REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
AZBIL TELSTAR UK LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
AZBIL TELSTAR UK LIMITED |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Statement of Comprehensive Income | 9 |
Balance Sheet | 10 |
Statement of Changes in Equity | 11 |
Notes to the Financial Statements | 12 |
AZBIL TELSTAR UK LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: |
AUDITORS: |
Statutory Auditors |
605 Albert House |
256-260 Old Street |
London |
EC1V 9DD |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their strategic report for the year ended 31 December 2023. |
REVIEW OF BUSINESS |
The statement of comprehensive income is set out on page 8 and shows turnover for the year of £ 6,086,787 which is a 18% reduction in comparison to 2022 turnover. |
In 2023 there were a continuation of Operational Challenges which contributed to the loss, and required organisational changes which were put in place within the year, these changes have improved the result significantly and those changes will continue to improve the Operational performance of the business. |
Market conditions have created a negative impact on the business, with the market been affected by global conflicts, and inflation rising reducing the confidence of clients to invest. The demand interest in the product offering continues to increase which is reflected in the improved pipeline. However client decisions are taking longer than previous years to conclude, due in part to the market conditions. |
At the year end this pipeline is continuing to grow and is in a healthy position to give confidence that future growth is possible. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The company's foreign exchange risks are managed by currency forwarding contracts thereby minimising the effect of currency fluctuations. A constant review of overseas foreign exchange orders is made, to evaluate if the company should move to a full hedging arrangement. In addition, we are further minimising this risk by asking worldwide clients to place orders in £ Sterling where feasible. |
ATUK continues to have strict debtor procedures in place for current and potential customers to keep the risk of bad debts to a minimum. |
Group support which is reflected in the balance sheet as current liabilities; is a long-term commitment from the group on Azbil Telstar UK Ltd. As a going concern ATUK are a key competence centre for barrier system in containment and aseptic which supports the growth of the group. |
Other than factors outside the company's control the directors are not aware of any significant risk which may adversely impact on the company during the forthcoming financial year. |
KEY PERFORMANCE INDICATORS |
Financial |
Orders Received increased in 2023 by 4.6%, which will improve turnover in 2024. Even though the Sales level dropped, due in part to late arrival of Orders, the profitability of those sales increased in both percentage and value in comparison to the previous year. |
Non-Financial |
Following ATUK ISO:14001, our Carbon Footprint is being analysed with the goal of become carbon neutral by 2030. In 2023 we have seen a reduction of 4% in this footprint which is a good starting point. |
In 2023 we also reported an improvement in both Absenteeism, Staff Turnover and Accidents, which are all positive improvements. |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FUTURE DEVELOPMENTS |
The directors expect the general level of activity to increase in the forthcoming year. This is as a result of the increased demand in the product offering, the pipeline of future work and development of new and improved products. |
It is to be hoped that consumer confidence will return, decision making will be accelerated and that the shocks suffered by the global market in 2023 will dissipate. |
ON BEHALF OF THE BOARD: |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of the design, manufacture, validation and after care of Barrier System, Containment and Aseptic equipment for the pharmaceutical and life science market. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2023. |
RESEARCH AND DEVELOPMENT |
Using both internal expertise and external consultants the company continually invests in research and development into new products and processes.The company will continue to invest in research and development that has a suitable return. |
During 2024 the company's will develop a new Aseptic Isolator that is planned to launch at the main European Pharmaceutical Trade Show in Q2 of 2024. The product takes feedback, improvements and enhancements form a previous successful product, to the market to comply with new regulations. The Development started in 2023 and aims to be completed in 2024. |
FUTURE DEVELOPMENTS |
Future developments are considered within the Strategic Report. |
POST BALANCE SHEET EVENTS |
The Directors consider there are no significant post balance sheet events requiring disclosure within the accounts. |
DIRECTORS |
Other changes in directors holding office are as follows: |
DIRECTORS’ INDEMNITIES |
The Company made qualifying third party indemnity provisions for the benefit of its directors during the year. These remain in force at the date of this report. |
COMPANY'S POLICY ON PAYMENT OF CREDITORS |
It is company policy to agree and clearly communicate the terms of payment as part of the commercial arrangement negotiated with suppliers and then to pay according to those terms based upon the timely receipt of an accurate invoice. |
The number of average days purchases of the company represented by trade creditors at 31 December 2023 was 49 (2022 - 81). |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 'Reduced Disclosure Framework'. 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are 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 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company 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 directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director 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 company's auditors are aware of that information. |
AUDITORS |
Sedulo Audit Limited have indicated their willingness to be re-appointed. The decision on this will be made by the directors at the Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
AZBIL TELSTAR UK LIMITED |
Opinion |
We have audited the financial statements of Azbil Telstar UK Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and 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 101 'Reduced Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the 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 company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, 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. |
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 Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
AZBIL TELSTAR UK LIMITED |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
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, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the 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 Statement of Directors' Responsibilities set out on page five, 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 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 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 company or to cease operations, or have 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: |
- Enquiring of directors and inspection of policy documentation as to the Company's high-level policies and procedures to prevent and detect fraud, as well as whether they have knowledge of any actual, suspected or alleged fraud. |
- Reading Board and sub committee meeting minutes. |
- Considering remuneration incentive schemes and performance targets for management, directors and sales staff. |
- Using analytical procedures to identify any unusual or unexpected relationships. |
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 |
AZBIL TELSTAR UK 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 |
Statutory Auditors |
605 Albert House |
256-260 Old Street |
London |
EC1V 9DD |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
STATEMENT OF COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
31.12.23 | 31.12.22 |
as restated |
Notes | £ | £ | £ | £ |
TURNOVER | 4 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
2,229,496 | 2,313,562 |
OPERATING LOSS | ( |
) | ( |
) |
Interest payable and similar expenses | 6 |
LOSS BEFORE TAXATION | 7 | ( |
) | ( |
) |
Tax on loss | 8 | ( |
) |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
( |
) |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
BALANCE SHEET |
31 DECEMBER 2023 |
31.12.23 | 31.12.22 |
as restated |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Owned |
Intangible assets | 10 | 87 | 87 |
Tangible assets | 11 | 107,255 | 121,764 |
Right-of-use |
Tangible assets | 11, 16 | 704,043 | 784,256 |
CURRENT ASSETS |
Stocks | 12 |
Debtors | 13 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 14 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES | ( |
) | ( |
) |
CREDITORS |
Amounts falling due after more than one year |
15 |
NET LIABILITIES | ( |
) | ( |
) |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Share premium | 19 |
Capital redemption reserve | 19 |
Retained earnings | 19 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS | ( |
) | ( |
) |
The financial statements were approved by the Board of Directors and authorised for issue on |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Called up | Capital |
share | Retained | Share | redemption | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 January 2022 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 December 2022 | 838,735 | (4,573,570 | ) | 249,655 | (3,484,670 | ) |
Changes in equity |
Total comprehensive income | - | ( |
) | - | - | ( |
) |
Balance at 31 December 2023 | ( |
) | ( |
) |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | STATEMENT OF CHANGES IN EQUITY |
Total comprehensive loss is fully attributable to owners of the parent. |
2. | STATUTORY INFORMATION |
Azbil Telstar UK Limited is a private company, limited by shares, domiciled and registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page. |
3. | ACCOUNTING POLICIES |
Basis of preparation |
These financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and the Companies Act 2006. The financial statements have been prepared under the historical cost convention. |
The financial statements are prepared in pound sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound. |
The presentation of financial statements in accordance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies. |
Going Concern |
Notwithstanding the company has net current liabilities at the balance sheet date, this is due to group working capital funding of c.£4.8m being categorized as due within one year. |
The parent company has confirmed its intention, via a letter of support, to continue to provide financial support to the entity for a period of at least 12 months from the date of the Directors' Report and the Directors are confident of the ability of the parent company to provide this support. |
In addition the company has built up a substantial order book at 31 December 2023 and even though the expectation for 2024 is loss, the contribution to the overall group is substantial along. The expectation is an improvement in the operating performance as aligned with the companies mid term plan. |
Accordingly, at the time of signing these accounts the Directors are of the opinion that the company will remain viable for the foreseeable future and therefore these Financial Statements have been prepared on the Going Concern basis. |
Disclosure exemptions |
The company has taken advantage of certain disclosure exemptions available under FRS 101 in relation to: |
-financial instruments where disclosure requirements appear in the group accounts; |
-fair value measurement; |
-the presentation of a cash flow statement and associated notes; |
-capital management; |
-related party disclosures and transactions |
Where required, equivalent disclosures are given in the group accounts of the ultimate parent company. |
Turnover |
Turnover is derived from ordinary activities represented by net invoiced goods, long term contracts completed in the year and a percentage of completion for long term contracts ongoing at the year end. |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Short leasehold | - |
Fixtures and fittings | - |
Motor vehicles | - |
Financial instruments |
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. |
The company only enters into transactions in 'basic' financial instruments which result in the recognition of assets and liabilities; these include trade and other debtors and creditors, bank balances, loans from banks and other third parties, and loans to related parties. |
Basic financial assets (other than those classified as payable within one year) are initially measured at cost, and are subsequently carried at cost or amortised cost using the effective interest method, less any impairment losses. Basic financial assets classified as receivable within one year are not amortised. |
Basic financial liabilities (other than those classified as payable within one year) are initially recognised at present value of future cash flows and subsequently at amortised costs using the effective interest method. Basic financial liabilities classified as payable within one year are not amortised. |
Financial assets and liabilities are offset, with the net amounts reported in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. |
Foreign currency contracts are derivative financial instruments. Where gains or losses arise from changes in fair value of derivative financial instruments these are only recognised where the amount is material to the financial statements. Where material, such fair value gains and losses are included in the Income statement in the period in which they arise. |
Stocks |
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost includes all direct expenditure and an appropriate proportion of fixed and variable overheads |
Work-In-Progress |
For long term contracts which have started but not completed at 31 December each year the company has adopted the following policy:- |
Costs to date for ongoing projects where the project is not considered material and is not included in long term contracts are disclosed under work-in-progress at lower of cost and net realisable value. |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
Taxation |
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the balance sheet date. |
Full provision is made for deferred tax assets and liabilities arising from all timing differences between the recognition of gains and losses in the financial statements and recognised in the tax computation. |
A net deferred tax asset is recognised only if it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. |
Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse. |
Deferred tax assets and liabilities are not discounted. |
Research and development |
Expenditure on research activities is recognised as an expense in the period in which it is incurred. |
An internally-generated intangible asset arising from the development phase is recognised if, and only if, all of the following conditions have been demonstrated: |
- the technical feasibility of completing the intangible assets so that it will be available for use or sale; |
- the intention to complete the intangible asset and use or sell it; |
- the ability to use or sell the intangible asset; |
- how the intangible asset will generate probable future economic benefits; |
- the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible assets; and |
- the ability to measure reliably the expenditure attributable to the intangible asset during its development. |
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. |
Where no internally-generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred. |
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at either the rates of exchange ruling at the balance sheet date or the rate of exchange agreed in any respective hedging contract. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Derivatives, including foreign currency forward exchange contracts, are recognised where material to the financial statements. They are initially recognised at fair value on the date entered into,and subsequently re-measured at fair value. Changes in the fair value are recognised in the Income statement in other operating expenses. |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
Leases |
The Company assesses whether a contract is or contains a lease, at inception of the contract. |
The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. |
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. |
The incremental borrowing rate depends on the term, currency and start date of the lease and is determined based on a series of inputs including: the risk-free rate based on government bond rates; a country-specific risk adjustment; a credit risk adjustment based on bond yields; and an entity-specific adjustment when the risk profile of the entity that enters into the lease is different to that of the Company and the lease does not benefit from a guarantee from the Company. |
Lease payments included in the measurement of the lease liability comprise: |
- Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable; |
- Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; |
- The amount expected to be payable by the lessee under residual value guarantees; |
- The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and |
- Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease. |
The lease liability is presented as a separate line in the balance sheet and is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. |
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever: |
- The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. |
- The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used). |
- A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. |
The Company did not make any such adjustments during the periods presented. |
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories. |
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. |
The right-of-use assets are presented within the tangible fixed assets line in the balance sheet. |
The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the 'impairment of tangible and intangible assets' policy. |
Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs. |
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. |
The Company has not used this practical expedient. For contracts that contain a lease component |
and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. |
Employee benefit costs |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate. |
Contracts with customers |
Large contracts are recognised as follows: |
Amounts by which recognised turnover is in excess of invoices raised to date is separately disclosed within debtors as amounts due from contract customers. |
Amounts by which invoices raised to date is in excess of recognised turnover is separately disclosed within creditors as amounts due to contract customers. |
Amounts by which recorded expenditure is in excess of costs to date is disclosed within accruals. |
All costs to date on projects calculated in this way are taken out of work-in-progress. |
This accounting policy is considered by the directors to be the most accurate way of accounting for profit on long term contracts evenly over the life of each project. |
Grant income |
Grants in relation to tangible fixed asset are credited to profit and loss account over the useful lives of the related assets, whereas those in relation to expenditure are credited when the expenditure is charged to profit and loss. |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
4. | TURNOVER |
The turnover and loss before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
United Kingdom |
Europe |
Rest of world |
5. | EMPLOYEES AND DIRECTORS |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Wages and salaries | 2,540,372 | 2,338,938 |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
31.12.23 | 31.12.22 |
as restated |
Operations and sales | 54 | 56 |
Administration and finance | 3 | 3 |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Interest re lease liabilities | 48,017 | 52,532 |
Loans from group undertakings |
7. | LOSS BEFORE TAXATION |
The loss before taxation is stated after charging: |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Cost of inventories recognised as expense |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts or finance leases |
Loss on disposal of fixed assets |
Auditors' remuneration |
Pension costs | 201,970 | 168,173 |
Loss on foreign exchange | 89,835 | 256,580 |
Operating lease charges | 160 | 160 |
8. | TAXATION |
Analysis of tax income |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Current tax: |
Tax | ( |
) |
Total tax income in statement of comprehensive income | ( |
) |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
8. | TAXATION - continued |
Factors affecting the tax expense |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Loss before income tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of (2022 - |
(233,453 |
) |
(401,741 |
) |
Effects of: |
Expenses not deductible for tax purposes | - | 166 |
determining taxable profit |
Depreciation in excess of capital allowances | - | 727 |
Losses carried forward/(utilized) | 233,453 | 400,848 |
Research and development credit | (75,302 | ) | - |
Tax income | ( |
) |
The company has tax losses of approximately £5,650,000 (2022: £4,267,000) to offset against future trading profits. A deferred tax asset of £1,058,000 (2022: £795,000) has not been provided in respect of these losses due to the uncertainty over the timing of their recovery. |
9. | PRIOR YEAR ADJUSTMENT |
In order to correctly account for leases and right of use assets it has been necessary to restate the comparative accounts. |
The net effect of the restatement was: |
£ |
Increase fixed assets | 784,256 |
Increase current liabilities | 92,055 |
Increase long term liabilities | 783,450 |
Reduction in reserves | 76,899 |
In order to correctly account for work in progress it has been necessary to restate both stock and debtors. |
The net effect of the restatement was: |
£ |
Increase stock | 308,823 |
Decrease debtors | 308,823 |
Impact on reserves | Nil |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
10. | INTANGIBLE FIXED ASSETS |
Development |
costs |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
11. | TANGIBLE FIXED ASSETS |
Fixtures |
Short | and | Motor |
leasehold | fittings | vehicles | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
11. | TANGIBLE FIXED ASSETS - continued |
Included within tangible fixed assets are the following Right-of-use assets: |
Short | Motor |
leasehold | vehicles | Totals |
COST | £ | £ | £ |
At 1 January 2023 | 1,011,943 | - | 1,011,943 |
Additions | - | 25,177 | 25,177 |
At 31 December 2023 | 1,011,943 | 25,177 | 1,037,120 |
DEPRECIATION |
At 1 January 2023 | 227,687 | - | 227,687 |
Charge | 101,194 | 4,196 | 105,390 |
At 31 December 2023 | 328,881 | 4,196 | 333,077 |
NET BOOK VALUE |
At 31 December 2023 | 683,062 | 20,981 | 704,043 |
At 31 December 2022 | 784,256 | - | 784,256 |
12. | STOCKS |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Raw materials |
Work-in-progress |
13. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Trade debtors | 682,216 | 3,072,264 |
Amounts owed by group undertakings |
Amounts due from contract |
customers | 1,195,360 | 1,214,043 |
Prepayments and accrued income |
Transactions with group companies are conducted at arms length with standard credit terms. |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Social security and other taxes |
VAT | 20,521 | 7,947 |
Other creditors |
Amounts due to contract |
customers | 1,542,368 | 2,205,189 |
Lease liabilities | 105,352 | 92,055 |
Loans from group undertaking | 4,856,895 | 4,983,128 |
Accruals and deferred income |
Transactions with group companies are conducted at arms length with standard credit terms. |
15. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Lease liabilities | 700,990 | 783,450 |
16. | LEASING |
Right-of-use assets |
Included on the balance sheet are the following liabilities in relation to right of use assets: |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Amounts falling due within one year | 105,352 | 92,055 |
Amounts falling due after one year | 700,990 | 783,450 |
806,342 | 875,505 |
The lease term in relation to short leasehold is 10 years. |
The lease term in relation to motor vehicles is 3 years. |
The income statement shows the following in relation to leases: |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Depreciation - short leasehold | 101,194 | 101,194 |
Depreciation - motor vehicle | 4,196 | - |
Interest expense | 48,017 | 52,532 |
153,407 | 153,726 |
AZBIL TELSTAR UK LIMITED (REGISTERED NUMBER: 02878660) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
17. | FINANCIAL INSTRUMENTS |
The company enters into forward exchange currency contracts to mitigate exchange rate risk for trade debts receivable in Euros. |
At 31 December 2023 the outstanding contracts all mature within 12 months of the year end and the company has contracts to sell €433,050 (2022 - €729,000) with a fair value gain of £8,181 (2022 - loss of £27,600). |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.23 | 31.12.22 |
value: | as restated |
£ | £ |
Ordinary | 0.01 | 838,735 | 838,735 |
Full voting and dividend rights are attached to the Ordinary shares. |
19. | RESERVES |
Capital |
Retained | Share | redemption |
earnings | premium | reserve | Totals |
£ | £ | £ | £ |
At 1 January 2023 | ( |
) | (4,323,405 | ) |
Deficit for the year | ( |
) | ( |
) |
At 31 December 2023 | ( |
) | (5,476,802 | ) |
20. | PENSION COMMITMENTS |
The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the company to the scheme and amounted to £201,970 (2022: £168,173). |
21. | RELATED PARTY DISCLOSURES |
As detailed in note 3 ''accounting policies'' the company has taken advantage of the exemption not to disclose related party transactions with wholly owned subsidiaries within the group. |
22. | EVENTS AFTER THE REPORTING PERIOD |
The Directors consider there are no significant post balance sheet events requiring disclosure within the accounts. |
23. | ULTIMATE CONTROLLING PARTY |
Azbil Corporation (incorporated in Japan) is regarded by the directors as being the company's ultimate parent company. |
Azbil Telstar S.L.U (incorporated in Spain) is regarded by the directors as the company's parent company. |
The group's consolidated financial statements are publically available from www.azbil.com. |