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| 2. |
Summary of Significant Accounting Policies |
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The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements. |
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Statement of compliance |
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The financial statements of the company for the financial year ended 31 December 2025 have been prepared in accordance with the provisions of FRS 102 Section 1A (Small Entities) and the Companies Act 2006. |
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Basis of preparation |
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The financial statements have been prepared on the going concern basis and in accordance with the historical cost convention except for certain properties and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. |
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Turnover |
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Turnover comprises the invoice value of goods supplied by the company, exclusive of trade discounts and value added tax. |
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Intangible assets |
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VOIP Platform |
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The VOIP Platform is valued at amortised cost. Cost represents development expenditure recognised by HMRC as qualifying for R&D tax credit relief. The directors believe that although the platform has yet to generate significant revenues, they are confident in its future potential. For this reason, the directors have departed from the provisions within FRS 102 and have not determined fair value by reference to an active market given such a market does not presently exist. In 2020 it was assessed that commercial exploitation of the technology had commenced with customer contracts typically having a duration of 5 years. Accordingly amortisation was calculated based on revenues in that year and those expected to accrue over the next 4 years. That policy was continued in 2021 and 2022 with amortisation in 2022 being based on revenues in 2020 to 2022 and those expected over the following two years. In the current and prior years it became apparent that further development was required and additional spend of £341,008 (2024: £297,267) was incurred on the Platform. Accordingly amortisation has been calculated in 2025 based on turnover in that year and estimated revenues in the following five years to 2030 (2024: 2029). |
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Where factors, such as technological advancement, indicate that the useful life has changed, the amortisation rate of over 6 years will be amended to reflect the new circumstances. The company evaluates the carrying value of intangibles in each financial year to determine if there has been an impairment in value which would result in the inability to recover the carrying amount. When it is determined that the carrying value exceeds the recoverable amount, the excess will be written off to the profit and loss account. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. |
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Tangible assets and depreciation |
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Tangible assets are stated at cost or at valuation, less accumulated depreciation. The charge to depreciation is calculated to write off the original cost or valuation of tangible assets, less their estimated residual value, over their expected useful lives as follows: |
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Fixtures, fittings and equipment |
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15% Straight line |
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The carrying values of tangible fixed assets are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable. |
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Stocks |
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Stocks are valued at the lower of cost and net realisable value. Stocks are determined on a first-in first-out basis. Cost comprises expenditure incurred in the normal course of business in bringing stocks to their present location and condition. Full provision is made for obsolete and slow moving items. Net realisable value comprises actual or estimated selling price (net of trade discounts) less all further costs to completion or to be incurred in marketing and selling. |
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Trade and other debtors |
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Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts. |
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Borrowing costs |
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Borrowing costs relating to the acquisition of assets are capitalised at the appropriate rate by adding them to the cost of assets being acquired. Investment income earned on the temporary investment of specific borrowings pending their expenditure on the assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. |
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Provisions |
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Provisions are recognised when the company has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the same value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense. |
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Trade and other creditors |
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Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost. |
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Employee benefits |
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The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The assets of this scheme are held separately from those of the company, being invested with pension fund managers. |
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Taxation |
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Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the financial year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date. |
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Government grants |
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Capital grants received and receivable are treated as deferred income and amortised to the Profit and Loss Account annually over the useful economic life of the asset to which it relates. Revenue grants are credited to the Profit and Loss Account when received. |
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Foreign currencies |
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Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the Balance Sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the rates of exchange ruling at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The resulting exchange differences are dealt with in the Profit and Loss Account. |
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Share capital of the company |
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Ordinary share capital |
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The ordinary share capital of the company is presented as equity. |
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Preference share capital |
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The company has in issue £1,440,000 (2024: £1,350,000) of redeemable (at the company’s option) preference shares, of which £640,000 (2024: £550,000) have a 3% coupon rate, and £800,000 have no coupon. As these shares are held, the main, by the parent company and the controlling shareholders of that company have waived entitlement to the dividends, the entire holding has been treated as equity not withstanding that the cumulative dividend element would indicate a partial debt-like component |
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| 17. |
Related party transactions |
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Transactions with group companies include the recharging of certain expenses between the company and its parent, Clarity Telecom Limited. At the year end the company owed Clarity Telecom £2,032,532 (2024: £1,632,949). |
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Voxbit Ltd previously provided services to a related party. At the year end 31st December 2025 £15,602 (2024: £15,602) was owed by that related party. Voxbit Limited is a 90% subsidiary of Clarity Telecom Limited, a company incorporated in Northern Ireland. During the year Voxbit Ltd paid Beach Beech Ltd £40,977 (2024: £153,258) for management wages. Beach Beech Ltd is a connected party. At the year end the amount owed to Beach Beech Ltd, included in trade creditors was £Nil (2024: £Nil). During the year, Voxbit Limited, had transactions with Clarity ROI Limited, a sister ROI company to Clarity Telecom Limited. At the 31st December 2025, Clarity ROI Limited was owed £65,754 by Voxbit Limited (2024: £45,852). |