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Registered number: 14397421










AZEGO GROUP HOLDINGS LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2023

 
AZEGO GROUP HOLDINGS LIMITED
 

COMPANY INFORMATION


Directors
Mr R A Arbuckle (appointed 4 October 2022)
Mr S Dopson (appointed 4 October 2022)




Registered number
14397421



Registered office
Unit 7 Ely Road
Theale

Reading

England

RG7 4BQ




Independent auditors
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor

16 Great Queen Street

Covent Garden

London

WC2B 5AH





 
AZEGO GROUP HOLDINGS LIMITED
 

CONTENTS



Page
Group Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Consolidated Statement of Comprehensive Income
 
9
Consolidated Statement of Financial Position
 
10
Company Statement of Financial Position
 
11
Consolidated Statement of Changes in Equity
 
12
Company Statement of Changes in Equity
 
13
Consolidated Statement of Cash Flows
 
14
Consolidated Analysis of Net Debt
 
15
Notes to the Financial Statements
 
16 - 32


 
AZEGO GROUP HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023

Introduction
 
Azego Group Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 7, Ely Road, Theale, Reading, Berkshire, RG7 4BQ.
The Company was incorporated on 4 October 2022 and in October 2022, as part of a group reorganisation, it acquired 100% of the shares of Azego TS Limited and Vision Display Solutions Limited. 

Business review
 
The objective of the Group is to be a leading independent distributor of electronic components and to provide high quality display technology solutions. 
The principal activity of the company was a holding company.
During the reporting period, the Group was successful in meeting the demand for electronic components to its existing customers by sourcing supply using its global network. During 2023, demand for semiconductors was at a level commonly seen within the industry.

Principal risks and uncertainties
 
The Group monitors risk with a range of processes, including monthly operation and finance reviews.
The directors have identified the following risks as those significant to the prospects of the business:
Supply chain risks
The Group has developed an agile approach to procurement and good relationships with suppliers to enable it to react to supply chain disruptions arising from demand fluctuations, natural disasters and COVID shutdowns. The Group has a sophisticated stock management system that supports the business in managing and monitoring supply.
Price Risks
In 2022, the industry faced supply chain issues which increased the prices of components and products. Transport and overhead expenses were impacted by the energy price increase resulting from Russia's invasion of Ukraine and the gas shortage. To mitigate the price risk, the Group has stock level controls in place and does not hold stock for long periods of time. As above, prices have started to return to normal levels.
Interest Rate Risk
Inflationary pressures have started to ease in 2023, but interest rates are expected to remain high for the foreseeable future. The Group has significantly reduced its debt and has invested cash into interest bearing accounts to mitigate the risk of moderate interest rate increases.

Future developments
 
The Directors are not aware of any future developments that would impact their business, although uncertainty within the the global socio-economic environment will impact their results.

Page 1

 
AZEGO GROUP HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Financial key performance indicators
 
The Group's key financial indicators during the year were as follows:

2023
£'000
Turnover

48,411

EBITDA*

7,705


See commentary above regarding the results for the year.
*Earnings before interest, tax, depreciation and amortisation.


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





Mr S Dopson
Director

Date: 22 July 2024

Page 2

 
AZEGO GROUP HOLDINGS LIMITED
 

 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the period ended 31 December 2023.

Directors

The directors who served during the period were:

Mr R A Arbuckle (appointed 4 October 2022)
Mr S Dopson (appointed 4 October 2022)

Directors' responsibilities statement

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

 In preparing these financial statements, the directors are required to:


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

make judgments and accounting estimates that are reasonable and prudent;

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

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

Results and dividends

The profit for the period, after taxation, amounted to £9,203,000.

Dividends of £4,000,000 were paid during the period.

Disclosure of information to auditors

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

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

Auditors

The auditorsBlick Rothenberg Audit LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 3

 
AZEGO GROUP HOLDINGS LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

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





Mr S Dopson
Director

Date: 22 July 2024

Page 4

 
AZEGO GROUP HOLDINGS LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AZEGO GROUP HOLDINGS LIMITED
 

Opinion


We have audited the financial statements of Azego Group Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's profit for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


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


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 5

 
AZEGO GROUP HOLDINGS LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AZEGO GROUP HOLDINGS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

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


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


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

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


In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
AZEGO GROUP HOLDINGS LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AZEGO GROUP HOLDINGS LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

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


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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;
•  we identified the laws and regulations applicable to the company through discussions with directors and        other management, and from our commercial knowledge and experience of the company's sector;
• we focused on specific laws and regulations which we considered may have a direct material effect on the  financial statements or the operations of the company, including the Companies Act 2006 and taxation        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 and the Parent Company’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 the internal controls in place to mitigate risks of fraud and non-compliance with laws and           regulations.
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 a sample of journal entries to identify unusual transactions;
•  assessed whether judgements and assumptions made in determining the accounting estimates set out in     note 3 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;
•  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 HM Revenue and Customs.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
 
Page 7

 
AZEGO GROUP HOLDINGS LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AZEGO GROUP HOLDINGS LIMITED (CONTINUED)


Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Mahmood Ramji (Senior Statutory Auditor)
  
for and on behalf of
Blick Rothenberg Audit LLP
 
Chartered Accountants & Statutory Auditor
  
16 Great Queen Street
Covent Garden
London
WC2B 5AH

22 July 2024
Page 8

 
AZEGO GROUP HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023

2023
Note
£

  

Turnover
 4 
48,411,449

Cost of sales
  
(35,603,032)

Gross profit
  
12,808,417

Administrative expenses
  
(2,622,349)

Other operating income
 5 
97,308

Operating profit
 6 
10,283,376

Income from fixed assets investments
 10 
51,013

Interest receivable and similar income
 11 
396,677

Interest payable and similar expenses
  
(26,654)

Profit before tax
  
10,704,412

Tax on profit
 12 
(1,501,412)

Profit for the financial period
  
9,203,000

Profit for the year attributable to:
  

Owners of the parent company
  
(9,203,000)

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

There was no other comprehensive income for 2023.

The notes on pages 16 to 32 form part of these financial statements.

Page 9

 
AZEGO GROUP HOLDINGS LIMITED
REGISTERED NUMBER: 14397421

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
Note
£

Fixed assets
  

Tangible assets
 15 
621,372

Investments
 16 
20,390

  
641,762

Current assets
  

Stocks
 17 
1,795,792

Debtors: amounts falling due within one year
 18 
2,927,435

Cash at bank and in hand
 19 
16,622,160

Current liabilities
  
21,345,387

Creditors: amounts falling due within one year
 20 
(8,658,987)

Net current assets
  
 
 
12,686,400

Total assets less current liabilities
  
13,328,162

Provisions for liabilities
  

Deferred tax
 21 
(128,280)

Net assets
  
13,199,882


Capital and reserves
  

Called up share capital 
 22 
100,000

Share premium account
 23 
7,896,882

Profit and loss account
 23 
5,203,000

  
13,199,882


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




Mr S Dopson
Director

Date: 22 July 2024

The notes on pages 16 to 32 form part of these financial statements.

Page 10

 
AZEGO GROUP HOLDINGS LIMITED
REGISTERED NUMBER: 14397421

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
Note
£

Fixed assets
  

Investments
 16 
10,240,000

  
10,240,000

Current assets
  

Cash at bank and in hand
 19 
10,263,412

  
10,263,412

Creditors: amounts falling due within one year
 20 
(59,038)

Net current assets
  
 
 
10,204,374

Total assets less current liabilities
  
20,444,374

Net assets
  
20,444,374


Capital and reserves
  

Called up share capital 
 22 
100,000

Share premium account
 23 
7,896,882

Profit and loss account
  
12,447,492

  
20,444,374


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




Mr S Dopson
Director

Date: 22 July 2024

The notes on pages 16 to 32 form part of these financial statements.

Page 11

 
AZEGO GROUP HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023


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

£
£
£
£



Profit for the period
-
-
9,203,000
9,203,000

Dividends: Equity capital
-
-
(4,000,000)
(4,000,000)

Shares issued during the period
100,000
7,896,882
-
7,996,882


At 31 December 2023
100,000
7,896,882
5,203,000
13,199,882

The notes on pages 16 to 32 form part of these financial statements.

Page 12

 
AZEGO GROUP HOLDINGS LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023


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

£
£
£
£



Profit for the period
-
-
16,447,492
16,447,492

Dividends: Equity capital
-
-
(4,000,000)
(4,000,000)

Shares issued during the period
100,000
7,896,882
-
7,996,882


At 31 December 2023
100,000
7,896,882
12,447,492
20,444,374

The notes on pages 16 to 32 form part of these financial statements.

Page 13

 
AZEGO GROUP HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2023
£

Cash flows from operating activities

Profit for the financial period
9,203,000

Adjustments for:

Amortisation of intangible assets
(3,116,417)

Depreciation of tangible assets
223,440

Tangible assets on acquisition of subsidiary
(1,415,672)

Goodwill on acquisition of subsidiary
3,116,417

Loss on disposal of tangible assets
(96,591)

Interest paid
8,038

Taxation charge
1,687,565

Increase in deferred tax liability
128,280

(Increase) in stocks
(1,795,792)

(Increase) in debtors
(2,927,435)

Increase in creditors
8,443,090

Increase in investments
(20,390)

Corporation tax (paid)/received
(1,471,668)

Net cash generated from operating activities

11,965,865


Cash flows from investing activities

Purchase of tangible fixed assets
(151,883)

Sale of tangible fixed assets
819,334

Net cash from investing activities

667,451

Cash flows from financing activities

Issue of ordinary shares
7,996,882

Dividends paid
(4,000,000)

Interest paid
(8,038)

Net cash used in financing activities
3,988,844

Net increase in cash and cash equivalents
16,622,160

Cash and cash equivalents at the end of period
16,622,160


Cash and cash equivalents at the end of period comprise:

Cash at bank and in hand
16,622,160

16,622,160


The notes on pages 16 to 32 form part of these financial statements.

Page 14

 
AZEGO GROUP HOLDINGS LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 DECEMBER 2023




Cash flows
Acquisition and disposal of subsidiaries
At 31 December 2023
£

£

£

Cash at bank and in hand

10,263,412

6,356,127

16,619,539

Debt due within 1 year

-

-

-


10,263,412
6,356,127
16,619,539

The notes on pages 16 to 32 form part of these financial statements.

Page 15

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

1.


General information

Azego Group Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 7, Ely Road, Theale, Reading, Berkshire, RG7 4BQ.
These financial statements present the results for the period from incorporation of the company on 4 October 2022 to 31 December 2023.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

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

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

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. The results of the subsidiaries are therefore included from the date of the reorganisation of the Group, being October 2022. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 04 October 2022.

A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Where the Group owns less than 50% of the voting power of an entity but controls the entity by virtue of an agreement with other investors which give control of the financial and operating policies of the entity it accounts for the entity as a subsidiary.
Any subsidiary undertakings sold or acquired during the period are included up to, or from, the dates of change of control.

Page 16

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

The Directors have considered the ability of the Group and Company to continue trading for the foreseeable future. This review has included cash flow forecasts and projections for at least twelve months from the date of signing the financial statements. Based on this review and taken together with existing financing facilities and cash position the Directors believe that the financial statements have been prepared appropriately on the going concern basis.

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

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

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

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

Page 17

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Revenue

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

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.6

Interest income

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

 
2.7

Current and deferred taxation

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

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

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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

Page 18

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Intangible assets

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

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

Negative goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. 
Negative goodwill is amortised on a straight-line basis to the consolidated profit and loss account over its useful economic life.
Negative goodwill is amortised back to the profit and loss account on a straight line basis over a 1 year period.

 
2.9

Tangible fixed assets

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

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

Depreciation is provided on the following basis:

Freehold property
-
2%
per annum
Long-term leasehold property
-
10%
per annum
Plant and machinery
-
25%
per annum
Motor vehicles
-
25%
per annum

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

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

 
2.10

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.11

Stocks

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

At each reporting 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.

Page 19

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.12

Debtors

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

 
2.13

Cash and cash equivalents

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

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

 
2.14

Creditors

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

 
2.15

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.16

Financial instruments

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

 
2.17

Dividends

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

Page 20

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the group's accounting policies, the directors are required to make judgments, 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 assuptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the reviesion affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessments consider issues such as the remaining life of the asset and projected disposal values.
Stock provision
The Group establishes provisions based on reasonable estimates. Factors considered in the determination of net realisable value are the ageing, category and condition of inventories, recent inventory utilisation and forecasts of projected inventory utilisation. Reviews of provisions held against damaged, obsolete and slow-moving inventory are carried out at least quarterly by management and these reviews require the application of judgment and estimates. Changes to these estimates could result in changes to the net valuation of inventory.
Bad debt provision
The Group establishes provisions based on reasonable estimates. The Group makes specific provisions when it is probable that complete recovery of amounts due from trade debtors will not be made. Reviews of provisions held against customer accounts are carried out at least quarterly by management who consider cash inflows, historic recoveries and market information.


4.


Turnover

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


2023
£

Distribution of electronic equipment
48,411,449


Analysis of turnover by country of destination:

2023
£

United Kingdom
35,860,614

Rest of the World
12,550,835

48,411,449


Page 21

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

5.


Other operating income

2023
£

Other operating income
97,308



6.


Operating profit

The operating profit is stated after charging:

2023
£

Research & development charged as an expense
43,403

Exchange differences
(301,728)

Other operating lease rentals
173,889

Depreciation
223,440

Amortisation
(3,116,417)

Profit on sale of tangible assets
(96,591)


7.


Auditors' remuneration

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


2023
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
28,000

Page 22

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

8.


Employees

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


Group
Company
2023
2023
£
£


Wages and salaries
2,718,958
-

Social security costs
383,841
-

Cost of defined contribution scheme
50,085
-

3,152,884
-


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



Group
Company
        2023
        2023
            No.
            No.







Average No. of Employees
37
2


9.


Directors' remuneration

2023
£

Directors' emoluments
16,848

Group contributions to defined contribution pension schemes
40,000

56,848


The Directors are considered to be the key management personnel.


10.


Income from investments

2023
£



Dividends received from unlisted investments
51,013



11.


Interest receivable

2023
£


Other interest receivable
396,677

Page 23

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

12.


Taxation


2023
£

Corporation tax


Current tax on profits for the year
1,687,565

Deferred tax


Origination and reversal of timing differences
(186,153)


Tax on profit
1,501,412

Factors affecting tax charge for the period

The tax assessed for the period is lower than the standard rate of corporation tax in the UK of 26.24%. The differences are explained below:

2023
£


Profit on ordinary activities before tax
10,704,412


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 26.24%
2,808,758

Effects of:


Expenses not deductible for tax purposes
(502,705)

Fixed asset differences
(193,337)

Non-taxable income
(591,635)

Remeasurement of deferred tax for changes in tax rates
(11,016)

Other differences leading to an increase (decrease) in the tax charge
(8,653)

Total tax charge for the period
1,501,412


Factors that may affect future tax charges

The main rate of corporation tax will rise from 19% to 25% from 1 April 2023. On this basis deferred tax is provided at the future rate of 25%.


13.


Dividends

2023
£


Dividends
4,000,000

Page 24

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

14.


Intangible assets

Group




Negative goodwill

£



Cost


On acquisition of subsidiaries
(3,116,417)



At 31 December 2023

(3,116,417)



Amortisation


Charge for the period on owned assets
(3,116,417)



At 31 December 2023

(3,116,417)



Net book value



At 31 December 2023
-



Page 25

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

15.


Tangible fixed assets

Group






Freehold property
Long-term leasehold property
Office equipment
Total

£
£
£
£



Cost or valuation


Additions
-
7,475
144,408
151,883


Acquisition of subsidiary
833,195
598,551
764,361
2,196,107


Disposals
(833,195)
-
-
(833,195)



At 31 December 2023

-
606,026
908,769
1,514,795



Depreciation


Charge for the period on owned assets
-
74,943
148,497
223,440


Disposals
(110,452)
-
-
(110,452)


Acquisition of subsidiary 
110,452
215,937
454,046
780,435



At 31 December 2023

-
290,880
602,543
893,423



Net book value



At 31 December 2023
-
315,146
306,226
621,372


16.


Fixed asset investments

Group





Unlisted investments
Other fixed asset investments
Total

£
£
£



Cost or valuation


Additions
20,000
-
20,000


On acquisition of subsidiaries
-
7,807
7,807


Disposals
-
(7,417)
(7,417)



At 31 December 2023
20,000
390
20,390




Page 26

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
Company





Investments in subsidiary companies
Unlisted investments
Total

£
£
£



Cost or valuation


Additions
10,220,000
20,000
10,240,000



At 31 December 2023
10,220,000
20,000
10,240,000





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Azego TS Limited
Ordinary
100%
Vision Display Solutions Ltd
Ordinary
100%

Both subsidiaries share the same regsitered office as the parent company of Unit 7, Ely Road, Theale, Reading, Berkshire, United Kingdom, RG7 4BQ.

The aggregate of the share capital and reserves as at 31 December 2023 and the profit or loss for the period ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit
£
£

Azego TS Limited
2,562,918
5,743,213

Vision Display Solutions Ltd
412,590
174,795


17.


Stocks

Group
Company
2023
2023
£
£

Raw materials and consumables
1,795,792
-


Page 27

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

18.


Debtors

Group
Company
2023
2023
£
£


Trade debtors
2,834,249
-

Other debtors
100
-

Prepayments and accrued income
93,086
-

2,927,435
-



19.


Cash and cash equivalents

Group
Company
2023
2023
£
£

Cash at bank and in hand
16,622,160
10,263,412



20.


Creditors: amounts falling due within one year

Group
Company
2023
2023
£
£

Trade creditors
413,557
-

Amounts owed to related companies
661,395
-

Corporation tax
215,897
59,038

Other taxation and social security
265,725
-

Invoice finance facility
21,738
-

Other creditors
5,911,654
-

Accruals and deferred income
1,169,021
-

8,658,987
59,038


Page 28

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

21.


Deferred taxation


Group




2023


£






Charged to the profit or loss
186,297


Arising on acquisition of subsidary
(314,577)



At end of year
(128,280)








The deferred taxation balance is made up as follows:

Group
Company
2023
2023
£
£

Accelerated capital allowances
(128,280)
-


22.


Share capital

2023
£
Allotted, called up and fully paid


42,325 A Ordinary shares of £1.00 each
42,325
42,325 B Ordinary shares of £1.00 each
42,325
15,350 C Ordinary shares of £1.00 each
15,350

100,000


On incorporation, 1 A Ordinary share was issued at par.
During the period, 42,324 A Ordinary shares, 42,325 B Ordinary shares, and 15,350 C Ordinary shares were issued in a share for share exchange as part of the reorganisation of the Group.

Page 29

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

23.


Reserves

Share premium account

The share premium account is used to record the aggregate amount or value of premiums paid when the Company's shares are issued at an amount in excess of nominal value.

Profit and loss account

The profit and loss account represents all accumulated profits available for distribution to members, less profits distributed as dividends.


24.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £50,085. Contributions totalling £2,621 were payable to the fund at the balance sheet date.


25.


Commitments under operating leases

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


Group
2023
£

Not later than 1 year
99,860

Later than 1 year and not later than 5 years
344,203

444,063

26.


Related party transactions

The Group is exempt under FRS 102 section 33.1A from disclosing related party transactions with entities that are part of the Group, where 100% of the voting rights are controlled within the Group. Balances due to members of the Group are disclosed in note 16.
At the balance sheet date, Azego TS Limited owed Azego TS Europe, a company which they hold a 5% shareholding in, £661,395. This loan is interest free and repayable on demand.
Included within other creditors at the balance sheet date is an amount of £5,861,746 due to the Directors. These loans are interest free and repayable on demand.


27.


Controlling party

The ultimate controlling parties are the directors by virtue of their shareholding in Azego Group Holdings Limited. There is no single controlling party. 

Page 30

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

28.
 

Business combinations

In October 2022, as part of a group reorganisation, the company acquired 100% of the shares of Azego TS Limited and Vision Display Solutions Limited. 

Acquisition of Azego TS Limited and Vision Display Solutions Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Azego TS Limited 
book value
Vision Display Solutions Limited 
book value
Fair value
£
£
£

Fixed Assets

Tangible
1,531,884
-
1,531,884

Investment
7,807
-
7,807

1,539,691
-
1,539,691

Current Assets

Stocks
4,245,057
347,276
4,592,333

Debtors
21,068,021
954,678
22,022,699

Deferred taxation
-
15,626
15,626

Cash at bank and in hand
478,045
1,958
480,003

Total Assets
27,330,814
1,319,538
28,650,352

Creditors

Due within one year
(13,928,518)
(1,081,743)
(15,010,261)

Deferred taxation
(303,674)
-
(303,674)

Total Identifiable net assets
13,098,622
237,795
13,336,417


Negative goodwill
(3,116,417)

Total purchase consideration
10,220,000



£


Cash
972,000

Equity instruments
8,048,000

Debt instruments
1,200,000

Total purchase consideration
10,220,000

Page 31

 
AZEGO GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

28.Business combinations (continued)

Cash outflow on acquisition

£


Purchase consideration settled in cash, as above
972,000

Less: Cash and cash equivalents acquired
(480,003)

Net cash outflow on acquisition
491,997

The results of Azego TS Limited and Vision Display Solutions Limited since acquisition are as follows:

Current period since acquisition
£

Azego
Turnover
45,413,182

Profit for the period since acquisition
5,743,213

Vision
Turnover
2,998,267

Profit for the period since acquisition
174,795

Page 32