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Registered number:
For the Year Ended
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Vodat Communications Group (VCG) Holding Limited
Company Information
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Vodat Communications Group (VCG) Holding Limited
Contents
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Vodat Communications Group (VCG) Holding Limited
Group Strategic Report
For the Year Ended 31 March 2025
The Directors present their Strategic Report for the year ended 31 March 2025.
The principal activities of the company during the year was a Holding Company, consolidating the activities of two subsidiary companies, VCG Technology Services Limited, and Axonex Limited. The principal trading activities of the Group is the provision of ICT solutions, business critical connectivity, managed networks and related services.
The Board identified the importance of ESG to it’s stakeholders. As such, an ESG policy has been created with specific targets set, that will be incorporated into key future decisions and business strategy. This will also enable the Group to trade with certain customers and suppliers who require such frameworks as part of their policies.
In a change to the Senior Leadership Team, the Sales Director has left the business, and this had led to a full review of the Sales function and go-to market strategy. The Company have now appointed a Chief Revenue Officer with clear objectives to achieve current revenue forecasts and deliver future growth. The Board reinforced the importance of diversification in the customer base and partner offerings. New go to market strategies began to be launched and materials were created, to drive margin rich, contracted re-occurring revenue streams for the Group. This has been split into multiple workstreams which will continue to be rolled out into the start of the next Financial Year. The Board are focused on continuing the growth of recurring revenue, delivering a predictable cash flow to the business, and supporting a wider number of customers with an improved managed service offering. The Board continue to ensure large customer contracts are resigned, enabling the business to continue its partnerships for the coming years. Whilst revenue is important to the Group, there is also a focus on its expenditure. A number of exercises have been completed and started with suppliers to ensure that the best purchase prices are being obtained and discounts sought, and rebates maximised during its operations which will maximise the margin retained by the Group. Recruitment has been strategically evaluated during the year. A number of roles have not been directly replaced following attrition, rather evaluating where best to deploy headcount to maximise the benefit to the Group and its customers. As a Managed Service Provider, a lot of value is derived from our Team within the business and the skills they possess. The Group has evaluated many of its systems during the year and continued to invest and make improvements to the way it operates. AI solutions have been sought to drive value and support the Group in staying at the front of modern technology and emerging technologies with solutions set to go live at the start of the next Financial Year. For the year ended 31 March 2025 turnover was £20.98m (2024: £29.38m) which represents a decrease of 29% during the year. After depreciation, amortisation, and exceptional items, the Group made a pre-tax loss of £59k (2024: profit of £269k), with EBITDAE of £974k (2024: £1,082k).
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Vodat Communications Group (VCG) Holding Limited
Group Strategic Report (continued)
For the Year Ended 31 March 2025
Macro-economic factors
With most of the activity within the Group UK based, the Group is dependent on the country's economic performance however the Group is constantly developing new business opportunities in different sectors to better hedge the Group's performance in the future. Changing industry The Group continues to assess new and innovative solutions to partner with customers in providing solutions to support the changing ways they work and do business. Supply chain issues The Board continues to work closely with our distributors and customers to manage the supply chain. A Vendor Relationship Manager was appointed and there was a review and recruitment of Account Managers during the year to strengthen these relationships.
The Group's key performance indicators are revenue and EBITDAE, both of which are analysed in the Business Review.
This report was approved by the board and signed on its behalf.
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Vodat Communications Group (VCG) Holding Limited
Directors' Report
For the Year Ended 31 March 2025
The directors present their report and the financial statements for the year ended 31 March 2025.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £99,317 (2024 - profit £249,587).
No dividends were paid during the year (2024: £Nil). The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
The Group continues to monitor changes in its operating sector and regularly assess which products and services it can to the portfolio to support the growth and future success of the Group.
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Vodat Communications Group (VCG) Holding Limited
Directors' Report (continued)
For the Year Ended 31 March 2025
Cash flow management and associated liquidity risk is a key factor for the business.
The group holds a loan with an investor which attracts a fixed rate of interest. Management ensure that sufficient cash is generated by the group to service this loan within its terms. The group also has finance agreements in respect of some purchases, these are displayed as other loans and amounts due under hire purchase and finance agreements. Management closely monitor cash flows and ensure that sufficient working capital is available to allow the business to operate effectively. Customers are required to adhere to credit terms and in normal conditions there are limited bad debts.
There have been no significant events affecting the Group since the year end.
The auditors, Hurst Accountants Limited, 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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Vodat Communications Group (VCG) Holding Limited
Independent Auditors' Report to the Members of Vodat Communications Group (VCG) Holding Limited
We have audited the financial statements of Vodat Communications Group (VCG) Holding Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2025, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 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 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.
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Vodat Communications Group (VCG) Holding Limited
Independent Auditors' Report to the Members of Vodat Communications Group (VCG) Holding Limited (continued)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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 Group Strategic Report or the Directors' Report.
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Vodat Communications Group (VCG) Holding Limited
Independent Auditors' Report to the Members of Vodat Communications Group (VCG) Holding Limited (continued)
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 Auditors' 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 Group 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:
Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: - The nature of the industry and sector in which the group operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. - The outcome of enquiries of group management, including whether management was aware of any instances of non- compliance with laws and regulations, and whether management had knowledge of any actual, susepcted, or alleged fraud. - Supporting documentation relating to the Group's policies and procedures for: - Identifying, evaluating, and complying with laws and regulations - Detecting and responding to the risks of fraud - The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. - The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. - The legal and regulatory framework in which the Group operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the group, including General Data Protection requirements, and Anti- bribery and Corruption. Audit response to risks identified Our procedures to respond to the risks identified included the following: - Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. - Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud. - Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities. - Enquiring of management about any actual and potential litigation and claims. - Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Vodat Communications Group (VCG) Holding Limited
Independent Auditors' Report to the Members of Vodat Communications Group (VCG) Holding Limited (continued)
We have also considered the risk of fraud through management override of controls by:
- Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error. - Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and - Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants & Statutory Auditors
3 Stockport Exchange
Cheshire
SK1 3GG
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Vodat Communications Group (VCG) Holding Limited
Consolidated Statement of Comprehensive Income
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Registered number: 07962206
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 35 form part of these financial statements.
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Vodat Communications Group (VCG) Holding Limited
Registered number: 07962206
Company Balance Sheet
As at
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 35 form part of these financial statements.
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Vodat Communications Group (VCG) Holding Limited
Consolidated Statement of Changes in Equity
For the Year Ended 31 March 2025
Company Statement of Changes in Equity
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Consolidated Analysis of Net Debt
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
Vodat Communications Group (VCG) Holding Limited is a private company limited by shares and incorporated in England and Wales. Its registered head office is located at Signal Point, Bredbury Park Way, Bredbury, Stockport, England, SK6 2SN. The company's registered number is 07962206.
The principal activities of the company during the year was a Holding Company, consolidating the activities of two subsidiary companies, VCG Technology Services Limited, and Axonex Limited. The principal trading activities of the Group is the provision of ICT solutions, business critical connectivity, managed networks and related services.
2.Accounting policies
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 Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 April 2015.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
2.Accounting policies (continued)
The consolidated financial statements have been prepared on a going concern basis. The following paragraphs set out the basis on which the directors have reached their conclusion.
At 31 March 2025, the Group had net liabilities of £707,286 (2024: £406,969) and a deficit on the profit and loss account of £5,611,794 (2024: £5,311,477). The directors have prepared forecast scenarios for the combined business, taking key strategic factors into consideration, namely: • insight of customer’s ICT investment strategies • market growth opportunities for our converged ICT propositions • synergies from consolidating to one business. The connectivity and managed services provided to the Group's customers are business critical and did not materially change during the year. The creation of the business acquisition team is designed to broaden the customer base in this area. The working capital and cash position has continued to be positive throughout the financial year and is expected to increase in line with the profit growth forecast. After reviewing the Group's forecasts and projections, the directors are confident that the Group has adequate resources to continue trading for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements.
Functional and presentation currency
Transactions and balances
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
2.Accounting policies (continued)
Support contracts and professional services Revenue is typically billed upfront to a customer and initially deferred in full. It is then recognised based on usually either one of the two criteria: - Where the contract relates to amounts billed in advance of the time the service is to be provided, revenue is released on a straight line basis over the period of the contract; - Where the customer has purchased a set amount of time for a support contract, revenue is recognised based on the number of hours consumed at a point in time. Licences Revenue generated from licences is typically a re-selling of a licence from a supplier. Therefore the entire value of the contract relates entirely to the licence itself, and revenue is therefore recognised in full upon the transfer of the licence to the customer. New installations Revenue generated from new installations is recognised based upon the completion of agreed stages, as set out in contracts with the customer. Often for such projects, equipment must be purchased as part of installation. This equipment is configured for each customer such that it cannot be repurposed for resale elsewhere, and once purchased the customer is obliged to pay the group. On occasion, the customer requests that the installation of the equipment be delayed, and therefore it is held by the group at their premises. It is the view of management that even though the equipment has not been installed, that the criteria to recognise a sale under the provisions of UK Accounting Standards have been met, and therefore the equipment is not recognised as stock in the company's balance sheet, but instead a sale and associated cost are recognised in the Statement of Comprehensive Income.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
2.Accounting policies (continued)
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.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
2.Accounting policies (continued)
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
2.Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Goodwill remaining relates solely to the core business of the group, and is currently being amortised over 25 years. It is the opinion of management that this is appropriate due to the ongoing service remaining broadly the same, and there is also strong retention of customers who use this service.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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 profit or loss.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
Estimates - carrying value of investments The Directors review the carrying value of investments on an ongoing basis to ascertain whether there are any indicators of impairment. The investments in subsidiaries are loss making and in a net liability position at the year end. Management have assessed these and concluded that future performance will improve and thus an impairment is not necessary. The carrying value of investments at 31 March 2025 was £10,311,893 (2024: £10,311,893). Judgements - revenue recognition As part of installation projects, the group purchases equipment such as routers to be installed at customer premises. This equipment is configured for each customer such that it cannot be repurposed for resale elsewhere, and once purchased the customer is obliged to pay the group. On occasion, the customer requests that the installation of the equipment be delayed, and therefore it is held by the group at their premises. It is the view of management that even though the equipment has not been installed, that the criteria to recognise a sale under the provisions of UK Accounting Standards have been met, and therefore the equipment is not recognised as stock in the company's balance sheet, but instead a sale and associated cost are recognised in the Statement of Comprehensive Income. Judgements - bad debt provision Management closely monitor debtors and make appropriate provision where the recovery of debts is considered doubtful. At the year end, a bad debt provision of £21,659 (2024: £21,357) was recognised in the Balance sheet.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
Analysis of turnover by country of destination:
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
11.Taxation (continued)
There were no factors that may affect future tax charges.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
Assets held as rented assets are leased out to customers under operating leases. The company retains the risk and rewards of such assets.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
Please see note 21 for more information on other loans.
Finance lease obligations are secured against the assets to which they relate.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
Share premium account
Includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium. Capital redemption reserve Where shares are redeemed or bought back, the company is required to either replenish the capital by issuing fresh shares in lieu of the redeemed or bought back shares or to transfer their funds to an account called Capital Redemption Reserve, this is non-distributable. Profit and loss account Includes all current and prior periods retained profits and losses.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £147,271 (2024: £151,619). Contributions totalling £39,022 (2024: £39,200) were payable to the fund at the balance sheet date and are included in creditors.
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Vodat Communications Group (VCG) Holding Limited
Notes to the Financial Statements
For the Year Ended 31 March 2025
There is no overall controlling party.
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