Company registration number 00967924 (England and Wales)
TEKDATA INTERCONNECTIONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 JUNE 2024
TEKDATA INTERCONNECTIONS LIMITED
COMPANY INFORMATION
Directors
T Roberts
A Farrant
P Murphy
(Appointed 11 September 2024)
Secretary
A Trippitt
Company number
00967924
Registered office
Unit 2, Hargreaves Way
Sawcliffe Industrial Park
Scunthorpe
DN15 8RF
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
TEKDATA INTERCONNECTIONS LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 23
TEKDATA INTERCONNECTIONS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 29 JUNE 2024
- 1 -

The directors present the strategic report for the Period ended 29 June 2024.

Principal activities

 

The principal activity of the company continued to be that of the design, manufacture and sale of specialist cabling for the avionics, space cryogenic, defence, industrial, medical and specialist automotive markets.

Review of the business

The period under review resulted in an increase in turnover of 12%, on top of the 37% increase last year.

 

During the year to June 2023 the business moved to a much more aggressive stock provisioning policy to recognise slow or overstocked items. This year no further increase in provision is required with the business improving the systems in managing stock, which is evidenced by a stock reduction of over £0.5m in the year. This, along with both improvements in efficiency and reductions in the cost base, resulted in the gross profit margin improving from 5% in 2023 to 27% this year, delivering a positive operating profit. The improvement in profitability is expected to continue in the current year.

 

The company remains focussed upon further developing its presence in aerospace, defence, medical, industrial and space markets. This focus has resulted in strengthening relationships with key customers in these sectors and a reduction in business conducted with customers that do not meet the strategic objectives of the business. The change in customer mix is also contributing to the increase in the gross margin of the business.

TEKDATA INTERCONNECTIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 2 -
Principal risks and uncertainties

 

Set out below are the Company's seven major business risks, together with the systems and initiatives in place to address them:

 

Market risk

 

The electro-mechanical products market is subject to fluctuations in demand by customers. These fluctuations are linked to the economic cycle. The Company actively seeks to manage its exposure to these fluctuations by monitoring stock levels, restricting its dependence on large customers and maintaining close relationships with suppliers.

 

Credit risk

 

The Company assesses the creditworthiness of new customers before commencing trade with them. Based on this and the customer's capital base, authorised limits of credit are set. A proactive approach to the identification and control of bad and doubtful debts is maintained and significant credit risks are highlighted to the board

 

Interest Rate Risk

 

The Company and its parent Alpha 3 Manufacturing Limited have taken out interest bearing loans with a mixture of fixed and floating interest rates. The proportion of the combined group's debt subject to fixed rates is 53%.

 

Operational risk

 

This relates to the risk of financial loss and damage to reputation resulting from inadequate or failed internal processes and systems and from the actions of people or external events. The Company manages this risk through appropriate controls and loss mitigation actions. Examples include:

 

 

In addition, specialist support functions provide expertise in ensuring the Company adheres to local regulatory and legal requirements.

TEKDATA INTERCONNECTIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 3 -
Principal Risks and Uncertainties (continued)

 

Liquidity risk

 

This relates to the risk that the Company is unable to fund its requirements due to insufficient banking facilities. The Company funds its day-to-day operations through a revolving credit facility and its long term assets through a mixture of retained earnings and long term loans.

 

The Company's policy on liquidity is to ensure that there are sufficient medium and long term committed borrowing facilities to meet funding requirements. It is company policy not to enter into speculative transactions.

 

Exchange Rate Risk

 

The Company sells its products and purchases its material primarily in sterling. In addition, there are some transactions undertaken in US dollars and Euros. The Company manages its exchange exposure through natural hedging and keeps under review further risk mitigation through forward contracts.

 

Inflation Risk

 

The Company manages inflation risks through passing on material price increases where possible and by monitoring input costs closely.

 

Going concern

 

The directors have, at the time of approving the financial statements, a reasonable expectation that Inspirit Carey Topco Limited and its subsidiary undertakings, (the “Group”), has adequate resources to continue in operational existence for the foreseeable future.

 

The Group has prepared operating entity forecasts and projections up to 30 November 2025 which cover at least 12 months from the date of approval of the financial statements. The assumptions used in these forecasts are believed to be reasonable and prudent, include cost savings from fully completed restructuring programmes within the Group and show that the Group is now cashflow positive.

 

The Group has debt facilities from a third-party lender. Subsequent to the period end the third party covenants have been re-set providing additional liquidity and headroom for the Group. In addition, Inspirit Capital, the ultimate owner of the Group has provided a letter indicating that it remains supportive of the business and that its current intention is to support the Group should additional funding be required (subject to Inspirit Capital Investment committee approval).

 

The directors have therefore concluded that they have an expectation that the company has adequate resources to continue in the near future. As such, they therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Key performance indicators

 

The directors focus on two key indicators of financial performance, sales and gross profit margin. These are monitored regularly with explanations sought for variances against budgets, forecasts, and prior year.

 

 

2024

2023

Sales

£8,987k

£8,038k

Sales change

12%

37%

Gross profit

£2,447k

£374k

Gross profit margin

27%

5%

 

In addition, detailed financial statements are reviewed each month by the leadership team and the board of directors. These provide analysis of bookings, sales, cost of sales, gross profit and operating expenses, each measured against budget, forecast and prior year. Working capital is also closely monitored.

TEKDATA INTERCONNECTIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 4 -
Future developments

The directors anticipate that the business environment will remain competitive. However, the focus on developing its presence in aerospace, defence, medical, industrial and space markets is beginning to deliver margin benefits. This focus, combined with improving operation performance, underpins the board’s confidence in improved business performance in the medium term.

On behalf of the board

T Roberts
Director
18 October 2024
TEKDATA INTERCONNECTIONS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 29 JUNE 2024
- 5 -

The directors present their annual report and financial statements for the Period ended 29 June 2024.

Results and dividends

The results for the Period are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the Period and up to the date of signature of the financial statements were as follows:

T Roberts
A Farrant
P Murphy
(Appointed 11 September 2024)
Auditor

The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

On behalf of the board
T Roberts
Director
18 October 2024
TEKDATA INTERCONNECTIONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 29 JUNE 2024
- 6 -

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:

 

 

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.

TEKDATA INTERCONNECTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TEKDATA INTERCONNECTIONS LIMITED
- 7 -
Opinion

We have audited the financial statements of Tekdata Interconnections Limited (the 'company') for the Period ended 29 June 2024 which comprise the statement of comprehensive income, the balance sheet, 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 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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.

Other information

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:

TEKDATA INTERCONNECTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TEKDATA INTERCONNECTIONS LIMITED
- 8 -
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 and 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:

 

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.

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.

TEKDATA INTERCONNECTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TEKDATA INTERCONNECTIONS LIMITED
- 9 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we 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. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. 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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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.

Martin Davey
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
21 October 2024
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
TEKDATA INTERCONNECTIONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 29 JUNE 2024
- 10 -
2024
2023
Notes
£000
£000
Turnover
3
8,987
8,038
Cost of sales
(6,540)
(7,664)
Gross profit
2,447
374
Administrative expenses
(2,295)
(2,259)
Operating profit/(loss)
4
152
(1,885)
Interest payable and similar expenses
6
(77)
(34)
Profit/(loss) before taxation
75
(1,919)
Tax on profit/(loss)
7
-
0
(58)
Profit/(loss) for the financial Period
75
(1,977)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 13 to 23 form part of these financial statements.

TEKDATA INTERCONNECTIONS LIMITED
BALANCE SHEET
AS AT
29 JUNE 2024
29 June 2024
- 11 -
2024
2023
Notes
£000
£000
£000
£000
Fixed assets
Tangible assets
8
337
358
Current assets
Stocks
9
1,345
1,921
Debtors
10
1,880
2,212
Cash at bank and in hand
15
21
3,240
4,154
Creditors: amounts falling due within one year
11
(3,656)
(4,666)
Net current liabilities
(416)
(512)
Net liabilities
(79)
(154)
Capital and reserves
Called up share capital
14
15
15
Profit and loss reserves
(94)
(169)
Total equity
(79)
(154)
The financial statements were approved by the board of directors and authorised for issue on 18 October 2024 and are signed on its behalf by:
T Roberts
Director
Company Registration No. 00967924
TEKDATA INTERCONNECTIONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 29 JUNE 2024
- 12 -
Share capital
Profit and loss reserves
Total
£000
£000
£000
Balance at 3 July 2022
15
1,808
1,823
Period ended 1 July 2023:
Loss and total comprehensive income for the period
-
(1,977)
(1,977)
Balance at 1 July 2023
15
(169)
(154)
Period ended 29 June 2024:
Profit and total comprehensive income for the period
-
75
75
Balance at 29 June 2024
15
(94)
(79)
TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 JUNE 2024
- 13 -
1
Accounting policies
Company information

Tekdata Interconnections Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 2, Hargreaves Way, Sawcliffe Industrial Park, Scunthorpe, DN15 8RF.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“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 £1,000.

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:

 

 

The financial statements of the company are consolidated in the financial statements of Inspirit Carrey Topco Limited. These consolidated financial statements are available from its registered office, 2 Babmaes Street London SW1Y 6HD.

1.2
Going concern

The directors have, at the time of approving the financial statements, a reasonable expectation that Inspirit Carey Topco Limited and its subsidiary undertakings, which include Tekdata Interconnections Limited, (the “Group”), has adequate resources to continue in operational existence for the foreseeable future.

 

The Group has prepared operating entity forecasts and projections up to 30 November 2025 which cover at least 12 months from the date of approval of the financial statements. The assumptions used in these forecasts are believed to be reasonable and prudent, include cost savings from fully completed restructuring programmes within the Group and show that the Group will be cashflow positive in the near term.

 

The Group has debt facilities from a third-party lender. Subsequent to the period end the third party lender covenants were agreed to be re-set to provide additional liquidity in the event of ongoing trading challenges for the Group. In addition, Inspirit Capital, the ultimate owner of the Group has provided a letter indicating that it remains supportive of the business and that its current intention is to support the Group should additional funding be required (subject to Inspirit Capital Investment committee approval).

 

The directors have therefore concluded that they have an expectation that the company has adequate resources to continue in the near future. As such, they therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements.

TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Turnover 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 turnover 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.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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:

Leasehold land and buildings
over the lease term
Plant and equipment
over 3 to 10 years
Fixtures and fittings
over 5 to 10 years

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 credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. 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.

TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 15 -
1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

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.

TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 16 -
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.

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.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 17 -
1.10
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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

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. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
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.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

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.

1.14
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.

1.15

Interest income

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

TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 18 -
1.16

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

1.17

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Inventory

Management estimation is required to determine any potential impairment of inventory, as well as estimating the magnitude of the impairment.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Recoverability of stock

The company establishes a provision for stocks that are estimated not to be recoverable. When assessing recoverability the directors have considered factors such as the aging of the stocks, damaged and or obsolete stocks and past experience of recoverability.

Valuation of stock

In order to carry out the company's principal activities, a labour intesive process is required to raw materials to finished goods. Stock values include any cost of such labour and overheards attributable to generating finished goods, as management believe this is the most suitable costing method to take into account the matching concept of accounting.

3
Turnover
TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
3
Turnover
(Continued)
- 19 -
2024
2023
£000
£000
Turnover analysed by geographical market
United Kingdom
6,610
6,657
Rest of Europe
1,554
694
Rest of the World
823
687
8,987
8,038
4
Operating profit/(loss)
2024
2023
Operating profit/(loss) for the period is stated after charging:
£000
£000
Exchange (gains)/losses
-
0
1
Fees payable to the company's auditor for the audit of the company's financial statements
23
22
Depreciation of owned tangible fixed assets
67
64
Operating lease charges
203
214
5
Employees

The average monthly number of persons (including directors) employed by the company during the Period was:

2024
2023
Number
Number
Manufacturing and Administration
123
119
Directors
2
2
Total
125
121

Their aggregate remuneration comprised:

2024
2023
£000
£000
Wages and salaries
2,652
2,610
Social security costs
207
212
Pension costs
121
113
2,980
2,935
TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 20 -
6
Interest payable and similar expenses
2024
2023
£000
£000
Interest on bank overdrafts and loans
77
34
TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 21 -
7
Taxation
2024
2023
£000
£000
Deferred tax
Write down or reversal of write down of deferred tax asset
-
0
58

The actual charge for the Period can be reconciled to the expected charge/(credit) for the Period based on the profit or loss and the standard rate of tax as follows:

2024
2023
£000
£000
Profit/(loss) before taxation
75
(1,919)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
19
(393)
Tax effect of expenses that are not deductible in determining taxable profit
-
0
48
Tax effect of utilisation of tax losses not previously recognised
(19)
-
0
Change in unrecognised deferred tax assets
-
0
445
Other differences
-
0
(42)
Taxation charge for the period
-
58
8
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Total
£000
£000
£000
£000
Cost
At 1 July 2023
221
871
107
1,199
Additions
9
29
8
46
At 29 June 2024
230
900
115
1,245
Depreciation and impairment
At 1 July 2023
124
664
53
841
Depreciation charged in the Period
14
45
8
67
At 29 June 2024
138
709
61
908
Carrying amount
At 29 June 2024
92
191
54
337
At 1 July 2023
97
207
54
358
TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 22 -
9
Stocks
2024
2023
£000
£000
Raw materials and consumables
1,027
1,435
Work in progress
231
336
Finished goods and goods for resale
87
150
1,345
1,921
10
Debtors
2024
2023
Amounts falling due within one year:
£000
£000
Trade debtors
1,711
1,942
Other debtors
46
94
Prepayments and accrued income
123
176
1,880
2,212
11
Creditors: amounts falling due within one year
2024
2023
Notes
£000
£000
Bank loans
12
715
796
Trade creditors
1,072
1,221
Amounts owed to group undertakings
1,538
2,065
Other creditors
62
134
Accruals and deferred income
269
450
3,656
4,666

Bank loans are secured by way of fixed and floating charges over the assets of the entity.

12
Loans and overdrafts
2024
2023
£000
£000
Bank loans
715
796
Payable within one year
715
796

Bank loans comprise a receivables facility, bearing an interest rate of 2.85% above the Bank of England base rate with payment terms of up to 60 days.

 

TEKDATA INTERCONNECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 23 -
13
Retirement benefit schemes
2024
2023
Defined contribution schemes
£000
£000
Charge to profit or loss in respect of defined contribution schemes
121
113

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.

14
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£000
£000
Issued and fully paid
Ordinary shares of £1 each
15,000
15,000
15
15
15
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:

2024
2023
£000
£000
Within one year
98
200
Between two and five years
-
0
98
98
298
16
Ultimate controlling party

The Company's immediate parent and controlling party is Alpha 3 Manufacturing Limited, which is registered in England and Wales.

 

The ultimate parent undertaking into which the results of the company are consolidated is Inspirit Carrey Topco Limited, which is registered in England and Wales. The financial statements of this company are available to the public and may be obtained from Companies House or from the company's registered address: 2 Babmaes Street London SW1Y 6HD.

 

The ultimate controlling party is Inspirit Gp LLP by virtue of majority shareholding in the group.

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