Company registration number 06951286 (England and Wales)
ISTORAGE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
ISTORAGE LIMITED
COMPANY INFORMATION
Directors
Mr J Michael
Mr Sven Holm
(Appointed 29 October 2024)
Mr P Lalehzar
(Appointed 29 October 2024)
Secretary
Mrs O Michael
(Resigned 29 October 2024)
Company number
06951286
Registered office
Sixth Floor
Capital Tower
91 Waterloo Road
London
SE1 8RT
Auditor
Arnold Hill & Co LLP
Sixth Floor
Capital Tower
91 Waterloo Road
London
SE1 8RT
ISTORAGE LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
13 - 19
ISTORAGE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -

The directors present the strategic report for the year ended 31 July 2024.

Review of the business

 

Result for the year

The result for the year reflects three key areas:

 

 

These activities required significant management focus from a small senior team. At the same time, operational activities have been streamlined and strengthened in preparation for the Company’s new role at the centre of the broader group.

 

Against that backdrop, the Company’s revenues were £654k lower than the prior year at £10.62m. Margins held steady at just over 52%.

 

The corporate activity saw a £107k increase in legal, professional and consulting spend over the prior period with overhead increases seen in areas such as bank and payments charges and computing costs offsetting reductions in expenditure on marketing activities, R&D costs and headcount costs.

 

Overall operating profitability and cash generation remained strong with operating profit margin of 16.1% against 18.3% in the prior year and closing cash up by over £1.5m reflecting both the post tax profit of £1.3m and a reduction in trading working capital (which excludes tax liabilities and intra-group items) of £584k and together with the investment in new equipment and the quarterly corporation tax payments.

 

The tax charge increased from 16.5% of pre-tax profits to 25% reflecting the change in the rate of corporation tax from April 2023 meaning the whole of the current period’s profits are taxed at the increased rate.

ISTORAGE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
Principal risks and uncertainties

The Company and the Group face a range of normal commercial and technological risks.

 

The key risks, their impact on the Company and the main mitigating actions taken are:

 

Matter of Concern

Potential Impact on the Company

Mitigating actions

Technological and certification changes

Products may become out of date or not be capable of meeting incoming certification standards.

The Company maintains ongoing R&D activity and actively interacts with standard setting bodies to ensure visibility of upcoming changes and input into the standard setting processes. The Company combines developing its own IPR with licencing of key items where that is more effective. Management aims to submit products early into any new certification processes.

Supply chain

The current geopolitical and global economic environment is impacting on the availability of components while customers continue to expect stock to be on hand.

The Company has taken the opportunity of natural changes within its supply chain to evaluate supplier options. Where practical, the Company looks to build long-term relationships while also mitigating against the risks identified. Increased inventory levels have also been maintained both in-house and at distributors to optimise delivery times to customers.

Exchange rates

Both components and sales may be denominated in currencies other than sterling. Volatility in exchange rates can therefore have a material impact on both sales levels and margins.

Management monitors exchange rates and maintains cash balances in multiple currencies to provide a natural hedge against movements. Additional hedging through currency contracts is considered when necessary.

Integration of IMC and integration into CAST

The acquisition of IMC was made to complement and expand the core business of the Company with the aim of contributing to the success of the Group and its stakeholders.

 

Similarly, the acquisition of the Group by CAST looks to provide a deeper platform financially, commercially and technologically to support the growth of the Company and the Group.

 

However, there is a risk that integration processes may fail to fully achieve these objectives.

Robust due diligence was undertaken ahead of the acquisition involving specialist external advisors as well as senior members of the management team.

 

Operations are being integrated with early cross-supply of product and close co-operation between local management teams.

 

Back office functions will be migrating to share service approaches within the iStorage Group.

Competition in our markets

The Company operates in a competitive market environment and the development of products matched to evolving customer needs is key to success.

The Company monitors competitor offerings, IPR registrations and market intelligence to ensure that its own portfolio and R&D programmes and pricing are matched to customer needs without infringing the rights of others.

 

ISTORAGE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 3 -
Key performance indicators

Management utilises key performance measures set out above focusing on:

 

 

The Result for the Year section above comments on each of these items.

 

Revenue and profitability by product grouping are also closely monitored as are specific stock levels given the recent history of global supply constraints for certain components and devices.

Strategy and future outlook

The geopolitical implications of the conflicts in Ukraine and the Middle East together with increasing levels of cyber-crime have brought an enhanced focus on the need for safeguarding data whether at rest, in transit or in use.

 

iStorage Holdings Limited, the Company’s immediate holding company, was set up to bring together the existing capabilities of the Company in physical secured devices with the remote management expertise of IMC as well as adding in additional product offerings from IMC’s portfolio such as duplicators and self-encrypting drives. The iStorage Group is focused on growing both top line revenues and aligning its end to end operations to optimise working capital deployment and allow it to continue to invest in the technology needed to address and combat the expanding threats to data the modern world presents.

 

The acquisition also gives the Group significant trading activities in Europe and the US with a network of distributor and reseller relationships unmatched in the space.

 

Integration of the two businesses is currently ongoing with territory-appropriate product offerings from each operating unit already available to local distribution partners.

 

Together with the launch of its latest FIPS140-3 level 3 product sets, the Company has already seen significant interest from customers in the expanded range that the combination with IMC brings.

 

The Group will retain its focus on its key technological and client segments while exploring the opportunities that are becoming visible in related areas such as cloud storage and international project/data collaboration.

 

The purchase of the Group as the first member of the CAST Group in the final quarter of 2024 provides a further strengthening of the commercial and financial platform for the Group’s development. CAST has been founded by the private equity house Systematic Growth to become the leader in the safeguarding of data in all its states. CAST’s intention is to acquire additional businesses in neighbouring segments of the data safeguarding space which has the potential to give the Company access to additional expertise, IPR and relationships. The iStorage Group will continue to be run as an autonomous group within the broader CAST Group with access to CAST’s network and capabilities.

On behalf of the board

Mr J Michael
Director
21 January 2025
ISTORAGE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 4 -

The directors present their annual report and financial statements for the year ended 31 July 2024.

Principal activities

The principal activity of the company continued to be that of the provision of secure portable data storage and cloud encryption solutions.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr J Michael
Mr Sven Holm
(Appointed 29 October 2024)
Mr P Lalehzar
(Appointed 29 October 2024)
Auditor

The auditor, Arnold Hill & Co LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr J Michael
Director
21 January 2025
ISTORAGE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 5 -

The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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:

 

 

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 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.

ISTORAGE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ISTORAGE LIMITED
- 6 -
Opinion

We have audited the financial statements of IStorage Limited (the 'company') for the year ended 31 July 2024 which comprise the profit and loss account, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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 our audit:

ISTORAGE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ISTORAGE LIMITED
- 7 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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.

Detection of fraud and breaches of laws and regulations

To identify risks of material misstatement due to fraud, we considered events or conditions that could indicate an

incentive or pressure to commit fraud or provide an opportunity to do so. Our approach included:

 

 

We communicated identified fraud risks throughout our team and remained alert to any indications of fraud

throughout the audit.

 

To identify risks of material misstatement due to non-compliance with laws and regulations, our approach was as

follows:

ISTORAGE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ISTORAGE LIMITED
- 8 -

 

 

We communicated identified laws and regulations throughout our team and remained alert to any indications of

non-compliance throughout the audit.

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. We also performed procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular the risks that revenue is recorded in the wrong period and that management may be in a position to make inappropriate accounting entries. Our procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiries of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding nondetection of fraud rather than error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Mr Justin Moore (Senior Statutory Auditor)
For and on behalf of Arnold Hill & Co LLP
22 January 2025
Chartered Accountants
Statutory Auditor
Sixth Floor
Capital Tower
91 Waterloo Road
London
SE1 8RT
ISTORAGE LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2024
- 9 -
2024
2023
£
£
Turnover
10,619,485
11,273,132
Cost of sales
(5,089,289)
(5,349,388)
Gross profit
5,530,196
5,923,744
Distribution costs
(159,691)
(189,316)
Administrative expenses
(3,663,350)
(3,676,742)
Operating profit
1,707,155
2,057,686
Interest receivable and similar income
20,583
4,747
Interest payable and similar expenses
(7,657)
(12,503)
Profit before taxation
1,720,081
2,049,930
Tax on profit
(431,577)
(337,586)
Profit for the financial year
1,288,504
1,712,344

The profit and loss account has been prepared on the basis that all operations are continuing operations.

ISTORAGE LIMITED
BALANCE SHEET
AS AT 31 JULY 2024
31 July 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
5
100,492
58,718
Current assets
Stocks
3,311,951
4,227,621
Debtors
7
1,169,722
915,104
Cash at bank and in hand
3,303,016
1,770,035
7,784,689
6,912,760
Creditors: amounts falling due within one year
8
(648,821)
(823,624)
Net current assets
7,135,868
6,089,136
Net assets
7,236,360
6,147,854
Capital and reserves
Called up share capital
10
450
450
Capital redemption reserve
50
50
Profit and loss reserves
7,235,860
6,147,354
Total equity
7,236,360
6,147,854

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 21 January 2025 and are signed on its behalf by:
Mr J  Michael
Director
Company registration number 06951286 (England and Wales)
ISTORAGE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 August 2022
450
50
4,835,006
4,835,506
Year ended 31 July 2023:
Profit and total comprehensive income
-
-
1,712,344
1,712,344
Dividends
-
-
(399,996)
(399,996)
Balance at 31 July 2023
450
50
6,147,354
6,147,854
Year ended 31 July 2024:
Profit and total comprehensive income
-
-
1,288,504
1,288,504
Dividends
-
-
(199,998)
(199,998)
Balance at 31 July 2024
450
50
7,235,860
7,236,360
ISTORAGE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
2,257,994
2,437,082
Interest paid
(7,657)
(12,503)
Income taxes paid
(452,217)
(228,939)
Net cash inflow from operating activities
1,798,120
2,195,640
Investing activities
Purchase of tangible fixed assets
(85,724)
(66,263)
Interest received
20,583
4,747
Net cash used in investing activities
(65,141)
(61,516)
Financing activities
Repayment of bank loans
-
0
(479,592)
Dividends paid
(199,998)
(399,996)
Net cash used in financing activities
(199,998)
(879,588)
Net increase in cash and cash equivalents
1,532,981
1,254,536
Cash and cash equivalents at beginning of year
1,770,035
515,499
Cash and cash equivalents at end of year
3,303,016
1,770,035
ISTORAGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 13 -
1
Accounting policies
Company information

IStorage Limited is a private company limited by shares incorporated in England and Wales. The registered office is Sixth Floor, Capital Tower, 91 Waterloo Road, London, SE1 8RT.

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.

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

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

 

The Directors remain satisfied that the Company is able to meet its liabilities as they fall due over the next 12 months. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

The turnover shown in the profit and loss account represents amounts earned during the year, exclusive of Value Added Tax.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Tangible fixed assets

Tangible fixed assets 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:

Leasehold improvements
Straightline over the length of lease - 3 years
Fixtures, Fittings and Equipment
Straightline over 4 years

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.

1.5
Impairment of fixed 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.

ISTORAGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 14 -

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
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
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.

1.8
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 balance sheet 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 debtors 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.

ISTORAGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 15 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 creditors 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

ISTORAGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Taxation

The tax expense represents the sum of the tax currently payable.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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.

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 fixed 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
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.

ISTORAGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 17 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Directors' remuneration
2024
2023
£
£
Remuneration paid to directors
500,000
500,956
4
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Total
24
24
5
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 August 2023
137,927
268,626
406,553
Additions
-
0
85,724
85,724
At 31 July 2024
137,927
354,350
492,277
Depreciation and impairment
At 1 August 2023
137,927
209,908
347,835
Depreciation charged in the year
-
0
43,950
43,950
At 31 July 2024
137,927
253,858
391,785
Carrying amount
At 31 July 2024
-
0
100,492
100,492
At 31 July 2023
-
0
58,718
58,718
ISTORAGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 18 -
6
Subsidiaries

Details of the company's subsidiaries at 31 July 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
ISTORAGE LLC
United States
Ordinary
100.00
7
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,015,476
817,532
Other debtors
154,246
97,572
1,169,722
915,104

Other debtors includes £105,728 of costs incurred in the acquisition of Interactive Media Corp prior to the incorporation of iStorage Holdings Limited. These costs are expected to be recovered from iStorage Holdings Limited.

8
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
369,403
491,061
Corporation tax
179,478
200,118
Other taxation and social security
51,240
22,932
Other creditors
48,700
109,513
648,821
823,624
9
Retirement Contribution schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
20,350
21,078

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

10
Called up share capital
2024
2023
Ordinary share capital
£
£
Issued and fully paid
450 Ordinary shares of £1 each
450
450
ISTORAGE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 19 -
11
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases in respect of land and buildings, vehicles and equipment, which fall due as follows:

2024
2023
£
£
42,532
114,019
12
Events after the reporting date

iStorage Holdings Limited, a new holding company, was incorporated after the reporting date. iStorage Limited was acquired by iStorage Holdings Limited by way of share for share exchange on 20 September 2024.

On 29 October 2024 iStorage Holdings Limited was itself acquired by SG IM Holding Limited (UK), which is owned by Swedish holding company CAST MC AB, which in turn is controlled by SG CAST Topco AB.

 

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