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SpliceGroup Europe Limited
Registered number: 02622534
Annual report and
financial statements
For the year ended 31 December 2024
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SPLICEGROUP EUROPE LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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SPLICEGROUP EUROPE LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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SPLICEGROUP EUROPE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
We aim to provide a balanced and comprehensive review of the development and performance of the Company during the whole year and its position at the year end. Our view is consistent with the size and complex nature of the Company.
The trading results for the year are set out on page 10 of the Financial Statements. The Company has had another strong year generating revenue of £12.1m (2023: £12.6m).
The Company recognises the effort and dedication of its hard-working team and their commitment in providing a high-quality service to our customers and partners.
The Company is driven by continual investment into innovation. This continual investment has enabled the Company to provide real time solutions to both existing and new customers and improve efficiencies and reporting systems. This has greatly assisted in retaining existing trade and has provided a solid base to attract new customers.
The Company is continuing to develop the strong relationships it has internationally which gives it a strong competitive edge. The SpliceGroup business continues to develop a global structure with a presence in the USA, Scandinavia, Ireland and Asia.
The Company's forecasts and projections show that the Company will be able to operate well within its current banking facilities. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and for a period of at least twelve months from the date of approval of these financial statements. They thus continue to adopt the going concern basis of accounting in preparing the annual financial statements.
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SPLICEGROUP EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Principal risks and uncertainties
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Like all businesses we are exposed to competition in the market. We manage this by providing an excellent service and working closely with our customers. In terms of operational risk, this is proactively managed through our integrated management systems. Our Quality management system, certified to ISO9001, ensures we have procedures in place for the business to work efficiently and maintain expected quality levels. We take the health, safety and wellbeing of our stakeholders very seriously and, in addition to Safe Contractor, CHAS SSIP, RISQS and FSQS certification, our occupational Health & Safety management system is certified to ISO45001 Standard.
Monitoring & Improving on our environmental performance continues to be important to the business and our ISO14001 certification ensures we have the most appropriate environmental management system in-place.
Sustainability Performance
The Company remains deeply committed to sustainability and our role in achieving global net-zero goals. Our plan now is to transition, over the coming months, from an annual carbon footprint to a quarterly review. We anticipate this will allow for a more proactive dynamic approach to reaching our sustainability KPI’s.
Our carbon footprint for 2024 was 894 tCo2e. This is a reduction of 15% compared to the prior year and 18% compared to the 2021 baseline. This fall in emissions was mostly related to the transportation and distribution category, specifically less emissions from air freight in 2024. This was primarily due to our net-zero driven decision to switch the sourcing of certain products to European suppliers.
We now have SBTi approved targets in-place, to reduce scope 1 & scope 2 emissions 42% by 2030 and to measure and reduce our scope 3 emissions. We also continue to share our sustainability performance on the EcoVadis platform and have published our Net Zero Transition Plan on our website. We believe that taking these steps shows a commitment to transparency and accountability, in respect of our sustainability performance.
Financial risk
The Company's principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the Company's working capital requirements. In respect of bank balances, the liquidity risk is managed by ensuring that sufficient cash is held within the bank account to provide the required working capital and to enable the Company to take advantage of any opportunities that may arise.
At the year end, the Company had bank balances of £5.4m (2023: £5.3m) available as headroom.
Trade debtors are managed in respect of credit and cash flow risk by robust policies and formal agreements in respect of the level of credit offered to customers and the regular monitoring of amounts outstanding in respect of both time and value. The amounts presented in the Statement of Financial Position are net of provisions for any doubtful debts.
The Company prides itself on its creditor payment policy and ensuring that creditors are paid on time and within terms as agreed.
The Company has monitored closely its exposure to foreign exchange risk during 2024 after suffering historic exchange losses. These measures, together with a more stable currency market, has resulted in the elimination of these losses and the implementation of better controls and procedures to monitor future exposure to this risk.
Operational risk
The Company has solid reporting systems and as a result produces timely and accurate management information, which is regularly reviewed by the directors. The IT infrastructure that has been developed and put in place by the business also helps to deliver the first-class customer service mentioned below.
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SPLICEGROUP EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Market risk
The major risks to the business are customer loss through non-competitive pricing or poor service. The Company mitigates these risks by continually monitoring market prices, ensuring a flexible approach and tailoring its financial commitments to the length of its customer contracts, providing a first-class service to customers supported by industry leading I.T. The directors are focused on developing their relationships and volume of business with existing customers whilst at the same time identifying and bringing on board new customers who can benefit from the Company's services.
Financial key performance indicators
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The directors consider the financial KPI’s of the business to be:
• Turnover;
• Gross margin;
• Operational costs; and
• Cash flow.
These metrics are monitored on a monthly basis and resultant actions are taken as and when necessary.
In addition non-financial KPI’s are considered to be:
• High standard of customer service;
• Health & safety compliance; and
• Environmental issues.
Future prospects
The Company continues to research, invest and implement best in class methods which, together with continual innovation are expected to lead to improved efficiencies and tighter cost control. The Company will continue to pursue increased efficiencies for its customers which will safeguard margins in the next twelve months.
This report was approved by the board and signed on its behalf.
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SPLICEGROUP EUROPE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £1,150,760 (2023: £1,662,870).
Dividends of £1,500,000 (2023: £1,500,000) were declared during the year.
The directors who served during the year were:
Research and development activities
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The directors will oversee the Company’s continued commitment and investment in research and development, not only in new products but also in establishing improved designs of current products.
The directors see the development of the business in the USA and Europe as important to the continued success of the business. The business will grow organically and focus on its core activities.
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SPLICEGROUP EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Qualifying third party indemnity provisions
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Qualifying third party indemnity insurance is in place for the benefit of the directors. This was in place throughout the year and up to the date of this report.
Matters covered in the Strategic Report
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Certain information is not shown in the Directors’ Report because it is shown in the Strategic Report instead under s414C (11). The Strategic Report includes a business review, the directors’ consideration of going concern, principal risk and uncertainties and key performance indicators.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the directors are aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the directors have taken all the steps that ought to have been taken as directors in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The auditor, Forvis Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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SPLICEGROUP EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SPLICEGROUP EUROPE LIMITED
Opinion
We have audited the financial statements of SpliceGroup Europe Limited (the ‘Company’) for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and 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 FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the state of the Company’s affairs as at 31 December 2024 and of its profit for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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SPLICEGROUP EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SPLICEGROUP EUROPE LIMITED
Other information (continued)
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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SPLICEGROUP EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SPLICEGROUP EUROPE LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless either the directors intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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. Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
• Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
• Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
• Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
• Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as: tax legislation, pension legislation and the Companies Act 2006.
We evaluated the directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of management override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue (which we pinpointed to the cut-off assertion), loans and transactions with related parties and significant one-off or unusual transactions.
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SPLICEGROUP EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SPLICEGROUP EUROPE LIMITED
Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:
∙discussing with the directors and management their policies and procedures regarding compliance with laws and regulations;
∙communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙considering the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud.
Our audit procedures in relation to fraud included but were not limited to:
∙making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙discussing amongst the engagement team the risks of fraud; and
∙addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
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 auditor’s report.
Use of the audit 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.
Ashley Barraclough (Senior Statutory Auditor)
for and on behalf of
Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
5th Floor
3 Wellington Place
Leeds
8 September 2025
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SPLICEGROUP EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial year
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There were no recognised gains and losses for 2024 or 2023 other than those included in the Statement of Comprehensive Income.
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There was no other comprehensive income for 2024 (2023: £Nil).
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The notes on pages 14 to 32 form part of these financial statements.
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SPLICEGROUP EUROPE LIMITED
REGISTERED NUMBER: 02622534
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
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Creditors: Amounts falling due within one year
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Total assets less current liabilities
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Creditors: Amounts falling due after more than one year
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Capital redemption reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 32 form part of these financial statements.
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SPLICEGROUP EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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Capital redemption reserve
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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The notes on pages 14 to 32 form part of these financial statements.
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SPLICEGROUP EUROPE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Repayment of finance leases
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Net cash used in financing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
SpliceGroup Europe Limited is a private company, limited by shares, registered in England and Wales, registration number 02622534. The registered office is The Coach House, Whitehall Road, Drighlington, West Yorkshire, BD11 1LN.
The principal activity of the Company is the design, manufacture, installation and service maintenance of advanced fibre cabling systems for the data and telecommunications industry.
These financial statements have been presented in pound sterling which is the functional currency of the Company, and rounded to the nearest £.
A summary of the Company's accounting policies, which have been consistently applied, are set out below:
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The Company's forecasts and projections show that the Company will be able to operate well within its current banking facilities. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and for a period of at least twelve months from the date of approval of these financial statements. They thus continue to adopt the going concern basis of accounting in preparing the annual financial statements.
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Sale of goods
Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is provided on the following bases:
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Computer and office equipment
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|
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.
Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
- 16 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the Statement of Comprehensive Income.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
- 17 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
- 18 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within other operating income.
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid.
Defined contribution pension plans
The Company operates defined contribution plans for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plans are held separately from the Company in independently administered funds.
- 19 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to the Statement of Comprehensive Income.
Provisions are charged as an expense to the Statement of Comprehensive Income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
- 20 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
- 21 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Judgments in applying accounting policies and key sources of estimation uncertainty
|
The critical judgments that the directors have made in the process of applying the Company’s accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
(i) Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability and where applicable, the ability of the asset to be operated as planned. There have been no indicators of impairments identified during the current financial year.
(ii) Assessing recoverability of related party balances
Related party balances represent financial assets measured at cost less impairment. In assessing whether there is objective evidence of impairment at the balance sheet date, the directors have considered the financial position of the related parties at the balance sheet date and determined the ability of the related parties to repay the amounts as they fall due. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the directors' best estimate of recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date. Impairment losses are recognised in the Statement of Comprehensive Income.
Key sources of estimation uncertainty
The directors do not believe there are any key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the financial statements.
Analysis of turnover by country of destination:
- 22 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The operating profit is stated after charging/(crediting):
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Research & development charged as an expense
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Other operating lease rentals
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During the year, the Company obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution schemes
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The average monthly number of employees, including the directors, during the year was as follows:
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Service maintenance and installation
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- 23 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 1 director (2023 - 1) in respect of defined contribution pension schemes.
The highest paid director received remuneration of £273,474 (2023 - £273,657).
The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £25,200 (2023 - £25,200).
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Interest payable and similar expenses
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Finance leases and hire purchase contracts
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- 24 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Foreign tax on income for the year
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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- 25 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
11.Taxation (continued)
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Factors affecting tax credit for the year
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The tax assessed for the year is lower than (2023 -lower than) the standard rate of corporation tax in the UK of 25% (2023 -23.52%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 -23.52%)
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Expenses not deductible for tax purposes
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Adjustments to tax charge in respect of prior periods
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Adjustments to tax charge in respect of prior periods - deferred tax
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Remeasurement of deferred tax for changes in tax rates
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Income not taxable for tax purposes
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Adjustment in research and development tax credit leading to a decrease in the tax charge
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Total tax charge for the year
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
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Dividends declared during the year
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- 26 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Release of debt provision
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During the year, the Company released a £436,140 (2023: £350,000) provision that was no longer required against a related party debtor balance.
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Computer and office equipment
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Charge for the year
on financed assets
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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- 27 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
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Raw materials and finished goods
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An impairment loss of £21,434 (2023: £11,340) was recognised in cost of sales against stock during the period due to slow-moving and obsolete stock.
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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- 28 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Deferred taxation (liability)/asset
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Fixed asset timing differences
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Short term timing differences
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- 29 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Provision transferred from accruals
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Credited to the Statement of Comprehensive Income
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A provision for dilapidations on the Company's leased premises exists, reflecting the obligation to rectify alterations made during the lease term.
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Allotted, called up and fully paid
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4,750 (2023: 4,750) Ordinary shares of £1.00 each
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The holders of the Ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
|
The Company operates defined contribution pension schemes. The assets of the schemes are held separately from those of the Company in independently administered funds. The pension cost charge represents contributions payable by the Company to the funds and amounted to £137,514 (2023 - £126,543). Contributions totaling £16,968 (2023 - £15,666) were payable to the funds at the Statement of Financial Position date and are included in creditors.
- 30 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
Commitments under operating leases
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At 31 December 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Capital redemption reserve
This reserve arose from the historic issuing of 419 Ordinary shares of £1 each at a premium of £154 per share. The shares were subsequently purchased by the Company and cancelled.
Other reserves
This reserve arose when the Company purchased 250 Ordinary shares of £1 each.
Profit & loss account
This reserve represents cumulative profits and losses less dividends paid. The full reserve is available for distribution.
- 31 -
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SPLICEGROUP EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
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Related party transactions
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During the year the Company sold goods amounting to £15,738 (2023 - £30,237) and purchased goods amounting to £1,026,238 (2023 - £1,144,866) from Splice Tech & Logistics Inc. D B Woodhead, a director of the Company, is the majority shareholder of Splice Tech & Logistics Inc. At the year end, £146,232 (2023 - £362,908) was owed from Splice Tech & Logistics Inc. At the year end, £178,580 (2023 - £288,698) was owed to Splice Tech & Logistics Inc. During the year the Company did not release a provision (2023 - £350,000).
During the year, the Company sold goods amounting to £31,112 (2023 - £14,545) and purchased goods amounting to £Nil (2023 - £Nil) from SpliceGroup (USA) Inc. D B Woodhead, a director of the Company is the majority shareholder of Splicegroup (USA) Inc. At the year end, £90,762 (2023 - £569,487) was owed from SpliceGroup (USA) Inc., of which £Nil (2023 - £439,010) was provided for. At the year end, £Nil (2023 - £291,215) was owed to Splice Group (USA) Inc. During the year the Company released a provision of £436,140 (2023 - £Nil).
During the year, the Company purchased goods amounting to £226,027 (2023 - £78,848) from Splice Asia Inc. D B Woodhead, the owner of SpliceGroup Europe Limited is the majority shareholder of Splice Asia Inc. At the year end, £588,581 (2023 - £588,581) was owed from Splice Asia Inc., of which £588,581 (2023 - £588,581) was provided for. At the year end, £35,892 (2023 - £Nil) was owed to Splice Asia Inc.
The Company pays rent to D B Woodhead for use of part of the Company's offices. The total rent charged in the year to 31 December 2024 was £45,000 (2023 - £45,000).
The Company declared dividends to a director during the year of £1,500,000 (2023 - £1,500,000). At the year end, the Company owed Mr D B Woodhead (director) £2,911,756 (2023 - £1,736,521) and the company was owed £177,641 (2023 - £692,641) by Mr A Varley (director).
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The Company is wholly owned by Mr D B Woodhead (director).
- 32 -
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