Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-312023-12-31false29falsefalse2023-01-01No description of principal activity7false 12705502 2023-01-01 2023-12-31 12705502 2021-12-01 2022-12-31 12705502 2023-12-31 12705502 2022-12-31 12705502 2021-12-01 12705502 1 2023-01-01 2023-12-31 12705502 d:CompanySecretary1 2023-01-01 2023-12-31 12705502 d:Director1 2023-01-01 2023-12-31 12705502 d:Director2 2023-01-01 2023-12-31 12705502 d:Director3 2023-01-01 2023-12-31 12705502 d:Director4 2023-01-01 2023-12-31 12705502 d:Director4 2023-12-31 12705502 d:Director5 2023-01-01 2023-12-31 12705502 d:Director5 2023-12-31 12705502 d:Director6 2023-01-01 2023-12-31 12705502 d:Director6 2023-12-31 12705502 d:Director7 2023-01-01 2023-12-31 12705502 d:Director7 2023-12-31 12705502 d:RegisteredOffice 2023-01-01 2023-12-31 12705502 d:Agent1 2023-01-01 2023-12-31 12705502 c:Buildings c:LongLeaseholdAssets 2023-01-01 2023-12-31 12705502 c:Buildings c:LongLeaseholdAssets 2023-12-31 12705502 c:Buildings c:LongLeaseholdAssets 2022-12-31 12705502 c:LandBuildings 2023-12-31 12705502 c:LandBuildings 2022-12-31 12705502 c:MotorVehicles 2023-01-01 2023-12-31 12705502 c:MotorVehicles 2023-12-31 12705502 c:MotorVehicles 2022-12-31 12705502 c:MotorVehicles c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 12705502 c:FurnitureFittings 2023-01-01 2023-12-31 12705502 c:FurnitureFittings 2023-12-31 12705502 c:FurnitureFittings 2022-12-31 12705502 c:FurnitureFittings c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 12705502 c:OfficeEquipment 2023-01-01 2023-12-31 12705502 c:OfficeEquipment 2023-12-31 12705502 c:OfficeEquipment 2022-12-31 12705502 c:OfficeEquipment c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 12705502 c:ComputerEquipment 2023-01-01 2023-12-31 12705502 c:OtherPropertyPlantEquipment 2023-01-01 2023-12-31 12705502 c:OtherPropertyPlantEquipment 2023-12-31 12705502 c:OtherPropertyPlantEquipment 2022-12-31 12705502 c:OtherPropertyPlantEquipment c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 12705502 c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 12705502 c:CurrentFinancialInstruments 2023-12-31 12705502 c:CurrentFinancialInstruments 2022-12-31 12705502 c:CurrentFinancialInstruments c:WithinOneYear 2023-12-31 12705502 c:CurrentFinancialInstruments c:WithinOneYear 2022-12-31 12705502 c:ShareCapital 2023-01-01 2023-12-31 12705502 c:ShareCapital 2023-12-31 12705502 c:ShareCapital 2021-12-01 2022-12-31 12705502 c:ShareCapital 2022-12-31 12705502 c:ShareCapital 2021-12-01 12705502 c:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 12705502 c:RetainedEarningsAccumulatedLosses 2023-12-31 12705502 c:RetainedEarningsAccumulatedLosses 2021-12-01 2022-12-31 12705502 c:RetainedEarningsAccumulatedLosses 2022-12-31 12705502 c:RetainedEarningsAccumulatedLosses 2021-12-01 12705502 d:FRS102 2023-01-01 2023-12-31 12705502 d:Audited 2023-01-01 2023-12-31 12705502 d:FullAccounts 2023-01-01 2023-12-31 12705502 d:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 12705502 c:WithinOneYear 2023-12-31 12705502 c:WithinOneYear 2022-12-31 12705502 c:BetweenOneFiveYears 2023-12-31 12705502 c:BetweenOneFiveYears 2022-12-31 12705502 c:MoreThanFiveYears 2023-12-31 12705502 c:MoreThanFiveYears 2022-12-31 12705502 e:PoundSterling 2023-01-01 2023-12-31 iso4217:GBP xbrli:pure

Registered number:12705502
















DIGITAL INFRASTRUCTURE LTD




DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023


































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DIGITAL INFRASTRUCTURE LTD

 
COMPANY INFORMATION


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




COMPANY SECRETARY
Mr K Plahay



REGISTERED NUMBER
12705502



REGISTERED OFFICE
Aperture
Pynes Hill

Exeter

EX2 5AZ




INDEPENDENT AUDITORS
Bishop Fleming LLP
Chartered Accountants & Statutory Auditors

2nd Floor Stratus House

Emperor Way

Exeter Business Park

Exeter

EX1 3QS




BANKERS
HSBC UK Bank Plc
8 Canada Square

London

E14 5HQ






DIGITAL INFRASTRUCTURE LTD


CONTENTS



Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditors' report
4 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 21



DIGITAL INFRASTRUCTURE 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.

DIRECTORS

The Directors who served during the year were:

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

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.

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.

SMALL COMPANIES NOTE

In preparing this report, the Directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

Page 1


DIGITAL INFRASTRUCTURE LTD
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
GOING CONCERN

As of 31 December, the Company reported a loss of £15.2 million (2022: £7.0 million) and net liabilities amounting to £23.8 million (2022: £8.6 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 wider 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 Holdings 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. 

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


Mr J Warner
Director

Date: 27 January 2025

Aperture
Pynes Hill
Exeter
EX2 5AZ

Page 2


DIGITAL INFRASTRUCTURE LTD

 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors are responsible for preparing the Directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the Directors are required to:

select suitable accounting policies for the Company's financial statements and then apply them consistently;

make 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 3


DIGITAL INFRASTRUCTURE LTD

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


We have audited the financial statements of Digital Infrastructure 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 2.2 in the financial statements, which indicates that  the Company incurred a net loss of £15.2m (2022: £7.0m) during the year ended 31 December 2023 and, as of that date, the Company had net liabilities of £23.8m (2022: £8.6m).   


The Company’s ability to continue as a going concern is dependent on it's 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 2.2, these events or conditions, along with other matters as set forth in Note 2.2, 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 4


DIGITAL INFRASTRUCTURE LTD
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIGITAL INFRASTRUCTURE 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 Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Directors' report has been prepared in accordance with applicable legal requirements.


MATTERS ON WHICH WE ARE REQUIRED TO REPORT 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 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; or
the Directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Directors' report and from the requirement to prepare a Strategic report.


RESPONSIBILITIES OF DIRECTORS
 

As explained more fully in the Directors' responsibilities statement set out on page 3, 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 5


DIGITAL INFRASTRUCTURE LTD
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIGITAL INFRASTRUCTURE 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 p rocesses 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 6


DIGITAL INFRASTRUCTURE LTD
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIGITAL INFRASTRUCTURE 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 7


DIGITAL INFRASTRUCTURE LTD

 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

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

  

Turnover
  
273,966
15,680

Cost of sales
  
(937,300)
(112,262)

Gross loss
  
(663,334)
(96,582)

Administrative expenses
  
(9,650,856)
(5,183,639)

Operating loss
  
(10,314,190)
(5,280,221)

Interest payable and similar expenses
  
(4,867,945)
(1,683,334)

Loss before tax
  
(15,182,135)
(6,963,555)

Loss for the financial year
  
(15,182,135)
(6,963,555)

Other comprehensive income for the year
  

Total comprehensive income for the year
  
(15,182,135)
(6,963,555)

The notes on pages 11 to 21 form part of these financial statements.

Page 8


DIGITAL INFRASTRUCTURE LTD
REGISTERED NUMBER:12705502

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 6 
72,046,511
41,005,712

  
72,046,511
41,005,712

Current assets
  

Debtors
 7 
2,156,114
3,510,548

Cash at bank and in hand
 8 
256,436
338,296

  
2,412,550
3,848,844

Creditors: amounts falling due within one year
 9 
(98,213,840)
(53,427,200)

Net current liabilities
  
 
 
(95,801,290)
 
 
(49,578,356)

Total assets less current liabilities
  
(23,754,779)
(8,572,644)

  

Net liabilities
  
(23,754,779)
(8,572,644)


Capital and reserves
  

Called up share capital 
  
100
100

Profit and loss account
  
(23,754,879)
(8,572,744)

  
(23,754,779)
(8,572,644)


The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

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





Mr J Warner
Director

Date: 27 January 2025

The notes on pages 11 to 21 form part of these financial statements.

Page 9


DIGITAL INFRASTRUCTURE 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
100
(1,609,189)
(1,609,089)


Comprehensive income for the period

Loss for the period
-
(6,963,555)
(6,963,555)
Total comprehensive income for the period
-
(6,963,555)
(6,963,555)



At 1 January 2023
100
(8,572,744)
(8,572,644)


Comprehensive income for the year

Loss for the year
-
(15,182,135)
(15,182,135)
Total comprehensive income for the year
-
(15,182,135)
(15,182,135)


At 31 December 2023
100
(23,754,879)
(23,754,779)


The notes on pages 11 to 21 form part of these financial statements.

Page 10


DIGITAL INFRASTRUCTURE LTD

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

1.


GENERAL INFORMATION

Digital Infrastructure 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:

Page 11


DIGITAL INFRASTRUCTURE LTD

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

2.ACCOUNTING POLICIES (continued)

 
2.2

GOING CONCERN

As of 31 December, the Company reported a loss of £15.2 million (2022: £7.0 million) and net liabilities amounting to £23.8 million (2022: £8.6 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 wider 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 Holdings 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 12


DIGITAL INFRASTRUCTURE LTD

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

2.ACCOUNTING POLICIES (continued)

 
2.3

FOREIGN CURRENCY TRANSLATION

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

 
2.4

REVENUE

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

OPERATING LEASES: THE COMPANY AS LESSEE

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Page 13


DIGITAL INFRASTRUCTURE LTD

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

2.ACCOUNTING POLICIES (continued)

 
2.6

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.

 
2.7

PENSIONS

DEFINED CONTRIBUTION PENSION PLAN

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.8

TANGIBLE FIXED ASSETS

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Assets under construction are accounted for at cost. They are not depreciated until the accounting period in which they are brought into use. The Company brings the assets into use only once the fibre cables being laid become live.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
10 years
Motor vehicles
-
5 years
Fixtures and fittings
-
3-5 years
Active network
-
6 years
Passive network
-
25 years
Assets under construction
-
Not depreciated

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 14


DIGITAL INFRASTRUCTURE LTD

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

2.ACCOUNTING POLICIES (continued)

 
2.9

IMPAIRMENT OF FIXED ASSETS AND GOODWILL

Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.10

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.

 
2.11

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.

 
2.12

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.

 
2.13

PRIOR YEAR RESTATED

The restatement represents remapping of turnover from other operating income and cost of sales from administrative expenses.
The balance sheet restatement in 2022 represents a remapping of creditors due to group entities from other creditors so that these can be eliminated at consolidated level.

Page 15


DIGITAL INFRASTRUCTURE 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

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following have been considered to be significant estimates or judgements. 
Useful economic life of fixed assets: Depreciation is charges so as to allocate the cost of assets less their residual value over their estimated useful lives. The basis for depreciation charges are detailed in note 2.7 and are reviewed and adjusted prospectively if appropriate or if there is a significant change since the last reporting date. Useful lives are estimated by management with reference to manufacturers guidelines and existing knowledge and experience of the sector in which the business operates.
Carrying value of tangible assets: Management assesses the probability of expected future economic benefits using reasonable and supportable assumptions that represent their best estimate of the economic conditions that will exist over the useful life of the asset. Due to the specialised nature of the assets judgement is used to assess the degree of certainty attached to the flow of future economic benefits and the technical feasibility and success of the various projects. In reviewing for impairment the carrying value of such assets is compared to the estimates on the part of management. If there is a material change in economic conditions, climate or other circumstances influencing the estimate of future cash flows or fair value the Company could be required to recognise impairment charges in the future. 


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 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.







Employees
29
7

Page 16


DIGITAL INFRASTRUCTURE LTD

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

6.


TANGIBLE FIXED ASSETS





Long-term leasehold property
Motor vehicles
Fixtures and fittings
Network Assets
Assets under construction

£
£
£
£
£



COST OR VALUATION


At 1 January 2023
248,863
190,676
367,329
18,107,149
22,168,076


Additions
-
117,267
128,285
14,658,341
19,513,758


Transfers between classes
-
-
-
22,320,713
(22,320,713)



At 31 December 2023

248,863
307,943
495,614
55,086,203
19,361,121



DEPRECIATION


At 1 January 2023
8,295
5,943
62,143
-
-


Charge for the year on owned assets
24,887
53,220
107,372
1,946,194
-


Impairment charge
-
-
-
1,245,179
-



At 31 December 2023

33,182
59,163
169,515
3,191,373
-



NET BOOK VALUE



At 31 December 2023
215,681
248,780
326,099
51,894,830
19,361,121



At 31 December 2022
240,568
184,733
305,186
18,107,149
22,168,076
Page 17


DIGITAL INFRASTRUCTURE LTD

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

           6.TANGIBLE FIXED ASSETS (CONTINUED)


Total

£



COST OR VALUATION


At 1 January 2023
41,082,093


Additions
34,417,651


Transfers between classes
-



At 31 December 2023

75,499,744



DEPRECIATION


At 1 January 2023
76,381


Charge for the year on owned assets
2,131,673


Impairment charge
1,245,179



At 31 December 2023

3,453,233



NET BOOK VALUE



At 31 December 2023
72,046,511



At 31 December 2022
41,005,712

Management perform an impairment review at year end to assess whether there are any sites which are no longer expected to be ready-for-service (RFS) premises and hence generate future economic benefit. Impairment charges have been recognised accordingly.




The net book value of land and buildings may be further analysed as follows:


2023
2022
£
£

Long leasehold
215,681
240,568

215,681
240,568



7.


DEBTORS

As restated
2023
2022
£
£



Trade debtors
210,000
-

Amounts owed by group undertakings
290,375
-
Page 18


DIGITAL INFRASTRUCTURE LTD

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

7.DEBTORS (CONTINUED)


Other debtors
1,655,254
3,326,457

Prepayments and accrued income
485
184,091

2,156,114
3,510,548



8.


CASH AND CASH EQUIVALENTS

2023
2022
£
£

Cash at bank and in hand
256,436
338,296

256,436
338,296



9.


CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

As restated
2023
2022
£
£

Trade creditors
1,199,630
671,335

Amounts owed to group undertakings
95,265,643
51,653,084

Other creditors
-
26,737

Accruals and deferred income
1,748,567
1,076,044

98,213,840
53,427,200


The restatement in 2022 represents a remapping of creditors due to group entities from other creditors.
Included in amounts owed to group undertakings are unsecured intercompany loans of £76,110,300 (2022: £42,211,163) and accrues interest at 8% per annum and will be capitalised on each 12 month anniversary of the date of the agreement if not paid. At the year end £6,551,280 (2022: £1,683,334) of interest had been accrued and is included in the above.


10.


DEFERRED TAXATION


A net deferred tax liability of £14,008,265 (2022: £10,163,980) in respect of fixed asset timing differences has been offset by a net deferred tax asset in respect of tax losses of £14,008,265 (2022: £10,163,980).
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 further deferred tax asset has not been recognised. 
The Company has an unrecognised net deferred tax asset in respect of the tax losses of £7,762,823 (2022: £5,193,475).

Page 19


DIGITAL INFRASTRUCTURE LTD

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

11.


FINANCIAL COMMITMENTS, GUARANTEES AND CONTINGENCIES


The financial commitments, guarantees and contingencies not provided for comprise:

2023
2022
£
£


Commitments under license agreements
4,592,380
958,276

4,592,380
958,276


12.


COMMITMENTS UNDER OPERATING LEASES

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

As restated
2023
2022
£
£


Not later than 1 year
92,108
121,598

Later than 1 year and not later than 5 years
2,642,041
1,265,183

Later than 5 years
-
139,272

2,734,149
1,526,053

The restatement in 2022 represents a correction in the disclosure of operating leases.


13.


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. 


14.


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 20


DIGITAL INFRASTRUCTURE LTD

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

15.


CONTROLLING PARTY

The immediate parent company is Digital Holdings 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 21