Caseware UK (AP4) 2023.0.135 2023.0.135 9162323580160000462895524343281551572109167201387344428955271917606760533312024-06-302023-07-01false3600 06760533 2023-07-01 2024-06-30 06760533 1 2023-07-01 2024-06-30 06760533 2 2023-07-01 2024-06-30 06760533 2022-07-01 2023-06-30 06760533 1 2022-07-01 2023-06-30 06760533 2 2022-07-01 2023-06-30 06760533 2024-06-30 06760533 2023-06-30 06760533 d:CompanySecretary1 2023-07-01 2024-06-30 06760533 d:Director1 2023-07-01 2024-06-30 06760533 d:Director2 2023-07-01 2024-06-30 06760533 d:Director3 2023-07-01 2024-06-30 06760533 d:RegisteredOffice 2023-07-01 2024-06-30 06760533 e:LandBuildings 2023-07-01 2024-06-30 06760533 e:LandBuildings 2022-07-01 2023-06-30 06760533 e:LandBuildings 2024-06-30 06760533 e:LandBuildings 2023-06-30 06760533 e:LandBuildings 2022-07-01 06760533 e:PlantMachinery 2023-07-01 2024-06-30 06760533 e:PlantMachinery 2022-07-01 2023-06-30 06760533 e:PlantMachinery 2024-06-30 06760533 e:PlantMachinery 2023-06-30 06760533 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Registered number: 06760533










Avtel (UK) Limited










Audited Financial Statements

For the year ended 30 June 2024

 
Avtel (UK) Limited
 

 
Company Information

Directors
M Hick 
M Hodby 
C Meldrum 




Company secretary
M Hick



Registered number
06760533



Registered office
5 Presley Way
Crownhill

1st Floor

Milton Keynes

England

MK8 0ES




Independent auditor
Kreston Reeves LLP
Chartered Accountants & Statutory Auditor

Springfield House

Springfield Road

Horsham

West Sussex

RH12 2RG





 
Avtel (UK) Limited
 

 
Contents

Page
Directors' report
1 - 2
Independent auditor's report
3 - 6
Statement of profit or loss and other comprehensive income
7
Statement of financial position
8 - 9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 39
Detailed profit and loss account and summaries
39

 
Avtel (UK) Limited
 

 
Directors' report
For the year ended 30 June 2024

The directors present their report and the financial statements for the year ended 30 June 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Directors' report and the financial statements, in accordance with applicable law.

Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

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 the financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent;

state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Principal activity

The principal activity of the company is that of a security system provider.

Results and dividends

The profit for the year, after taxation, amounted to £458,116 (2023 - £179,008).
No dividends were paid during the year (2023: £Nil).

Directors

The directors who served during the year were:

M Hick 
M Hodby 
C Meldrum 

Page 1

 
Avtel (UK) Limited
 

 
Directors' report (continued)
For the year ended 30 June 2024

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Small companies' exemption note

In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

Auditor

The auditor, Kreston Reeves LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 



................................................
C Meldrum
Director
Date: 19 December 2024
Page 2

 
Avtel (UK) Limited
 

 
Independent auditor's report to the members of Avtel (UK) Limited
 

Opinion


We have audited the financial statements of Avtel (UK) Limited for the year ended 30 June 2024 which comprise the Statement of profit or loss and other comprehensive incomethe Statement of financial positionthe Statement of cash flowsthe Statement of changes in equity and the related notes, including a summary of significant accounting policies set out on pages 14 - 20. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.

In our opinion the financial statements:

give a true and fair view of the state of the Company's affairs as at 30 June 2024 and of its profit for the year then ended;

have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; and

have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.  Our responsibilities under those standards are further described in the 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 United Kingdom, including the Financial Reporting Council'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.

Page 3

 
Avtel (UK) Limited
 

 
Independent auditor's report to the members of Avtel (UK) Limited (continued)


Opinion on other matters prescribed by the Companies Act 2006


In our opinion, based on the work undertaken in the course of the audit: 

the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Directors' report has been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit; or
the directors were not entitiled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report. 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement on page 1, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 
Page 4

 
Avtel (UK) Limited
 

 
Independent auditor's report to the members of Avtel (UK) Limited (continued)


Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards).  We considered the extent to which non-compliance might have a material effect on the financial statements.  We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.  We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.  We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements such as revenue and margin recognition on long-term contracts.  Audit procedures performed by the engagement team included:
 
Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud, and review of the reports made by management; and
Assessment of identified fraud risk factors; and
Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
Perfoming analytical procedures with automated data analytics tools to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatements due to fraud; and
Identifying and testing journal entries, in particular any manual entries made at the year-end for financial statement preparation.
 
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.

Page 5

 
Avtel (UK) Limited
 

 
Independent auditor's report to the members of Avtel (UK) Limited (continued)




As part of an audit in accordance with ISAs (UK), we exercise professional judgment 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.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

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.


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.

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.  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.




 
 
Allan Pinner FCCA (Senior statutory auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
Springfield House
Springfield Road
Horsham
West Sussex
RH12 2RG

19 December 2024
Page 6

 
Avtel (UK) Limited
 

 
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2024

2024
2023
Note
£
£

  

Revenue
 7 
11,716,887
6,865,461

Cost of sales
  
(8,951,392)
(4,932,026)

Gross profit
  
2,765,495
1,933,435

  

Distribution expenses
  
(393,850)
(195,234)

Administrative expenses
  
(1,739,304)
(1,533,514)

Operating profit/(loss)
  
632,341
204,687

  

Finance income
 11 
1,348
403

Finance expense
 11 
(28,832)
(16,825)

Profit before tax
  
604,857
188,265

  

Tax expense
 12 
(146,741)
(9,257)

Profit for the year
  
458,116
179,008


Total comprehensive income
  
458,116
179,008

The notes on pages 12 to 38 form part of these financial statements.

Page 7

 
Avtel (UK) Limited
Registered number: 06760533

 
Statement of financial position
As at 30 June 2024

2024
2023
Note
£
£

Assets

Non-current assets
  

Property, plant and equipment
 13 
336,512
136,055

Other non-current investments
 16 
42,380
42,380

Trade and other receivables
 18 
42,276
42,967

  
421,168
221,402

Current assets
  

Inventories
 17 
303,942
261,656

Trade and other receivables
 18 
3,284,620
3,004,660

Cash and cash equivalents
 26 
334,786
14,481

  
3,923,348
3,280,797

  

Total assets

  

4,344,516
3,502,199

Liabilities

Non-current liabilities
  

Loans and borrowings
 20 
215,356
236,767

Deferred tax liability
 12 
4,664
4,664

  
220,020
241,431

Current liabilities
  

Bank overdraft
 26 
22
27,332

Trade and other liabilities
 19 
2,968,291
2,652,388

Loans and borrowings
 20 
235,619
118,600

  
3,203,932
2,798,320

  

Total liabilities
  
3,423,952
3,039,751

  

  

Net assets
  
920,564
462,448


SHAREHOLDERS EQUITY
  

Share capital
 21 
2
2

Capital contribution
  
144,776
144,776

Retained earnings
  
775,786
317,670

TOTAL EQUITY
  
920,564
462,448

Page 8

 
Avtel (UK) Limited
Registered number: 06760533

 
Statement of financial position (continued)
As at 30 June 2024

The financial statements on pages 7 to 39 were approved and authorised for issue by the board of directors and were signed on its behalf by:



................................................
C Meldrum
Director
Date: 19 December 2024

The notes on pages 14 to 39 form part of these financial statements.

Page 9

 
Avtel (UK) Limited


 
For the year ended 30 June 2024


Share capital
Capital contribution
Retained earnings (restated)
Total equity (restated)


£
£
£
£

At 1 July 2022 (as previously stated)
2
144,776
145,479
290,257

Prior year adjustment
-
-
(6,817)
(6,817)

At 1 July 2022 (as restated)
2
144,776
138,662
283,440

Comprehensive income for the year



Profit for the year
-
-
179,008
179,008

Total comprehensive income for the year
-
-
179,008
179,008

Contributions by and distributions to owners





At 30 June 2023
2
144,776
317,670
462,448

At 1 July 2023
2
144,776
317,670
462,448

Comprehensive income for the year



Profit for the year
-
-
458,116
458,116

Total comprehensive income for the year
-
-
458,116
458,116

Contributions by and distributions to owners





At 30 June 2024
2
144,776
775,786
920,564

The notes on pages 14 to 39 form part of these financial statements.

Page 10

 
Avtel (UK) Limited


 
Statement of cash flows
For the year ended 30 June 2024

2024
2023
Note
£
£

Cash flows from operating activities
  

Profit for the year
  
458,116
179,008

Adjustments for
  

Depreciation of property, plant and equipment
 13 
94,828
74,792

Finance income
 11 
(1,348)
(403)

Finance expense
 11 
28,832
16,825

Income tax expense
 12 
146,741
9,257

  
727,169
279,479

Movements in working capital:
  

Increase in trade and other receivables
  
(279,147)
(713,831)

(Increase)/decrease in inventories
  
(42,286)
12,931

Increase in trade and other payables
  
175,390
414,162

Cash generated from operations
  
581,126
(7,259)

  

Income taxes paid
  
(6,228)
20,526

Net cash from operating activities

  
574,898
13,267

Cash flows from investing activities
  

Purchases of property, plant and equipment
  
(33,896)
(7,684)

Interest received
  
1,348
403

Net cash used in investing activities

  
(32,548)
(7,281)

Cash flows from financing activities
  

Repayment of bank borrowings
  
(80,004)
(80,004)

Payments of finance lease creditors
  
(85,899)
(73,887)

Interest paid on bank loans and leases
  
(28,832)
(16,825)

Net cash used in financing activities
  
(194,735)
(170,716)

Net increase/(decrease) in cash and cash equivalents
  
347,615
(164,730)

  

Cash and cash equivalents at the beginning of year
  
(12,851)
151,879

Cash and cash equivalents at the end of the year
 26 
334,764
(12,851)

The notes on pages 14 to 39 form part of these financial statements.

Page 11

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

1.


General information

Avtel (UK) Limited is a private company limited by shares and is incorporated in England with the
registration number 06760533. The address of the registered office is 5 Presley Way, Crownhill, 1st Floor, Milton Keynes, England, MK8 0ES.

2.


Basis of accounting

Statement of compliance and basis of accounting
The company's financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) including standards and interpretations issued by the International Accounting
Standards Board (IASB) and in accordance with International Accounting Standards in conformity with the
requirements of the Companies Act 2006.
Basis of accounting
These financial statements have been prepared on the historical cost basis.
The preparation of financial statements in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future
periods.
The accounting policies set out below have been applied to all periods presented.
Exemption from preparing consolidated financial statements
The company is a parent company that is also a subsidiary included in the consolidated financial
statements of a larger group by a parent undertaking that is not established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial
statements under section 401 of the Companies Act 2006.
 

Page 12

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

3.


Adoption of new and revised standards

Presentation of financial statements in accordance with IAS 1 (Revised 2007)
The financial statements are presented in accordance with IAS 1 Presentation of Financial Statements
(Revised 2007). The company has elected to present the "Statement of comprehensive income" as a
single statement. Two comparative periods are presented for the statement of financial position when the
company:
 - applies an accounting policy retrospectively;
 - makes a retrospective restatement of items in its financial statements; or
 - reclassifies items in the financial statements.
i
) New standards, interpretations and amendments effective
During the financial year, there were no new IFRSs or IFRIC interpretations that were effective for the first
time that would be expected to have a material impact on the company.
The following pronouncements have been adopted in the year and either had no impact on the financial
statements or resulted in changes to presentation and disclosure only: 
- Definition of Accounting Estimates (Amendments to IAS 8); effective 1 January 2023
- Classification regarding the disclosure of accounting policies (Amendments to IAS 1); effective 1 January 2023
- Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS12); effective 1 January 2023
- Insurance Contracts and amendments to IFRS 17; effective 1 January 2023
ii) New standards, interpretations and amendments not yet effective
At the date of authorisation of these financial statements, the following standards, interpretations and
amendments relevant to the company, which have not been applied in these financial statements, were in
issue but not yet effective:
The following amendments are effective for the period beginning 1 January 2024: 
- Classification of Liabilities as Current or Non-current - Disclosure of accounting policies (Amendment to IAS 1 and IFRS Practice Statement 2)
- Leases: Lease liability in a sale and leaseback (Amendments to IFRS 16)
- Non-current Liabilities with Covenants (Amendments to IAS 1)
The following amendments are effective for the period beginning 1 January 2026:
- IFRS S1 General Requirements for Dislcosure of Sustainability-related Financial Information
- IFRS S2 Climate-related Disclosures
None of the other standards, interpretations and amendments which are effective for periods beginning
after 30 June 2024 and which have not been adopted early are expected to have a material effect on
the financial statements. Management anticipates that all relevant pronouncements will be adopted for the
first period beginning on or after the effective date of the pronouncement.


4.


Functional and presentation currency

These financial statements are presented in pound sterling, which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated.

Page 13

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

5.Accounting policies


5.1

Going concern

The financial statements have been prepared on a going concern basis. The directors have a reasonable
expectation that the company will continue in operational existence for the foreseeable future.

 
5.2

Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognises revenue when it transfers control over a product or service to a customer.  Revenue is recognised whether at a point in time or over time, when (or as) the Company satisfies performance obligations by transferring the promised goods or services to its customers.
Revenue mainly arises from contracts for the provision of security systems.
To determine whether to recognise revenue, the Company follows a 5-step process:
     1. Identify the contract with a customer
     2. Identifying the performance obligations
     3. Determining the transaction price
     4. Allocating the transaction price to the performance obligations
     5. Recognising revenue when/as performance obligation(s) are satisfied.

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.


Sale of goods

Revenue from the sale of goods is recognised on the satisfaction of performance obligations, such as the transfer of a promised good, identified in the contract between the Company and the customer.

A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

  
5.3

Leasing

The Company assesses whether a contract is or contains a lease, at inception of a contract.  The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets.  For these leases the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease.  If this rate cannot be readily determined, the Company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise fixed lease payments (including in-substance fixed payments), less any lease incentives.
The lease liability is included in the 'Loans and borrowings' lines in the Statement of Financial Position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease laibility (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
 
Page 14

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

5.Accounting policies (continued)


5.3
Leasing (continued)


The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs.  They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter peiod of lease term and useful life of the underlying asset.  If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of use asset is depreciated over the useful life of the underlying asset.  The depreciation starts at the commencement of the lease.
Instead of performing an impairment review on the right-of use assets at the date of initial application, the Company has relied on its historic assessment as to whether leases were onerous immediately before the date of initial applciation of IFRS 16.
The right-of-use assets are included in the 'Property, Plant and Equipment' in the Statement of Financial Position.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead accounts for any lease and associated non-lease components as a single arrangement.  The Company has used this practical expedient.

 
5.4

Foreign currency

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
exchange differences on transactions entered into in order to hedge certain foreign currency risks (see  for hedging accounting policies); and
exchange differences on monetary items receivable from or payable to foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

Page 15

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

5.Accounting policies (continued)


5.5

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

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

 
5.6

Government grants

Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which they become receivable.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

 
5.7

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.


(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the Statement of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Page 16

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

5.Accounting policies (continued)


5.7
Taxation (continued)


(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

 
5.8

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost of certain items of property, plant and equipment at 01/07/2021, the Company's date to transition to IFRS, was determined with reference to its fair value at that date.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

Freehold property
30% Straight line
Plant and machinery
33% Straight line
Motor vehicles
25% Straight line
Fixtures and fittings
33% Straight line
Office equipment
33% Straight line
Computer equipment
33% Straight line
Computer software
33% Straight line

Page 17

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

5.Accounting policies (continued)

 
5.9

Inventories

Inventories are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Costs of inventories are determined on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, inventories are assessed for impairment.  If inventories are impaired, the carrying amount is reduced to its selling price less costs to complete and sell.  The impairment loss is recognised immediately in profit or loss.


5.10

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

 
5.11

Financial instruments

Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments.

Financial assets
Initial recognition and measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss ("FVPL"), transaction costs that are directly attributable to the acquisition of the financial asset.  Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Trade receivables are measured at the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third party, if the trade receivables do not contain a significant financing component at initial recognition.
Subsequent measurement
Investments in debt instruments
Subsequent measurement of debt instruments depends on the business model for managing the asset and the contractual cash flow characteristics of the asset.  The three measurement categories for classification of debt instruments are amortised cost, fair value through other comprehensive income ("FVOCI") and FVPL.  The three measurement categories for classification of debt instruments are:
Amortised cost
Financial assets that are held for the collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost.  Financial assets are measured at amortised cost using the effective interest method, less impairment.  Gains and losses are recognised in profit or loss when the assets are derecognised or impaired, and through amortisation process.
 
Page 18

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

5.Accounting policies (continued)


5.11
Financial instruments (continued)


Fair value through other comprehensive income ("FVOCI")
Financial assets theat are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI.  Financial assets measured at FVOCI are subsequently measured at fair value.  Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses and interest calculated using the effective interest method are recognised in profit or loss.  The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is de-reconised.
Fair value through profit or loss ("FVPL")
Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL.  A gain or loss on a debt instrument that is subsequently measured at FVPL and is not part of a hedging relationship is recognised in profit or loss in the period in which it arises.
Investments in equity instruments
On initial recognition of an investment in equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in FVOCI which will not be reclassifed subsequently to profit or loss.  Dividends from such investments are to be recognised in profit or loss which the right to receive payments is established.  For investments in equity instruments which the Company has not elected to present subsequent changes in FVOCI, changes in fair value are recognised in profit or loss.
Derecognition
A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired.  On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income for debt instruments is recognised in profit or loss.
Financial liabilities
Initial recognition and measurement
Finacial liabilities are recognised when, and only when, the Company becomes a party to the contractual provisions of the financial instrument.  The Company determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at FVPL, directly attributable transaction costs.
Subsequent measurement
After initial recognition, financial liabilities that are not carried at FVPL are subsequently measured at amortised cost using the effective interest method.  Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.
 
Page 19

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

5.Accounting policies (continued)


5.11
Financial instruments (continued)


Derecognition
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires.  On derecognition, the difference between the carrying amounts and the consideration paid is recognised in profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Impairment of financial assets
The Company recognises an allowance for expected credit losses ("ECLs") for all debt instruments not held at fair value through profit or loss and financial guarantee contracts.  ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate.  The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages.  For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL).  For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs.  Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.  The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment which could affect debtors' ability to pay.
The Company considers a financial asset in default when contractual payments are 90 days past due.  However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company.  A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

  
5.12

Defined contribution schemes

Contributions to defined contribution pension schemes are charged to the statement of comprehensive income in the year to which they relate.

Page 20

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

6.


Accounting estimates and judgments

6.1 Judgment

Stage of completion for revenue contracts

Determining the stage of completion for revenue contracts requires an estimate of the total expected revenue. Sales invoices are issued at key stages throughout the contract, the fulfilment stage determines the proportion of revenue recognised per contract. 


7.


Revenue


The following is an analysis of the Company's revenue for the year from continuing operations:


2024
2023
£
£


Project delivery
7,655,643
5,367,295

Labour income
4,061,244
1,498,166

11,716,887
6,865,461


8.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor:


2024
2023
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements
30,000
34,520

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 21

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

9.


Employee benefit expenses

2024
2023
£
£

Employee benefit expenses (including directors) comprise:

Wages and salaries
2,348,363
2,215,734

National Insurance
306,712
249,938

Defined contribution pension cost
51,313
45,773

2,706,388
2,511,445


The monthly average number of persons, including the directors, employed by the Company during the year was as follows:


2024
2023

Total
36
31

36
31


10.


Directors' remuneration

2024
2023
£
£


Directors' emoluments
99,948
99,498

Company contributions to pension schemes
5,474
4,276

Excess benefits paid to directors and past directors
5,204
5,184

110,626
108,958


Page 22

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

11.


Finance income and expense

Recognised in profit or loss


2024
2023
£
£
Finance income



Interest receivable from group companies
1,348
403

Total finance income

1,348
403

Finance expense

Bank interest payable
15,941
13,804

Finance leases (interest portion)
12,891
3,021

Total finance expense
28,832
16,825


Net finance expense recognised in profit or loss
(27,484)
(16,422)






Page 23

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

12.


Tax expense

12.1 Income tax recognised in profit or loss



2024
2023
£
£

Current tax

Current tax on profits for the year
146,741
9,257

Total current tax
146,741
9,257


146,741
9,257

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:


2024
2023
£
£


Profit for the year
458,116
179,008

Income tax expense (including income tax on associate, joint venture and discontinued operations)
146,741
9,257

Profit before income taxes
604,857
188,265


Tax using the company's domestic rate of 25% (2023: 20.5%)
151,214
40,015

Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
1,463
(1,397)

Capital allowances for the year in excess of depreciation
(5,936)
(107)

Unrelieved tax losses carried forward
-
(29,254)

Total tax expense
146,741
9,257

12.2 Deferred tax balances

The following is the analysis of deferred tax assets/(liabilities) presented in the statement of financial position:


2024
2023
£
£


Deferred tax liabilities
(4,664)
(4,664)

(4,664)
(4,664)

Page 24

Avtel (UK) Limited


 

 
Notes to the financial statements
For the year ended 30 June 2024

13.


Property, plant and equipment





Freehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Office equipment
Computer equipment
Other property, plant and equipment
Total

£
£
£
£
£
£
£
£



Cost or valuation










At 1 July 2022
163,734
2,453
176,535
21,812
7,777
68,144
59,884
500,339


Additions
-
1,700
-
-
-
5,984
-
7,684


Right-of-use assets
-
-
132,497
-
-
-
-
132,497


Disposals
-
(249)
-
-
-
-
-
(249)



At 30 June 2023
163,734
3,904
309,032
21,812
7,777
74,128
59,884
640,271


Additions
-
6,105
-
-
17,558
10,233
-
33,896


Right-of-use assets
178,280
-
83,109
-
-
-
-
261,389


Disposals
(163,734)
-
(141,335)
-
-
-
-
(305,069)



At 30 June 2024
178,280
10,009
250,806
21,812
25,335
84,361
59,884
630,487

Page 25


Avtel (UK) Limited


 

 
Notes to the financial statements
For the year ended 30 June 2024

13.Property, plant and equipment (continued)


Freehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Office equipment
Computer equipment
Other property, plant and equipment
Total

£
£
£
£
£
£
£
£



Accumulated depreciation and impairment










At 1 July 2022
130,938
1,879
146,436
21,129
7,238
61,920
59,884
429,424


Charge owned for the year
-
439
-
683
539
3,442
-
5,103


Disposals
-
(249)
-
-
-
-
-
(249)


Charge right-of-use for the year
28,111
-
41,827
-
-
-
-
69,938



At 30 June 2023
159,049
2,069
188,263
21,812
7,777
65,362
59,884
504,216


Charge owned for the year
-
2,210
-
-
2,213
5,728
-
10,151


Disposals
(163,734)
-
(141,335)
-
-
-
-
(305,069)


Charge right-of-use for the year
34,398
-
50,279
-
-
-
-
84,677



At 30 June 2024
29,713
4,279
97,207
21,812
9,990
71,090
59,884
293,975



Net book value


At 1 July 2022
32,796
574
30,099
683
539
6,224
-
70,915


At 30 June 2023
4,685
1,835
120,769
-
-
8,766
-
136,055


At 30 June 2024
148,567
5,730
153,599
-
15,345
13,271
-
336,512

Page 26
 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

13.Property, plant and equipment (continued)


13.1. Assets held under leases


The net book value of owned and leased assets included as "Property, plant and equipment" in the Statement of financial position is as follows:

30 June 2024
30 June 2023
£
£


Property, plant and equipment owned
34,347
10,601

Right-of-use assets, excluding investment property
302,165
125,454

336,512
136,055

Information about right-of-use assets is summarised below:

Net book value

30 June 2024
30 June 2023
£
£

Property
148,567
4,685

Motor vehicles
153,598
120,769

302,165
125,454



Additions to right-of-use assets

30 June 2024
30 June 2023
£
£

Additions to right-of-use assets
261,389
132,497

Page 27

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

14.


Subsidiaries

Details of the Company's material subsidiaries at the end of the reporting period are as follows:

Name of subsidiary
Place of incorporation and operation
Proportion of ownership interest and voting power held by the Company (%)


2024
2023






1SiStech Groep B.V


The principal activity of the company is that of a security system provider.
 
100

100

2SiStech Elektrotechniek B.V


The principal activity of the company is that of a security system provider.
 
100

100

3Avtel (NL) B.V


The principal activity of the company is that of a security system provider.
 
100

100

4Avtel (PL) Sp, z o.o


The principal activity of the company is that of a security system provider.
 
100

-


Page 28

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

15.


Leases




(i) Leases as a lessee



The Company has entered into several agreements for property and car leases, these have been measured from the inception date.


Lease liabilities are due as follows:

2024
2023
£
£

Contractual undiscounted cash flows due

Not later than one year
106,777
47,415

Between one year and five years
229,038
98,269

335,815
145,684




The following amounts in respect of leases have been recognised in profit or loss:

2024
2023
£
£

Interest expense on lease liabilities
12,891
3,021


16.

Other non-current investments

2024
2023
Note
£
£

Investments in subsidiary companies
 14 
42,380
42,380

  
42,380
42,380


17.


Inventories

2024
2023
£
£



Finished goods and goods for resale
303,942
261,656

303,942
261,656

Page 29

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

18.


Trade and other receivables


2024
2023
£
£


Trade receivables
953,200
608,323

Trade receivables - net
953,200
608,323

Receivables from related parties
1,040,149
1,631,760

Loans to related parties
42,276
42,967

Total financial assets other than cash and cash equivalents classified as loans and receivables
2,035,625
2,283,050

Prepayments and accrued income
1,107,099
637,258

Other receivables
184,172
127,319

Total trade and other receivables
3,326,896
3,047,627

Less: current portion - trade receivables
(953,200)
(608,323)

Less: current portion - prepayments and accrued income
(1,107,099)
(637,258)

Less: current portion - other receivables
(184,172)
(127,319)

Less: current portion - receivables from related parties
(1,040,149)
(1,631,760)

Total current portion
(3,284,620)
(3,004,660)

Total non-current portion
42,276
42,967

The carrying value of trade and other receivables classified as loans and receivables approximates fair value.
The value of impaired trade and other receivables is £Nil (2023: £Nil).

Page 30

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

19.


Trade and other payables


2024
2023
£
£


Current

Trade payables
1,385,948
1,224,651

Payables to related parties
119,298
237,679

Other payables
31,998
40,525

Accruals
1,081,255
704,785

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
2,618,499
2,207,640

Other payables - tax and social security payments
224,448
139,363

Deferred income
125,344
305,385

Total current trade and other payables
2,968,291
2,652,388

The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.


20.


Loans and borrowings

The book value and fair value of loans and borrowings are as follows:


Book value
Fair value
Book value
Fair value
2024
2024
2023
2023
£
£
£
£

Non-current

Bank loans - secured
-
-
146,654
146,654

Lease liabilities
215,356
237,624
90,113
90,113

215,356
237,624
236,767
236,767

Current

Overdrafts
22
232,248
27,332
27,332

Bank loans - secured
146,654
146,654
80,004
80,004

Lease liabilities
88,965
75,117
38,596
38,596

235,641
454,019
145,932
145,932

Total loans and borrowings
450,997
691,643
382,699
382,699

The bank loans are secured over all assets of the company.  The lease laibilities are secured over the asset that the lease relates to.

21.


Share capital

Page 31

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

21.Share capital (continued)

Issued and fully paid


2024
2024
2023
2023
Number
£
Number
£

Called up share capital shares of £1 each

At 1 July and 30 June
2

2

2
 
2
 

Page 32

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

22.


Reserves


Other reserves

Capital contribution reserve - The share capital and capital contribution reserve will remain at £144,776 in total.

Retained earnings

Include all current and prior period retained profits and losses.

23.


Financial instruments - fair values and risk management


23.1 Financial risk management objectives

The Company is exposed to financial risks arising from its operations and the use of financial instruments.  The key financial risks include foreign currency risk, credit risk and liquidity risk.  The Company's risk management policies focus on the unpredictability of financial markets and seek to, where appropriate, minimise potential adverse effects on the financial performance of the Company.  The Company does not have any written financial risk management policies and guidelines and there has been no change to the Company's exposure to these financial risks or the manner in which it manages and measures the risks.
The following sections provide details regarding the Company's exposure to the financial risks associated with financial instruments held in the ordinary course of business and the objectives, policies and processes for the management of these risks.


23.2 Market risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.  Current risk arises when transactions are denominated in foreign currencies.
The Company has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the functional currency.  The foreign currencies in which these transactions are denominated are mainly Great British Pound ("GBP"), United States Dollar ("USD"), Euro ("EUR"), Japanese Yen ("JPY"), Singapore Dollar ("SGD") and Australian Dollar ("AUD").  The Company's trade receivable and trade payable balances at the end of the reporting period have similar exposures.  The Company also hold cash and short-term deposits denominated in foreign currencies for working capital purposes.
However, the Company does not use any financial derivatives such as foreign currency forward contracts, foreign currency options or swaps for hedging purposes.
As at the end of the reporting period, the Company's foreign currency exposures are insignificant.  Accordingly, foreign exchange sensitivity analysis is not prepared.

Page 33

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

23.Financial instruments - fair values and risk management (continued)


23.3 Credit risk management

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations.  The Company's exposure to credit risk arises primarily from trade and other receivables.  Guidelines on credit terms provided to trade customers are established and continually monitored.  For other financial assets (including cash and short-term deposits, fixed deposits, investment securities and investment funds), the Company minimises credit risk by dealing exclusively with reputable and well-established local and foreign banks, and companies with high credit ratings and no history of defaults.
The Company's objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposures.  Credit policies with guidelines on credit terms and limits set the basis for risk control.  New customers are subject to credit evaluation while the Company continues to monitor existing customers, especially those with repayment issues.  In addition, appropriate allowances are made for probable losses when necessary for identified debtors.
The Company does not hold any collateral or other credit enhancements to cover its credit risks associated with its financial assets.
In order to minimise credit risk, the Company has developed and maintained the Company's credit risk gradings to categorise exposures according to their degree of risk of default.  The credit rating information is supplied by independent rating agencies where available and, if not available, the Company uses other publicly available financial information and the Company's own trading records to rate its major customers and other debtors.  The Company's exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.
The Company's current credit risk grading framework comprises the following categories:
 

Category
Description
Basis for recognising expected credit losses ("ECL")

Performing
The counterparty has a low risk of default and does not have any past-due amounts.
 
12-month ECL

Doubtful
Amount is >30 days past due or there has been a significant increase in credit risk since initial recognition.
 
Lifetime ECL - not credit-impaired

In default
Amount is >90 days past due or ther is evidence indicating the asset is credit-impaired.
 
Lifetime ECL - credit-impaired

Write-off
There is evidence indicating that the debtor is in severe financial difficulty and has no realistic prospect of recovery.
 
Amount is written off

Exposure to credit risk
At the end of the reporting period, the Company's maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position.  No other financial assets carry a significant exposure to credit risk.
 
Page 34

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

23.Financial instruments - fair values and risk management (continued)


23.3 Credit risk management (continued)


Credit risk concentration profile
At the end of the reporting period, there were no significant concentrations of credit risk due to the Company's many varied customers.
It is the Company's policy to sell to a diversity of creditworthy customers so as to reduce concentration of credit risk.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Company.  Cash and short-term deposits, investment securities and derivatives that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 18 (Trade receivables).
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds.  The Company's exposure to liquidity risk arises primarily from possible mismatches of the maturities of financial assets and liabilities.  The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of standby credit facilities.
Fair value of assets and liabilities
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The carrying amount of financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.
However, the Company does not anticipate that the carrying amounts recorded at the end of the reporting period would be significantly different from the values that would eventually be received or settled.
Capital management
The primary objective of the Company's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 30 June 2024 and 30 June 2023.  The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.  The Company is not subjected to externally imposed capital requirements.
The Company will continue to be guided by prudent financial policies of which gearing is an important aspect.
 
Page 35

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

23.Financial instruments - fair values and risk management (continued)


23.3 Credit risk management (continued)


Page 36

Avtel (UK) Limited


 

 
Notes to the financial statements
For the year ended 30 June 2024

23.Financial instruments - fair values and risk management (continued)



23.4 Liquidity risk management

Liquidity and interest risk tables

The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

Carrying amount
Total
1 - 3 months
3 - 12 months
1 - 2 years
2 - 5 years
More than 5 years
        £
        £
        £
        £
        £
        £
        £
30 June 2024









Secured bank loans

146,654

146,654

20,001

60,003

66,650

-

-

Finance lease liabilities

335,815

335,815

30,874

75,903

101,203

127,835

-

Trade payables

1,385,948

1,385,948

1,385,948

-

-

-

-



1,868,417
1,868,417
1,436,823
135,906
167,853
127,835
-

Carrying amount
Total
1 - 3 months
3 - 12 months
1 - 2 years
2 - 5 years
More than 5 years
        £
        £
        £
        £
        £
        £
        £
30 June 2023









Bank overdraft

27,332

27,332

27,332

-

-

-

-

Secured bank loans

226,658

226,658

20,001

60,003

80,004

66,650

-

Finance lease liabilities

128,709

128,709

14,852

23,867

32,955

57,035

-

Trade payables

1,224,651

1,224,651

1,224,651

-

-

-

-



1,607,350
1,607,350
1,286,836
83,870
112,959
123,685
-

Page 37
 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

24.


Related party transactions

Details of transactions between the Company and its related parties are disclosed below.

24.1 Trading transactions


During the year, the Company entered into the following trading transactions with related parties:



Sales of goods
Purchases of goods
2024
2023
2024
2023
£
£
£
£


AVTEL (Aust) Pty Ltd
17,729
4,647
-
-

AVTEL Holdings (Pte) Ltd
1,013,136
890,678
644,144
640,210

AVTEL Services (India) LLP
299,326
172,993
101,549
99,732

AVTEL Limited
11,693
8,922
-
-

AVTEL Korea Limited
3,306
4,880
-
-

AVTEL (NL) B.V.
2,693,339
2,282,319
1,202,992
11,051

AVTEL (Singapore) Pte Ltd
27,991
9,855
3,790
2,588

AVTEL (US), Inc.
43,880
909
37,014
45,343

Sistech Groep BV
-
-
-
3,668

AVTEL Taiwan
2,048
-
-
-

AVTEL Malaysia
1,925
-
-
-

4,114,373
3,375,203
1,989,489
802,592

The following balances were outstanding at the end of the reporting period:



Amounts owed by related parties
Amounts owed to related parties
2024
2023
2024
2023
£
£
£
£


AVTEL Holdings (Pte) Ltd
380,154
679,267
-
-

AVTEL Services India LLP
152,694
9,384
100,284
-

AVTEL Limited
-
-
-
969

AVTEL (NL) B.V.
495,075
912,822
-
-

Avtel (Singapore) Pte Ltd
-
-
19,013
199,841

AVTEL (US), Inc.
12,226
-
-
31,897

Sistech Groep BV
42,276
42,967
-
4,972

Associates
-
30,287
-
-

1,082,425
1,674,727
119,297
237,679

In 2024, £Nil has been recognised for bad or doubtful debts. In 2023, £1,560 was recognised for bad or doubtful debts in respect of the balance owed by AVTEL Data Destruction Pty Ltd.

Page 38

 
Avtel (UK) Limited
 

 
Notes to the financial statements
For the year ended 30 June 2024

25.


Controlling party

The company is a wholly owned subsidiary of Avtel Holdings Pte Ltd based in Singapore. The registered
office and trading address is 82 Ubi Avenue 4, #06-03 Edward Boustead Centre, Singapore 408832.  Copies of this company's group financial statements may be obtained from the registered office.


26.

Notes supporting statement of cash flows

2024
2023
£
£


Cash at bank available on demand
334,633
14,328

Cash on hand
153
153

Cash and cash equivalents in the statement of financial position

334,786
14,481


Bank overdrafts used for cash management purposes
(22)
(27,332)

Cash and cash equivalents in the statement of cash flows
334,764
(12,851)

Page 39