity risk. |
The business is financed through cash generated from operating activities and there is limited reliance on external sources of finance. Cash on the balance sheet is £5.3m (2022: £4.7m) at the year end. |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
2. | ACCOUNTING POLICIES - continued |
During the year, O2 carried out a review of its position as a franchisor and announced they will not continue with the franchise model, with plans to transfer ownership of the stores from the franchisee to O2. The director will continue to manage the transition to ensure a smooth transfer. Although the stores were not affected during the year, the transfers had taken place by the signing date. The going concern assessment for each individual subsidiary has been made within each subsidiary's respective financial statements. |
After considering all relevant uncertainties, the director has a reasonable expectation that the Group has adequate resources to continue to operate as a going concern for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. |
TURNOVER |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Turnover represents revenue earned from the sale of goods. |
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (on dispatch of the goods), when the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Revenue share commissions which are received based on a proportion of contract income of the franchisor are recognised in line with the contractual arrangements between the end customer and our franchisor. |
GOODWILL |
Goodwill, being the amount paid in connection with the acquisition of a business in 2012 and 2015, is being amortised evenly over its useful life of 10 years. |
INTANGIBLE ASSETS |
Intangible assets are measured at cost less accumulated amortisation and any accumulated impairment losses. |
Intangible assets represents franchise costs. Amortisation is charged so as to write off the actual cost of the franchise fee over the estimated useful economic life of 5 to 10 years. |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
2. | ACCOUNTING POLICIES - continued |
TANGIBLE FIXED ASSETS |
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Such cost includes costs directly attributable to making the asset capable of operating as intended. |
Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less estimated residual value, of each asset on a systematic basis over its expected useful life as follows: |
Improvements to property - 10% on cost |
Fixtures and fittings - 10% on cost |
The carrying values of tangible fixed assets are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable. |
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and |
are recognised in the Income Statement. |
IMPAIRMENT OF ASSETS |
At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss. |
If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss. |
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. |
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. |
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. |
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. |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
2. | ACCOUNTING POLICIES - continued |
FINANCIAL INSTRUMENTS |
The Group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and loans to related parties. |
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. |
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income. |
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. |
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date. |
Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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. |
TAXATION |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
2. | ACCOUNTING POLICIES - continued |
DEFERRED TAX |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
HIRE PURCHASE AND LEASING COMMITMENTS |
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the lease term, unless the rental payments are structured to increase in line with expected general inflation, in which case the group recognises annual rent expense equal to amounts owed to the lessor. |
The aggregate benefit of lease incentives are recognised as a reduction to the expense over the lease term on a straight line basis. |
PENSION COSTS AND OTHER POST-RETIREMENT BENEFITS |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
3. | CRITICAL ACCOUNTING JUDGEMENTS 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. |
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. |
Critical judgements in applying the Group's accounting policies |
The directors conclude that there are no critical judgements in applying the Group's accounting policies. |
Key source of estimation uncertainty |
Depreciation and amortisation rates are based on estimates of the useful lives and residual values of the assets involved. |
Determining whether stock values are recoverable requires estimations based on up to date trading information. The directors use their knowledge of the business, the trading environment and future projections to assess whether provision is necessary in these areas. |
4. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the Group and belong to one geographical market, being the United Kingdom. |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
5. | EMPLOYEES AND DIRECTORS |
31/3/23 | 31/3/22 |
£ | £ |
Wages and salaries | 2,493,615 | 2,536,989 |
Social security costs | 209,553 | 192,896 |
Other pension costs | 161,812 | 163,069 |
2,864,980 | 2,892,954 |
The average number of employees during the year was as follows: |
31/3/23 | 31/3/22 |
Retail | 111 | 118 |
Management and administration | 5 | 7 |
31/3/23 | 31/3/22 |
£ | £ |
Director's remuneration | 11,000 | 11,000 |
Director's pension contributions to money purchase schemes | 40,381 | 40,381 |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 1 | 1 |
6. | OPERATING LOSS |
The operating loss is stated after charging: |
31/3/23 | 31/3/22 |
£ | £ |
Other operating leases | 880,867 | 976,299 |
Depreciation - owned assets | 36,258 | 34,970 |
Goodwill amortisation | 477,365 | 477,365 |
Franchise costs amortisation | - | 2,000 |
Auditors' remuneration | 1,980 | 1,800 |
The auditing of accounts of any associate of the company | 17,765 | 16,150 |
Other non- audit services | 12,025 | 12,342 |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31/3/23 | 31/3/22 |
£ | £ |
Interest on other loans | 4,720 | 1,243 |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
8. | TAXATION |
Analysis of the tax charge |
The tax charge on the loss for the year was as follows: |
31/3/23 | 31/3/22 |
£ | £ |
Current tax: |
UK corporation tax | 157,426 | 97,514 |
Deferred tax | (11,769 | ) | (3,405 | ) |
Tax on (loss)/profit | 145,657 | 94,109 |
RECONCILIATION OF TOTAL TAX CHARGE INCLUDED IN PROFIT AND LOSS |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
31/3/23 | 31/3/22 |
£ | £ |
(Loss)/profit before tax | (912,647 | ) | 24,961 |
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19 % (2022 - 19 %) |
(173,403 |
) |
4,743 |
Effects of: |
Expenses not deductible for tax purposes | 90,699 | 90,701 |
Depreciation in excess of capital allowances | 19,477 | 2,070 |
Deferred taxation | (11,769 | ) | (3,405 | ) |
Other group adjustments | 220,653 | - |
Total tax charge | 145,657 | 94,109 |
9. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
10. | DIVIDENDS |
31/3/23 | 31/3/22 |
£ | £ |
Final | 2,000 | - |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
11. | INTANGIBLE FIXED ASSETS |
Group |
Franchise |
Goodwill | costs | Totals |
£ | £ | £ |
COST |
At 1st April 2022 | 4,773,655 | 85,750 | 4,859,405 |
Disposals | (4,773,655 | ) | - | (4,773,655 | ) |
At 31st March 2023 | - | 85,750 | 85,750 |
AMORTISATION |
At 1st April 2022 | 3,134,960 | 85,750 | 3,220,710 |
Amortisation for year | 477,365 | - | 477,365 |
Eliminated on disposal | (3,612,325 | ) | - | (3,612,325 | ) |
At 31st March 2023 | - | 85,750 | 85,750 |
NET BOOK VALUE |
At 31st March 2023 | - | - | - |
At 31st March 2022 | 1,638,695 | - | 1,638,695 |
12. | TANGIBLE FIXED ASSETS |
Group |
Improvements | Fixtures |
to | and |
property | fittings | Totals |
£ | £ | £ |
COST |
At 1st April 2022 | 247,730 | 216,038 | 463,768 |
Impairments | (247,730 | ) | (216,038 | ) | (463,768 | ) |
At 31st March 2023 | - | - | - |
DEPRECIATION |
At 1st April 2022 | 226,295 | 127,819 | 354,114 |
Charge for year | 14,700 | 21,558 | 36,258 |
Impairments | (240,995 | ) | (149,377 | ) | (390,372 | ) |
At 31st March 2023 | - | - | - |
NET BOOK VALUE |
At 31st March 2023 | - | - | - |
At 31st March 2022 | 21,435 | 88,219 | 109,654 |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
13. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertaking |
£ |
COST |
At 1st April 2022 |
and 31st March 2023 |
NET BOOK VALUE |
At 31st March 2023 |
At 31st March 2022 |
The Group or the Company's investments at the Statement of Financial Position date in the share capital of companies include the following: |
SUBSIDIARIES |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
14. | STOCKS |
Group |
31/3/23 | 31/3/22 |
£ | £ |
Stocks | 746,642 | 1,130,307 |
15. | DEBTORS |
Group | Company |
31/3/23 | 31/3/22 | 31/3/23 | 31/3/22 |
£ | £ | £ | £ |
Amounts falling due within one year: |
Trade debtors | 281,295 | 2,097,975 |
Other debtors | 396,171 | 287,944 |
Prepayments and accrued income | 222,971 | 211,587 |
900,437 | 2,597,506 |
Amounts falling due after more than one | year: |
Other debtors | 4,133,057 | 4,011,057 |
Aggregate amounts | 5,033,494 | 6,608,563 |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31/3/23 | 31/3/22 | 31/3/23 | 31/3/22 |
£ | £ | £ | £ |
Purchase ledger control | 1,359,313 | 3,718,575 | - | - |
Amounts owed to group undertakings | - | - |
Corporation tax | 260,162 | 98,016 |
Social security and other taxes | 82,897 | 101,580 |
VAT | 1,080,840 | 1,075,562 | - | - |
Wages control account | 179,157 | 175,092 |
Other creditors | 543,843 | 345,999 | - | 13,500 |
Director's current accounts | - | 631 | - | - |
Accruals and deferred income | 210,867 | 102,817 |
3,717,079 | 5,618,272 |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
17. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
31/3/23 | 31/3/22 |
£ | £ |
Other creditors | - | 130,231 |
18. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Non-cancellable | operating leases |
31/3/23 | 31/3/22 |
£ | £ |
Within one year | 544,717 | 739,285 |
Between one and five years | - | 727,242 |
In more than five years | - | 37,500 |
544,717 | 1,504,027 |
19. | PROVISIONS FOR LIABILITIES |
Group |
31/3/23 | 31/3/22 |
£ | £ |
Deferred tax |
Accelerated capital allowances | 7,185 | 18,954 |
Group |
Deferred |
tax |
£ |
Balance at 1st April 2022 | 18,954 |
Credit to Income Statement during year | (11,769 | ) |
Balance at 31st March 2023 | 7,185 |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31/3/23 | 31/3/22 |
value: | £ | £ |
Ordinary | £1 | 101 | 101 |
THE AVERTEC GROUP LIMITED (REGISTERED NUMBER: 10034084) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST MARCH 2023 |
21. | RESERVES |
Group |
Retained |
earnings |
£ |
At 1st April 2022 | 8,387,268 |
Deficit for the year | (1,058,304 | ) |
Dividends | (2,000 | ) |
At 31st March 2023 | 7,326,964 |
22. | CONTINGENT LIABILITIES, BANK GUARANTEES AND SECURITIES |
The Avertec Group Limited is subject to a composite guarantee with all group companies in favour of the bank. Security is by way of fixed and floating charges over group assets. Total group indebtedness at the year end was nil. |
23. | RELATED PARTY DISCLOSURES |
Transactions between Group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
The Group has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Included in other debtors are loans to companies under which the director of those companies is also a director of The Avertec Group Limited. At the year end the Group was owed £4,133,057 (2022: £4,011,057). The loans included interest receivable of £122,000 for the year. |
It is the opinion of the director that there are no members of key management personnel other than the director himself. Details of director remuneration is given in note 5. |
24. | POST BALANCE SHEET EVENTS |
After the year end, but before the signing of the financial statements, the stores were transferred as a result of the announcement made during the year by O2 of its plans to transfer ownership of the stores from the franchisee to O2, as explained in note 2. |
25. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party is Mr M Menair. |