Company registration number 09036266 (England and Wales)
WELCOMM HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
WELCOMM HOLDINGS LIMITED
COMPANY INFORMATION
Directors
A Piper
C Ruddle
Company number
09036266
Registered office
Welcomm House
24 The Point
Rockingham Road
Market Harborough
Leicestershire
LE16 7QU
Auditor
Mayfield & Co.
2 Merus Court
Meridian Business Park
Leicester
LE19 1RJ
WELCOMM HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 29
WELCOMM HOLDINGS 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 group continued to be that of the sale of telecommunication equipment and airtime connections.
The financial period saw the group 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 group has increased by 32.2%
Gross Profit of the group has decreased by 4.4%
Turnover from Unified products has increased by 9.2%
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
21 October 2024
WELCOMM HOLDINGS 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 principle activity of the company continued to be that of a holding company.
The principle activity of the group 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.
Ordinary dividends were paid amounting to £131,960. The directors do not recommend payment of a further dividend.
Preference dividends were paid amounting to £54,173. 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
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 auditor of the company 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 auditor of the company 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
21 October 2024
WELCOMM HOLDINGS 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 group and company, and of the profit or loss of the group 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 on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
WELCOMM HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WELCOMM HOLDINGS LIMITED
- 4 -
Opinion
We have audited the financial statements of Welcomm Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 group's and the parent company's affairs as at 30 September 2023 and of the group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 group's and parent 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 HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WELCOMM HOLDINGS LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the 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 parent 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 parent 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 HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WELCOMM HOLDINGS LIMITED
- 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 HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WELCOMM HOLDINGS LIMITED
- 7 -
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.
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
21 October 2024
WELCOMM HOLDINGS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
10,829,468
8,188,951
Cost of sales
(7,224,744)
(4,660,530)
Gross profit
3,604,724
3,528,421
Administrative expenses
(3,405,320)
(3,452,912)
Operating profit
4
199,404
75,509
Interest receivable and similar income
6
30
Interest payable and similar expenses
7
(275,883)
(96,063)
Loss before taxation
(76,449)
(20,554)
Tax on loss
8
(68,278)
(65,457)
Loss for the financial year
23
(144,727)
(86,011)
Loss for the financial year is all attributable to the owners of the parent company.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WELCOMM HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
2023
2022
£
£
Loss for the year
(144,727)
(86,011)
Other comprehensive income
-
-
Total comprehensive income for the year
(144,727)
(86,011)
Total comprehensive income for the year is all attributable to the owners of the parent company.
WELCOMM HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
4,359,571
4,760,460
Tangible assets
11
401,263
408,842
Investments
12
1,120
1,120
4,761,954
5,170,422
Current assets
Stocks
14
66,384
136,323
Debtors
15
4,715,630
5,095,518
Cash at bank and in hand
243,690
142,612
5,025,704
5,374,453
Creditors: amounts falling due within one year
16
(3,530,493)
(4,168,841)
Net current assets
1,495,211
1,205,612
Total assets less current liabilities
6,257,165
6,376,034
Creditors: amounts falling due after more than one year
17
(1,724,778)
(1,488,665)
Provisions for liabilities
Deferred tax liability
20
56,304
80,426
(56,304)
(80,426)
Net assets
4,476,083
4,806,943
Capital and reserves
Called up share capital
22
4,743,066
4,743,066
Profit and loss reserves
23
(266,983)
63,877
Total equity
4,476,083
4,806,943
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
The financial statements were approved by the board of directors and authorised for issue on 21 October 2024 and are signed on its behalf by:
21 October 2024
C Ruddle
Director
Company registration number 09036266 (England and Wales)
WELCOMM HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 30 SEPTEMBER 2023
30 September 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
12
10,119,518
10,119,518
Current assets
Debtors
15
353,927
360,428
Cash at bank and in hand
12,574
37,158
366,501
397,586
Creditors: amounts falling due within one year
16
(1,749,836)
(1,557,905)
Net current liabilities
(1,383,335)
(1,160,319)
Total assets less current liabilities
8,736,183
8,959,199
Creditors: amounts falling due after more than one year
17
(1,472,317)
(1,472,317)
Net assets
7,263,866
7,486,882
Capital and reserves
Called up share capital
22
4,743,066
4,743,066
Profit and loss reserves
23
2,520,800
2,743,816
Total equity
7,263,866
7,486,882
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £36,884 (2022 - £652 loss).
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 21 October 2024 and are signed on its behalf by:
21 October 2024
C Ruddle
Director
Company registration number 09036266 (England and Wales)
WELCOMM HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2021
4,753,066
339,041
5,092,107
Year ended 30 September 2022:
Loss and total comprehensive income
-
(86,011)
(86,011)
Dividends
9
-
(182,153)
(182,153)
Redemption of shares
22
(10,000)
(7,000)
(17,000)
Balance at 30 September 2022
4,743,066
63,877
4,806,943
Year ended 30 September 2023:
Loss and total comprehensive income
-
(144,727)
(144,727)
Dividends
9
-
(186,133)
(186,133)
Balance at 30 September 2023
4,743,066
(266,983)
4,476,083
WELCOMM HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2021
4,753,066
2,933,621
7,686,687
Year ended 30 September 2022:
Loss and total comprehensive income for the year
-
(652)
(652)
Dividends
9
-
(182,153)
(182,153)
Redemption of shares
22
(10,000)
(7,000)
(17,000)
Balance at 30 September 2022
4,743,066
2,743,816
7,486,882
Year ended 30 September 2023:
Profit and total comprehensive income
-
(36,883)
(36,883)
Dividends
9
-
(186,133)
(186,133)
Balance at 30 September 2023
4,743,066
2,520,800
7,263,866
WELCOMM HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
514,279
680,115
Interest paid
(275,883)
(96,063)
Income taxes paid
(61,482)
Net cash inflow from operating activities
176,914
584,052
Investing activities
Purchase of tangible fixed assets
(174,780)
(133,199)
Proceeds from disposal of tangible fixed assets
29,250
86,701
Repayment of loans
13,410
(13,410)
Interest received
30
Net cash used in investing activities
(132,090)
(59,908)
Financing activities
Redemption of shares
(17,000)
Proceeds from borrowings
-
297,000
Repayment of borrowings
146,463
(63,754)
Repayment of bank loans
-
(473,958)
Payment of finance leases obligations
95,924
(10,551)
Dividends paid to equity shareholders
(186,133)
(182,153)
Net cash generated from/(used in) financing activities
56,254
(450,416)
Net increase in cash and cash equivalents
101,078
73,728
Cash and cash equivalents at beginning of year
142,612
68,884
Cash and cash equivalents at end of year
243,690
142,612
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 15 -
1
Accounting policies
Company information
Welcomm Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The address of the registered office and place of business is given in the company information page of these financial statements.
The group consists of Welcomm Holdings Limited and all of its subsidiaries ("the group").
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2
Business combinations
The consolidated financial statements incorporate those of Welcomm Holdings Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). All financial statements are made up to 30 September 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
1.3
Basis of consolidation
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
1.4
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
1.5
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.
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
1.6
Intangible fixed assets - goodwill
Goodwill arising on the acquisition of subsidiary undertakings, representing the excess of the fair value of the consideration given over the fair value of identifiable assets and liabilities acquired, is capitalised and written off on a straight line basis over its useful economic life of 20 years. Provision is made for any impairment.
Goodwill arising on the acquisition of an unincorporated businesses, representing the excess of the fair value of the consideration given over the fair value of net assets acquired, is capitalised and written off on a straight line basis over its estimated useful life of 10-20 years. Provision is made for any impairment.
1.7
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 or valuation 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
1.8
Fixed asset investments
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
1.9
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.
1.10
Financial instruments
Financial instruments are recognised in the group's balance sheet when the group 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.
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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 group 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.
1.11
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. The group’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 if, and only if, there is 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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.14
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 leased asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the group’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 and other revenue
An analysis of the group's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Goods and Services
4,566,540
1,586,328
Commissions
6,262,928
6,602,623
10,829,468
8,188,951
2023
2022
£
£
Other revenue
Interest income
30
-
All turnover originates in the United Kingdom from the group's principal activity.
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 19 -
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Fees payable to the group's auditor for the audit of the group's financial statements
-
-
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)
Amortisation of intangible assets
400,889
400,889
Operating lease charges
91,803
92,434
5
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Sales and administration
61
72
-
1
Directors
2
2
2
2
Total
63
74
2
3
Their aggregate remuneration comprised:
Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
1,765,105
1,914,599
34,827
Social security costs
167,144
182,610
-
3,999
Pension costs
34,910
37,660
1,967,159
2,134,869
38,826
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
30
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
6
Interest receivable and similar income
(Continued)
- 20 -
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
30
-
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
208,798
73,741
Other interest on financial liabilities
63,207
18,168
272,005
91,909
Other finance costs:
Interest on finance leases and hire purchase contracts
3,878
4,154
Total finance costs
275,883
96,063
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
On 1 April 2023 the applicable rate of corporation tax changed from 19% to 25%. The taxation rate used in the reconciliation shown below is 25%.
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
8
Taxation
(Continued)
- 21 -
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(76,449)
(20,554)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(19,112)
(3,905)
Effect of change in corporation tax rate
(13,665)
-
Group relief
1,225
Permanent capital allowances in excess of depreciation
23,729
(9,695)
Amortisation on assets not qualifying for tax allowances
100,222
76,169
Other tax adustments
(24,121)
2,888
Taxation charge
68,278
65,457
9
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Interim paid
186,133
182,153
10
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 October 2022
8,017,784
Disposals
(1,510,788)
At 30 September 2023
6,506,996
Amortisation and impairment
At 1 October 2022
3,257,324
Amortisation charged for the year
400,889
Disposals
(1,510,788)
At 30 September 2023
2,147,425
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
10
Intangible fixed assets
(Continued)
- 22 -
Carrying amount
At 30 September 2023
4,359,571
At 30 September 2022
4,760,460
The company had no intangible fixed assets at 30 September 2023 or 30 September 2022.
11
Tangible fixed assets
Group
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
The company had no tangible fixed assets at 30 September 2023 or 30 September 2022.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2023
2022
2023
2022
£
£
£
£
Motor vehicles
141,834
38,645
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 23 -
12
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
13
1,120
1,120
10,119,518
10,119,518
Movements in fixed asset investments
Group
Shares in subsidiaries
£
Cost or valuation
At 1 October 2022 and 30 September 2023
1,120
Carrying amount
At 30 September 2023
1,120
At 30 September 2022
1,120
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 October 2022 and 30 September 2023
10,119,518
Carrying amount
At 30 September 2023
10,119,518
At 30 September 2022
10,119,518
13
Subsidiaries
Details of the company's subsidiaries at 30 September 2023 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
Davison Communications (UK) Ltd
1
Ordinary
0
100.00
Welcomm Communications Ltd
1
Ordinary
100.00
-
Welcomm Energy Ltd
1
Ordinary
0
100.00
Registered office addresses (all UK unless otherwise indicated):
1
Welcomm House, 24 The Point Business Park, Rockingham Road, Market Harborough, Leicestershire, LE16 7QU.
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 24 -
14
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods and goods for resale
66,384
136,323
15
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
3,289,211
3,754,378
223,075
258,013
Corporation tax recoverable
8,086
8,086
Amounts owed by group undertakings
-
-
10,549
10,549
Other debtors
997,106
703,818
120,303
90,588
Prepayments and accrued income
421,227
629,236
1,278
4,715,630
5,095,518
353,927
360,428
16
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
19
67,623
20,103
Other borrowings
18
192,000
233,246
Trade creditors
1,340,247
1,337,825
Amounts owed to group undertakings
1,287,972
1,183,709
Corporation tax payable
285,132
254,214
Other taxation and social security
240,379
285,991
36,000
36,000
Dividends payable
50,629
50,629
50,629
50,629
Other creditors
1,196,320
1,785,177
327,790
258,328
Accruals and deferred income
158,163
201,656
47,445
29,239
3,530,493
4,168,841
1,749,836
1,557,905
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 25 -
17
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
19
64,752
16,348
Other borrowings
18
937,709
750,000
750,000
750,000
Preference dividends payable
722,317
722,317
722,317
722,317
1,724,778
1,488,665
1,472,317
1,472,317
18
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Other loans
1,129,709
983,246
750,000
750,000
Payable within one year
192,000
233,246
Payable after one year
937,709
750,000
750,000
750,000
The loan notes shown as 'Other loans' are unsecured and repayable in full by 14 August 2024. These loan notes carry a variable rate of interest at bank base rate plus 3%.
19
Finance lease obligations
Group
Company
2023
2022
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 group for certain motor vehicles.
Finance lease liabilities are secured on the assets to which they relate.
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 26 -
20
Deferred taxation
Deferred tax assets and liabilities are offset where the group or 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
Group
£
£
Accelerated capital allowances
56,304
80,426
The company has no deferred tax assets or liabilities.
Group
Company
2023
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
-
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
34,910
37,660
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
22
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Founder shares of £1 each
60,000
60,000
60,000
60,000
Ordinary B shares of £1 each
20,000
20,000
20,000
20,000
Ordinary C shares of £1 each
18,750
18,750
18,750
18,750
98,750
98,750
98,750
98,750
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
22
Share capital
(Continued)
- 27 -
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Preference shares of £1 each
5,417,262
5,417,262
5,417,262
5,417,262
Preference shares classified as equity
4,644,316
4,644,316
Preference shares classified as liabilities
772,946
772,946
5,417,262
5,417,262
Total equity share capital
4,743,066
4,743,066
Preference shares
The preference shares do not carry any voting rights. They entitle the holders to an annual fixed cumulative preferential dividend. On a return of capital they have priority over the equity shares. There are no redemption rights attached to the preference shares.
Equity shares
With the exception of dividend rights each class of equity shares, Founder, B Ordinary and C Ordinary, are ranked pari passu. Dividends may be declared separately on each class of share at the directors discretion. Each share carries voting rights at one vote per share. On a return of capital each shareholder would be entitled to receive a proportion of the balance (if any) of any surplus assets, after settlement is paid to all creditors and preference shareholders. There are no redemption rights attached to the equity shares.
23
Profit and loss reserves
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
63,877
339,041
2,743,816
2,933,621
Loss for the year
(144,727)
(86,011)
(36,883)
(652)
Dividends
(186,133)
(182,153)
(186,133)
(182,153)
Share redemption or reduction
-
(7,000)
-
(7,000)
At the end of the year
(266,983)
63,877
2,520,800
2,743,816
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 28 -
24
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2023
2022
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
-
-
25
Related party transactions
Transactions with related parties
The following amounts were outstanding at the reporting end date:
Amounts due from related parties
2023
2022
Balance
Balance
£
£
Group
Other related parties
541,586
407,583
Other information
During the year the amount of interest on loans paid to shareholders was £63,207 (2022: £18,168 ). The balance of loans owed to shareholders at the year end was £750,000 (2022: £750,000), and is included within creditors due after more than one year.
26
Directors' transactions
Advances or credits have been granted by the group to its directors as follows:
Dividends totalling £131,960 (2022 - £36,433) were paid in the year in respect of shares held by the company's directors.
Creditors falling due within one year include directors' current account balances of £79,011 (2022: £52,991).
WELCOMM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 29 -
27
Cash generated from group operations
2023
2022
£
£
Loss for the year after tax
(144,727)
(86,011)
Adjustments for:
Taxation charged
68,278
65,457
Finance costs
275,883
96,063
Investment income
(30)
Gain on disposal of tangible fixed assets
(16,039)
(31,866)
Amortisation and impairment of intangible assets
400,889
400,889
Depreciation and impairment of tangible fixed assets
169,148
167,895
Movements in working capital:
Decrease/(increase) in stocks
69,938
(13,638)
Decrease/(increase) in debtors
366,479
(417,649)
(Decrease)/increase in creditors
(675,540)
498,975
Cash generated from operations
514,279
680,115
28
Analysis of changes in net debt - group
1 October 2022
Cash flows
30 September 2023
£
£
£
Cash at bank and in hand
142,612
101,078
243,690
Borrowings excluding overdrafts
(983,246)
(146,463)
(1,129,709)
Obligations under finance leases
(36,451)
(95,924)
(132,375)
(877,085)
(141,309)
(1,018,394)
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