REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
FOR |
ITALK AFFILIATE TELECOMMUNICATIONS LTD |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
FOR |
ITALK AFFILIATE TELECOMMUNICATIONS LTD |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Director | 3 |
Report of the Independent Auditors | 5 |
Statement of Comprehensive Income | 9 |
Balance Sheet | 10 |
Statement of Changes in Equity | 11 |
Cash Flow Statement | 12 |
Notes to the Cash Flow Statement | 13 |
Notes to the Financial Statements | 14 |
ITALK AFFILIATE TELECOMMUNICATIONS LTD |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 MARCH 2024 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
Chartered Accountants |
Pavilion View |
19 New Road |
Brighton |
East Sussex |
BN1 1EY |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MARCH 2024 |
The director presents his strategic report for the year ended 31 March 2024. |
REVIEW OF BUSINESS |
The Company generates revenue through the sale of telephone, broadband and fibre broadband services to the consumer market across the UK. The Company markets its services via direct and indirect marketing channels. Costs incurred by the business are primarily related to the supply of wholesale services and equipment, marketing, and general overheads. |
The Director believes the financial key performance indicators of the business to be turnover, gross profit and loss/profit before taxation. |
For the financial year ending 2024, turnover during the year was £13,778,746 (2023: £13,689,522). This represented an increase on the prior year of 0.7%. |
The Company recorded a gross profit of £5,216,687 (2023: £4,828,622), which represents an 8% increase on the prior year. |
Total comprehensive income for the year represents a net loss of £1,393,452 (2023: £845,250). |
PRINCIPAL RISKS AND UNCERTAINTIES |
The management of the company and the execution of the company's strategies are subject to risks and uncertainties. |
Rising inflation in the UK means that consumers are under increasing pressure financially whilst supply side price increases are inevitable. We continue to monitor the market to ensure our products and services are priced both fairly and competitively. |
The "Cost of living Crisis" has impacted consumers across the country. This poses a risk to revenue collection, and we continue to refine internal strategy to ensure a robust yet fair collections process. |
OBJECTIVES AND STRATEGY |
The Company's core strategy is to provide affordable fixed line connectivity to consumers with the highest standard of Customer Care. We aim to achieve this by focussing on three key areas: Personnel, Supply Chain and Marketing. |
The Company invests heavily in its Staff and internal processes to ensure a high level of training, expertise and automation throughout all departments. This is reflected in our Trustpilot score which is used internally as a key performance indicator of Customer Satisfaction. |
We maintain strong relationships with all suppliers to ensure efficient spend enabling us to offer cost effective solutions to the market, and the Company continues to explore new and alternative marketing strategies to reach new and varied audiences. |
FUTURE PROSPECTS |
The shift from traditional broadband and fibre products to new high-speed Fibre-To-The-Premises services continues at pace, and the Company now predominantly sells products designed around this new technology. |
General availability of these services is strong, and we expect coverage to continue to increase rapidly over the coming years. As it does, we will continue to work with both new and existing customers with a strong focus to onboarding them on to the new products, as ultimately these services will provide both faster speeds and better quality of service, ensuring high satisfaction across our customer base. |
ON BEHALF OF THE BOARD: |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
REPORT OF THE DIRECTOR |
FOR THE YEAR ENDED 31 MARCH 2024 |
The director presents his report with the financial statements of the company for the year ended 31 March 2024. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of providing telephone and internet access services in the UK. |
DIVIDENDS |
In total, dividends of £270,200 were paid in the year ended 31 March 2024 (2023: £311,000). |
DIRECTOR |
FINANCIAL INSTRUMENTS |
The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities. |
Price risk |
The company carefully monitors costs incurred from suppliers and constantly reviews the pricing of its products to ensure that margins remain favourable. |
Credit risk |
The risk of financial loss due to third parties failing to honour their obligations arises where the company provides services to customers. The company has implemented policies to minimize such losses and require that terms are only granted to customers who meet the internal requirements for having suitable payment history and adequate creditworthiness. |
Liquidity risk |
The director manages daily the cost and borrowing requirements and is comfortable with the current arrangements in place. |
Cash flow risk |
The company's cash requirements are partially financed by bank loans. The business has maintained a good relationship with their bankers and there is no indication that support will not be ongoing. |
THIRD PARTY INDEMNITY PROVISION |
There is a third party indemnity provision in place for the benefit of the director of the company. |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is 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 director is 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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. |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
REPORT OF THE DIRECTOR |
FOR THE YEAR ENDED 31 MARCH 2024 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ITALK AFFILIATE TELECOMMUNICATIONS LTD |
Qualified opinion |
We have audited the financial statements of Italk Affiliate Telecommunications Ltd (the 'company') for the year ended 31 March 2024 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of 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, except for the possible effects of the matter described in the Basis for qualified opinion section of our report, the financial statements: |
- give a true and fair view of the state of the company's affairs as at 31 March 2024 and 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. |
Basis for qualified opinion |
The company's Other debtors include an amount of £1,008,636 due from the shareholder. We were unable to obtain sufficient appropriate audit evidence regarding the recoverability of this amount. Consequently, we were unable to determine whether the director's decision not to recognise a provision against the amount due was appropriate. |
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 Auditors' 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 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 qualified opinion. |
Material uncertainty related to going concern |
We draw attention to Note 2 in the financial statements, which explains that the company made a reported loss of £1,393,452 for the year ended 31 March 2024 (2023: £845,250) and had net current liabilities of £2,124,242 (2023: £1,761,587), including cash at bank of £51,153 (2023: £22,555) and bank and business loans of £225,260 (2023: £220,966) falling due within one year and £1,342,609 (2023: £1,527,044) falling due after more than one year. As stated in Note 2 these circumstances along with other matters referred to in Note 2 give rise to a material overall uncertainty that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 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. As described in the Basis for qualified opinion section of our report, a provision has not been recognised in respect of the amount due to the company from the shareholder. We have not been able to obtain sufficient and appropriate audit evidence regarding the recoverability of this amount and we are therefore unable to conclude that the net loss reported in the Strategic Report is materially correct in respect of this matter. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ITALK AFFILIATE TELECOMMUNICATIONS LTD |
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 Report of the Director. |
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 director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ITALK AFFILIATE TELECOMMUNICATIONS LTD |
Auditors' 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 a Report of the Auditors 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: |
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks. |
Audit approach to identifying and assessing potential risks related to irregularities |
Our procedures for identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, included the following: |
- Enquiring of management, including obtaining and reviewing supporting documentation, concerning the company's policies and procedures relating to: |
- identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; |
- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and |
- the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. |
- Discussing among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. |
- Obtaining an understanding of the legal and regulatory frameworks that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. |
The key laws and regulations we considered to have a direct effect on the financial statements included the Financial Reporting Standard FRS 102 "The Financial Reporting applicable in the UK and Republic of Ireland" and the Companies Act 2006, distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. |
Audit approach in response to identified risks |
Our procedures to respond to risks identified included the following: |
- Enquiring of management and, where appropriate, those charged with governance, as to whether the entity is in compliance with such laws and regulations. |
- Inspecting correspondence, if any, with the relevant licensing or regulatory authorities. |
- Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with reporting requirements. |
- 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, we also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
- Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud. |
Through these procedures, we have not become aware of any actual or suspected non-compliance. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ITALK AFFILIATE TELECOMMUNICATIONS LTD |
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements. This is particularly true for those laws and regulations far removed from transactions reflected in the financial statements. As with any audit, there remained a higher risk of non-detection of irregularities that result from fraud, due to an implied intent behind this, than from those that result from error. As stated in the audit standards, we are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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 a Report of the Auditors 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. |
for and on behalf of |
Statutory Auditors |
Chartered Accountants |
Pavilion View |
19 New Road |
Brighton |
East Sussex |
BN1 1EY |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
STATEMENT OF COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ | £ | £ |
TURNOVER |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
6,482,737 | 5,528,129 |
(1,266,050 | ) | (699,507 | ) |
Other operating income |
OPERATING LOSS | 4 | ( |
) | ( |
) |
Interest receivable and similar income |
(1,238,417 | ) | (675,063 | ) |
Interest payable and similar expenses | 5 |
LOSS BEFORE TAXATION | ( |
) | ( |
) |
Tax on loss | 6 | ( |
) |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
( |
) |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
BALANCE SHEET |
31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 8 |
CURRENT ASSETS |
Debtors: amounts falling due within one year | 9 |
Debtors: amounts falling due after more than one year |
9 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 10 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
( |
) |
CREDITORS |
Amounts falling due after more than one year |
11 |
NET (LIABILITIES)/ASSETS | ( |
) |
CAPITAL AND RESERVES |
Called up share capital | 15 |
Retained earnings | 16 | ( |
) |
SHAREHOLDERS' FUNDS | ( |
) |
The financial statements were approved by the director and authorised for issue on |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 MARCH 2024 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 April 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 March 2023 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 March 2024 | ( |
) | ( |
) |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | ( |
) |
Interest paid | ( |
) | ( |
) |
Finance costs paid | (5,600 | ) | - |
Tax paid |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
New loans in year |
Loan repayments in year | ( |
) | ( |
) |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) |
Increase/(decrease) in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
25,145 |
Cash and cash equivalents at end of year |
2 |
51,153 |
22,555 |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
NOTES TO THE CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 MARCH 2024 |
1. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2024 | 2023 |
£ | £ |
Loss before taxation | ( |
) | ( |
) |
Depreciation charges |
Profit on disposal of fixed assets | ( |
) |
Freehold property impairment | 1,588,791 | - |
Finance costs | 155,035 | 170,575 |
Finance income | (27,299 | ) | (24,444 | ) |
330,004 | (692,362 | ) |
Decrease in trade and other debtors |
Decrease in trade and other creditors | ( |
) | ( |
) |
Cash generated from operations | ( |
) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 March 2024 |
31/3/24 | 1/4/23 |
£ | £ |
Cash and cash equivalents | 51,153 | 22,555 |
Year ended 31 March 2023 |
31/3/23 | 1/4/22 |
£ | £ |
Cash and cash equivalents | 22,555 | 25,145 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1/4/23 | Cash flow | At 31/3/24 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 22,555 | 28,598 | 51,153 |
22,555 | 51,153 |
Debt |
Debts falling due within 1 year | (220,966 | ) | (4,294 | ) | (225,260 | ) |
Debts falling due after 1 year | (1,527,044 | ) | 184,435 | (1,342,609 | ) |
(1,748,010 | ) | 180,141 | (1,567,869 | ) |
Total | (1,725,455 | ) | 208,739 | (1,516,716 | ) |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
1. | STATUTORY INFORMATION |
iTalk Affiliate Telecommunications Ltd is a private company, limited by shares, incorporated in England and Wales. The company's registered number and registered office address can be found on the Company Information page. |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements have been prepared on the going concern basis which assumes that the company will continue in operational existence for the foreseeable future. Based on the reported results, the company made a loss of £1,393,452 for the year ended 31 March 2024 (2023: £845,250). At the year end the company had net current liabilities of £2,124,242 (2023: £1,761,587), including cash at bank of £51,153 (2023: £22,555), and net liabilities of £1,504,991 (2023: net assets of £158,661). The company had bank and business loans of £225,260 (2023: £220,966) falling due within one year and £1,342,609 (2023: £1,527,044) falling due after more than one year. |
After the year end, the company entered into a Company Voluntary Arrangement ('CVA') with its external creditors (taking effect on 23 October 2024). The director has concluded that the CVA will allow the company to continue to trade and generate sufficient profits to make distributions to its creditors in accordance with the CVA. Following the commencement of the CVA, the company has made monthly contributions to the CVA funds in accordance with the terms agreed. |
Due to the company's financial position at the year end and thereafter, a material uncertainty exists regarding the company's ability to meet its fixed costs and liabilities as they fall due. The existence of this material uncertainty may cast significant doubt on the company's ability to continue as a going concern. |
The director has considered the company's business prospects and all relevant aspects of the company's financing position, including its ability to generate positive cash flows and obtain any additional funding that may be required and the terms and requirements of the CVA. The director has reviewed the expected forecasts for the company and the levels of cash to be generated. Based on the current outlook, the director is confident in the company's ability to meet its financial requirements. On that basis, the director is satisfied that the going concern basis of preparing the financial statements is appropriate. |
Significant judgements and estimates |
In the application of the company's accounting policies, which are described below, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based in 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both the current and future periods. |
The areas for which estimation has been applied are considered to be in calculating depreciation and the useful economic lives of assets, bad debt provision, deferred tax and accrued and prepaid expenditure. Although these areas are subject to judgement, they are not considered to be subject to significant estimation. |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
The company provides telecommunication services to individual customers. The company recognises fixed subscription charges as revenue on a straight-line basis over the period that the services are provided. Upfront charges for connection and installation services are recognised at the point that the installation is completed. Variable charges such as call charges are recognised as and when the related services are delivered. |
Tangible fixed assets |
Motor vehicles | - |
Fixtures and fittings | - |
Computer equipment | - |
Depreciation is not charged on freehold land and buildings. This represents a departure from the Companies Act requirements concerning the depreciation of fixed assets, however the director considers that the adoption of this policy is necessary to give a true and fair view. |
Music equipment have been reviewed by the director at 31 March 2024. Where, in their opinion, these assets have an anticipated residual value below cost, provision has been made to write down the value of the assets to the estimated residual value. No depreciation is otherwise provided on these assets as in the opinion of the director the residual value of these assets is expected to be equal to or exceed cost. |
All other tangible fixed assets are stated at cost less accumulated depreciation less accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended by management. |
At each balance sheet date, the company reviews the carrying amount of its tangible fixed assets to determine whether there is any indication that any items have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any. |
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. Impairment loss is recognised as an expense immediately. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
2. | ACCOUNTING POLICIES - continued |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Operating leases |
Rentals payable under operating leases are charged to the Profit and Loss on a straight line basis over the period of the lease term. |
Financial instruments - financial assets |
Basic financial assets, including trade and other debtors, cash and bank balances and investments in commercial paper, are initially recognised at transaction price. |
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. |
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. |
Financial instruments - financial liabilities |
Basic financial liabilities, including trade and other creditors and bank loans are initially recognised at transaction price. |
Trade creditors 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. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method, unless the effect of discounting would be immaterial, in which case they are stated at cost. |
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between the amount initially recognised and redemption value being recognised in the statement of comprehensive income over the period of the borrowings, together with any interest and fees payable, using the effective interest method. |
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. |
3. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
3. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees during the year was as follows: |
2024 | 2023 |
Admin / Billing / Collections / Faults | 32 | 35 |
Compliance | 6 | 6 |
Customer Care | 26 | 29 |
Director | 1 | 1 |
IT | 4 | 4 |
Managers | 3 | 4 |
Recruitment | 2 | 2 |
Resolution | 3 | 3 |
Sales and marketing | 12 | 13 |
Studio | 2 | - |
2024 | 2023 |
£ | £ |
Director's remuneration |
Director's pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
4. | OPERATING LOSS |
The operating loss is stated after charging/(crediting): |
2024 | 2023 |
£ | £ |
Depreciation - owned assets |
Profit on disposal of fixed assets | ( |
) |
Auditors' remuneration |
Auditors' remuneration for non audit work |
Foreign exchange differences |
5. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2024 | 2023 |
£ | £ |
Mortgage interest |
Loan interest |
Interest on late paid tax |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
6. | TAXATION |
Analysis of the tax credit |
The tax credit on the loss for the year was as follows: |
2024 | 2023 |
£ | £ |
Deferred tax | ( |
) |
Tax on loss | ( |
) |
Reconciliation of total tax credit included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2024 | 2023 |
£ | £ |
Loss before tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of (2023 - |
( |
) |
( |
) |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | - | ( |
) |
Short term timing differences | - | (7 | ) |
earlier periods |
Losses carried forward | 264,756 | 138,860 |
Total tax credit | - | (388 | ) |
7. | DIVIDENDS |
2024 | 2023 |
£ | £ |
Interim |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
8. | TANGIBLE FIXED ASSETS |
Fixtures |
Freehold | Motor | and |
property | vehicles | fittings |
£ | £ | £ |
COST |
At 1 April 2023 |
Additions |
Disposals |
Impairments | (1,588,791 | ) | - | - |
At 31 March 2024 |
DEPRECIATION |
At 1 April 2023 |
Charge for year |
Eliminated on disposal |
At 31 March 2024 |
NET BOOK VALUE |
At 31 March 2024 |
At 31 March 2023 |
Music | Computer |
equipment | equipment | Totals |
£ | £ | £ |
COST |
At 1 April 2023 |
Additions |
Disposals | ( |
) | ( |
) |
Impairments | - | - | (1,588,791 | ) |
At 31 March 2024 |
DEPRECIATION |
At 1 April 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 March 2024 |
NET BOOK VALUE |
At 31 March 2024 |
At 31 March 2023 |
9. | DEBTORS |
2024 | 2023 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Other debtors |
Prepayments and accrued income |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
9. | DEBTORS - continued |
2024 | 2023 |
£ | £ |
Amounts falling due after more than one year: |
Tax |
Aggregate amounts |
Other debtors include £nil (2023: £519,731) due from a connected company. Amounts due from the connected company are unsecured, interest free and repayable on demand. |
10. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Bank loans and overdrafts (see note 12) |
Trade creditors |
Tax |
Social security and other taxes |
VAT | 1,974,458 | 935,948 |
Other creditors |
Accruals and deferred income |
11. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2024 | 2023 |
£ | £ |
Bank loans (see note 12) |
12. | LOANS |
An analysis of the maturity of loans is given below: |
2024 | 2023 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
Amounts falling due in more than five years: |
Repayable by instalments |
Bank loans more 5 yr by instal | 599,423 | 675,564 |
ITALK AFFILIATE TELECOMMUNICATIONS LTD (REGISTERED NUMBER: 06403147) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
13. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2024 | 2023 |
£ | £ |
Within one year |
Between one and five years |
Lease payments recognised in the Profit & Loss Account as an expense in the year are £121,756 (2023: £201,948) |
14. | SECURED DEBTS |
The following secured debts are included within creditors: |
2024 | 2023 |
£ | £ |
Bank loans |
A legal mortgage charge is held over the freehold property. A fixed and floating charge is held over all assets of the company. |
15. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
value: | £ | £ |
Ordinary | £1 | 100 | 100 |
Each share is entitled to one vote in any circumstances, pari passu to dividend payments or any other distribution, pari passu to participate in a distribution arising from a winding up of the company and no rights of redemption. |
16. | RESERVES |
Reserves include all current and prior period profits and losses. |
17. | RELATED PARTY DISCLOSURES |
During the year, the sole shareholder of the company received a salary of £24,000 (2023: £24,000), declared dividends of £270,200 (2023: £311,000) and received personal medical insurance with a value of £1,639 (2023: £1,901). At the year-end, the sole shareholder owed an amount of £1,008,636 (2023: £900,303) to the company. The amount, included in other debtors, is unsecured and not subject to any specific repayment terms. Interest is charged on the outstanding balance at 2.50% per annum, with total interest charged in the period of £23,602 (2023: £21,792). |
During the year, close family members of the sole shareholder received salaries of £100,970 (2023: £100,840) and benefits in kind of £5,382 (2023: £3,382). |
During the year, the total of key management personnel compensation was £365,800 (2023: £365,551). |
18. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party of the company is R A Church, the sole shareholder. |