Company registration number 02708351 (England and Wales)
TARGA VIASAT UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
TARGA VIASAT UK LIMITED
COMPANY INFORMATION
Directors
Katie Keam-George
Simon Keam-George
Carlo Stefanelli
(Appointed 16 May 2023)
Massimiliano Balbo Di Vinadio
(Appointed 16 May 2023)
Nicola De Mattia
(Appointed 16 May 2023)
Alberto Falcone
(Appointed 16 May 2023)
Secretary
Lucy Keam-George
Company number
02708351
Registered office
Unit 11 Britannia Business Park
Comet Way
Southend on Sea
Essex
SS2 6GE
Auditor
Taylor Viney & Marlow Limited
46-54 High Street
Ingatestone
Essex
CM4 9DW
TARGA VIASAT UK LIMITED
CONTENTS
Page
Directors' report
1
Directors' responsibilities statement
2
Independent auditor's report
3 - 5
Income statement
6
Statement of financial position
7
Statement of changes in equity
8
Notes to the financial statements
9 - 25
TARGA VIASAT UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is the provision of telematics and security systems for mobile and remote assets.
The company changed it's name on 1st August 2024, the previous company name being Viasat Connect Limited.
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Katie Keam-George
Simon Keam-George
Stephane Puis
(Resigned 23 October 2023)
Carlo Stefanelli
(Appointed 16 May 2023)
Massimiliano Balbo Di Vinadio
(Appointed 16 May 2023)
Nicola De Mattia
(Appointed 16 May 2023)
Alberto Falcone
(Appointed 16 May 2023)
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Small companies provision statement
This report has been prepared in accordance with the special provisions of section 381 of the Companies Act 2006 relating to small companies. The directors have taken exemption under this regime not to disclose the strategic report.
On behalf of the board
Simon Keam-George
Director
23 September 2024
TARGA VIASAT UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors are responsible for preparing the annual report 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). 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
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.
TARGA VIASAT UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TARGA VIASAT UK LIMITED
- 3 -
Opinion
We have audited the financial statements of Targa Viasat UK Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 profit 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
TARGA VIASAT UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TARGA VIASAT UK LIMITED
- 4 -
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 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, 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to take advantage of the small companies exemption from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. Audit staff with sufficient knowledge and expertise to identify non-compliance with laws and regulations were deployed on the audit.
Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. We did not identify any key audit matters relating to irregularities, including fraud.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals, and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
TARGA VIASAT UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TARGA VIASAT UK LIMITED
- 5 -
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 an auditor's 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.
Stuart McCallum (Senior Statutory Auditor)
For and on behalf of Taylor Viney & Marlow Limited
23 September 2024
Chartered Accountants
Statutory Auditor
46-54 High Street
Ingatestone
Essex
CM4 9DW
TARGA VIASAT UK LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
2023
2022
Notes
£
£
Revenue
3
2,820,599
3,132,922
Cost of sales
(845,445)
(841,197)
Gross profit
1,975,154
2,291,725
Administrative expenses
(1,684,033)
(1,778,881)
Operating profit
4
291,121
512,844
Investment income
8
6,827
7,424
Finance costs
9
(4,760)
(6,346)
Profit before taxation
293,188
513,922
Tax on profit
10
(101,663)
(64,852)
Profit and total comprehensive income for the financial year
22
191,525
449,070
TARGA VIASAT UK LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 7 -
2023
2022
Notes
£
£
£
£
Non-current assets
Intangible assets
11
623,319
574,292
Property, plant and equipment
12
391,960
413,410
1,015,279
987,702
Current assets
Inventories
13
126,466
204,085
Trade and other receivables
14
2,808,845
2,765,873
Cash and cash equivalents
530,253
342,523
3,465,564
3,312,481
Current liabilities
15
(1,139,181)
(1,178,402)
Net current assets
2,326,383
2,134,079
Total assets less current liabilities
3,341,662
3,121,781
Non-current liabilities
15
(904,391)
(911,936)
Provisions for liabilities
Deferred tax liabilities
18
(140,967)
(105,066)
Net assets
2,296,304
2,104,779
Equity
Called up share capital
21
50,100
50,100
Retained earnings
22
2,246,204
2,054,679
Total equity
2,296,304
2,104,779
The financial statements were approved by the board of directors and authorised for issue on 23 September 2024 and are signed on its behalf by:
Simon Keam-George
Director
Company registration number 02708351
TARGA VIASAT UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 January 2022
50,100
1,605,609
1,655,709
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
449,070
449,070
Balance at 31 December 2022
50,100
2,054,679
2,104,779
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
191,525
191,525
Balance at 31 December 2023
50,100
2,246,204
2,296,304
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
1
Accounting policies
Company information
Targa Viasat UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 11 Britannia Business Park, Comet Way, Southend on Sea, Essex, SS2 6GE. The company's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
The requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 - 'Revenue from Contracts with Customers' (disaggregation of revenue, significant changes in contract assets and liabilities, details on transaction price allocation, timing of the satisfaction of performance obligations and significant judgements made in the application of IFRS 15).
There are no amendments to accounting standards, or IFRIC interpretations that are effective for the year ended 31 December 2023 that have had a material impact on the company's financial statements.
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 10 -
1.2
Going concern
The directors have considered going concern in preparing these financial statements.true
A cash-flow forecast has been prepared for the period of 12 months from the date of signing these financial statements. This forecast demonstrates that the company has sufficient liquidity to meet liabilities as they fall due in the period.
The directors have at the time of approving the financial statements, a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future being a period of at least 12 months from the date of signing these financial statements.
Accordingly, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Recognition
The company earns revenue from the sale of telematics and security systems for mobile and remote assets. This revenue is recognised in the accounting period when control of the product has been transferred, at an amount that reflects the consideration to which the entity expects to be entitled in exchange for fulfilling its performance obligations to customers.
The company also earns revenue from the provision of services relating to the rental of telematics and security systems for mobile and remote assets, and sales of fleet management monitoring software. This revenue is recognised in the accounting period when the services are rendered at an amount that reflects the consideration to which the entity expects to be entitled in exchange for fulfilling its performance obligations to customers.
The principles in IFRS are applied to revenue recognition criteria using the following 5 step model:
1. Identify the contracts with the customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognise revenue when or as the entity satisfies its performance obligations
The main performance obligations to customers consist of the delivery of product for the sale of equipment or the provision of fleet management monitoring software. Due to the nature of the business, judgements made in evaluating when control has passed are limited.
The company recognises revenue from the following major sources:
Sale of goods
Rendering of services
The analysis of the company's revenue for the year from continuing operations is as follows:
Sale of goods
Performance obligations are specified within our contracts with customers. The company has contracts for the sale of goods which are all for delivery within the next 12 months. The performance obligation for these contracts is satisfied upon delivery and installation of the equipment and payment is generally due within 30 to 90 days from delivery.
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
Rendering of services
Certain of the contracts for the rendering of services have a contractual period of greater than 12 months such as rental of equipment and monitoring services. For these contracts the performance obligation is satisfied over a period of time and payment is required before the services are provided.
1.4
Intangible assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads.
Amortisation is charged to Administrative expenses in the Profit and Loss Account.
Where factors, such as technological advancement or changes in market price, indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances. The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired.
Costs associated with maintaining computer software are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the company are recognised as intangible assets when the following criteria are met:
It is technically feasible to complete the software so that it will be available for use;
Management intends to complete the software and use or sell it;
There is an ability to use or sell the software;
It can be demonstrated how the software will generate probable future economic benefits;
Adequate technical, financial and other resources to complete the development and to use or sell the software are available; and
The expenditure attributable to the software during its development can be reliably measured.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Amortisation is recognised so as to write off the cost or valuation of assets over their useful lives on the following bases:
1.5
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. The cost of assets includes directly attributable incremental costs incurred in their acquisition and installation.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the company and the cost of the item can be reliably measured. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit and loss during the financial period in which they are incurred.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
over the period of the lease
Fixtures, fittings and equipment
over 4 years
Motor vehicles
over 4 years
Other property, plant and equipment
over 3 to 4 years
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
1.6
Impairment of tangible and intangible assets
At each reporting end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Inventories
Inventories are stated at the lower of cost and net realisable value, after due regard for obsolete and slow moving stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs.
Cost includes purchase price, including import duties, transport and handling costs, calculated on a consistent basis which excludes periodic trade discounts on certain lines specified at manufacture.
Cost is calculated using the standard costing method.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
1.8
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
1.9
Financial assets
Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive cash.
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Financial assets held at amortised cost
A financial asset is measured at amortised cost if both the following conditions are met:
the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
This category is the most relevant to the company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account and discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
Impairment of financial assets
Measurement of Expected Credit Losses
In accordance with IFRS 9, the company applies expected credit loss (ECL) model for the measurement and recognition of impairment loss on financial assets held at amortised cost e.g., trade debtors and bank balance.
For trade debtors, the company applies the simplified approach, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The measure the expected credit losses, trade debtors have been grouped based on shared credit risk characteristics and the days past due.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.10
Financial liabilities
Financial liabilities are recognised when the entity becomes a party to the contract and, as a consequence, has a legal obligation to pay cash.
Other financial liabilities
All financial liabilities are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate method.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
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 operates and generates taxable income.
Deferred tax
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or subsequently enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. The company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The company pays contributions to publicly or privately administered pension plans on a mandatory, contractual or voluntary basis. The company has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
1.14
Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
1.15
Foreign exchange
Translations in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
1.16
Trade debtors are the amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.
Trade debtors are initially recognised at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment.
The company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade debtors.
1.17
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Key sources of estimation uncertainty
Allowance for estimated irrecoverable debtors
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate and overall expected credit loss rate for each group. These assumptions include recent sales experience, historical collection rates, the impact of the Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance for expected credit losses is calculated based on the information available at the time of preparation. The actual credit losses in future years may be higher or lower.
Useful life and impairment of development costs
Intangible assets are amortised over their useful lives. Useful lives are based on management's estimates of the period that the assets will generate revenue. These estimates are reviewed at least annually and changes to these estimates can result in significant variations in the carrying value and amounts charged to profit or loss. The carrying amount of intangible assets by each class is included in the notes to the financial statements and details of the useful lives- are included within the accounting policy. The directors have also considered whether there are indicators of impairment of the company's intangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the assets.
3
Revenue
2023
2022
£
£
Revenue analysed by class of business
Sale of goods
1,457,704
1,663,317
Rendering of services
1,362,895
1,469,605
2,820,599
3,132,922
2023
2022
£
£
Revenue analysed by geographical market
UK and Europe
2,687,108
2,923,579
Africa and Middle East
133,491
209,343
2,820,599
3,132,922
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Revenue
(Continued)
- 17 -
Performance obligations are specified within our contracts with customers. The company has contracts for the sale of goods which are all for delivery within the next 12 months. The performance obligation for these contracts is satisfied upon delivery and installation of the equipment and payment is generally due within 30 to 90 days from delivery.
However, certain of the contracts for the rendering of services have a contractual period of greater than 12 months such as rental of equipment and monitoring services. For these contracts the performance obligation is satisfied over a period of time and payment is required before the services are provided.
Contract assets arise where goods and services are transferred to the customer before the customer pays consideration, or before payment is due. Contract receivables (loans and advances) represent our unconditional right to consideration for the goods or services supplied and performance obligations delivered. Contract liabilities (deposits from customers) relate to consideration received when we still have an obligation to deliver goods or services for that consideration.
Contract assets and contract liabilities are included within "Debtors" and "Creditors" respectively on the face of the balance sheet. They arise from the company's rental and monitoring services, where contracts are entered into that can take a few years to complete, because cumulative payments received from customers at each balance sheet date do not necessarily equal the amount of revenue recognised on the contracts.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
5,849
(16,643)
Depreciation of property, plant and equipment
148,611
129,446
Profit on disposal of property, plant and equipment
(3,163)
(18,615)
Amortisation of intangible assets (included within administrative expenses)
228,961
216,439
Cost of inventories recognised as an expense
441,153
513,693
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
12,000
12,000
For other services
Tax services
1,500
1,500
Other services
3,000
3,000
Total non-audit fees
4,500
4,500
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales
4
4
Operations
10
10
Management and administration
17
17
Total
31
31
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,157,142
1,060,333
Social security costs
129,398
126,461
Pension costs
28,010
28,562
1,314,550
1,215,356
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
133,488
120,755
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
Remuneration for certain directors has been borne by a related company. The directors are also directors or officers of a number of the companies within the Viasat Group S.p.A. Their directors' services to the company do not occupy a significant amount of their time. As such the directors do not consider that they have received any remuneration for their incidental services to the company for the year.
8
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
3,221
524
Other interest income
3,606
6,900
Total income
6,827
7,424
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
4,760
3,184
Interest on lease liabilities
-
3,162
4,760
6,346
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
59,028
78,920
Adjustments in respect of prior periods
5,160
-
Total UK current tax
64,188
78,920
Foreign taxes and reliefs
1,574
3,619
65,762
82,539
Deferred tax
Origination and reversal of temporary differences
35,901
(17,687)
Total tax charge
101,663
64,852
The charge for the year can be reconciled to the profit per the income statement as follows:
2023
2022
£
£
Profit before taxation
293,188
513,922
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
68,958
97,645
Effect of expenses not deductible in determining taxable profit
(629)
(218)
Adjustment in respect of prior years
5,161
Double tax relief
(3,619)
Permanent capital allowances in excess of depreciation
57,655
38,482
Research and development tax credit
(5,161)
Effect of overseas tax rates
-
3,619
Deferred tax adjustments in respect of prior years
35,901
(17,687)
IFA expenditure treated as R&D
(65,383)
(48,209)
Taxation charge for the year
101,663
64,852
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Intangible fixed assets
Internally generated software development costs
£
Cost
At 31 December 2022
2,482,093
Additions - internally generated
277,988
At 31 December 2023
2,760,081
Amortisation and impairment
At 31 December 2022
1,907,801
Charge for the year
228,961
At 31 December 2023
2,136,762
Carrying amount
At 31 December 2023
623,319
At 31 December 2022
574,292
The assets are being written off on a straight line basis as detailed in the accounting policies in note 1. The amortisation charge is recorded in administrative expenses in the profit and loss account.
12
Property, plant and equipment
Freehold land and buildings
Fixtures, fittings and equipment
Motor vehicles
Other property, plant and equipment
Total
£
£
£
£
£
Cost
At 1 January 2023
289,487
191,274
136,401
963,519
1,580,681
Additions
11,250
51,612
65,435
128,297
Disposals
(13,649)
(13,649)
At 31 December 2023
289,487
202,524
174,364
1,028,954
1,695,329
Accumulated depreciation and impairment
At 1 January 2023
18,982
168,803
99,158
880,328
1,167,271
Charge for the year
56,948
9,496
34,545
47,622
148,611
Eliminated on disposal
(12,513)
(12,513)
At 31 December 2023
75,930
178,299
121,190
927,950
1,303,369
Carrying amount
At 31 December 2023
213,557
24,225
53,174
101,004
391,960
At 31 December 2022
270,505
22,471
37,243
83,191
413,410
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Property, plant and equipment
(Continued)
- 21 -
Property, plant and equipment includes right-of-use assets, as follows:
Right-of-use assets
2023
2022
£
£
Net values at the year end
Property
213,558
270,505
Motor vehicles
7,096
13,181
220,654
283,686
Total additions in the year
-
128,174
Depreciation charge for the year
Property
56,948
47,660
Motor vehicles
6,084
6,084
63,032
53,744
13
Inventories
2023
2022
£
£
Raw materials
58,084
107,040
Work in progress
36,582
40,072
Finished goods
31,800
56,973
126,466
204,085
There is no significant difference between the replacement cost of finished goods and their carrying value.
14
Trade and other receivables
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Trade receivables
485,264
541,813
-
-
Provision for bad and doubtful debts
(16,927)
(89,365)
-
-
468,337
452,448
-
-
Amount owed by parent undertaking
2,226,055
2,187,153
Other receivables
58,593
60,981
-
-
Prepayments and accrued income
55,860
65,291
-
-
582,790
578,720
2,226,055
2,187,153
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Trade and other receivables
(Continued)
- 22 -
Included within Debtors from parent undertaking is an amount of £2,226,055 (2022 - £2,187,153) which is held in a group cash pooling facility and is readily convertible to cash on demand by the company. Viasat Group S.p.A. pays interest on the cash pooling balances at a rate of 0.1% for the first £50,000 and at a rate of 0.25% above £50,001 for each account in the 3 currencies of £, US$ and Euros. The interest is calculated quarterly.
All other amounts receivable from group undertakings are unsecured, interest free, and are repayable on demand. Trade debtors are stated after provisions for impairment of £16,927 (2022 - £89,365). The (credit)/charge for the impairment of trade debtors in the year of (£30,477) (2022 - £90,127 is included in administration expenses.
15
Liabilities
Current
Non-current
2023
2022
2023
2022
Notes
£
£
£
£
Trade and other payables
16
177,916
216,652
Corporation tax
31,435
26,449
-
-
Other taxation and social security
136,997
82,106
-
-
Lease liabilities
17
54,674
61,479
161,895
224,486
Deferred income
19
738,159
791,716
742,496
687,450
1,139,181
1,178,402
904,391
911,936
16
Trade and other payables
2023
2022
£
£
Trade payables
138,919
203,818
Accruals and deferred income
38,997
12,834
177,916
216,652
17
Lease liabilities
2023
2022
Maturity analysis
£
£
Within one year
62,908
61,479
In two to five years
153,661
224,486
Total undiscounted liabilities
216,569
285,965
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Lease liabilities
(Continued)
- 23 -
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2023
2022
£
£
Current liabilities
54,674
61,479
Non-current liabilities
161,895
224,486
216,569
285,965
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
-
3,162
Other leasing information is included in note 23.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Accelerated tax depreciation
Provisions
Total
£
£
£
Liability at 1 January 2022
125,291
(2,538)
122,753
Deferred tax movements in prior year
Charge/(credit) to profit or loss
12,296
(29,983)
(17,687)
Liability at 1 January 2023
137,587
(32,521)
105,066
Deferred tax movements in current year
Charge/(credit) to profit or loss
8,997
26,904
35,901
Liability at 31 December 2023
146,584
(5,617)
140,967
19
Deferred revenue
2023
2022
£
£
Arising from sales invoiced in the year or previous periods
1,480,655
1,479,166
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
28,010
28,562
Contributions totalling £5,542 (2022 - £4,739) were payable to the scheme at the end of the year and are included in creditors.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,100
50,100
50,100
50,100
The balance classified as equity share capital includes the total net proceeds on issue of the company's equity shares.
All shares rank pari passu in all respects.
22
Retained earnings
Profit and loss account
The profit and loss account reserve includes all current and prior period retained profits and losses.
TARGA VIASAT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
23
Other leasing information
Set out below are the future cash outflows to which the lessee is potentially exposed that are not reflected in the measurement of lease liabilities:
2023
2022
Land and buildings
£
£
Within one year
3,017
4,265
Between two and five years
3,240
7,423
6,257
11,688
2023
2022
Operating leases apart from land and buildings
£
£
Within one year
123
283
Between two and five years
-
123
123
406
Information relating to lease liabilities is included in note 17.
24
Related party transactions
The company has taken advantage of the exemption under 8(k) of FRS 101 not to disclose transactions with fellow group wholly owned subsidiaries.
25
Controlling party
The immediate parent company is Viasat S.p.A. and the ultimate parent of the company is Investindustrial VII L.P..
The most senior parent entity producing publicly available financial statements is Targa Telematics S.p.A. These financial statements are available on request from 87 Via E. Reginato, Treviso (Tv), Cap 31100, Italy.
26
Parent of group in whose consolidated financial statements the company is consolidated
The name of the parent of the group in whose consolidated financial statements the company's financial statements are consolidated is Targa Telematics S.p.A.
These financial statements are available upon request from 87 Via E. Reginato, Treviso (Tv), Cap 31100, Italy.
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