Company registration number 03815160 (England and Wales)
WELCOMM COMMUNICATIONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
WELCOMM COMMUNICATIONS LIMITED
COMPANY INFORMATION
Directors
A Piper
C Ruddle
S W L Mason
(Appointed 30 June 2023)
Secretary
Mr C R Ruddle
Company number
03815160
Registered office
24 The Point
Rockingham Road
Market Harborough
Leicestershire
LE16 7QU
Auditor
Mayfield & Co.
2 Merus Court
Meridian Business Park
Leicester
LE19 1RJ
WELCOMM COMMUNICATIONS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 21
WELCOMM COMMUNICATIONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 September 2023.
Review of the business
The principal activity of the company continued to be that of the sale of telecommunication equipment and airtime connections.
The financial period saw the company continue to concentrate its efforts on the sale of O2's products and services, specifically their digital portfolio whilst continuing to sell the Unified communication offering provided by Gamma.
Principal risks and uncertainties
The principal risks to the group remain to be margin reduction and the evolution of the mobile and unified markets as they continue to consolidate and release new products.
The impact of inflation and subsequent interest rises are potential risks that we continue to monitor. Price rises from the networks are intrinsically linked to inflation measures as a result of the European Electronic Communications Code and these price rises mean our customers prices are rising. During the year the group continued to supply bespoke homeworking solutions to support its customers along with your more typical communications solutions. The company has continued to develop its IT offering to support customers. Welcomm has throughout this period operated a hybrid working policy.
Development and performance
The group has continued to maintain its mobile base at similar levels to the past few years, despite increasing competition from other networks and wholesale providers. During the year the trading company again achieved both the Digital Excellence Award and Customer Excellence Award from O2 which recognised the group’s efforts in hitting the key targets set by O2. The trading company was also awarded for the fifth time “Best Direct Partner of the Year” by O2 which reinforced the status of dual award winner and the efforts of the group to provide excellent customer service.
Key performance indicators
Turnover of the company has increased by 33%
Gross Profit of the company has increased by 3.4%
Turnover from Unified products has increased by 43.8%
Future Development and Research & Development
The mobile market continues to be a challenging trading environment with competition from other networks, traditional mobile businesses, other distributor based entities and mobile wholesale businesses. The economy as a whole remains a challenging environment with the continuing recovery from the Covid-19 global pandemic affecting the whole economy and the current inflation rate and subsequent interest rate rises to try and reduce inflation effecting business decisions. As a group, Welcomm has continued investing in its staff with the accreditation scheme continuing to build on the foundations created by historic training with the aim to further up skill our sales staff to continuously improve our customer experience and identify further opportunities to cross sell products that will add value to the customers’ business in these uncertain times. The group has continued its ethos in focusing on retaining existing customers and ensuring they have a positive customer experience, whilst understanding the need for bringing in new customers. As part of the continual improvement in our customers experience work has commenced on creating a customer portal to provide customers with a further way to interact with Welcomm.
C Ruddle
Director
17 October 2024
WELCOMM COMMUNICATIONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 September 2023.
Principal activities
The principal activity of the company continued to be that of sale of telecommunications services and hardware.
Results and dividends
The results for the year are set out on page 8.
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:
A Piper
C Ruddle
S W L Mason
(Appointed 30 June 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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
C Ruddle
Director
17 October 2024
WELCOMM COMMUNICATIONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
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;
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.
WELCOMM COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WELCOMM COMMUNICATIONS LIMITED
- 4 -
Opinion
We have audited the financial statements of Welcomm Communications Limited (the 'company') for the year ended 30 September 2023 which comprise the statement of income and retained earnings, the balance sheet 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 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 September 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 strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
WELCOMM COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WELCOMM COMMUNICATIONS LIMITED (CONTINUED)
- 5 -
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 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.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
WELCOMM COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WELCOMM COMMUNICATIONS LIMITED (CONTINUED)
- 6 -
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation (ie. gives a true and fair view).
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
WELCOMM COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WELCOMM COMMUNICATIONS LIMITED (CONTINUED)
- 7 -
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Thomas Mayfield BA FCA
Senior Statutory Auditor
For and on behalf of Mayfield & Co.
Chartered Accountants
Statutory Auditor
2 Merus Court
Meridian Business Park
Leicester
LE19 1RJ
17 October 2024
WELCOMM COMMUNICATIONS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
10,797,093
8,112,919
Cost of sales
(7,224,744)
(4,660,530)
Gross profit
3,572,349
3,452,389
Administrative expenses
(2,999,142)
(3,004,015)
Operating profit
4
573,207
448,374
Interest payable and similar expenses
7
(211,398)
(67,387)
Profit before taxation
361,809
380,987
Tax on profit
8
(68,278)
(65,457)
Profit for the financial year
293,531
315,530
Retained earnings brought forward
2,682,069
2,366,539
Retained earnings carried forward
2,975,600
2,682,069
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WELCOMM COMMUNICATIONS LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
401,263
408,842
Investments
11
1,120
1,120
402,383
409,962
Current assets
Stocks
13
66,384
136,323
Debtors
14
5,678,159
5,923,533
Cash at bank and in hand
231,116
104,968
5,975,659
6,164,824
Creditors: amounts falling due within one year
15
(3,069,427)
(3,771,693)
Net current assets
2,906,232
2,393,131
Total assets less current liabilities
3,308,615
2,803,093
Creditors: amounts falling due after more than one year
16
(252,461)
(16,348)
Provisions for liabilities
Deferred tax liability
19
56,304
80,426
(56,304)
(80,426)
Net assets
2,999,850
2,706,319
Capital and reserves
Called up share capital
21
1,062
1,062
Share premium account
23,188
23,188
Profit and loss reserves
2,975,600
2,682,069
Total equity
2,999,850
2,706,319
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 17 October 2024 and are signed on its behalf by:
C Ruddle
Director
Company registration number 03815160 (England and Wales)
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
1
Accounting policies
Company information
Welcomm Communications Limited is a private company limited by shares incorporated in England and Wales. The company registration number and registered office is given in the company information page of these financial statements.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 and the requirements of the Companies Act 2006.
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Welcomm Holdings Limited. These consolidated financial statements are available from Companies House, Cardiff.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts invoiced during the year for commission and hand set sales. Contracted commission is recognised in line with the relevant costs of supplying the service. Non contracted commission is recognised in the periods for which it is incurred.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Intangible fixed assets - goodwill
Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of 10/20 years.
1.5
Tangible fixed assets
Tangible fixed assets are measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and machinery
25% reducing balance
Motor vehicles
25% reducing balance
1.6
Fixed asset investments
Interests in subsidiaries are measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price. Cost comprises direct purchase costs.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Financial instruments
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Debtors and creditors with no stated interest rate and receivable or payable within one year are measured at transaction price. Any losses arising from impairment are recognised in the profit and loss account.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets. The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received. Company contributions to defined contribution plans for the benefit of employee's are expensed as they become payable.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.14
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Welcomm Communications Limited is a wholly owned subsidiary of Welcomm Holdings Limited and the results of Welcomm Communications Limited are included in the consolidated financial statements of Welcomm Holdings Limited which are publicly available from Companies House.
2
Judgements and key sources of estimation uncertainty
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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Goods and Services
4,566,540
1,682,638
Commissions
6,230,553
6,430,281
10,797,093
8,112,919
All turnover originates in the United Kingdom from the company's principal activity.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
25,000
17,000
Depreciation of owned tangible fixed assets
148,032
153,340
Depreciation of tangible fixed assets held under finance leases
21,116
14,555
Profit on disposal of tangible fixed assets
(16,039)
(31,866)
Operating lease charges
91,803
92,434
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 15 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales and administration
61
68
Directors
3
2
Total
64
70
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,765,105
1,879,772
Social security costs
167,144
178,611
Pension costs
34,910
37,660
1,967,159
2,096,043
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
72,896
17,665
Company pension contributions to defined contribution schemes
612
-
73,508
17,665
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
207,520
63,233
Interest on finance leases and hire purchase contracts
3,878
4,154
211,398
67,387
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 16 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
92,400
62,569
Deferred tax
Origination and reversal of timing differences
(24,122)
2,888
Total tax charge
68,278
65,457
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
361,809
380,987
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
90,452
72,388
Effect of change in corporation tax rate
(13,665)
Group relief
(8,117)
(124)
Permanent capital allowances in excess of depreciation
23,729
(9,695)
Deferred tax movement in year
(24,121)
2,888
Taxation charge for the year
68,278
65,457
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 17 -
9
Intangible fixed assets
Goodwill
£
Cost
At 1 October 2022
1,510,788
Disposals
(1,510,788)
At 30 September 2023
Amortisation and impairment
At 1 October 2022
1,510,788
Disposals
(1,510,788)
At 30 September 2023
Carrying amount
At 30 September 2023
At 30 September 2022
10
Tangible fixed assets
Plant and machinery
Motor vehicles
Total
£
£
£
Cost
At 1 October 2022
1,719,573
212,559
1,932,132
Additions
42,728
132,052
174,780
Disposals
(36,944)
(36,944)
At 30 September 2023
1,762,301
307,667
2,069,968
Depreciation and impairment
At 1 October 2022
1,379,706
143,584
1,523,290
Depreciation charged in the year
140,739
28,409
169,148
Eliminated in respect of disposals
(23,733)
(23,733)
At 30 September 2023
1,520,445
148,260
1,668,705
Carrying amount
At 30 September 2023
241,856
159,407
401,263
At 30 September 2022
339,867
68,975
408,842
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
10
Tangible fixed assets
(Continued)
- 18 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Motor vehicles
141,834
38,645
11
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
12
1,120
1,120
12
Subsidiaries
Details of the company's subsidiaries at 30 September 2023 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
Davison Communications (UK) Ltd
1
Ordinary
100.00
Welcomm Energy Ltd
1
Ordinary
100.00
Registered office addresses (all UK unless otherwise indicated):
1
24 The Point, Rockingham Road, Market Harborough, Leicestershire, LE16 7QU
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
66,384
136,323
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 19 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,066,136
3,496,365
Corporation tax recoverable
8,086
8,086
Amounts owed by group undertakings
1,305,907
1,177,894
Other debtors
876,803
613,230
Prepayments and accrued income
421,227
627,958
5,678,159
5,923,533
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
18
67,623
20,103
Other borrowings
17
192,000
233,246
Trade creditors
1,340,247
1,337,825
Corporation tax
285,132
254,214
Other taxation and social security
204,379
249,991
Other creditors
869,328
1,503,897
Accruals and deferred income
110,718
172,417
3,069,427
3,771,693
Obligations under finance leases are secured on the assets to which they relate.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
64,752
16,348
Other borrowings
17
187,709
252,461
16,348
Obligations under finance leases are secured on the assets to which they relate.
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
17
Loans and overdrafts
2023
2022
£
£
Other loans
379,709
233,246
Payable within one year
192,000
233,246
Payable after one year
187,709
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
67,622
20,103
In two to five years
64,753
16,348
132,375
36,451
Finance lease payments represent rentals payable by the company for certain motor vehicles.
Finance lease liabilities are secured on the assets to which they relate.
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
56,304
80,426
2023
Movements in the year:
£
Liability at 1 October 2022
80,426
Credit to profit or loss
(24,122)
Liability at 30 September 2023
56,304
WELCOMM COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 21 -
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
34,910
37,660
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of 0.083p each
1,279,819
1,279,819
1,062
1,062
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
59,800
39,000
Between two and five years
170,950
126,750
In over five years
83,200
313,950
165,750
23
Related party transactions
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Other related parties
381,283
407,583
24
Ultimate controlling party
The parent undertaking for which consolidated accounts are prepared is Welcomm Holdings Limited, a company registered in England and Wales. Consolidated accounts are publicly available from Companies House, Cardiff.
The registered address of Welcomm Holdings Limited is the same as the company's registered office address as given in the company information page of these financial statements.
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