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REGISTERED NUMBER: 02878660 (England and Wales)















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: N M Street
E Pablos Prunera



SECRETARY: N M Street



REGISTERED OFFICE: Hawthorne House Dark Lane
Birstall
Batley
West Yorkshire
WF17 9LW



REGISTERED NUMBER: 02878660 (England and Wales)



SENIOR STATUTORY AUDITOR: Diccon Thornely



AUDITORS: Sedulo Audit Limited
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:





N M Street - Director


22 March 2024

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
N M Street has held office during the whole of the period from 1 January 2023 to the date of this report.

Other changes in directors holding office are as follows:

J H Dick - resigned 24 July 2023
E Pablos Prunera - appointed 24 July 2023

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:





N M Street - Director


22 March 2024

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.




Diccon Thornely (Senior Statutory Auditor)
for and on behalf of Sedulo Audit Limited
Statutory Auditors
605 Albert House
256-260 Old Street
London
EC1V 9DD

26 March 2024

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 6,086,787 7,407,052

Cost of sales 4,779,598 7,070,165
GROSS PROFIT 1,307,189 336,887

Distribution costs 514,463 453,057
Administrative expenses 1,715,033 1,860,505
2,229,496 2,313,562
OPERATING LOSS (922,307 ) (1,976,675 )


Interest payable and similar expenses 6 306,392 137,751
LOSS BEFORE TAXATION 7 (1,228,699 ) (2,114,426 )

Tax on loss 8 (75,302 ) -
LOSS FOR THE FINANCIAL YEAR (1,153,397 ) (2,114,426 )


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR

(1,153,397

)

(2,114,426

)

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
811,385 906,107

CURRENT ASSETS
Stocks 12 396,751 539,968
Debtors 13 1,997,416 4,585,551
Cash at bank and in hand 274,132 675,777
2,668,299 5,801,296
CREDITORS
Amounts falling due within one year 14 7,416,761 9,408,623
NET CURRENT LIABILITIES (4,748,462 ) (3,607,327 )
TOTAL ASSETS LESS CURRENT LIABILITIES (3,937,077 ) (2,701,220 )

CREDITORS
Amounts falling due after more than one
year

15

700,990

783,450
NET LIABILITIES (4,638,067 ) (3,484,670 )

CAPITAL AND RESERVES
Called up share capital 18 838,735 838,735
Share premium 19 249,655 249,655
Capital redemption reserve 19 510 510
Retained earnings 19 (5,726,967 ) (4,573,570 )
SHAREHOLDERS' FUNDS (4,638,067 ) (3,484,670 )

The financial statements were approved by the Board of Directors and authorised for issue on 22 March 2024 and were signed on its behalf by:





N M Street - Director


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 838,735 (2,459,144 ) 249,655 510 (1,370,244 )

Changes in equity
Total comprehensive income - (2,114,426 ) - - (2,114,426 )
Balance at 31 December 2022 838,735 (4,573,570 ) 249,655 510 (3,484,670 )

Changes in equity
Total comprehensive income - (1,153,397 ) - - (1,153,397 )
Balance at 31 December 2023 838,735 (5,726,967 ) 249,655 510 (4,638,067 )

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
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Short leasehold - Over the life of the lease
Fixtures and fittings - 50% on reducing balance, 30% on reducing balance and 25% on cost
Motor vehicles - 25% on cost

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 2,243,419 1,788,541
Europe 2,614,909 3,084,721
Rest of world 1,228,459 2,533,790
6,086,787 7,407,052

5. EMPLOYEES AND DIRECTORS
31.12.23 31.12.22
as restated
£    £   
Wages and salaries 2,540,372 2,338,938
Social security costs 273,083 265,372
Other pension costs 201,970 168,173
3,015,425 2,772,483

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
57 59

31.12.23 31.12.22
as restated
£    £   
Directors' remuneration 84,614 113,742
Directors' pension contributions to money purchase schemes 6,880 6,841

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 1 1

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 258,375 85,219
306,392 137,751

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 2,545,287 4,840,997
Depreciation - owned assets 46,245 40,690
Depreciation - assets on hire purchase contracts or finance leases 105,390 101,194
Loss on disposal of fixed assets 1,882 -
Auditors' remuneration 40,935 11,000
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 (75,302 ) -
Total tax income in statement of comprehensive income (75,302 ) -

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 (1,228,699 ) (2,114,426 )
Loss multiplied by the standard rate of corporation tax in the UK of 19%
(2022 - 19%)

(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 (75,302 ) -

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 assets784,256
Increase current liabilities92,055
Increase long term liabilities783,450
Reduction in reserves76,899

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 stock308,823
Decrease debtors308,823
Impact on reservesNil

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 87
NET BOOK VALUE
At 31 December 2023 87
At 31 December 2022 87

11. TANGIBLE FIXED ASSETS
Fixtures
Short and Motor
leasehold fittings vehicles Totals
£    £    £    £   
COST
At 1 January 2023 1,109,463 264,868 - 1,374,331
Additions - 33,617 25,177 58,794
Disposals - (9,035 ) - (9,035 )
At 31 December 2023 1,109,463 289,450 25,177 1,424,090
DEPRECIATION
At 1 January 2023 262,137 206,174 - 468,311
Charge for year 103,702 43,737 4,196 151,635
Eliminated on disposal - (7,154 ) - (7,154 )
At 31 December 2023 365,839 242,757 4,196 612,792
NET BOOK VALUE
At 31 December 2023 743,624 46,693 20,981 811,298
At 31 December 2022 847,326 58,694 - 906,020

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 206,776 231,145
Work-in-progress 189,975 308,823
396,751 539,968

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 23,560 198,603
Amounts due from contract
customers 1,195,360 1,214,043
Prepayments and accrued income 96,280 100,641
1,997,416 4,585,551

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 344,220 1,094,832
Amounts owed to group undertakings 295,228 549,652
Social security and other taxes 36,258 39,718
VAT 20,521 7,947
Other creditors 42,442 51,610
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 173,477 384,492
7,416,761 9,408,623

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
£    £   
83,873,500 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 (4,573,570 ) 249,655 510 (4,323,405 )
Deficit for the year (1,153,397 ) (1,153,397 )
At 31 December 2023 (5,726,967 ) 249,655 510 (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.