Company registration number 06350460 (England and Wales)
INTERMEDIA TECHNOLOGIES COMPANY LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
INTERMEDIA TECHNOLOGIES COMPANY LTD
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 11
INTERMEDIA TECHNOLOGIES COMPANY LTD
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 1 -
2022
2021
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
3
323,777
432,752
Current assets
Trade and other receivables
5
3,490,324
2,291,981
Cash and cash equivalents
77,286
199,418
3,567,610
2,491,399
Current liabilities
6
(2,558,477)
(1,639,965)
Net current assets
1,009,133
851,434
Total assets less current liabilities
1,332,910
1,284,186
Provisions for liabilities
(46,048)
(65,632)
Net assets
1,286,862
1,218,554
Equity
Called up share capital
8
1,000,000
1,000,000
Retained earnings
286,862
218,554
Total equity
1,286,862
1,218,554
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 15 October 2023 and are signed on its behalf by:
J H Veldhuis
Director
Company registration number 06350460 (England and Wales)
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
1
Accounting policies
Company information
Intermedia Technologies Company Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Manfield House, 1 Southampton Street, London, WC2R 0LR. The trading address is Bristol & Bath Science Park, Emersons Green, Bristol BS16 7FR.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
In adopting the going concern basis for preparing the financial statements the directors have considered the business activities as well as the company's principal risks and uncertainties within the company's cash flow forecasts and projections. This consideration includes the potential ongoing effects of global inflation and potential recession on the business.true
1.3
Revenue
Revenue is recognised at the fair value of the consideration received or receivable for providing cloud service applications, and is shown net of VAT and other sales related taxes.
The cloud services are sold based on Master Service Agreements to end customers directly and also through various partner channels such as resellers, agents and distributors.
Revenue is generally considered to be earned and recognised when all of the following criteria are met:
- Persuasive evidence of an arrangement exists
- Delivery has occurred or services have been rendered
- Seller's price to the buyer is fixed or determinable
- Collectability is reasonably assured
Revenue also relates to management charges billed to the parent entity located in the US, recognised on a cost-plus basis.
1.4
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
20% on cost & 33.33% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 3 -
1.5
Impairment of non-current assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
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 and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Classification of 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 deducting all of its liabilities.
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 4 -
Basic financial liabilities
Basic financial liabilities, including trade and other payables and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 5 -
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Share-based payments
The company participates in the share-based compensation plan operated by the ultimate parent companies, Ivy Parent Holdings LLC and Intermedia Cloud Communications, Inc., throughout the Group.
The company does not recognise any share based payment expenses and liabilities. These have been recognised in the consolidated financial statements prepared by the ultimate parent company.
The details of instruments granted have been disclosed as part of Note 7 to the financial statements.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Total
35
30
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
3
Property, plant and equipment
Plant and machinery etc
£
Cost
At 1 January 2022
1,874,981
Additions
96,843
At 31 December 2022
1,971,824
Depreciation and impairment
At 1 January 2022
1,442,229
Depreciation charged in the year
205,818
At 31 December 2022
1,648,047
Carrying amount
At 31 December 2022
323,777
At 31 December 2021
432,752
4
Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Country of incorporation
Nature of business
Class of shares held
% Held
Direct
Intermedia Technologies Japan G.K
Japan
Cloud based communication services
Ordinary shares
100.00
This entity has a registered office of c/o Baker & McKenzie (Gaikokuho Joint Enterprise), Ark Hills Sengokuyama Mori Tower 28F, 1-9-10 Roppongi, Minato-ku, Toyko
5
Trade and other receivables
2022
2021
Amounts falling due within one year:
£
£
Trade receivables
123,466
105,508
Amounts owed by group undertakings
3,179,826
2,070,230
Other receivables
187,032
113,276
3,490,324
2,289,014
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
5
Trade and other receivables
(Continued)
- 7 -
2022
2021
Amounts falling due after more than one year:
£
£
Other receivables
2,967
Total debtors
3,490,324
2,291,981
6
Current liabilities
2022
2021
£
£
Trade payables
254,566
271,807
Amounts owed to group undertakings
1,910,329
790,176
Taxation and social security
56,043
303,757
Other payables
337,539
274,225
2,558,477
1,639,965
7
Share-based payment transactions
The company participates in the share-based compensation plans operated by the ultimate parent company and the penultimate parent company. Some employees of Intermedia Technologies Company Limited participated in the scheme. The purpose of the scheme is to align employee interests with company interests. The pricing of these grants are denominated in United States Dollar (USD or $).
Details of the number of units granted, valuation and vesting conditions are detailed below.
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
7
Share-based payment transactions
(Continued)
- 8 -
2017 Stock Option Plan under penultimate parent company, Intermedia Cloud Communications Inc. (formerly Ivy Holding Corp).
In May 2017, for the benefit of the Company’s employees, the stockholders of the Company’s penultimate parent company, Intermedia Cloud Communications Inc. (formerly Ivy Holding Corp). (“IHC”), approved the adoption of IHC’s 2017 Stock Option Plan (the “2017 IHC Plan”). Options granted under the 2017 Plan were structured to expire no later than 10 years from the date of grant.
For stock options granted under the 2017 Plan, 2/3 of the shares subject to the stock option are subject to a time-based vesting component, and the remaining 1/3 of the shares subject to the stock option are subject to a performance-based vesting component. The time-based vesting component generally vests over a period of four years from the vesting commencement date, with 25% vesting on the one-year anniversary of the option grant’s vesting commencement date and the remainder vesting pro-rata over the remaining period. The performance-based vesting component is split into two tranches of performance, and will vest only if specified performance is met in relation to a specified level of Madison Dearborn Capital Partners (“MDP”)’s internal rate of return or ratio of MDP’s cash inflows against cash outflows. The fair value of the stock options as measured at the grant date shall be recognised over the requisite service period upon attainment of the performance criteria, which is not considered probable as of December 31 2021 and 2022 and therefore no expense is recorded in the period ended December 31 2021 and December 31 2022.
2017 Equity Incentive Plan under ultimate parent company, Ivy Parent Holdings, LLC
In May 2017, for the benefit of the Company’s employees, the members of the Company’s ultimate parent company, Ivy Parent Holdings, LLC (“IPH”), approved the adoption of IPH’s 2017 Equity Incentive Plan and LLC Agreement Supplement (the “2017 IPH Plan”). The Company’s parent granted incentive units in 2017 to certain employees of the Company.
For incentive units granted under the 2017 IPH Plan, 2/3 of the units subject to the award are subject to a time-based vesting component, and the remaining 1/3 of the units subject to the award are subject to a performance-based vesting component. The time-based vesting component generally vests over a period of four years from the vesting commencement date, with 25% vesting on the one-year anniversary of the incentive unit award’s vesting commencement date and the remainder vesting ratably over the remaining period. The performance vesting component is split into two tranches of performance, and will vest only if specified performance is met in relation to a specified level of MDP’s internal rate of return or ratio of MDP’s cash inflows against cash outflows. The fair value of the incentive units as measured at the grant date shall be recognised over the requisite service period upon attainment of the performance criteria, which is not considered probable as of December 31, 2021 and 2022 and therefore no expense is recorded in the year ended December 31 2021, or the year ended December 31, 2022.
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
7
Share-based payment transactions
(Continued)
- 9 -
2021 Long-Term Incentive Plan under penultimate parent company, Intermedia Cloud Communications Inc.
In June 2021, for the benefit of the Company’s employees, the stockholders of the Company’s penultimate parent company, Intermedia Cloud Communications Inc. (“ICC”), approved the adoption of ICC’s 2021 Long-Term Incentive Plan (the “2021 ICC Plan”).
For stock options granted under the 2021 plan, the shares are subject to the stock option are subject to a time-based vesting component. The time-based vesting component generally vests over a period of four years from the vesting commencement date, with 25% vesting on the one-year anniversary of the option grant’s vesting commencement date and the remainder vesting pro-rata over the remaining period. The fair value of the stock options as measured at the grant date shall be recognised over the requisite service period. No expense has been recognised in respect of these options for the year ended December 31, 2021 and 2022 as the total amount is not material.
For Restricted Stock Units (RSUs) granted under the 2021 plan, these are subject to a time-based vesting requirement and a performance-based vesting requirement. The time-based vesting requirement vests over a period of four years from the vesting commencement date. The performance-based requirement is only fulfilled at the earliest of i) a change in control, ii) the company's first underwritten public offering ("IPO"), and iii) a transaction involving the sale of the company. RSUs granted under the plan expire no later than 7 years from the date of grant. The fair value of the RSUs as measured at the grant date shall be recognised over the requisite vesting period. The directors consider that determining whether the performance-based requirements will be fulfilled is not possible until it occurs due to high degree of uncertainty. As such no expense has been recognised in repsect of RSUs granted under the scheme for the year ended December 31, 2021 and 2022.
Equity instruments other than share options
Valuation methodology
For determining the fair value as at grant date, the equity instruments were fair valued by an independent external valuation as at 10 April 2017, using the Black Scholes based 'option pricing method' framework.
For units issued in the year 2019, valuation was done based on the independent external valuation as of July 19, 2018, using the Black Scholes method.
For units issued in the year 2020, valuation was done based on the independent external valuation as of December 31, 2019, using the Black Scholes method.
For units issued in the year 2021, valuation was done based on the independent external valuation as of April 30, 2021, using the Black Scholes method.
For units issued in the year 2022, valuation was done based on the independent external valuation as of April 30, 2022, using the Black Scholes method.
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
7
Share-based payment transactions
(Continued)
- 10 -
Details of units granted
As at 31 December 2022, the following is a summary of the options and units outstanding with the employees:-
110,000 incentive units outstanding (2021: 110,000) consisting of both time based and performance based units. nil (2021: nil) time and performance based incentive units were issued during the year. Weighted average participation threshold was $5.03 for units issued in 2019 and $4 for units issued prior to that. As at 31 December 2022 107,333 (2021: 97,611) units vested.
79,031 stock options outstanding (2021: 32,000) consisting of both time based and performance based units, with weighted average exercise price of $8.75 for options issued in 2022, $13.42 for options issued in 2021, $5.76 for options issued in 2020 and $3.42 for units issued in previous years. As at 31 December 2022, 24,896 (2021: 15,850) options vested and no options were cancelled during the year.
49,443 RSUs outstanding (2021: 40,946) with an fair value of $13.42. As at 31 December 2022, 21,047 (2020: nil) have vested.
Recognition of share-based payment expense
The company does not recognize any share based payment expenses and liabilities. The fair value of the options and units are not material to be accounted in the financial statements of the entity. These have been recognized in the ultimate parent company consolidated financial statements.
In the event of buy-back, IHC or IPH will bear the costs of buy back of the stock options and incentive units, respectively.
8
Called up share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
1,000,000 Ordinary shares of £1 each
1,000,000
1,000,000
INTERMEDIA TECHNOLOGIES COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
9
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Christopher Mantel
Statutory Auditor:
Alliotts LLP
10
Related party transactions
Amounts owed to/by related parties
The following amounts were outstanding at the reporting end date:
Amount owed to
Amounts owed by
2022
2021
2022
2021
£
£
£
£
Entities over which the entity has control, joint control or significant influence
1,643,925
555,857
Entities with control, joint control or significant influence over the company
260,751
228,666
3,126,215
2,016,620
Other related parties
5,653
5,653
53,610
53,610
Other information
The company has taken advantage of the exemption provided under FRS 102 Section 1A whereby it has not disclosed transactions with the immediate parent company or any wholly owned subsidiary undertaking of the group.
11
Parent company
The immediate parent company is Intermedia (UK) Holdings Limited, a company registered at 6th Floor, Manfield House, 1 Southampton Street, London, WC2R OLR.
Ivy Parent Holdings, LLC is the ultimate parent, having its registered office at 100 Mathilda Place, Suite 600, Sunnyvale, CA 94086.
No one person has overall control.
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