Company registration number 04252845 (England and Wales)
VIRTUAL IT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
VIRTUAL IT LIMITED
COMPANY INFORMATION
Directors
D Somen
J Somen
L Strong (Chairman)
P Tiller
Chair
L Strong
Secretary
D Somen
Company number
04252845
Registered office
1st Floor, Omni House
252 Belsize Road
London
England
NW6 4BT
Auditor
MGI Midgley Snelling LLP
Ibex House
Baker Street
Weybridge
Surrey
KT13 8AH
VIRTUAL IT LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9 - 10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 31
VIRTUAL IT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 1 -
The directors present the strategic report for the year ended 30 September 2024.
Principal activities
The principal activity of the company continued to be that of managed IT service encompassing provision of hardware, software, email, remote access, disaster recovery and support as well as providing related consultancy services.
Review of the business
The results for the year and the financial position of the group are shown in the following statutory accounts.
The group measures performance by year on year revenue growth and earnings before interest, depreciation and amortisation (EBITDA), along with a number of other key performance indicators which are reviewed every month by the Board and senior management. The group produces an annual detailed business plan and monthly management information detailing revenues, margins, profitability, cash flows and operational measures against which performance is reviewed.
Management has spent the last year working on fully integrating all our acquisitions and ensuring that both the B2B and the education divisions are functioning as smoothly and efficiently as possible to ensure excellent customer service for our clients and good financial returns for our shareholders. We have invested significantly into our sales and account management teams which now number nearly twenty people.
Management has also worked hard on management of costs, both by ongoing negotiations with long standing suppliers to extract improved margins on resold products and services, and at the overhead level. The group continues to invest in line of business applications to streamline processes and to deliver further operational efficiencies.
The group is also investing consistently in employee satisfaction and rewards and targeting high employee retention and happiness.
Principal risks and uncertainties
The company's activities are subject to risks and uncertainties, which may affect future financial performance. There may be additional risks and uncertainties not currently known or that are not believed to be material.
The company is exposed to a variety of financial and operational risks which could have an impact on the company's future performance. At the year end the company's key risks were considered and set out below.
Competitive Risk
There are a number of MSPs who provide similar services. However, the group prides itself on outstanding customer services, investment in staff and product innovation. This mitigates the risk of client churn and over the years has resulted in long-standing relationships with many customers.
Financial Risk
The company's principal financial assets are bank deposits and trade receivables. A majority of the company's sales are recurring based on long term contracts. As a result, recurring sales and cashflows are stable, easily forecast and well managed. All new pay-monthly customers are asked to pay in advance by direct debit and customers on annual contracts are asked to pay annually in advance.
Operational Risk
The company invests in, and has developed, a range of technology applications to ensure uninterrupted service provision with multiple layers of redundancy across infrastructure, applications, security and premises, thereby keeping services continuously available to customers in real time.
Cyber Risk
The company and its customers as with all companies and individuals today are exposed to risk from cyber attacks. The company has invested significantly in software systems processes and training to counter such attacks for both itself and its clients and many clients purchase various cyber security protection services from the business.
VIRTUAL IT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 2 -
Development and performance
Management was pleased with the steady delivery of organic growth in both divisions and all product lines throughout the year leading to a steady increase in recurring gross margin. In parallel to this, management worked hard to control overhead cost and were therefore able to steadily increase the all important “recurring gross margin less overhead cost” metric. We intend to continue with the same plan in 2025.
Key performance indicators
The company's key performance indicators (KPIs) are recurring revenue, gross margin and EBITDA. The table below sets out the results of the year under review.
D Somen
Director
14 January 2025
VIRTUAL IT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2024.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid during the year.
Shortly after the year-end, on 29 October 2024, the company approved a dividend of £1,156,322, equivalent to £0.80 per share. These will be recognised in the financial statements to 30 September 2025.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
D Somen
J Somen
L Strong (Chairman)
P Tiller
Auditor
The auditor, MGI Midgley Snelling LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management and future developments.
VIRTUAL IT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 4 -
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
D Somen
Director
14 January 2025
VIRTUAL IT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VIRTUAL IT LIMITED
- 5 -
Opinion
We have audited the financial statements of Virtual IT Limited (the 'company') for the year ended 30 September 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 company's affairs as at 30 September 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
VIRTUAL IT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VIRTUAL IT LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In planning and designing our audit tests, we identify and assess the risks of material misstatements within the financial statements, whether due to fraud or error. Our assessment of these risks includes consideration of the nature of the industry and sector, the control environment and the business performance along with the results of our enquiries of management, about their own identification and assessment of the risks of irregularities. We are also required to perform specific procedures to respond to the risk of management override.
As a result of this assessment, we considered the opportunities and incentives that may exist within the company for fraud and identified that the greatest area of risk was in relation to management override, the valuation of goodwill and completeness of income.
We have obtained an understanding of the legal and regulatory frameworks that the company operates in from discussions with the directors and our knowledge of the company and its industry sector. We have focused on the provisions of those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and local tax legislation.
VIRTUAL IT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VIRTUAL IT LIMITED
- 7 -
We performed the following audit procedures after consideration of the above risks which included the following:
enquiry of management of actual and potential litigation and claims;
review of contracts and orders to sales invoices, and review of sales recorded after the balance sheet date for any income that has been excluded from the period;
impairment review of goodwill ensuring assets acquired are continuing to provide future economic benefits and revenue streams acquired are profitable;
reviewing correspondence with HMRC;
reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
The engagement partner has assessed that all engagement team members were made aware of the relevant laws and regulations and potential fraud risks and were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
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. The risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
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.
Sarah Squires BEng FCA
Senior Statutory Auditor
For and on behalf of MGI Midgley Snelling LLP
15 January 2025
Chartered Accountants
Statutory Auditor
Ibex House
Baker Street
Weybridge
Surrey
KT13 8AH
VIRTUAL IT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
17,415,528
14,164,403
Cost of sales
(8,158,430)
(6,983,422)
Gross profit
9,257,098
7,180,981
Administrative expenses
(8,295,592)
(6,534,051)
Other operating income
4,048
5,001
Operating profit
4
965,554
651,931
Income from shares in group undertakings
8
280,315
Other interest receivable and similar income
8
9,638
5,979
Interest payable and similar expenses
9
(51,617)
(111,374)
Amounts written off investments
(48,545)
(1)
Profit before taxation
1,155,345
546,535
Tax on profit
10
(425,179)
(206,651)
Profit for the financial year
730,166
339,884
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 13 to 31 form part of these financial statements.
VIRTUAL IT LIMITED
BALANCE SHEET
AS AT 30 SEPTEMBER 2024
30 September 2024
- 9 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
12
3,491,975
4,076,137
Other intangible assets
12
9,385
35,173
Total intangible assets
3,501,360
4,111,310
Tangible assets
13
212,610
233,497
Investments
14
100
48,645
3,714,070
4,393,452
Current assets
Stocks
17
91,331
111,350
Debtors
18
2,496,159
2,388,796
Cash at bank and in hand
1,557,747
1,609,924
4,145,237
4,110,070
Creditors: amounts falling due within one year
19
(5,490,894)
(5,977,318)
Net current liabilities
(1,345,657)
(1,867,248)
Total assets less current liabilities
2,368,413
2,526,204
Creditors: amounts falling due after more than one year
20
(671,736)
Provisions for liabilities
Provisions
22
285,600
Deferred tax liability
23
14,478
(14,478)
(285,600)
Net assets
2,353,935
1,568,868
Capital and reserves
Called up share capital
26
14,454
14,454
Share premium account
177,500
177,500
Other reserves
25
104,403
49,502
Profit and loss reserves
2,057,578
1,327,412
Total equity
2,353,935
1,568,868
The notes on pages 13 to 31 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
VIRTUAL IT LIMITED
BALANCE SHEET (CONTINUED)
AS AT 30 SEPTEMBER 2024
30 September 2024
- 10 -
The financial statements were approved by the board of directors and authorised for issue on 14 January 2025 and are signed on its behalf by:
D Somen
Director
Company registration number 04252845 (England and Wales)
VIRTUAL IT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 11 -
Share capital
Share premium account
Share option reserve
Profit and loss reserves
Total
£
£
£
£
£
As restated for the period ended 30 September 2023:
Balance at 1 October 2022
14,454
177,500
-
1,448,589
1,640,543
Restatement adjustment
-
49,502
(461,061)
(411,559)
As restated at 1 October 2022
14,454
177,500
49,502
987,528
1,228,984
Year ended 30 September 2023:
Profit and total comprehensive income
-
-
-
339,884
339,884
Balance at 30 September 2023
14,454
177,500
49,502
1,327,412
1,568,868
Year ended 30 September 2024:
Profit and total comprehensive income
-
-
-
730,166
730,166
Credit to equity for equity settled share-based payments
-
-
54,901
54,901
Balance at 30 September 2024
14,454
177,500
104,403
2,057,578
2,353,935
The notes on pages 13 to 31 form part of these financial statements.
VIRTUAL IT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
31
1,184,720
2,319,720
Interest paid
(51,617)
(111,374)
Income taxes paid
(210,674)
(199,367)
Net cash inflow from operating activities
922,429
2,008,979
Investing activities
Purchase of intangible assets
(39,385)
(1,594,301)
Purchase of tangible fixed assets
(100,263)
(134,734)
Proceeds from disposal of tangible fixed assets
11,859
7,949
Interest received
9,638
5,979
Dividends received
280,315
Net cash generated from/(used in) investing activities
162,164
(1,715,107)
Financing activities
Repayment of bank loans
(1,136,770)
307,965
Payment of finance leases obligations
(1,459)
Net cash (used in)/generated from financing activities
(1,136,770)
306,506
Net (decrease)/increase in cash and cash equivalents
(52,177)
600,378
Cash and cash equivalents at beginning of year
1,609,924
1,009,546
Cash and cash equivalents at end of year
1,557,747
1,609,924
The notes on pages 13 to 31 form part of these financial statements.
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 13 -
1
Accounting policies
Company information
Virtual IT Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1st Floor, Omni House, 252 Belsize Road, London, England, NW6 4BT.
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 has taken advantage of the exemption under section 402 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group
1.2
Going concern
Given the strength of the company balance sheet and following another successful year of trading, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of business combinations over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.5
Intangible fixed assets other than goodwill
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation 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:
Software licenses
5 years
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
25%-33% straight line
Fixtures and fittings
12.5% straight line
Computers
25% straight line
Motor vehicles
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Fixed asset investments
Interests in subsidiaries and associates are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Cost is calculated using the average weighted method.
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
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 17 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.15
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.17
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 18 -
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.18
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.19
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock
Determine whether any provision is required against slow moving or obsolete stock items. These decisions will depend on an assessment of the expiry date of the goods held in stock at the balance sheet date along with a physical inspection to identify any damaged stock items.
Debtor recoverability
Determine whether there are any debtors that have been overdue for an extended period of time, or there is any indication of any customers who may be facing financial problems. The company regularly reviews the overdue debit balances and determines based on either their previous trading experience with the customer, or their knowledge of the debtor whether a repayment should be expected.
Tangible fixed assets
Determine whether there are indicators of impairment of the company's tangible assets. Factors taken into consideration when reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 19 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the asset and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as the working condition of the assets and whether the assets are still in use are both taken into account.
Intangible fixed assets
Goodwill arises from the excess of purchase consideration over the net assets of former subsidiaries that have been hived up into the business. The directors have determined a finite useful life of 10 years for goodwill, applying straight-line amortisation over this period.
This useful life reflects the directors' expectation that the acquired asset will continue to provide future economic benefits.
Share options
In determining the charge to the Statement of Comprehensive Income, the Directors have used the Black-Scholes model which makes assumptions about future performance, retention and timescales and is therefore a best estimate.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Services
14,764,435
11,728,060
Hardware
2,651,093
2,436,343
17,415,528
14,164,403
2024
2023
£
£
Other revenue
Interest income
9,638
5,979
Dividends received
280,315
-
Commissions received
4,048
5,001
All turnover arose within the United Kingdom.
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 20 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
2,940
2,648
Depreciation of owned tangible fixed assets
100,027
104,339
Loss on disposal of tangible fixed assets
9,264
-
Amortisation of intangible assets
620,245
472,143
Loss on disposal of intangible assets
29,090
-
Share-based payments
54,901
-
Operating lease charges
281,508
259,350
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
23,000
24,080
Auditor's remuneration for the year ended 30 September 2024 is paid to MGI Midgley Snelling LLP (2023: Wellers).
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Sales and administration
26
27
Customer support and services
110
77
Total
136
104
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
5,146,708
3,875,224
Social security costs
583,483
442,836
Pension costs
148,797
123,418
5,878,988
4,441,478
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 21 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
214,531
200,901
Company pension contributions to defined contribution schemes
5,765
5,385
220,296
206,286
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
196,531
179,488
Company pension contributions to defined contribution schemes
5,765
5,385
The number of directors for whom retirement benefits are accruing under defined benefit contribution schemes amounted to 1 (2023 - 1)
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
9,638
5,979
Income from fixed asset investments
Income from shares in group undertakings
280,315
Total income
289,953
5,979
Disclosed on the profit and loss account as follows:
Income from shares in group undertakings
280,315
Other interest receivable and similar income
9,638
5,979
Dividends received relates to a final distribution from JSPC Computer Services Limited. The company was dissolved on 1 October 2024.
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 22 -
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
51,617
95,374
Other finance costs:
Other interest
16,000
51,617
111,374
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
394,036
211,390
Adjustments in respect of prior periods
665
Total current tax
394,701
211,390
Deferred tax
Origination and reversal of timing differences
30,478
(4,739)
Total tax charge
425,179
206,651
From 1 April 2023, the UK corporation tax rate changed from 19% to 25%, with marginal relief available for profits between £50,000 and £250,000, therefore the effective tax rate last year differs to this year.
2024
2023
£
£
Profit before taxation
1,155,345
546,535
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.01%)
288,836
120,292
Tax effect of income not taxable in determining taxable profit
(70,079)
Adjustments in respect of prior years
665
Permanent capital allowances in excess of depreciation
(4,640)
(10,784)
Non-tax deductible amortisation of goodwill and impairment
154,519
99,483
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
28,575
2,039
Other timing differences
(3,175)
(4,379)
Deferred tax
30,478
Taxation charge for the year
425,179
206,651
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 23 -
11
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2024
2023
Notes
£
£
In respect of:
Fixed asset investments
14
48,545
1
Recognised in:
Amounts written off investments
48,545
1
The impairment losses in respect of subsidiaries are recognised in other gains and losses in the profit and loss account.
12
Intangible fixed assets
Goodwill
Software licenses
Total
£
£
£
Cost
At 1 October 2023
6,084,797
195,145
6,279,942
Additions
33,912
5,473
39,385
Disposals
(128,294)
(128,294)
At 30 September 2024
6,118,709
72,324
6,191,033
Amortisation and impairment
At 1 October 2023 as restated
2,008,660
159,972
2,168,632
Amortisation charged for the year
618,074
2,171
620,245
Disposals
(99,204)
(99,204)
At 30 September 2024
2,626,734
62,939
2,689,673
Carrying amount
At 30 September 2024
3,491,975
9,385
3,501,360
At 30 September 2023 as restated
4,076,137
35,173
4,111,310
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 24 -
13
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 October 2023
230,463
126,859
192,483
21,671
571,476
Additions
54,884
3,553
29,451
12,375
100,263
Disposals
(38,041)
(17,632)
(12,375)
(68,048)
At 30 September 2024
247,306
112,780
221,934
21,671
603,691
Depreciation and impairment
At 1 October 2023
118,299
51,439
152,159
16,082
337,979
Depreciation charged in the year
60,486
14,918
21,639
2,984
100,027
Eliminated in respect of disposals
(34,663)
(11,489)
(773)
(46,925)
At 30 September 2024
144,122
54,868
173,798
18,293
391,081
Carrying amount
At 30 September 2024
103,184
57,912
48,136
3,378
212,610
At 30 September 2023
112,164
75,420
40,324
5,589
233,497
14
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
15
48,545
Investments in associates
16
100
100
100
48,645
Movements in fixed asset investments
Shares in subsidiaries and associates
£
Cost or valuation
At 1 October 2023
48,645
Amounts written off
(48,545)
At 30 September 2024
100
Carrying amount
At 30 September 2024
100
At 30 September 2023
48,645
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 25 -
15
Subsidiaries
Details of the company's subsidiaries at 30 September 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
JSPC Computer Services Limited
Omni House, 252 Belsize Road, London, England, NW6 4BT
Ordinary
100.00
Computer Talk Limited
Omni House, 252 Belsize Road, London, England, NW6 4BT
Ordinary
100.00
Both subsidiaries were not trading during the year and have been dissolved shortly after the year end.
16
Associates
Details of the company's associates at 30 September 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Maya Solutions Limited
25 Grove House 76 Sidmouth Avenue, Isleworth, England, TW7 4FQ
Ordinary
30.00
17
Stocks
2024
2023
£
£
Finished goods and goods for resale
91,331
111,350
There were no impairment losses to recognise at 30 September 2023 (2023: Nil)
18
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,255,516
1,071,990
Other debtors
845
13,857
Prepayments and accrued income
1,214,275
1,261,426
2,470,636
2,347,273
Deferred tax asset (note 23)
16,000
2,470,636
2,363,273
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
18
Debtors
(Continued)
- 26 -
2024
2023
Amounts falling due after more than one year:
£
£
Other debtors
25,523
25,523
Total debtors
2,496,159
2,388,796
19
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
21
465,034
Trade creditors
1,299,659
1,403,097
Amounts owed to group undertakings
281,315
Corporation tax
394,036
210,009
Other taxation and social security
639,622
602,472
Other creditors
43,851
66,899
Accruals and deferred income
3,113,726
2,948,492
5,490,894
5,977,318
20
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
21
671,736
21
Loans and overdrafts
2024
2023
£
£
Bank loans
1,136,770
Payable within one year
465,034
Payable after one year
671,736
The bank loans were fully settled during the year.
22
Provisions for liabilities
2024
2023
£
£
-
285,600
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
22
Provisions for liabilities
(Continued)
- 27 -
In the previous year, a provision arose in respect of deferred consideration on business acquisitions undertaken. This has been fully settled in the year.
23
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Balances:
£
£
£
£
Accelerated capital allowances
18,566
-
-
16,000
Retirement benefit obligations
(4,088)
-
-
-
14,478
-
-
16,000
2024
Movements in the year:
£
Asset at 1 October 2023
(16,000)
Charge to profit or loss
30,478
Liability at 30 September 2024
14,478
The deferred tax liability set out above is expected to reverse within 24 months and relates to accelerated capital allowances that are expected to mature within the same period.
24
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
148,797
123,418
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
Amounts due in relation to the defined contribution pension scheme as at 30 September 2024 were £35,259 (2023: £29,050).
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 28 -
25
Share-based payment transactions
Liabilities and expenses
The company operates a share options scheme under a non-approved Enterprise Management Scheme.
75,000 options were granted between 2015 and 2020, all of which are still outstanding. The options vest immediately on issue and have a exercise price of between £2.45 and £4.
35,000 options were granted in 2021, all of which are still outstanding. The options vest immediately on issue and have a exercise price of £4.
During the year a further 32,500 options were granted, all of which are outstanding. The options vest immediately on issue and have a exercise price of £5.
All the options have a maximum term of 10 years.
Under the scheme no options were exercised in the year.
Using the Black-Scholes model the directors have calculated a charge of £54,901 (2023: £Nil) for the current year. The model makes assumptions about future performance, and it therefore is a best estimate.
The accumulated amount as stated in the share option reserve at year end is £104,403 (2023: £49,502).
26
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
1,445,402
1,445,402
14,454
14,454
27
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
268,174
112,590
Between two and five years
555,444
361,808
In over five years
13,107
21,000
836,725
495,398
28
Events after the reporting date
Shortly after the year-end, on 29 October 2024, the company approved a dividend of £1,156,322, equivalent to £0.80 per share. As this approval occurred after the reporting period, the dividend has not been recognised as a liability in these financial statements.
29
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
29
Related party transactions
(Continued)
- 29 -
Sales
Sales
Purchases
Purchases
2024
2023
2024
2023
£
£
£
£
Entities over which the entity has control, joint control or significant influence
6,045
6,527
147,753
125,082
2024
2023
Amounts due to related parties
£
£
Entities over which the entity has control, joint control or significant influence
15,724
38,326
Sales and purchases are made under normal market conditions. Amounts due at the year end are repayable within 30-60 days.
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Other related parties
756
373
Sales and purchases are made under normal market conditions. Amounts due at the year end are repayable within 30-60 days.
30
Ultimate controlling party
Eldama Invest Limited (incorporated in British Virgin Islands) is regarded by the directors as being the company's ultimate parent company. Its registered office is Trident Chambers, PO Box 146, Road Town, VG1110, British Virgin Islands.
The ultimate controlling party is J Somen.
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 30 -
31
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
730,166
339,884
Adjustments for:
Taxation charged
425,179
206,651
Finance costs
51,617
111,374
Investment income
(289,953)
(5,979)
Loss on disposal of tangible fixed assets
9,264
-
Loss on disposal of intangible assets
29,090
-
Amortisation and impairment of intangible assets
620,245
472,144
Depreciation and impairment of tangible fixed assets
100,027
105,163
Impairment of investments
48,545
1
Equity settled share based payment expense
54,901
-
(Decrease)/increase in provisions
(285,600)
285,600
Movements in working capital:
Decrease/(increase) in stocks
20,019
(24,561)
Increase in debtors
(123,363)
(802,210)
Increase in creditors
75,898
1,631,653
Cash generated from operations
1,466,035
2,319,720
32
Analysis of changes in net funds
1 October 2023
Cash flows
30 September 2024
£
£
£
Cash at bank and in hand
1,609,924
(52,177)
1,557,747
Borrowings excluding overdrafts
(1,136,770)
1,136,770
-
473,154
1,084,593
1,557,747
33
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment
As restated at 30 Sep 2023
£
£
£
Fixed assets
Goodwill
4,487,696
(411,559)
4,076,137
Capital and reserves
Other reserves
-
49,502
49,502
Profit and loss reserves
1,788,473
(461,061)
1,327,412
Total equity
1,980,427
(411,559)
1,568,868
VIRTUAL IT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
33
Prior period adjustment
(Continued)
- 31 -
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 30 September 2023
£
£
£
Profit for the financial period
339,884
-
339,884
Reconciliation of changes in equity
1 October
2022
£
Adjustments to prior year
Increase/decrease in accumulated amortisation
(411,559)
Total adjustments
(411,559)
Equity as previously reported
1,640,543
Equity as adjusted
1,228,984
Analysis of the effect upon equity
Share option reserve
49,502
Profit and loss reserves
(461,061)
(411,559)
Reconciliation of changes in profit for the previous financial period
2023
£
Total adjustments
-
Profit as previously reported
339,884
Profit as adjusted
339,884
Notes to reconciliation
A restatement has been made to correct retained earnings as at 1 October 2022 for the recognition of a share option scheme and for an adjustment to correct accumulative amortisation on goodwill.
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