FOR THE YEAR ENDED 31 DECEMBER 2023
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IRIS INFRA HOLDCO LIMITED
COMPANY INFORMATION
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IRIS INFRA HOLDCO LIMITED
CONTENTS
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IRIS INFRA HOLDCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their strategic report and the audited financial statements of the Company for the year ended 31 December 2023.
The company is a 100% subsidiary of Iris Infra Master Holdco Ltd, whose ultimate parent is Basalt Infrastructure III LLP (“Basalt”), an infrastructure investment fund.
The company received funding of £40.3m of intercompany loan notes during the year (2022: £60.6m) from Iris Holdco Ltd, whose ultimate parent is Basalt Infrastructure III LLP. The company reported a loss before tax of £0.5m for the year (2022: £0.4m).
The UK broadband market continues to evolve rapidly, driven by increasing demand for high-speed internet services. The transition to remote working and the growing use of streaming services, online education, and ecommerce have accelerated the need for reliable and fast broadband connections. Increasingly seen as a required utility service, the need for fast and reliable broadband is ever increasing with approximately 19 million households now able to access Full Fibre broadband.
Key industry trends impacting our business include: Fibre Expansion: The rollout of fibre networks gained significant momentum, with both private and public sector investments increasing. As a major player in the broadband infrastructure space, we are well-positioned to continue to capture a significant share of this growth. 5G Deployment: The ongoing rollout of 5G networks provides new opportunities for broadband providers to enhance their service offerings and meet the increasing demand for mobile data. Regulatory Developments: The UK government continues to support the rollout of full-fibre networks, with initiatives such as Project Gigabit providing financial incentives for infrastructure providers.
Like all businesses, the Company faces a range of risks and uncertainties that could impact its performance.
These include:
∙Regulatory Risks: Changes in government policies or regulations could affect our ability to deliver services or change the cost structure of our operations.
∙Competition: The broadband market is highly with both established providers and new entrants seeking to capture market share. We continuously monitor market conditions and adjust our strategy to maintain our competitive edge.
∙Economic Conditions: Economic downturns or uncertainties such as inflation, changes in consumer spending, or disruptions in global supply chains could negatively impact our financial results.
∙Availability of funding: The Company is reliant on continued funding to finalise the network build, connect new customers, and support ongoing business operations.
To mitigate these risks, we continuously monitor our operating environment, invest in future-proof technologies, and maintain strong relationships with key stakeholders.
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IRIS INFRA HOLDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The trading subsidiaries' key performance indicators are regularly reviewed by the board of directors and include Network expansion to ready-for-service (RFS) premises, Revenue Growth and new Customer acquisition, EBITDA and the number of customers serviced for the company.
Performance is measured against detailed annual operating plans and rolling long-term financial forecast models.
The top key measures are:
∙Number of Ready for Service (RFS) premises: properties that can be connected to our network within our standard SLA and at a known cost
∙Cost per Premises Passed: average network build cost per RFS premise
∙Penetration: number of customers acquired as a proportion of properties ready for service in an area
∙Average Revenue Per User: average revenue per customer per month
∙Cost per Customer Acquired: cost of advertising and acquiring a customer to connect to the network
∙Cost per Installation: cost of activating a property with live ultra-high speed broadband connectivity
∙Cost per Customer Served: cost of operating the network and servicing the customer
In accordance with Section 172(1) of the Companies Act 2006, the Directors of Iris Infra Holdco Limited confirm their duty to promote the success of the Company for the benefit of its members as a whole. In doing so, they have had regard to the following matters:
Likely Consequences of Decisions in the Long Term The Company’s strategy prioritises sustainable growth and technological innovation to meet the growing demand for fibre optic broadband across the UK. Strategic decisions are evaluated to ensure they align with the long-term interests of stakeholders. Interests of the Company’s Employees The Company’s commitment to employee engagement, wellbeing, and professional development ensures that our workforce remains motivated and equipped to contribute effectively to the Company’s success. Fostering Relationships with Suppliers, Customers, and Others The Company’s collaborative approach with suppliers, customers, and other stakeholders ensures that their needs and expectations are understood and addressed effectively. This fosters trust, loyalty, and mutual benefit. Impact on the Community and the Environment Environmental sustainability is embedded in the Company’s operations, with significant investments in energy efficiency, emissions reduction, and community engagement initiatives. High Standards of Business Conduct The Company adheres to robust corporate governance frameworks, ethical practices, and compliance with all regulatory requirements. Acting Fairly Between Members of the Company Transparent communication with shareholders ensures that their interests are consistently considered in decision-making. The Directors believe that these considerations have been effectively integrated into the Company’s decision-making processes throughout the year.
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IRIS INFRA HOLDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company and its trading subsidiaries are transitioning from the network build phase of its development to accelerating sales and customer growth on its completed network footprint, and results to date have been in line with expectations.
The Company and its trading subsidiaries remains well-positioned to take advantage of the growing demand for high-quality broadband services in the UK. With a robust strategic plan, continuous investment in technology, and a focus on customer satisfaction, we are confident in our ability to achieve continued growth and success in the coming years. We thank our employees, customers, and shareholders for their continued support as we work towards our mission of building a connected future for all.
The Company operates as a holding company, and consequently, the assessment of going concern is contingent upon the future trading capabilities of its subsidiaries.
As of 31 December, the Company reported a loss of £0.5 million (2022: £0.4 million) and net liabilities amounting to £1 million (2022: £0.5 million), attributed to losses incurred that align with the current financial plan. Short to medium term funding for the business is reliant on the continued support of the Group’s shareholders, who have continued to fund the business throughout 2024, in accordance with the financial plan and have provided a letter to support funding for the business through 2025 and 2026. The Group includes the immediate parent Iris Infra Master Holdco Limited and its subsidiaries as set out in Note 9. In evaluating the going concern basis for the preparation of the financial statements, the Directors have considered the Board-approved annual budget and long-range business plan for the Company. They have stress-tested the baseline plan by developing a downside scenario that emphasises critical planning assumptions. The primary factors incorporated into this downside scenario include:
∙A decline in customer sales volumes;
∙A reduction in recurring revenues due to lower average revenues per user (ARPU);
∙An increase in the cost base driven by higher inflation assumptions affecting both operating costs and capital expenditures; and
∙An assumption of lower long-term penetration and utilization of the network, which diminishes opportunities for returns on capital investment.
In both the base case and downside scenarios, the Directors are confident that the business possesses sufficient cash resources to sustain operations for the foreseeable future, with expectations that the trading group will achieve operational cash-flow positivity.
The Company is reliant on continued funding to finalise the network build, connect new customers, and support ongoing business operations. Following the completion of network construction, the Company will remain dependent on capital for a brief period until it becomes cash-generative and self-sustaining. Shareholders have already provided additional funding post-year-end and have expressed their intention to continue providing financial support. Note 14 Post Balance Sheet Events includes details of funding secured post year end. In the event that a materially lower amount of future funding is received, the Directors would take mitigating action on the operations of the businesses to ensure that the Company continues to realise assets and discharge liabilities in the normal course of business.
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IRIS INFRA HOLDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors’ assumptions and outlook assume continued shareholder support to finance business operations. The financial statements do not reflect the adjustments that would be necessary should the ability of the Company to trade be compromised due to the loss of such support. As such there is a material uncertainty related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern.
Consequently, the Directors conclude that, whilst there remains a reliance on continued shareholder support to finance business operations in the medium term, it is appropriate to adopt the going concern basis in preparing the financial statements for the year ending 31 December 2023.
This report was approved by the board on 27 January 2025 and signed on its behalf.
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IRIS INFRA HOLDCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The loss for the year, after taxation, amounted to £508,772 (2022: loss £435,474).
No dividends (£nil) were paid during the year ended 31 December 2023 (2022: £Nil).
The directors who served during the year were:
The Company is transitioning from the network build phase of its development to accelerating sales and customer growth on its completed network footprint, and results to date have been in line with expectations.
The Company remains well-positioned to take advantage of the growing demand for high-quality broadband services in the UK. With a robust strategic plan, continuous investment in technology, and a focus on customer satisfaction, we are confident in our ability to achieve continued growth and success in the coming years.
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IRIS INFRA HOLDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company strives to build sustainable, equitable, healthy, and diverse communities through a combination of innovative business practises and exemplary environmental, social and governance (ESG) performance. This commitment informs every aspect of our business, including how we design and build new projects, operate our company, collaborate with stakeholders and report progress.
Engaging with Suppliers
The Company maintains collaborative relationships with a robust network of suppliers to ensure the efficient delivery of fibre-optic broadband infrastructure with ethical procurement. Key engagement practices include:
∙Supplier Partnerships: Establishing long-term contracts that promote mutual growth and innovation.
∙Sustainability Alignment: Engaging suppliers on their sustainability practices to align with the Company’s environmental commitments.
∙Performance Reviews: Regular supplier evaluations to ensure quality, cost efficiency, and timely delivery.
Engaging with Customers
The Company’s customers range from individual households to large enterprises. Our engagement practices are designed to enhance customer satisfaction and loyalty:
∙Customer Feedback Channels: Surveys, focus groups, and direct feedback channels allow us to tailor our services to customer needs.
∙Proactive Communication: Dedicated customer support teams provide updates on service installations and maintenance.
∙Digital Innovation: Investments in technology to ensure seamless access to account management and support.
Engaging with Other Stakeholders
The Company engages with a range of external stakeholders, including local authorities, regulators, and community groups, to support the successful delivery of projects:
∙Regulatory Compliance: Active dialogue with Ofcom and other regulatory bodies ensures adherence to industry standards.
∙Community Engagement: Partnerships with local councils and community groups facilitate smooth project
rollouts and address local concerns.
∙Investor Relations: Regular updates, presentations, and reports ensure transparency with investors.
The Company has included mandatory Directors' Report disclosures within the Strategic Report as they are considered by the Directors to be of strategic importance, as permitted by the Companies Act 2006 (Strategic Report and Director's Report Regulation).
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IRIS INFRA HOLDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
During 2024 a further £42,079,303 of unsecured loan notes were issued.
The Company's parent undertaking Iris Holdco Limited is in active discussions to merge with Zzoomm Group Ltd, developing a larger single operating business. This merger will strengthen the individual financial positions of each company through leveraging greater operational efficiencies and broader market reach, gaining the ability to acquire more customers. As at 27 January 2025 the transaction had completed with the creation of a new intermediate parent company Altnet Partners Limited, owned 71% by Iris Infra Holdco Limited and 29% by Zzoomm Group Limited. This new intermediate holding company will own 100% of the combined Zzoomm and Iris Infra Group companies. Both parties will continue to fund their respective business plans in line with current forecasts.
The auditors, Bishop Fleming LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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IRIS INFRA HOLDCO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors are responsible for preparing the Strategic report, 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;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙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.
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IRIS INFRA HOLDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRIS INFRA HOLDCO LIMITED
We have audited the financial statements of Iris Infra Holdco Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We draw attention to note 2.4 in the financial statements, which indicates that the Company incurred a net loss of £0.5m (2022: £0.4m) during the year ended 31 December 2023 and, as of that date, the Company had net liabilities of £1m (2022: £0.5m).
The Company’s ability to continue as a going concern is dependent on it's ability to secure additional funding to meet its operational and financial obligations as they fall due which, whilst intended, is not guaranteed. As stated in Note 2.4, these events or conditions, along with other matters as set forth in Note 2.4, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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. 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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IRIS INFRA HOLDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRIS INFRA HOLDCO LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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IRIS INFRA HOLDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRIS INFRA HOLDCO LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙We have considered the nature of the industry and sector, control environment and financial performance, key drivers for directors’ remuneration, bonus levels and performance targets
∙We have considered the results of enquiries with management and the directors in relation to their own identification and assessment of the risks of irregularities within the Company;
∙We have reviewed the documentation of key processes and controls and performed walkthrough of transactions to confirm that systems are operating in line with documentation; and
∙We have considered the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud
As a result of these procedures, we considered the opportunities and incentives that may exist within the
organisation for fraud and identified the highest areas of risk to be in relation to revenue recognition and management override We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, FRS 102 and UK tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company’s ability to operate or to avoid a material penalty. These include data protection regulations, occupational health and safety regulations, employment law and the Communications Act 2003. Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having direct effect on the financial statements.
∙Enquiring of management concerning actual and potential litigation and claims;
∙Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
∙Reviewing board meeting minutes;
∙Performing detailed transactional testing in relation to the recognition of revenue; and
∙In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries, and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of the business.
We also communicated relevant identified laws and regulations and potential fraud risk to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
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IRIS INFRA HOLDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IRIS INFRA HOLDCO LIMITED (CONTINUED)
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from an error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
2nd Floor Stratus House
Emperor Way
Exeter Business Park
EX1 3QS
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IRIS INFRA HOLDCO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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IRIS INFRA HOLDCO LIMITED
REGISTERED NUMBER:13055379
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 25 form part of these financial statements.
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IRIS INFRA HOLDCO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Iris Infra Holdco Limited is a private company limited by shares incorporated in England and Wales. The
registered office is Aperture, Pynes Hill, Exeter, England, EX2 5AZ.
2.ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Iris Infra Master Holdco Limited as at 31 December 2023 and these financial statements may be obtained from the Registrar of Companies, Companies House, Crown Way, Cardiff, CF14 3UZ.
The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (continued)
The Company operates as a holding company, and consequently, the assessment of going concern is contingent upon the future trading capabilities of its subsidiaries.
As of 31 December, the Company reported a loss of £0.5 million (2022: £0.4 million) and net liabilities amounting to £1 million (2022: £0.5 million), attributed to losses incurred that align with the current financial plan. Short to medium term funding for the business is reliant on the continued support of the Group’s shareholders, who have continued to fund the business throughout 2024, in accordance with the financial plan and have provided a letter to support funding for the business through 2025 and 2026. The Group includes the immediate parent Iris Infra Master Holdco Limited and its subsidiaries as set out in Note 9. In evaluating the going concern basis for the preparation of the financial statements, the Directors have considered the Board-approved annual budget and long-range business plan for the Company. They have stress-tested the baseline plan by developing a downside scenario that emphasises critical planning assumptions. The primary factors incorporated into this downside scenario include:
∙A decline in customer sales volumes;
∙A reduction in recurring revenues due to lower average revenues per user (ARPU);
∙An increase in the cost base driven by higher inflation assumptions affecting both operating costs and capital expenditures; and
∙An assumption of lower long-term penetration and utilization of the network, which diminishes opportunities for returns on capital investment.
In both the base case and downside scenarios, the Directors are confident that the business possesses sufficient cash resources to sustain operations for the foreseeable future, with expectations that the trading group will achieve operational cash-flow positivity.
The Company is reliant on continued funding to finalise the network build, connect new customers, and support ongoing business operations. Following the completion of network construction, the Company will remain dependent on capital for a brief period until it becomes cash-generative and self-sustaining. Shareholders have already provided additional funding post-year-end and have expressed their intention to continue providing financial support. Note 14 Post Balance Sheet Events includes details of funding secured post year end. In the event that a materially lower amount of future funding is received, the Directors would take mitigating action on the operations of the businesses to ensure that the Company continues to realise assets and discharge liabilities in the normal course of business. The Directors’ assumptions and outlook assume continued shareholder support to finance business operations. The financial statements do not reflect the adjustments that would be necessary should the ability of the Company to trade be compromised due to the loss of such support. As such there is a material uncertainty related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. Consequently, the Directors conclude that, whilst there remains a reliance on continued shareholder support to finance business operations in the medium term, it is appropriate to adopt the going concern basis in preparing the financial statements for the year ending 31 December 2023.
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
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 debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) 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 debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (continued)
recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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.
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 creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments 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 creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (continued)
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.
Impairment of fixed asset investments - At each reporting date management assess whether there are any indicators of impairment taking into account significant changes in the economic environment in which the entity operates, the trading performance of its subsidiary and future revenue streams which require an element of judgement. Recoverability of intercompany debtor - Included in debtors less than one year is a balance due from the company’s subsidiary for £230,634,586, recoverability of which will be dependent on the financial performance of the trading entity. The directors are of the opinion that the entity will have adequate cash resources to continue operations for the foreseeable future, upon which the trading company is expected to turn operationally cash-flow positive. The recoverability of intercompany debtor balances is a key area of judgment in the preparation of these financial statements. Management assesses whether intercompany debtor balances are recoverable based on the financial position, liquidity, and future cash flow projections of the debtor entity, as well as the nature and terms of the intercompany arrangements. In making this judgment, management considers:
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
8.TAXATION (CONTINUED)
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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IRIS INFRA HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
On the 8 January 2021 3,605,000 £0.01 ordinary shares were issued at par.
On the 26 September 2023 3,026,000 £0.01 ordinary shares were issued at par. The Company’s parent undertaking Iris Holdco Limited is in active discussions to merge with Zzoomm Group Ltd, developing a larger single operating business. As at 27 January 2025 the transaction had completed with the creation of a new intermediate parent company Altnet Partners Limited, owned 71% by Iris Infra Holdco Limited and 29% by Zzoomm Group Limited. This new intermediate holding company will own 100% of the combined Zzoomm and Iris Infra Group companies. Both parties will continue to fund their respective business plans in line with current forecasts.
The company's immediate parent undertaking is Iris Infra Master Holdco Limited (13055343).
The directors are of the opinion the Company's ultimate parent undertaking is Basalt Infrastructure Partners III Gp Limited, a company incorporated in Guernsey. The parent undertaking of the largest group to consolidate these financial statements is Full Fibre Master Holdco Limited (13055343) which changed its name to Iris Infra Master Holdco Limited on 18 August 2023, the consolidated financial statements of which are available at Companies House, Cardiff.
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