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COMPANY REGISTRATION NUMBER: 13122176
AVR Photonics Group Limited
Consolidated Financial Statements
For the year ended
31 August 2024
AVR Photonics Group Limited
Consolidated Financial Statements
Year ended 31 August 2024
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
4
Independent auditor's report to the members
6
Consolidated statement of comprehensive income
11
Consolidated statement of financial position
12
Company statement of financial position
13
Consolidated statement of changes in equity
14
Company statement of changes in equity
15
Consolidated statement of cash flows
16
Notes to the consolidated financial statements
17
AVR Photonics Group Limited
Officers and Professional Advisers
The board of directors
D A Gillett
G A Holmes
A C C Hughes
G J Mudge
N J Tiley
Registered office
Unit 9 Avro Court
Esmine Business Park
Huntingdon
Cambridgeshire
PE29 6XS
Auditor
Streets Audit LLP
Chartered accountants & statutory auditor
Enterprise House
38 Tyndall Court
Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
PE2 6LR
Bankers
Santander UK
Bridle Road
Bootle
Merseyside
L30 4GB
AVR Photonics Group Limited
Strategic Report
Year ended 31 August 2024
The principal activity of the group continues to be specialist suppliers of high technology equipment to the scientific & technological community. We aim to present a balanced and comprehensive review of the development and performance of our business during the year and at the year end. Our review is consistent with the size and nature of our business, incorporating our key performance indicators and the principal risks and uncertainties that the business faces. We consider that the key performance indicators for the group are turnover, profit, net assets, and liquidity (cash balance). The directors report turnover in the year of £18.5m (2023 - £21.6m) with pre-tax losses for the year of £0.4m (2023 - £0.4m profit). At the year end the group had net assets of £2.8m (2023 - £3.6m) and cash of £0.7m (2023 - £1.8m). The group's principal financial instruments include cash and intra-group debtor balances. The existence of these financial instruments exposes the company to financial risks. The directors review and agree policies for managing each of these risks and they are summarised below. Inflation risk Inflation in the purchase price of goods and carriage has largely been recovered by sales pricing. Credit risk The group seeks to manage its credit risk by dealing with established customers or otherwise checking the creditworthiness of new customers, establishing clear contractual relationships with those customers and by identifying and addressing any credit issues arising in a timely manner. Liquidity risk The group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Short term flexibility where necessary is achieved by overdraft facilities. Outlook Conflicts in Eastern Europe and the Middle East, and tensions in East Asia, continue to be threats to the world economy. There is uncertainty about Government spending priorities in the USA and the UK following recent elections, and there is the prospect of international trade tariffs. The group is well placed to be resilient to changes in spending priorities and to mitigate new trade tariffs as it serves several diverse markets and has strong supply chains within Europe and within North America. Recent tax changes in the UK are not expected to make a material impact on our business. The gradual reduction of interest rates and absorption of the effects of inflation by businesses and consumers, are likely to lead to increased confidence of our customers to invest, but at a cautious pace. Whilst it carefully monitors market sentiment and customer enquiries, the group does not foresee any adverse impacts to trading. The group monitors its financial affairs and management accounting information covering all areas of the business, which is reviewed on a regular basis. With the risks noted above and uncertainties in mind, we are aware that any plans for the business may be subject to unforeseen future events outside of our control. Environment and Social Responsibility The group continued its sponsorship of school STEM activities (STEM = Science, Technology, Engineering & Mathematics), reaching out to a wider range of schools in the East of England, with the aim of encouraging children from a broad diversity of socio-economic, cultural and gender backgrounds to study STEM subjects and purse careers in STEM. It was pleasing to see increased engagement in these activities across our workforce. The group continued to invest in nurturing the well-being and development of its employees. Coaching, training, and social events all form a part of this mix. We see this as core to our values and to our continued success in future.
This report was approved by the board of directors on 8 January 2025 and signed on behalf of the board by:
D A Gillett
Director
Registered office:
Unit 9 Avro Court
Esmine Business Park
Huntingdon
Cambridgeshire
PE29 6XS
AVR Photonics Group Limited
Directors' Report
Year ended 31 August 2024
The directors present their report and the Consolidated financial statements of the group for the year ended 31 August 2024 .
Directors
The directors who served the company during the year were as follows:
D A Gillett
G A Holmes
A C C Hughes
G J Mudge
N J Tiley
Dividends
The directors do not recommend the payment of a dividend.
Disclosure of information in the strategic report
The group has chosen to set out in the strategic report information about further developments of the group and the financial instruments.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the Consolidated financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare Consolidated financial statements for each financial year. Under that law the directors have elected to prepare the Consolidated 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 Consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and the profit or loss of the group for that period. In preparing these Consolidated financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - prepare the Consolidated 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 Consolidated 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.
This report was approved by the board of directors on 8 January 2025 and signed on behalf of the board by:
D A Gillett
Director
Registered office:
Unit 9 Avro Court
Esmine Business Park
Huntingdon
Cambridgeshire
PE29 6XS
AVR Photonics Group Limited
Independent Auditor's Report to the Members of AVR Photonics Group Limited
Year ended 31 August 2024
Opinion
We have audited the Consolidated financial statements of AVR Photonics Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2024 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the Consolidated financial statements: - give a true and fair view of the state of the group's and of the parent company's affairs as at 31 August 2024 and of the group's loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the Consolidated 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 Consolidated financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the Consolidated financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the Consolidated financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the Consolidated financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the Consolidated 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 Consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Consolidated 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 there is a material misstatement in the Consolidated financial statements or a material misstatement of the other information. 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 the audit:
- the information given in the strategic report and the directors' report for the financial year for which the Consolidated financial statements are prepared is consistent with the Consolidated financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company Consolidated financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the Consolidated 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 Consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the Consolidated financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the Consolidated 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 Consolidated financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the company and sector in which it operates; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, employment, environmental and health and safety legislation; - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and - considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures to identify any unusual or unexpected relationships; - tested journal entries to identify unusual transactions; - assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 3 were indicative of potential bias; and - investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; - reading the minutes of meetings of those charged with governance; - inquiring of management as to actual and potential litigation and claims; and - reviewing correspondence with HMRC, relevant regulators and the company's legal advisors. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to inquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the Consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the Consolidated financial statements, including the disclosures, and whether the Consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated Consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. 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.
Jonathan Day
(Senior Statutory Auditor)
For and on behalf of
Streets Audit LLP
Chartered accountants & statutory auditor
Enterprise House
38 Tyndall Court
Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
PE2 6LR
23 April 2025
AVR Photonics Group Limited
Consolidated Statement of Comprehensive Income
Year ended 31 August 2024
2024
2023
Note
£
£
Turnover
4
18,417,491
21,517,885
Cost of sales
12,621,133
15,094,536
-------------
-------------
Gross profit
5,796,358
6,423,349
Distribution costs
374,847
303,115
Administrative expenses
5,475,658
5,407,904
Other operating income
5
3,452
29,185
------------
------------
Operating (loss)/profit
6
( 50,695)
741,515
Other interest receivable and similar income
10
17,983
14,284
Interest payable and similar expenses
11
280,899
344,603
------------
------------
(Loss)/profit before taxation
( 313,611)
411,196
Tax on (loss)/profit
12
301,026
407,891
---------
---------
(Loss)/profit for the financial year
( 614,637)
3,305
---------
---------
Foreign currency retranslation
( 9,731)
( 44,373)
---------
--------
Total comprehensive income for the year
( 624,368)
( 41,068)
---------
--------
All the activities of the group are from continuing operations.
AVR Photonics Group Limited
Consolidated Statement of Financial Position
31 August 2024
2024
2023
Note
£
£
Fixed assets
Intangible assets
13
6,249,060
7,382,814
Tangible assets
14
56,857
116,030
Investments:
15
Investments in associates
25
62,531
Other fixed asset investments
1,310
1,310
------------
------------
6,307,252
7,562,685
Current assets
Stocks
16
1,157,115
1,031,558
Debtors
17
1,447,066
1,876,302
Cash at bank and in hand
716,112
1,796,545
------------
------------
3,320,293
4,704,405
Creditors: amounts falling due within one year
18
2,644,596
4,630,766
------------
------------
Net current assets
675,697
73,639
------------
------------
Total assets less current liabilities
6,982,949
7,636,324
Creditors: amounts falling due after more than one year
19
4,010,468
4,010,468
Provisions
20
133
9,327
------------
------------
Net assets
2,972,348
3,616,529
------------
------------
Capital and reserves
Called up share capital
23
3,006,300
3,006,300
Share premium account
24
76,950
76,950
Reserve for own shares
24
( 19,813)
Profit and loss account
24
( 91,089)
533,279
------------
------------
Shareholders funds
2,972,348
3,616,529
------------
------------
These Consolidated financial statements were approved by the board of directors and authorised for issue on 8 January 2025 , and are signed on behalf of the board by:
D A Gillett
Director
Company registration number: 13122176
AVR Photonics Group Limited
Company Statement of Financial Position
31 August 2024
2024
2023
Note
£
£
Fixed assets
Investments
15
15,109,895
15,109,895
Current assets
Debtors
17
33
465
Cash at bank and in hand
3,453
67,882
-------
--------
3,486
68,347
Creditors: amounts falling due within one year
18
3,086,126
4,024,732
------------
------------
Net current liabilities
3,082,640
3,956,385
-------------
-------------
Total assets less current liabilities
12,027,255
11,153,510
Creditors: amounts falling due after more than one year
19
4,010,468
4,010,468
-------------
-------------
Net assets
8,016,787
7,143,042
-------------
-------------
Capital and reserves
Called up share capital
23
3,006,300
3,006,300
Share premium account
24
76,950
76,950
Reserve for own shares
24
( 19,813)
Profit and loss account
24
4,953,350
4,059,792
------------
------------
Shareholders funds
8,016,787
7,143,042
------------
------------
The profit for the financial year of the parent company was £ 893,558 (2023: £ 2,135,690 ).
These Consolidated financial statements were approved by the board of directors and authorised for issue on 8 January 2025 , and are signed on behalf of the board by:
D A Gillett
Director
Company registration number: 13122176
AVR Photonics Group Limited
Consolidated Statement of Changes in Equity
Year ended 31 August 2024
Called up share capital
Share premium account
Reserve for own shares
Profit and loss account
Total
£
£
£
£
£
At 1 September 2022
3,006,300
76,950
574,347
3,657,597
Profit for the year
3,305
3,305
Other comprehensive income for the year:
Foreign currency retranslation
( 44,373)
( 44,373)
------------
--------
----
---------
------------
Total comprehensive income for the year
( 41,068)
( 41,068)
At 31 August 2023
3,006,300
76,950
533,279
3,616,529
Loss for the year
( 614,637)
( 614,637)
Other comprehensive income for the year:
Foreign currency retranslation
( 9,731)
( 9,731)
------------
--------
----
---------
------------
Total comprehensive income for the year
( 624,368)
( 624,368)
Purchase of treasury shares
( 19,813)
( 19,813)
----
----
--------
----
--------
Total investments by and distributions to owners
( 19,813)
( 19,813)
------------
--------
--------
--------
------------
At 31 August 2024
3,006,300
76,950
( 19,813)
( 91,089)
2,972,348
------------
--------
--------
--------
------------
AVR Photonics Group Limited
Company Statement of Changes in Equity
Year ended 31 August 2024
Called up share capital
Share premium account
Reserve for own shares
Profit and loss account
Total
£
£
£
£
£
At 1 September 2022
3,006,300
76,950
1,924,102
5,007,352
Profit for the year
2,135,690
2,135,690
------------
--------
----
------------
------------
Total comprehensive income for the year
2,135,690
2,135,690
At 31 August 2023
3,006,300
76,950
4,059,792
7,143,042
Profit for the year
893,558
893,558
------------
--------
----
------------
------------
Total comprehensive income for the year
893,558
893,558
Purchase of treasury shares
( 19,813)
( 19,813)
----
----
--------
----
--------
Total investments by and distributions to owners
( 19,813)
( 19,813)
------------
--------
--------
------------
------------
At 31 August 2024
3,006,300
76,950
( 19,813)
4,953,350
8,016,787
------------
--------
--------
------------
------------
AVR Photonics Group Limited
Consolidated Statement of Cash Flows
Year ended 31 August 2024
2024
2023
£
£
Cash flows from operating activities
(Loss)/profit for the financial year
( 614,637)
3,305
Adjustments for:
Depreciation of tangible assets
59,364
47,132
Amortisation of intangible assets
1,133,754
1,133,754
Other interest receivable and similar income
( 17,983)
( 14,284)
Interest payable and similar expenses
280,899
344,603
Tax on profit
301,026
407,891
Accrued (income)/expenses
( 220,303)
305,636
Changes in:
Stocks
( 125,557)
77,894
Trade and other debtors
429,236
85,659
Trade and other creditors
( 1,309,425)
( 989,340)
------------
------------
Cash generated from operations
( 83,626)
1,402,250
Interest paid
( 280,899)
( 344,603)
Interest received
17,983
14,284
Tax paid
( 351,195)
( 405,811)
---------
------------
Net cash (used in)/from operating activities
( 697,737)
666,120
---------
------------
Cash flows from investing activities
Purchase of tangible assets
( 191)
( 98,805)
---------
------------
Net cash used in investing activities
( 191)
( 98,805)
---------
------------
Cash flows from financing activities
Purchase of own shares
( 19,813)
Proceeds from borrowings
71,240
Repayments of borrowings
( 433,932)
( 1,305,847)
---------
------------
Net cash used in financing activities
( 382,505)
( 1,305,847)
---------
------------
Net decrease in cash and cash equivalents
( 1,080,433)
( 738,532)
Cash and cash equivalents at beginning of year
1,796,545
2,535,077
------------
------------
Cash and cash equivalents at end of year
716,112
1,796,545
------------
------------
AVR Photonics Group Limited
Notes to the Consolidated Financial Statements
Year ended 31 August 2024
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Unit 9 Avro Court, Esmine Business Park, Huntingdon, Cambridgeshire, PE29 6XS.
2. Statement of compliance
These Consolidated financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The group has made a loss for the year of £743k overall, however this is after amortisation of £1.1m and the group reported a positive EBITDA of £858k for the year. The group and company also have strong balance sheets. For these reasons the directors have prepared the financial statements on a going concern basis.
Disclosure exemptions
The group is not entitled to reduced disclosures under FRS 102.
Consolidation
The Consolidated financial statements consolidate the Consolidated financial statements of AVR Photonics Group Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Judgements and key sources of estimation uncertainty
The directors make estimates and assumptions about the future. These etimates and assumptions impact recognised assets and liabilities, as well as revenue and expenses and other disclosures. These estimates are based on historical experience and on various assumptions considered reasonable under the prevailing conditions. The actual outcome may diverge from these estimates if other assumptions are made, or other conditions arise. The directors consider the following key judgements and assumptions; 1 Amortisation of goodwill Goodwill arising on consolidation has a useful economic life on 9 years. The directors assessment is based on a review of the subsidiary's previous trading performance and the expected market conditions. 2 Preference shares Preferences shares held in the group parent company met the requirements to be classified as equity.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all material timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
9 years straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Fixtures and fittings
-
33% straight line
Equipment
-
33% straight line
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Investments in associates
Investments in associates are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the associate.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
Financial instruments
The group and company hold basic financial instruments as defined in FRS 102. The financial assets and financial liabilities of the group and company and their measurement basis are as follows; Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at amortised cost. Financial liabilities - trade creditors, accruals and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
2024
2023
£
£
Sale of goods
18,417,491
21,517,885
-------------
-------------
The turnover is attributable to the one principal activity of the group. An analysis of turnover by the geographical markets that substantially differ from each other is given below:
2024
2023
£
£
United Kingdom
14,938,413
17,866,929
Overseas
3,479,078
3,650,956
-------------
-------------
18,417,491
21,517,885
-------------
-------------
5. Other operating income
2024
2023
£
£
Other operating income
3,452
29,185
-------
--------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2024
2023
£
£
Amortisation of intangible assets
1,133,754
1,133,754
Depreciation of tangible assets
59,364
47,132
Impairment of trade debtors
(157)
1,693
Foreign exchange differences
11,334
10,348
Operating leases
51,600
51,600
------------
------------
7. Auditor's remuneration
2024
2023
£
£
Fees payable for the audit of the consolidated financial statements
16,150
14,000
--------
--------
8. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2024
2023
No.
No.
Production staff
36
36
Management staff
5
5
----
----
41
41
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2024
2023
£
£
Wages and salaries
2,679,037
2,652,294
Social security costs
260,735
283,604
Other pension costs
214,820
97,572
------------
------------
3,154,592
3,033,470
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2024
2023
£
£
Remuneration
525,255
486,052
Company contributions to defined contribution pension plans
97,982
19,011
---------
---------
623,237
505,063
---------
---------
The number of directors who accrued benefits under company pension plans was as follows:
2024
2023
No.
No.
Defined contribution plans
4
4
----
----
Remuneration of the highest paid director in respect of qualifying services:
2024
2023
£
£
Aggregate remuneration
177,834
169,076
Company contributions to defined contribution pension plans
11,828
6,345
---------
---------
189,662
175,421
---------
---------
10. Other interest receivable and similar income
2024
2023
£
£
Interest on cash and cash equivalents
17,983
14,284
--------
--------
11. Interest payable and similar expenses
2024
2023
£
£
Other interest payable and similar charges
280,899
344,603
---------
---------
12. Tax on profit
Major components of tax expense
2024
2023
£
£
Current tax:
UK current tax expense
274,299
405,811
Adjustments in respect of prior periods
35,921
---------
---------
Total current tax
310,220
405,811
---------
---------
Deferred tax:
Origination and reversal of timing differences
( 9,194)
2,080
---------
---------
Tax on profit
301,026
407,891
---------
---------
Reconciliation of tax expense
The tax assessed on the (loss)/profit on ordinary activities for the year is higher than (2023: higher than) the standard rate of corporation tax in the UK of 25 % (2023: 21.50 %).
2024
2023
£
£
(Loss)/profit on ordinary activities before taxation
( 313,611)
411,196
---------
---------
(Loss)/profit on ordinary activities by rate of tax
( 78,403)
118,131
Effect of expenses not deductible for tax purposes
44,856
42,451
Effect of capital allowances and depreciation
298,103
219,994
Other adjustment to tax liability
29,953
27,315
---------
---------
Tax on profit
294,509
407,891
---------
---------
13. Intangible assets
Group
Goodwill
£
Cost
At 1 September 2023 and 31 August 2024
10,217,199
-------------
Amortisation
At 1 September 2023
2,834,385
Charge for the year
1,133,754
-------------
At 31 August 2024
3,968,139
-------------
Carrying amount
At 31 August 2024
6,249,060
-------------
At 31 August 2023
7,382,814
-------------
The company has no intangible assets.
14. Tangible assets
Group
Fixtures and fittings
Equipment
Total
£
£
£
Cost
At 1 September 2023
69,257
141,936
211,193
Additions
191
191
Disposals
( 17,862)
( 101,859)
( 119,721)
--------
---------
---------
At 31 August 2024
51,395
40,268
91,663
--------
---------
---------
Depreciation
At 1 September 2023
32,945
62,218
95,163
Charge for the year
22,282
37,082
59,364
Disposals
( 17,862)
( 101,859)
( 119,721)
--------
---------
---------
At 31 August 2024
37,365
( 2,559)
34,806
--------
---------
---------
Carrying amount
At 31 August 2024
14,030
42,827
56,857
--------
---------
---------
At 31 August 2023
36,312
79,718
116,030
--------
---------
---------
The company has no tangible assets.
15. Investments
Group
Shares in group undertakings
Interests in associates
Total
£
£
£
Share of net assets/cost
At 1 September 2023 and 31 August 2024
1,310
62,531
63,841
-------
--------
--------
Impairment
At 1 September 2023
Disposals
62,506
62,506
-------
--------
--------
At 31 August 2024
62,506
62,506
-------
--------
--------
Carrying amount
At 31 August 2024
1,310
25
1,335
-------
--------
--------
At 31 August 2023
1,310
62,531
63,841
-------
--------
--------
Company
Shares in group undertakings
£
Cost
At 1 September 2023 and 31 August 2024
15,109,895
-------------
Impairment
At 1 September 2023 and 31 August 2024
-------------
Carrying amount
At 1 September 2023 and 31 August 2024
15,109,895
-------------
At 31 August 2023
15,109,895
-------------
Subsidiaries, associates and other investments
Details of the investments in which the group and the parent company have an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Advanced Technology Ventures (UK) Limited, Unit 9 Avro Court, Ermine Buisness Park, Huntingdon, Cambridgeshire, PE29 6XS
Ordinary
100
Laser 2000 (UK) Limited, Unit 9 Avro Court, Ermine Buisness Park, Huntingdon, Cambridgeshire, PE29 6XS
Ordinary
100
AVRO Inc (doing business as AVR Optics), 1387 Fairpoint Rd. Ste. 500, Fairpoint, NY 14450-2008
Ordinary
100
Other significant holdings
Light Source Systems Inc, PO Box 812, Lincoln, CA, United States, 95648-0812
Ordinary
20
16. Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
1,157,115
1,031,558
------------
------------
----
----
17. Debtors
Group
Company
2024
2023
2024
2023
£
£
£
£
Trade debtors
1,332,529
1,746,267
Prepayments and accrued income
87,260
104,258
371
Other debtors
27,277
25,777
33
94
------------
------------
----
----
1,447,066
1,876,302
33
465
------------
------------
----
----
18. Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Trade creditors
935,106
1,476,610
Amounts owed to group undertakings
2,099,995
2,249,995
Accruals and deferred income
297,181
517,484
83,036
85,538
Social security and other taxes
353,959
456,951
101,001
85,011
Director loan accounts
433,932
867,864
433,932
867,864
Other creditors
624,418
1,311,857
368,162
736,324
------------
------------
------------
------------
2,644,596
4,630,766
3,086,126
4,024,732
------------
------------
------------
------------
Included in other creditors are loans from shareholders and directors, which are secured by a fixed and floating charge against the assets within the company.
19. Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Director loan accounts
2,169,645
2,169,645
2,169,645
2,169,645
Other creditors
1,840,823
1,840,823
1,840,823
1,840,823
------------
------------
------------
------------
4,010,468
4,010,468
4,010,468
4,010,468
------------
------------
------------
------------
Included in other creditors are loans from shareholders and directors, which are secured by a fixed and floating charge against the assets within the company. Included within creditors: amounts falling due after more than one year is an amount of £2,005,234 in respect of liabilities payable or repayable by instalments which fall due for payment after more than five years from the reporting date.
20. Provisions
Group
Deferred tax (note 21)
£
At 1 September 2023
9,327
Additions
( 9,194)
-------
At 31 August 2024
133
-------
The company does not have any provisions.
21. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Included in provisions (note 20)
133
9,327
----
-------
----
----
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2024
2023
2024
2023
£
£
£
£
Accelerated capital allowances
133
9,327
----
-------
----
----
22. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 214,820 (2023: £ 97,572 ).
23. Called up share capital
Issued, called up and fully paid
2024
2023
No.
£
No.
£
Ordinary shares of £ 0.50 each
102,600
51,300
102,600
51,300
Preference shares of £ 1 each
2,955,000
2,955,000
2,955,000
2,955,000
------------
------------
------------
------------
3,057,600
3,006,300
3,057,600
3,006,300
------------
------------
------------
------------
24. Reserves
Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs. Profit and loss account - This reserve records retained earnings and accumulated losses.
25. Analysis of changes in net debt
At 1 Sep 2023
Cash flows
At 31 Aug 2024
£
£
£
Cash at bank and in hand
1,796,545
(1,080,433)
716,112
Debt due within one year
(867,864)
433,932
(433,932)
Debt due after one year
(2,169,645)
(2,169,645)
------------
------------
------------
( 1,240,964)
( 646,501)
( 1,887,465)
------------
------------
------------
26. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Not later than 1 year
51,600
51,600
Later than 1 year and not later than 5 years
51,600
--------
---------
----
----
51,600
103,200
--------
---------
----
----
27. Contingencies
The subsidiary companies have provided a cross guarantee to Santander UK PLC for the ultimate parent undertaking.
AVR Photonics Group Limited
Notes to the Consolidated Financial Statements (continued)
Year ended 31 August 2024
28. Directors' advances, credits and guarantees
The directors maintain a loan account within the company. The account remained in credit throughout the period.
29. Related party transactions
Group
The total employee benefits received by key management personnel for their services to the group was £839,918 (2023 - £652,051). The directors have vendor loan notes owing to them totalling £2,630,577 (2023 - £3,037,509) and interest on these loan notes of £132,847 (2023 - £157,912). The loan notes accrue interest at a rate of 3% per annum. The group paid rent to the director's pension scheme totalling £51,600 (2023 - £51,600).