Data Center Erith Ltd
Registered number: 10229638
Annual Report
For the year ended 31 August 2022
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Data Center Erith Ltd
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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Data Center Erith Ltd
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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Data Center Erith Ltd
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2022
The directors present their annual report and the audited financial statements of Data Center Erith Ltd (the 'company') for the year ended 31 August 2022.
The principal activity of the company is operation of servers and infrastructure for the services sold by the OVH Group. OVH Group sells Data Hosting Service to third parties.
Business review
For the fiscal year ended 31 August 2022, the company reported a net loss of £4,516,615, in line with the expectations set forth by the management and the group. This result is primarily attributed to the company's transfer pricing (TP) policy with the group, which has yet to fully offset the costs and investments related to the Data Center operations through revenue generated from its usage by the group entities.
Profit and Loss Statement (P&L):
• Total Revenue: £11,360,914
• Operating Expenses: £15,021,050
• EBITDA: £5,489,937
• Depreciation & Amortization: £9,150,073
• Loss Before Tax: £4,516,615
• Net Loss: £4,516,615
The net loss for the year reflects the ongoing nature of the company as a cost center within the group structure. It is important to note that the loss does not indicate any financial distress; rather, it aligns with the group's strategic approach to centralized Data Center management. The company's expenses are heavily weighted by significant investments in infrastructure and operational costs, which are yet to be fully absorbed by the revenue generated from the group's utilization of the Data Center.
Balance Sheet (BS):
• Total Assets: £37,648,840
• Fixed Assets: £33,412,659
• Current Assets: £4,236,181
• Cash and Cash Equivalents: £102,069
• Total Liabilities: £45,225,940
• Long-term Liabilities: £39,779,362
• Short-term Liabilities: £5,446,578
• Equity: £7,577,100
During the year, the company saw an increase in fixed assets by £414,469, reflecting continued investments in upgrading and expanding the Data Center infrastructure. These additions include new server installations and other critical IT infrastructure, which are vital to supporting the growing demands of the group.
Cash Pooling Agreement: The company continues to benefit from its cash pooling arrangement with the group, ensuring optimal liquidity management. This arrangement provides the company with the necessary financial support to meet its obligations and fund its ongoing investments without the need for external financing.
Transfer Pricing Policy: In response to the evolving needs of the Data Center and the broader group strategy, a new transfer pricing policy was implemented in 2023. This revised policy aims to create a more equitable distribution of costs and revenues between the Data Center and the group entities that utilize its services. The new policy is expected to gradually reduce the financial imbalance, although the full impact will likely be seen in the coming years as the utilization of the Data Center increases and becomes more consistent across the group.
The financial results for 2022 are consistent with the company's role within the group structure. The ongoing investments in Data Center infrastructure, while currently leading to a net loss, are in line with the group's long-term strategic objectives. The company remains fully supported by the group, and the revised transfer pricing policy is expected to progressively enhance the financial performance of the Data Center.
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Data Center Erith Ltd
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
The directors who served during the year and to the date of this report were:
F P A Sterin (resigned 18 February 2022)
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G P P G M-J De Gaulmyn (appointed 1 April 2022)
Directors' responsibilities statement
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The directors are responsible for preparing 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 judgements 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.
In considering going concern, the directors highlight the loss for the year of £4,516,615 (2021: loss for the year £1,958,880) and net current liabilities of £1,210,397 (2021: net current liabilities £6,086,730), which is after deducting group liabilities of £4,248,997 (2021: £8,599,029). The directors have received confirmation that the ultimate parent company, OVH Groupe, continues to be fully supportive of the company and will provide working capital, if required, to enable the company to meet its liabilities as they fall due for at least a period of 12 months from the date of signing these accounts. The forecast shows that with the support of OVH Groupe that the directors expect the company to have sufficient cash resources to realise its assets and discharge its liabilities in the normal course of business for the foreseeable future.
The directors are closely monitoring performance and cash flows and are confident that the matters referred to above will continue to be managed effectively. As a result of the above the directors believe that it is appropriate for the financial statements to be prepared on a going concern basis.
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Data Center Erith Ltd
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
Economic impact of global events
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UK businesses are facing many uncertainties and challenges caused by political, economic, social, technological, legal and environmental factors. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and concluded that the greatest impact on the business is expected to be from the economic ripple effect on the global economy. The directors have taken account of these potential impacts in their going concern assessment.
The company continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.
Statement as to disclosure of information to auditor
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The directors confirm that:
∙so far as each director is aware, there is no relevant audit information of which the company's auditor is unaware; and
∙that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
Post balance sheet events
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OVH Group implemented a change in the group's transfer pricing policy in 2023.
During the year, Grant Thornton UK LLP was appointed as auditor.
The auditor, Grant Thornton UK LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board and signed on its behalf by:
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Data Center Erith Ltd
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DATA CENTER ERITH LTD
Opinion
We have audited the financial statements of Data Center Erith Ltd (the ‘Company’) for the year ended 31 August 2022 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity 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 Financial Reporting Standard 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 August 2022 and of its loss for the year then ended;
∙the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙the financial statements 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
We are responsible for concluding on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Company to cease to continue as a going concern.
In our evaluation of the Directors’ conclusions, we considered the inherent risks associated with the Company's business model including effects arising from macro-economic uncertainties such as high interest rates and the economic climate, we assessed and challenged the reasonableness of estimates made by the Directors and the related disclosures and analysed how those risks might affect the Company's financial resources or ability to continue operations over the going concern period.
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.
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Data Center Erith Ltd
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DATA CENTER ERITH LTD
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.
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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Directors' Report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report under the Companies Act 2006
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 Directors' Report.
Matters on which we are required to report by exception
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; or
∙the Directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemption in preparing the Directors' Report and from the requirement to prepare a Strategic Report.
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Data Center Erith Ltd
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DATA CENTER ERITH LTD
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 2, 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 the Directors either 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
∙We obtained an understanding of the legal and regulatory frameworks applicable to the Company and determined that the most significant which are directly relevant to specific assertions in the financial statements are those related to the reporting frameworks (FRS 102 and the Companies Act 2006).
∙We understood how the Company is complying with those legal and regulatory frameworks by making inquiries of finance team and management. We corroborated our inquiries through our review of board minutes, walkthroughs performed with management;
∙We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur, by evaluating management’s incentives and opportunities for manipulation of the financial statements. This included the evaluation of the risk of management override of controls. Audit procedures performed by the engagement team included:
- Identifying and assessing the design and implementation of controls management has in place to prevent and detect fraud;
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
Challenging assumptions and judgements made by management in its significant accounting estimates;
Identifying and testing journal entries, focusing on large value, journal posted on or after 31st August 2022, journals with blank description and journals by certain users; and
Assessing the extent of compliance with the relevant laws and regulations
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Data Center Erith Ltd
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DATA CENTER ERITH LTD
∙These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it.
∙The engagement leader assessed whether the engagement team collectively had the appropriate competence and capabilities, including consideration of the engagement team’s understanding team’s understanding of and practical experience with audit engagements of a similar nature and complexity, knowledge of the industry in which the client operates, and understanding of the legal and regulatory requirements specific to the entity;
∙We have communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indication of fraud or non-compliance with laws and regulations throughout the audit; and
∙In assessing the potential risks of material misstatement, we obtained an understanding of the entity’s operations, including the nature of its revenue sources and services and of its objectives and strategies to understand the classes of transactions, account balances, expected financial statements disclosures and business risks that may result in risks of material misstatement.
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.
Matthew Flowers
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accoutants
London
30 August 2024
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Data Center Erith Ltd
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2022
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Interest payable and similar expenses
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Loss for the financial year
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Total comprehensive loss for the year
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The Statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
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The notes on pages 11 to 21 form part of these financial statements.
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Data Center Erith Ltd
REGISTERED NUMBER: 10229638
STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2022
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Debtors: Amounts falling due within one year
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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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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 11 to 21 form part of these financial statements.
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Data Center Erith Ltd
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2022
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At 1 September 2020 (as previously stated)
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Prior year adjustment - correction of error (note 11)
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At 1 September 2020 (as restated)
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Comprehensive loss for the year
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Other comprehensive loss for the year
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Total comprehensive loss for the year
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At 1 September 2021 (as previously stated)
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Prior year adjustment - correction of error (note 11)
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At 1 September 2021 (as restated)
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Comprehensive loss for the year
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Other comprehensive loss for the year
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Total comprehensive loss for the year
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The notes on pages 11 to 21 form part of these financial statements.
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
Data Center Erith Ltd is a private company limited by shares incorporated in England and Wales. The company's registered number is 10229638. The address of its registered office is 30 Old Bailey, London, United Kingdom, EC4M 7AU.
The principal activity of the company is operation of servers and infrastructure for the services sold by the OVH Group. OVH Group sells Data Hosting Service to third parties.
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 Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The financial statements have been presented in Pound Sterling as this is the currency of the primary economic environment in which the company operates and is rounded to the nearest pound.
The following principal accounting policies have been applied:
In considering going concern, the directors highlight the loss for the year of £4,516,615 (2021: loss for the year £1,958,880) and net current liabilities of £1,210,397 (2021: net current liabilities £6,086,730), which is after deducting group liabilities of £4,248,997 (2021: £8,599,029). The directors have received confirmation that the ultimate parent company, OVH Groupe, continues to be fully supportive of the company and will provide working capital, if required, to enable the company to meet its liabilities as they fall due for at least a period of 12 months from the date of signing these accounts. The forecast shows that with the support of OVH Groupe that the directors expect the company to have sufficient cash resources to realise its assets and discharge its liabilities in the normal course of business for the foreseeable future.
The directors are closely monitoring performance and cash flows and are confident that the matters referred to above will continue to be managed effectively. As a result of the above the directors believe that it is appropriate for the financial statements to be prepared on a going concern basis.
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
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:
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.
Turnover represents amounts recharged to group companies based on sales of data centre made as per the intercompany agreement.
OVH Group implemented a change in the group's transfer pricing policy in 2023. Revenue is now recognised at the commercial entity level, while the distribution centers are allocated a margin based on a percentage specified in the transfer pricing agreement.
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.
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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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:
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Buildings and improvements
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Fixed assets under construction
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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.
Depreciation is charged to 'administrative expenses' in the Statement of comprehensive income.
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Debtors: Amounts falling due within one year
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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.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
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.
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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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 profit or loss.
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.
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.
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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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 are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Foreign currency translation
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Functional and presentation currency
The company's functional and presentation currency is Pound sterling.
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.
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Interest payable and similar expenses
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Interest payable and similar expenses 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.
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
2.Accounting policies (continued)
Defined contribution pension plan
The company operates a defined contribution plan 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 other creditors as a liability in the Statement of financial position. The assets of the plan are held separately from the company in independently administered funds.
Tax is recognised in profit or loss 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.
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Fees payable to the company's auditor for the audit of the company's financial statements
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The average monthly number of employees, including the directors, during the year was 15 (2021: 14).
During the year, the directors received no remuneration for services provided to the company (2021: £nil).
During the year, there were no benefits accruing to the directors under money purchase pension schemes (2021: £nil).
During the year directors' remuneration was paid by OVH (France) SAS and it is not possible to reliably estimate the proportion of remuneration that is attributable to the services carried out within the UK.
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- 16 -
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
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Interest payable and similar expenses
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Loans from group undertakings
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- 17 -
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
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Buildings and improvement
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Fixed assets under construction
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- 18 -
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
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Debtors: Amounts falling due within one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, interest free and payable on demand.
Included in other debtors is an amount of £263,575 (2021: £980,100) which relates to VAT recoverable.
Included in other debtors is an amount of £34,332 (2021: £611,490) which relates to payments on account.
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
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Creditors: Amounts falling due after more than one year
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Amounts owed to group undertakings
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Included in amounts owed to group undertakings is an amount of £39,779,362 (2021: £28,916,316) which bears an interest of EURIBOR + 2.5% (2021: EURIBOR + 2.5%) per annum and is repayable on 31 August 2026. The remaining amounts are interest free.
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- 19 -
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
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Allotted, called up and fully paid
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5,000,000 (2021: 5,000,000) Ordinary shares of £1 each
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Each ordinary share is entitled to full voting and dividend rights.
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During the year the directors decided to review the revenue recognition policy in the prior year and have restated the prior year. Revenue increased by £162,919 to £9,667,287, while deferred income has decreased by £717,608. The remaining difference of £554,689 relates to year ended 2020. The net liabilities of the Company for the year ended 31 August 2022 has decreased by £717,608 to £3,060,485.
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Balance at 31/08/21
(as previously stated)
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Balance at 31/08/21
(restated)
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The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £6,520 (2021: £4,831) were payable to the fund at the reporting date and are included in other creditors.
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Related party transactions
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The company has taken advantage of the exemption from disclosing related party transactions undertaken between wholly owned members of the group that have been conducted under normal market conditions.
During the year the company made sales of £32,380 (2021: £20,144) to OVH Tunisia, a company under common control. At the year end the company was owed £38,341 (2021: £37,817), this balance is included in amounts owed by group undertakings.
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Post balance sheet events
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OVH Group implemented a change in the group's transfer pricing policy in 2023.
- 20 -
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Data Center Erith Ltd
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
The immediate parent company is OVH (France) SAS and the ultimate parent company is OVH Groupe (France), a company registered in France, which prepares consolidated accounts that can be obtained from 2 Rue Kellermann, Roubaix, France, 59100.
- 21 -
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