Company Registration No. SC291250 (Scotland)
RIGNET UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
RIGNET UK LIMITED
COMPANY INFORMATION
Directors
Ms S Duffy
Mr R Blair
Company number
SC291250
Registered office
Nessco House
Discovery Drive
Arnhall Business Park
Westhill
AB32 6FG
Auditor
Johnston Carmichael LLP
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
RIGNET UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Profit and loss account
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 24
RIGNET UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present their strategic report and financial statements in respect of RigNet UK Limited ("the company") for the year ended 31 March 2024. The company's ultimate parent, Viasat Inc. is listed on the NASDAQ Global Select Market.
Principal activity
The principal activity of the company continued to be the provision of managed communications for the upstream oil and gas industry.
Fair review of the business
The results of the company show a pre-tax loss of $2.9 million (2023: $2.0 million) for the year and turnover of $23.5 million (2023: $30.9 million). Net liabilities at the balance sheet date were $8.0 million (2023: $4.2 million). The directors consider key performance indicators for the company to be turnover, gross profit, profit before tax and net assets.
After the major downturn in the Oil & Gas market due to the Covid-19 pandemic, business has slowly recovered with the North Sea area remaining fairly stagnant, due largely to investment uncertainty in the basin as a result of the UK government fiscal tax policy.
Turnover decreased by 24% from the prior period principally due to the extended comparative period, and gross profit thereon was slightly reduced (from 19% to 17%). The main driver in this was in respect of the company's VSAT operations, which form a significant portion of its revenue streams. Although turnover remained relatively static on a month to month basis, maintaining the margin was challenging as the introduction of new service providers drove up the direct costs as we could not operate at capacity with these providers.
With the relative plateauing in revenue from 2023 to 2024, the company’s financial performance has regressed year on year, the gross profit decrease being due to under capacity on the bandwidth platforms. SG&A salary costs increased by around $100k per month due to alignment with the Viasat Inc. remuneration structure as well as new hires being brought in. The changes to the Corporate Global Transfer pricing also increased the entity administrative costs; these are up around $100k per month in the year to March 24. Pre global recharges, the company is cash generative in both the current and prior period, in respect of its underlying trade. The net liabilities position increased year on year at $8.0m versus $4.2m, reflecting the retained loss for the year. The directors continue to be of the view that the results generated in these challenging times represent a positive outcome, and reflect the ongoing investment by the company to be well positioned to participate in the recovery in the global oil and gas market, as part of the Viasat Inc. group.
Future developments
The oil and gas industry continues to operate in increasingly remote locations and requires additional communications to serve its operational, safety and crew welfare needs. RigNet UK Limited is well positioned to provide a premium managed communications service to current and new customers.
The company expects to maintain its customer base in 2024 & 2025 as part of an increase in activity within the global oil and gas industry. The company will continue to monitor market conditions to ensure it can respond and adapt, and be well placed for long-term success, with the support of its ultimate parent Viasat Inc.
RIGNET UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Principal risks and uncertainties
The company operates in a competitive market and manages this risk by endeavouring to provide good service and maintaining strong relationships with customers. The main risk to its business is considered to be the impact of lower oil and gas commodity prices on customer activity levels and investment decisions, particularly in light of UK government fiscal tax policy for the industry. While difficult to mitigate this risk across the UK segment, the company does have the ability to operate across different geographic regions, thereby focusing business development activity on regions which are seeing higher levels of activity. The company’s financial risk management policies and objectives are discussed within the Directors’ Report on pages 3-4.
Ms S Duffy
Director
18 February 2025
RIGNET UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid (2023: £nil). The directors do not recommend payment of a final dividend (2023: £nil).
Overseas branches
The company has an overseas branch in Cape Town, South Africa.
Going Concern
The company recorded a loss after tax of $3.8 million (2023: $3.7 million) for the year ended 31 March 2024. The net liabilities at the same balance sheet date were $8.0 million (2023: $4.2 million), with net current liabilities of $12.3 million (2023: $7.5 million) including $36.8 million (2023: $10.6 million) due to fellow group undertakings. It is appropriate to note, that financial performance of the company is subject to corporate recharges from the wider Viasat Inc. group, which significantly impacts the company’s financial performance. Excluding these recharges, the underlying performance of the company is cash generative, in both the current and prior years. Financial reporting and forecasting within the Viasat Inc. group is performed at a regional, service line level, rather than at a legal entity level. As such management do not ordinarily prepare financial forecasts for the company. However, as part of their going concern assessment for the company, management have overlaid the financial KPI forecast assumptions for the region for the next look forward period, onto the current financial performance for the company, to provide an indication of anticipated future financial performance for the company. Excluding group corporate recharges, both post year end actual and forecast financial performance for the company continues to be cash generative. The directors and management have considered a future period out to 31 March 2026.
Given the net liabilities and net current liabilities position at 31 March 2024, the directors have sought and received from its ultimate parent, Viasat Inc., confirmation in writing that it will continue to financially support the company for a minimum period of at least 12 months from the date of signing these financial statements. This financial support will also include the deferral of any intragroup liabilities, where payment would call into question the company's going concern applicability.
Having considered the financial position and future prospects, including the forecasts for the business and satisfying themselves that Viasat Inc. has the financial wherewithal to provide appropriate financial support if required, the directors have developed a reasonable expectation that the company has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing these financial statements. Accordingly, the going concern basis continues to be applied in preparing these financial statements.
Directors
The directors who held office during the year and up to the date of signature of the financial statements unless otherwise stated were as follows:
Ms S Duffy
Mr R Blair
Financial instruments
Financial risk management
The company's activities expose it to certain financial risks including liquidity risk, market risk and credit risk. The company does not use derivatives for either financial risk management or speculative purposes.
Liquidity risk
In order to maintain liquidity and to ensure sufficient funds are available for ongoing operations and future developments, management monitor the timing of cash flows and align these with its strategic planning. Further cash resources are available from the wider group if required, however the company's primary source of finance is the cash generated from trading activities.
RIGNET UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Market risk
The company's activities expose it primarily to the financial risk being changes in foreign currency exchange rates. Bank accounts are operated in sterling and US dollars, the two main trading currencies, which assists the company to monitor this exposure, through being able to receive and make payments in these currencies and thus operating natural hedging.
Credit risk
The company's principal financial assets are bank balances, trade receivables and amounts due from fellow group undertakings. Credit risk is primarily attributable to trade receivables and is managed through maintaining good customer relationships and the monitoring of credit levels and settlement periods. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The credit risk on liquid funds is considered limited because the counterparty is a bank with a recognised credit rating assigned by international credit rating agencies.
Future developments
The company has chosen in accordance with Companies Act 2006, s.414C(11) to set out 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. Details of future developments can be found in the Strategic Report on page 1 and forms part of this report by cross-reference.
Auditor
The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Ms S Duffy
Director
18 February 2025
RIGNET UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -
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.
RIGNET UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RIGNET UK LIMITED
- 6 -
Opinion
We have audited the financial statements of Rignet UK Limited (the 'company') for the year ended 31 March 2024 which comprise the Profit and Loss Account, the Balance Sheet, the Statement of Changes in Equity and the 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 31 March 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor 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.
RIGNET UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RIGNET UK LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where 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 set out on page 5, 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 responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, 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.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
RIGNET UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RIGNET UK LIMITED
- 8 -
Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company, focusing on provision of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
UK GAAP
Companies Act 2006
UK tax legislation
We gained an understanding of how the company is complying with laws and regulations by making enquires with management and those charged with governance. We corroborated these enquiries through our review of submitted returns, external inspections and relevant correspondence with regulatory bodies.
We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. We identified a heightened fraud risk in relation to:
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Making enquiries of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Performing audit work procedure over the risk revenue recognition, including testing a sample of sales for completeness through review of sales orders in the year and agreeing to customer documentation and entry into the finance system, incorporating appropriate cut-off procedures;
Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;
Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and assessing judgements made by management in their calculation of accounting estimates for potential management bias;
Completion of appropriate checklists and use of our experience to assess the company’s compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
RIGNET UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RIGNET UK LIMITED
- 9 -
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Stephen McIlwaine (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
21 March 2025
Chartered Accountants
Statutory Auditor
Bishop's Court
29 Albyn Place
Aberdeen
AB10 1YL
RIGNET UK LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
15-month
Year ended 31 March
Year ended 31 March
2024
2023
$
$
Turnover
3
23,479,659
30,875,647
Cost of sales
(19,580,602)
(24,917,560)
Gross profit
3,899,057
5,958,087
Administrative expenses
(3,939,566)
(3,934,268)
Exceptional items
4
(2,889,683)
(3,982,409)
Loss before taxation
5
(2,930,192)
(1,958,590)
Taxation
8
(849,708)
(1,729,716)
Loss for the financial year/period
(3,779,900)
(3,688,306)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and losses in the current year or prior period other than as included in the profit and loss account. Accordingly, no statement of comprehensive income is presented.
RIGNET UK LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 11 -
2024
2023
Notes
$
$
$
$
Fixed assets
Tangible assets
9
4,431,501
3,346,185
Current assets
Stocks
10
294,975
178,572
Debtors falling due after one year
11
58,907
33,875
Debtors falling due within one year
11
26,369,966
7,065,612
Cash at bank and in hand
433,180
230,959
27,157,028
7,509,018
Creditors: amounts falling due within one year
12
(39,505,632)
(15,020,901)
Net current liabilities
(12,348,604)
(7,511,883)
Total assets less current liabilities
(7,917,103)
(4,165,698)
Creditors: amounts falling due after more than one year
13
(66,933)
(38,438)
Net liabilities
(7,984,036)
(4,204,136)
Capital and reserves
Called up share capital
15
3
3
Profit and loss reserves
15
(7,984,039)
(4,204,139)
Total deficit
(7,984,036)
(4,204,136)
The financial statements were approved by the board of directors and authorised for issue on 18 February 2025 and are signed on its behalf by:
Ms S Duffy
Director
Company Registration No. SC291250
RIGNET UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
Share capital
Profit and loss reserves
Total
$
$
$
Balance at 1 January 2022
3
(515,833)
(515,830)
Period ended 31 March 2023:
Loss and total comprehensive expense for the period
-
(3,688,306)
(3,688,306)
Balance at 31 March 2023
3
(4,204,139)
(4,204,136)
Year ended 31 March 2024:
Loss and total comprehensive expense for the year
-
(3,779,900)
(3,779,900)
Balance at 31 March 2024
3
(7,984,039)
(7,984,036)
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
1
Accounting policies
Company information
Rignet UK Limited ("the company") is a limited company domiciled and incorporated in Scotland. The registered office is Nessco House, Discovery Drive, Arnhall Business Park, Westhill, AB32 6FG. The nature of the company's operations and its principal activities are set out within the Strategic Report on page 1.
1.1
Accounting convention
The 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. There were no material departures from this standard.
The financial statements are presented in US$ which the directors believe to be the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest US$.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
FRS 102 reduced disclosure framework
The company meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it. The company's ultimate parent company is Viasat Inc., which prepares consolidated financial statements in which the company's results are included and which are publicly available. Copies of the group financial statements for Viasat Inc. may be requested from Investor Relations, Viasat Inc., 6155 El Camino Real, Carlsbad, California 92009.
The company has taken advantage of the following disclosure exemptions under FRS 102 where applicable:
(a) The requirements of Section 7 Statement of Cash Flows and Section 3 Financial Statement Presentation paragraph 3.17 (d);
(b) The requirement of Section 33 Related Party Disclosures paragraph 33.7;
(c) The requirements of Section 26 Share Based Payment paragraphs 26.18 (b), 26.19 to 26.21 and 26.23, on the basis that any awards made are delivered from the parent company's instruments (Viasat Inc) and in the opinion of the directors, equivalent disclosures as required by FRS 102 are contained within the group financial statements of Viasat Inc;
(d) The requirements of Section 11 Basic Financial Instruments paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a) (iii), 11.48(a) (iv), 11.48(b) and 11.48(c).
Preparation of consolidated financial statements
The financial statements present information about the company as an individual undertaking and not about its group. The company has not prepared group financial statements as it is exempt from the requirement to do so by section 401 of the Companies Act 2006 as it is a subsidiary of another company which prepares consolidated financial statements including the company and its subsidiaries which are publicly available (note 19). These financial statements therefore present information about the company as an individual undertaking and not as a group.
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
1.2
Going concern
The company recorded a loss after tax of $3.8 million (2023: $3.7 million)true for the year ended 31 March 2024. The net liabilities at the same balance sheet date were $8.0 million (2023: $4.2 million), with net current liabilities of $12.3 million (2023: $7.5 million) including $36.8 million (2023: $10.6 million) due to fellow group undertakings. It is appropriate to note, that financial performance of the company is subject to corporate recharges from the wider Viasat Inc. group, which significantly impacts the company’s financial performance. Excluding these recharges, the underlying performance of the company is cash generative, in both the current and prior years. Financial reporting and forecasting within the Viasat Inc. group is performed at a regional, service line level, rather than at a legal entity level. As such management do not ordinarily prepare financial forecasts for the company. However, as part of their going concern assessment for the company, management have overlaid the financial KPI forecast assumptions for the region for the next look forward period, onto the current financial performance for the company, to provide an indication of anticipated future financial performance for the company. Excluding group corporate recharges, both post year end actual and forecast financial performance for the company continues to be cash generative. The directors and management have considered a future period out to 31 March 2026.
Given the net liabilities and net current liabilities position at 31 March 2024, the directors have sought and received from its ultimate parent, Viasat Inc., confirmation in writing that it will continue to financially support the company for a minimum period of at least 12 months from the date of signing these financial statements. This financial support will also include the deferral of any intragroup liabilities, where payment would call into question the company's going concern applicability.
Having considered the financial position and future prospects, including the forecasts for the business and satisfying themselves that Viasat Inc. has the financial wherewithal to provide appropriate financial support if required, the directors have developed a reasonable expectation that the company has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing these financial statements. Accordingly, the going concern basis continues to be applied in preparing these financial statements.
1.3
Reporting period
During the prior period, the company extended its accounting reference date to 31 March 2023. As a result, the current year covers 12 months to 31 March 2024 whereas the comparative period covers 15 months ended 31 March 2023. Therefore prior period amounts (including related notes) are not directly comparable.
1.4
Turnover
Turnover represents amounts receivable for goods and services stated net of VAT and trade discounts. Turnover is recognised when the company fulfils its contractual obligations to customers by supplying goods and services. Where services are performed gradually over time, turnover is recognised as activity progresses by reference to the value of work performed. Network service fee revenue is based on fixed price, day-rate contracts and is recognised monthly as the service is provided. Generally, customer contracts also provide for installation and maintenance services. Installation services are paid upon initiation of the contract and recognised over the life of the respective contract. Maintenance charges are recognised as specific services are performed. Deferred revenue consists of deferred installation billings, customer deposits and other prepayments for which services have not yet been rendered.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
10-15% straight line
Plant and machinery
10-33% straight line
Fixtures, fittings & equipment
10-33% straight line
Motor vehicles
20-33% straight line
The costs of assets under construction are capitalised as work progresses. Once assets are complete and available for use, they are transferred to the relevant category and depreciated from that date.
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 recognised in the profit and loss account.
Expenditure incurred after the asset is put to use, such as repairs and maintenance costs are expensed in the period incurred, while other expenses that are expected to generate future economic benefits are capitalised.
1.6
Impairment of fixed assets
At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any) by comparing this to the assets' carrying value. The recoverable amount of the assets is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtained as a result of the asset's continued use.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks.
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
1.9
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.
Financial assets
Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.
Basic financial assets
Basic financial assets, which include debtors, amounts due from fellow group companies 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. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the investment to the net carrying amounts on initial recognition.
Impairment of financial assets
Financial assets 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.
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, which include creditors and amounts due to fellow group companies, are initially recognised at transaction price 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.
Basic financial liabilities are subsequently carried at amortised cost, using the effective interest rate method.
Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. 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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
1.15
Foreign exchange
Transactions in currencies other than US$ 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 are included in the profit and loss account for the period.
1.16
The company's employees are eligible to participate in the ultimate parent's share incentive plans (Viasat Inc.). Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity settled share-based payments is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions. The fair value of options granted is recognised as an expense with a corresponding increase in equity of Viasat Inc. Viasat Inc. does not levy an intragroup recharge on the company as the amount of that recharge is considered not material for the group.
Fair value of options is measured by using an appropriate pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
1.17
Exceptional items comprise income and costs which the directors consider as material to the profit and loss account, that their separate disclosure is necessary for an appropriate understanding of the company's financial performance.
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.
The following are considered to be either judgements that have had the most significant effect on amounts recognised in the financial statements, or estimates that are dependent on assumptions which could change in the next financial year and which have a material effect on the carrying amounts of assets and liabilities recognised at the balance sheet date.
Critical judgements in applying the company's accounting policies
Impairment of tangible assets
In applying the accounting policy regarding impairment of tangible assets, management make judgements in their consideration for possible impairment indicators, which in turn leads to a judgement as to whether an estimation of recoverable value is required. Management have determined that there are no indicators of impairment which would require an impairment loss to be recognised in the year ended 31 March 2024.
The directors consider that there are no other judgements, estimates and underlying assumptions which have a significant risk of causing a material adjustment to the carrying value of assets and liabilities.
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
Year ended
15-month period ended
31 March
31 March
2024
2023
$
$
Turnover
Provision of services
23,222,203
29,881,466
Sale of goods
257,456
994,181
23,479,659
30,875,647
Turnover analysed by geographical market
Year ended
15-month period ended
31 March
31 March
2024
2023
$
$
UK
8,805,380
11,211,941
Europe
1,517,795
1,957,839
Africa
11,710,350
14,136,352
Rest of World
1,446,134
3,569,515
23,479,659
30,875,647
4
Exceptional items
Year ended
15-month period ended
31 March
31 March
2024
2023
$
$
Expenditure
Global transfer pricing charges in
5,712,610
6,494,331
Regional transfer pricing recharges out
(2,822,927)
(2,511,922)
2,889,683
3,982,409
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
5
Loss before tax
Year ended
15-month period ended
31 March
31 March
2024
2023
Loss before tax for the year is stated after charging:
$
$
Exchange losses
22,973
191,372
Depreciation of owned tangible fixed assets
1,252,529
1,494,708
Operating lease charges
458,674
643,853
The audit fee for 2024 was £30,100 (2023: £28,000) and the company also bore audit fees on behalf of other UK entities totalling £45,150 (2023: £43,000).
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Administration and support
25
27
Production
38
38
63
65
Their aggregate remuneration comprised:
Year ended
15-month period ended
31 March
31 March
2024
2023
$
$
Wages and salaries
4,971,738
6,203,566
Social security costs
610,661
704,275
Pension costs
199,417
225,922
5,781,816
7,133,763
7
Directors' remuneration
Each of the directors who served during the current year and prior period were remunerated by other group undertakings and received no remuneration for their services to the company.
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
8
Taxation
Year ended
15-month period ended
31 March
31 March
2024
2023
$
$
Current tax
Foreign current tax on profits for the current period
849,708
714,289
Deferred tax
Origination and reversal of timing differences
1,015,427
Total tax charge
849,708
1,729,716
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Year ended
15-month period ended
31 March
31 March
2024
2023
$
$
Loss before taxation
(2,930,192)
(1,958,590)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(732,548)
(372,132)
Tax effect of expenses that are not deductible in determining taxable profit
3,674
Movement in deferred tax not recognised
(278,028)
1,770,521
Group relief surrendered
1,148,045
73,613
Remeasurement of deferred tax for changes in tax rates
(181,222)
Foreign tax suffered
849,708
714,289
Other differences
(137,469)
(124,051)
Fixed asset differences
(154,976)
Taxation charge for the year
849,708
1,729,716
From 1 April 2023 UK corporation tax rate changed to 25%. Any deferred tax expected to unwind after 1 April 2023 has been calculated at 25%.
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
9
Tangible fixed assets
Leasehold improvements
Assets under construction
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
$
$
$
$
$
$
Cost
At 1 April 2023
58,640
359,454
28,804,583
730,509
6,735
29,959,921
Additions
658,710
1,709,035
2,367,745
Disposals
-
(29,900)
(29,900)
Transfers
(416,561)
416,561
At 31 March 2024
58,640
601,603
30,900,279
730,509
6,735
32,297,766
Depreciation and impairment
At 1 April 2023
58,640
25,825,195
723,166
6,735
26,613,736
Depreciation charged in the year
1,247,681
4,848
1,252,529
At 31 March 2024
58,640
27,072,876
728,014
6,735
27,866,265
Carrying amount
At 31 March 2024
601,603
3,827,403
2,495
4,431,501
At 31 March 2023
359,454
2,979,388
7,343
3,346,185
10
Stocks
2024
2023
$
$
Finished goods and goods for resale
294,975
178,572
11
Debtors
2024
2023
Amounts falling due within one year:
$
$
Trade debtors
5,695,440
5,402,419
Amounts owed by group undertakings
20,189,279
1,171,195
Other debtors
39,367
13,621
Prepayments and accrued income
445,880
478,377
26,369,966
7,065,612
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
11
Debtors
(Continued)
- 23 -
2024
2023
Amounts falling due after more than one year:
$
$
Other debtors
58,907
33,875
Total debtors
26,428,873
7,099,487
Amounts due from fellow group undertakings are unsecured, interest free and repayable on demand.
12
Creditors: amounts falling due within one year
2024
2023
$
$
Trade creditors
1,561,949
3,058,581
Amounts due to fellow group undertakings
36,758,326
10,618,015
Corporation tax payable
40,486
Other taxation and social security
13,940
Deferred income
100,339
90,074
Other creditors
-
134,881
Accruals
1,044,532
1,105,410
39,505,632
15,020,901
Amounts due to fellow group undertakings are unsecured, interest free and repayable on demand.
13
Creditors: amounts falling due after more than one year
2024
2023
$
$
Deferred income
66,933
38,438
14
Retirement benefit schemes
2024
2023
Defined contribution schemes
$
$
Charge to profit or loss in respect of defined contribution schemes
199,417
225,922
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.
Included within accruals are pension contributions of $42,616 (2023: $40,557).
RIGNET UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
15
Share capital and reserves
2024
2023
$
$
Ordinary share capital
Issued and fully paid
2 ordinary shares of £1 each
3
3
Profit and loss account
The profit and loss account represents cumulative profits and losses, net of dividends and other adjustments.
16
Operating lease commitments
Lessee
The total future minimum lease payments under non-cancellable operating leases are as follows:
2024
2023
$
$
Within one year
302,066
303,763
Between two and five years
137,390
439,456
439,456
743,219
17
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
$
$
Acquisition of tangible fixed assets
121,744
65,377
18
Related party transactions
The company has taken advantage of the exemption available in accordance with Section 33 of FRS 102 "Related Party Disclosures" not to disclose transactions entered into between two or more wholly owned members of the same group.
19
Ultimate controlling party
The immediate parent company is RigNet UK Holdings Limited, a company registered at Nessco House Discovery Drive, Arnhall Business Park, Westhill, Aberdeenshire, AB32 6FG.
The company's ultimate parent and the company which heads the largest and smallest group of undertakings to which the results of the company are consolidated is Viasat Inc, a company registered in Delaware, United States of America. Viasat Inc is listed on the NASDAQ Global Select Market. Copies of the financial statements may be requested from Investor Relations, Viasat Inc, 6155 El Camino Real, Carlsbad, California 92009.
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