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Registered number: 12954513
















DIGITAL HOLDINGS LTD




ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023


































img70d3.png


DIGITAL HOLDINGS LTD

 
COMPANY INFORMATION


DIRECTORS
P Doyle 
W Jones 
S Lowry 
J S Warner (appointed 29 February 2024)
C Bock Montero (resigned 26 September 2023)
O D Helm (appointed 26 September 2023, resigned 29 February 2024)
F Martinez Sanchez (resigned 26 September 2023)




COMPANY SECRETARY
K Plahay



REGISTERED NUMBER
12954513



REGISTERED OFFICE
Aperture
Pynes Hill

Exeter

EX2 5AZ




BANKERS
HSBC UK Bank Plc
8 Canada Square

London

E14 5HQ






DIGITAL HOLDINGS LTD


CONTENTS



Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditors' report
7 - 10
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Notes to the financial statements
14 - 22



DIGITAL HOLDINGS LTD

 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

INTRODUCTION
 
The directors present their strategic report and the audited financial statements of the Company for the year ended 31 December 2023. The prior period comparatives cover a 13 month period to 31 December 2022.

BUSINESS REVIEW
 
The holding company, and itself is a 100% subsidiary of Digital Master Holdco Ltd, whose ultimate parent is Basalt Infrastructure III LLP (“Basalt”), an infrastructure investment fund.
The company received funding of £33m of intercompany loan notes during the year (2022: £41m) from Digital Master Holdco Ltd.
Digital Holdings Ltd advanced intercompany loans in 2023 amounting to £42.01m to fund the operations of its subsidiaries.
The company reported a loss before tax of £1.8m for the year (2022: £1.0m).

PRINCIPAL RISKS AND UNCERTAINTIES
 
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.

FINANCIAL KEY PERFORMANCE INDICATORS
 
The 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.

Page 1


DIGITAL HOLDINGS LTD


STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

OTHER KEY PERFORMANCE INDICATORS
 
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

GOING CONCERN

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 £1.8 million (2022: £1.0 million) and net liabilities amounting to £1.9 million (2022: £0.1 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 Iris Infra Master Holdco Limited, Iris Infra Holdco Limited, Iris Infra Limited, Full Fibre Limited, Digital Master Holdco Limited, Digital Infrastructure Limited, Digital Infrastructure Services Limited and Be Fibre Limited.
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.

Page 2


DIGITAL HOLDINGS LTD


STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

GOING CONCERN (CONTINUED)

Shareholders have already provided additional funding post-year-end and have expressed their intention to continue providing financial support. Included with Iris Infra Master Holdco Limited Note 28 Post Balance Sheet events are 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. 


This report was approved by the board and signed on its behalf.



J S Warner
Director

Date: 27 January 2025

Page 3


DIGITAL HOLDINGS LTD

 
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 comparative figures are for the 13 month period to 31 December 2022.

RESULTS AND DIVIDENDS

The loss for the year, after taxation, amounted to £1,766,851 (2022:loss £969,846).

No dividends (£nil) were paid during the year ended 31 December 2023 (2022: £nil). 
Digital Holdings Ltd transferred its shareholding in Be Fibre Limited to fellow group company, Iris Infra Limited for a consideration of £100.

DIRECTORS

The Directors who served during the year were:

P Doyle 
W Jones 
S Lowry 
C Bock Montero (resigned 26 September 2023)
O D Helm (appointed 26 September 2023, resigned 29 February 2024)
F Martinez Sanchez (resigned 26 September 2023)

FUTURE DEVELOPMENTS

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.

MATTERS COVERED IN THE STRATEGIC REPORT

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).

DISCLOSURE OF INFORMATION TO AUDITORS

Each of the persons who are Directors at the time when this Directors' report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Page 4


DIGITAL HOLDINGS LTD
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
POST BALANCE SHEET EVENTS

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.


AUDITORS

The auditorsBishop Fleming LLPwill 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.
 






J S Warner
Director

Date: 27 January 2025

Aperture
Pynes Hill
Exeter
EX2 5AZ

Page 5


DIGITAL HOLDINGS LTD

 
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 judgments and accounting estimates that are reasonable and prudent;


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 2006They 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.

Page 6


DIGITAL HOLDINGS LTD

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIGITAL HOLDINGS LTD
OPINION


We have audited the financial statements of Digital Holdings Ltd (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 policiesThe 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 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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 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.


MATERIAL UNCERTAINTY RELATED TO GOING CONCERN


We draw attention to note 2.3 in the financial statements, which indicates that the Company incurred a net loss of £1.8m (2022: £1m) during the year ended 31 December 2023 and, as of that date, the Company had net liabilities of £1.9m (2022: £0.1m).   


The Company’s ability to continue as a going concern is dependent on its parent Company'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 2.3, these events or conditions, along with other matters as set forth in Note 2.3, 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.


Page 7


DIGITAL HOLDINGS LTD
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIGITAL HOLDINGS LTD (CONTINUED)

OTHER INFORMATION


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 ReportOur 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.


OPINION 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 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.


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 or 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:


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.


RESPONSIBILITIES OF DIRECTORS
 

As explained more fully in the Directors' responsibilities statement set out on page 6, 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.


Page 8


DIGITAL HOLDINGS LTD
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIGITAL HOLDINGS LTD (CONTINUED)

AUDITORS' 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 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;
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.




Page 9


DIGITAL HOLDINGS LTD
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIGITAL HOLDINGS LTD (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.


USE OF OUR 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 2006Our 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.






Fleur Lewis FCA (Senior statutory auditor)
for and on behalf of
Bishop Fleming LLP
Chartered Accountants
Statutory Auditors
2nd Floor Stratus House
Emperor Way
Exeter Business Park
Exeter
EX1 3QS

28 January 2025
Page 10


DIGITAL HOLDINGS LTD

 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

Year ended
31 December
13 month period ended
31 December
2023
2022
Note
£
£

  

Administrative expenses
  
(883,895)
(211,306)

Operating loss
  
(883,895)
(211,306)

Interest receivable and similar income
  
6,403,705
2,184,491

Interest payable and similar expenses
  
(7,286,661)
(2,943,031)

Loss before tax
  
(1,766,851)
(969,846)

Loss for the financial year
  
(1,766,851)
(969,846)

Other comprehensive income for the year
  

Total comprehensive income for the year
  
(1,766,851)
(969,846)

The notes on pages 14 to 22 form part of these financial statements.

Page 11


DIGITAL HOLDINGS LTD
REGISTERED NUMBER:12954513

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Investments
 9 
200
300

  
200
300

Current assets
  

Debtors: amounts falling due within one year
 10 
101,545,516
53,963,172

Cash at bank and in hand
 11 
2,625,646
11,680,079

  
104,171,162
65,643,251

Creditors: amounts falling due within one year
 12 
(106,079,980)
(65,785,318)

Net current liabilities
  
 
 
(1,908,818)
 
 
(142,067)

Total assets less current liabilities
  
(1,908,618)
(141,767)

  

Net liabilities
  
(1,908,618)
(141,767)


Capital and reserves
  

Called up share capital 
  
1,000,000
1,000,000

Profit and loss account
  
(2,908,618)
(1,141,767)

  
(1,908,618)
(141,767)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 





J S Warner
Director

Date: 27 January 2025

The notes on pages 14 to 22 form part of these financial statements.

Page 12


DIGITAL HOLDINGS LTD


STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 December 2021
1,000,000
(171,921)
828,079


Comprehensive income for the period

Loss for the period
-
(969,846)
(969,846)



At 1 January 2023
1,000,000
(1,141,767)
(141,767)


Comprehensive income for the year

Loss for the year
-
(1,766,851)
(1,766,851)


At 31 December 2023
1,000,000
(2,908,618)
(1,908,618)


The notes on pages 14 to 22 form part of these financial statements.

Page 13


DIGITAL HOLDINGS LTD

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


GENERAL INFORMATION

Digital Holdings Ltd 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

 
2.1

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

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 judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

FINANCIAL REPORTING STANDARD 102 - REDUCED DISCLOSURE EXEMPTIONS

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 4 Statement of Financial Position paragraph 4.12(a)(iv);
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).

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 Companies House.

Page 14


DIGITAL HOLDINGS LTD

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (continued)

 
2.3

GOING CONCERN

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 £1.8 million (2022: £1.0 million) and net liabilities amounting to £1.9 million (2022: £0.1 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 Iris Infra Master Holdco Limited, Iris Infra Holdco Limited, Iris Infra Limited, Full Fibre Limited, Digital Master Holdco Limited, Digital Infrastructure Limited, Digital Infrastructure Services Limited and Be Fibre Limited.

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. Included with Iris Infra Master Holdco Limited Note 28 Post Balance Sheet events are 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. 

Page 15


DIGITAL HOLDINGS LTD

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (continued)

 
2.4

INTEREST INCOME

Interest income is recognised in profit or loss using the effective interest method.

 
2.5

FINANCE COSTS

Finance costs are charged to profit or loss 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.

 
2.6

VALUATION OF INVESTMENTS

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in the Statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in profit or loss for the period.

 
2.7

DEBTORS

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.

 
2.8

CASH AND CASH EQUIVALENTS

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.9

CREDITORS

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.10

PRIOR YEAR RESTATED

The balance sheet restatement in 2022 represents a remapping of debtors and creditors in line with the wider Infra Master Holdco Group.

Page 16


DIGITAL HOLDINGS LTD

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.



JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Recoverability of Intercompany Debtor Balances
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:
• The debtor’s financial performance and solvency, including historical and forecasted results.
• The debtor’s payment history and ability to generate sufficient cash flows to meet its obligations.
• Any evidence of support, such as guarantees or letters of comfort provided by other group entities.
• Relevant external factors, including market and economic conditions, that may impact the debtor’s ability to repay.
Where there is evidence to suggest that the carrying amount of the intercompany debtor may not be recoverable, an impairment provision is recognized to reduce the balance to its estimated recoverable amount. Any impairment loss is charged to the profit and loss account in the period in which it is identified.
The assessment of recoverability involves significant estimates and assumptions. Changes in these estimates, or the emergence of new information, could result in material adjustments to the carrying value of the intercompany debtor balances.


4.


AUDITORS' REMUNERATION

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.


5.


EMPLOYEES



The Company has no employees other than the Directors, who did not receive any remuneration (2022:£NIL).

The average monthly number of employees, including the Directors, during the year was as follows:


      Year ended
     31 December
13 month period ended
      31 December
        2023
        2022
            No.
            No.





0
0

Page 17


DIGITAL HOLDINGS LTD

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


INTEREST RECEIVABLE

Year ended
31 December
13 month period ended
31 December
2023
2022
£
£


Interest receivable from group companies
6,302,246
2,184,491

Other interest receivable
101,459
-

6,403,705
2,184,491


7.


INTEREST PAYABLE AND SIMILAR EXPENSES

Year ended
31 December
13 month period ended
31 December
2023
2022
£
£


Loan interest payable from group undertakings
7,286,661
2,943,031

7,286,661
2,943,031


8.


TAXATION


Year ended
31 December
13 month period ended
31 December
2023
2022
£
£



TOTAL CURRENT TAX
-
-

DEFERRED TAX

TOTAL DEFERRED TAX
-
-


TAX ON LOSS
-
-
Page 18


DIGITAL HOLDINGS LTD

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
8.TAXATION (CONTINUED)


FACTORS AFFECTING TAX CHARGE FOR THE YEAR/PERIOD

The tax assessed for the year/period is higher than (2022:higher than) the standard rate of corporation tax in the UK of 23.52% (2022:19%). The differences are explained below:

Year ended
31 December
13 month period ended
31 December
2023
2022
£
£


Loss on ordinary activities before tax
(1,766,851)
(969,846)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022:19%)
(415,573)
(184,271)

EFFECTS OF:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
182,505
-

Unrelieved tax losses carried forward
-
184,271

Movement in deferred tax not recognised
247,728
-

Remeasurement of deferred tax forchanges in tax rates
(14,660)
-

TOTAL TAX CHARGE FOR THE YEAR/PERIOD
-
-


9.


FIXED ASSET INVESTMENTS





Investments in subsidiary companies

£



COST OR VALUATION


At 1 January 2023
300


Disposals
(100)



At 31 December 2023
200

The Company received consideration of £100 in relation to the fixed asset investment disposed during the year.

Page 19


DIGITAL HOLDINGS LTD

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

SUBSIDIARY UNDERTAKINGS


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Digital Infrastructure Limited
Aperture, Pynes Hill, Exeter, EX2 5AZ
Ordinary
100%
Digital Infrastructure Services Limited
Aperture, Pynes Hill, Exeter, EX2 5AZ
Ordinary
100%


10.


DEBTORS

As restated
2023
2022
£
£


Amounts owed by group undertakings
101,544,136
53,961,853

Other debtors
1,380
1,319

101,545,516
53,963,172



11.


CASH AND CASH EQUIVALENTS

As restated
2023
2022
£
£

Cash at bank and in hand
2,625,646
11,680,079

2,625,646
11,680,079



12.


CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

As restated
2023
2022
£
£

Amounts owed to group undertakings
106,055,980
65,769,318

Accruals and deferred income
24,000
16,000

106,079,980
65,785,318


Included in amounts owed to group undertakings are unsecured intercompany loans of £95,507,443 with capitalised interest of £10,548,537. The loans are repayable on demand. Interest will accrue at 8% and will be capitalised on each 12 month anniversary of the date of the agreement if not paid. During the year interest of £7,286,660 (2022: £2,943,091) was incurred on these loan notes. 


13.


DEFERRED TAXATION

Page 20


DIGITAL HOLDINGS LTD

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
13.DEFERRED TAXATION (CONTINUED)


The Company is still in the formative stages of deploying network and growing a revenue-generating customer base on the network, and has to date not generated a profit. The Company requires a critical mass of customers live on the network to generate a profit. Due to lack of certainty as to the timing of when the Company can then utilise the tax losses, a deferred tax asset has not been recognised. The Company has not recognised a net deferred tax asset in respect of the tax losses of £533,169 (2022: £247,727).


14.


SHARE CAPITAL

2023
2022
£
£
ALLOTTED, CALLED UP AND FULLY PAID



1,000,000 (2022:1,000,000) Ordinary shares shares of £1.00 each
1,000,000
1,000,000



15.


RESERVES

Profit and loss account

Profit and loss account represents cumulative profits or losses net of dividends paid and other adjustments.


16.


RELATED PARTY TRANSACTIONS

The company has taken advantage of the exemption available under FRS102 para 33.1A whereby it has not disclosed transactions and balances with any wholly owned group companies.
Included in legal and professional fees are amounts of £425,000 (2022: £Nil) charged for services provided by Maestro Technologies Limited, a company that has interest in the intermediate parent company, Iris Infra Master Holdco Limited.


17.


POST BALANCE SHEET EVENTS

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.

Page 21


DIGITAL HOLDINGS LTD

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


CONTROLLING PARTY

The immediate parent company is Digital Master Holdco Limited, a company incorporated in England and Wales.
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.

 
Page 22