Interliant UK Holdings Limited - Period Ending 2019-12-31
Interliant UK Holdings Limited - Period Ending 2019-12-31
Registration number:
Interliant UK Holdings Limited
for the Year Ended 31 December 2019
Interliant UK Holdings Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Profit and Loss Account |
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Consolidated Balance Sheet |
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Balance Sheet |
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Consolidated Statement of Changes in Equity |
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Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Notes to the Financial Statements |
Interliant UK Holdings Limited
Company Information
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Directors |
J Murphy M Clayman |
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Company secretary |
Business Control Limited |
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Registered office |
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Auditors |
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Interliant UK Holdings Limited
Strategic Report for the Year Ended 31 December 2019
The directors present their strategic report for the year ended 31 December 2019.
Principal activity
The principal activity of the company is acting as a holding company of its wholly owned subsidiary Navisite Europe Limited, and the principal activity of the group is the supply of infrastructure, application and cloud hosting services, together with the design and implementation of IT solutions and related consultancy
Fair review of the business
The group is a leading provider of enterprise-class, cloud-enabling hosting, managed applications and hosting services.
The group works in many markets, focusing across a number of sectors, including financial services, retail, healthcare and pharmaceuticals, manufacturing and distribution, publishing, media services and software.
The group provides IT support across a highly resilient platform within its data centres and network infrastructure, supported by highly trained staff providing 24/7 support for the mission critical IT and e-commerce sectors.
Investments in technology continued as planned with just under £1.0m being spent across the year.
A steady management of cash reserves, which rose from £2.9m to £3.1m, overall net assets decreased to £2.0m as a result of debtors of £8.5m falling from £11.4m. Liabilities fell from £13.9m to £11.1m largely due to an decrease in intragroup liabilities.
The group has a seen a fall in turnover by 7.5% (2018 - 10.3%) to £23.8m (2018 - £25.7m). Gross profit increased by 1.7% (2018 - an increase of 1.7%) to £15.3m (2018 - £15.0m) producing a higher margin compared to last year. The uncertainty surrounding Brexit has resulted in lower growth than had been expected.
A pre-tax loss of £2.0m arose in the year, a reduction compared to the previous year of £2.7m.
The decrease in turnover was as a result of a lost customer half way through the year, however this resulted in a higher decrease in costs, which helped increase the gross margin compared to last year.
During the year, we have continued to invest heavily in security and compliance by maintaining certification in ISO 27001, fully complying with GDPR and setting our internal standards for delegation of authority.
It is the group's policy to use certain Key Performance Indicators to assess, plan and fulfill objectives. These KPIs include, but are not exclusive to, revenue growth by quarter and by year, strong and positive EBITDA, and positive net income by the end of 2020. Other non-financial goals are also set for data centre usage performance, risk assessment policies and personnel performance goals.
On 9 September 2019, Remote DBA Experts, LLC, trading as RDX, acquired the share capital of Navisite LLC, the intermediate parent, from Charter Communications Operations LLC.
The continual development of technical platforms and tight and reviewed cost controlling efforts within the group, continues to strengthen the finances and we are anticipating that we will achieve a pre tax profit in 2020 of around £3.5m.
Interliant UK Holdings Limited
Strategic Report for the Year Ended 31 December 2019
Principal risks and uncertainties
The directors have considered the principal risks that the group faces and have addressed them as follows:
Outage risk
The principal risks facing the group include data centre outage and risk of terrorist attacks due to highly sensitive information being stored. These risks are well mitigated through client systems located in multiple, geographically diverse and highly secure buildings. The group also employs highly trained staff to ensure that the high technology equipment is kept up to date and products continue to be relevant to the target market sectors.
Currency risk
With the volatility of foreign exchange markets, it has been the group's policy to currency match whenever possible which has been a successful process.
Political risk
On 23 June 2016 the UK electorate voted to discontinue its membership of the EU. Until further clarity is known regarding the final terms in which the UK will exit, the directors are not able to assess the impact on the group or what impact the wider regulatory and legal consequences of the UK leaving the EU would be on the group. While the majority of the group’s customer base is in the UK, the group will continue to monitor the impact this could have on its customers, who may trade with EU member states.
Credit risk
The group has sufficiently mitigated credit risk by performing credit checks on all customers that are taken on by the group.
Liquidity risk
The group controls and monitors its liquidity risk by maintaining high levels of cash reserves and currently operates at a liquidity ratio of 1.28 (2018 - 1.22).
Market and coronavirus "Covid-19" pandemic
Following the outbreak of coronavirus "Covid-19" and the economic impact of the worldwide pandemic, the directors have reviewed and stress tested budgets and forecasts to assess the impact effect on the group.
Following a review of the group's performance to date in 2020, the directors do not believe that the group will suffer a decrease in revenue as a result of the coronavirus "Covid-19" pandemic. The group has not needed to rely on any Government schemes available to provide assistance during the current pandemic.
The coronavirus "Covid-19" pandemic has had an impact on the market in which the group operates. The directors have implemented measures like social distancing and other safe working practices to ensure the working environment is as safe as possible for business continuity. Combined with measures taken by the directors, this has ensured the group has sufficient working capital to operate for the foreseeable future and put it in a position to manage the impact on the market of Coronavirus "Covid-19" that will continue through the 2020 and 2021 financial years.
Outlook
The directors do not foresee any material changes in the principal activities and performance of the group due to the coronavirus "Covid-19" pandemic. By managing costs in line with revenue, the directors are confident the group can continue to trade for the foreseeable future.
Interliant UK Holdings Limited
Strategic Report for the Year Ended 31 December 2019
Approved by the
.........................................
Director
Interliant UK Holdings Limited
Directors' Report for the Year Ended 31 December 2019
The directors present their report and the for the year ended 31 December 2019.
Directors of the group
The directors who held office during the year were as follows:
Future developments
The future plans of the group are to continue to expand upon our services offered, in particular cloud services along with professional services and focus on the mid-tier IT outsourcing market.
With the support of the ultimate parent company, Database Holdings Inc., the group is investing heavily in new platforms and infrastructure whilst controlling costs. We will see a continued increase in revenue growth.
Financial instruments
It is the group's policy to minimise the financial risks as much as possible and to that extent we base our forward-looking plans upon a cautious quarterly and annual forecasting of revenues and cash flows to highlight risks and solve prospective uncertainties. It is each entities goal within the corporate structure to be financially independent and to gear its decision making accordingly. However, corporate management are tasked with accessing financial risk and to approve all pricing strategies and funding requirements as necessary.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Reappointment of auditors
The auditors Milsted Langdon LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Approved by the
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Director
Interliant UK Holdings Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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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 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.
Interliant UK Holdings Limited
Independent Auditor's Report to the Members of Interliant UK Holdings Limited
Opinion
We have audited the financial statements of Interliant UK Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2019, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2019 and of the group's 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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
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the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
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the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Interliant UK Holdings Limited
Independent Auditor's Report to the Members of Interliant UK Holdings Limited
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and 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 our knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company 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 Statement of Directors' Responsibilities 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 group’s and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Interliant UK Holdings Limited
Independent Auditor's Report to the Members of Interliant UK Holdings Limited
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 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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For and on behalf of
Freshford House
Redcliffe Way
BS1 6NL
Interliant UK Holdings Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2019
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Note |
2019 |
2018 |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
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Administrative expenses |
( |
( |
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Operating loss |
( |
( |
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Other interest receivable and similar income |
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- |
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Loss before tax |
( |
( |
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Tax on loss |
- |
- |
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Loss for the financial year |
( |
( |
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Profit/(loss) attributable to: |
|||
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Owners of the company |
( |
( |
The above results are derived from continuing operations. The group has not recognised gains or losses for this or the preceding year other than the results above. Accordingly a Statement of Other Comprehensive Income is not presented.
Interliant UK Holdings Limited
(Registration number: 02846821)
Consolidated Balance Sheet as at 31 December 2019
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Note |
2019 |
2018 |
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Fixed assets |
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Intangible assets |
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Tangible assets |
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Current assets |
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Debtors |
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Cash at bank and in hand |
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||
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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Total assets less current liabilities |
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Creditors: Amounts falling due after more than one year |
( |
( |
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Net assets |
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Capital and reserves |
|||
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Called up share capital |
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Share premium reserve |
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Other reserves |
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Profit and loss account |
( |
( |
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Equity attributable to owners of the company |
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Total equity |
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Approved and authorised by the
.........................................
Director
Interliant UK Holdings Limited
(Registration number: 02846821)
Balance Sheet as at 31 December 2019
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Note |
2019 |
2018 |
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Creditors: Amounts falling due within one year |
( |
( |
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Capital and reserves |
|||
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Called up share capital |
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|
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Share premium reserve |
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|
|
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Profit and loss account |
( |
( |
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Total equity |
( |
( |
The company made a loss after tax for the financial year of £- (2018 - loss of £-).
Approved and authorised by the
.........................................
Director
Interliant UK Holdings Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2019
Equity attributable to the parent company
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Share capital |
Share premium |
Other reserves |
Profit and loss account |
Total |
Total equity |
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At 1 January 2019 |
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( |
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Loss for the year |
- |
- |
- |
( |
( |
( |
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Other comprehensive income |
- |
- |
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- |
|
|
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Total comprehensive income |
- |
- |
|
( |
( |
( |
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At 31 December 2019 |
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|
|
( |
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Share capital |
Share premium |
Other reserves |
Profit and loss account |
Total |
Total equity |
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At 1 January 2018 |
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|
|
( |
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Loss for the year |
- |
- |
- |
( |
( |
( |
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Other comprehensive income |
- |
- |
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- |
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Total comprehensive income |
- |
- |
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( |
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At 31 December 2018 |
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( |
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Interliant UK Holdings Limited
Statement of Changes in Equity for the Year Ended 31 December 2019
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Share capital |
Share premium |
Profit and loss account |
Total |
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At 1 January 2019 |
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|
( |
( |
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At 31 December 2019 |
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|
( |
( |
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Share capital |
Share premium |
Profit and loss account |
Total |
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At 1 January 2018 |
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( |
( |
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At 31 December 2018 |
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( |
( |
Interliant UK Holdings Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2019
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Note |
2019 |
2018 |
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Cash flows from operating activities |
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Loss for the year |
( |
( |
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Adjustments to cash flows from non-cash items |
|||
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Depreciation and amortisation |
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|
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Profit on disposal of tangible assets |
( |
( |
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Finance income |
( |
- |
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Foreign exchange (gains) / losses |
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|
|
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( |
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||
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Working capital adjustments |
|||
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Decrease/(increase) in trade debtors |
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( |
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(Decrease)/increase in trade creditors |
( |
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Net cash flow from operating activities |
( |
( |
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Cash flows from investing activities |
|||
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Interest received |
( |
( |
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Acquisitions of tangible assets |
( |
( |
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Proceeds from sale of tangible assets |
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|
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Net cash flows from investing activities |
( |
( |
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Cash flows from financing activities |
|||
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Proceeds from capital injections |
1,645,672 |
4,681,531 |
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Net increase in cash and cash equivalents |
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Cash and cash equivalents at 1 January |
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Cash and cash equivalents at 31 December |
3,074,213 |
2,860,951 |
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The company is a qualifying entity for the purposes of FRS102 and has elected to take exemption under FRS102, paragraph 1.12(b) not to present the company statement of cash flows.
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
The financial statements are prepared in sterling, which is the functional currency of the company, and rounded to the nearest £.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2019.
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Going concern
The group has reported a loss after tax of £1,991,409 (2018 - £2,704,511) and the balance sheet has net liabilities of £1,978,162 (2018 - £2,323,899). Contributions totalling £1,645,672 (2018 - £4,681,531) have been made by Charter Communications Inc, the former ultimate parent company, during the year to support the group.
Notwithstanding the losses made and the net liabilities position, on the basis of the directors' assessment of the group's financial position, the enquires made of the executive management of Navisite LLC and Database Holdings Inc., and their indication of continued support of the group for a period of at least 12 months from the date of approval of these financial statements. The directors have a reasonable expectation that the group will be able to continue in operational existence for the foreseeable future.
The growth of the Coronavirus COVID-19 pandemic across the world has had an inevitable impact on the group’s trading outlook.
Although COVID-19 is expected to have an impact on trading performance in the year ended 31 December 2020, the directors do not consider that this will significantly impact the group’s ability to continue as a going concern. Given the continued support of the shareholders and parent company, the directors have concluded that the group has adequate resources in place to continue trading for the foreseeable future, being twelve months from the date of approval of the financial statements.
Therefore, the going concern basis continues to be applied in the preparation of the consolidated financial statements.
Revenue recognition
The group recognises the revenue for application hosting contracts over the term of the contract, net of Value Added Tax. Expenditure, including initial set up costs, are also expended to the profit and loss account over the contract term.
The group recognises revenue when:
- the amount of revenue can be reliably measured;
- it is probable that future economic benefits will flow to the entity; and
- specific criteria have been met for each of the group's activities.
Finance income and costs policy
Interest income and expenses are recognised using the effective interest rate method.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
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Asset class |
Depreciation method and rate |
|
Fixtures, fittings & office equipment |
20% straight line |
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Long leasehold improvements |
20% straight line over the term of the lease |
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Computer hardware |
33.33% straight line |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Intangible assets
Intangible assets are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
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Asset class |
Amortisation method and rate |
|
Computer software |
33.33% straight line |
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.
Creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Judgements and key sources of estimation uncertainty
In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The group recognises deferred income on the basis of income billed in advance for future periods. The estimation and judgement that directors make in recognising deferred income are based on contracted amounts and any other factors that are considered to be relevant.
|
Revenue |
The analysis of the group's revenue for the year from continuing operations is as follows:
|
2019 |
2018 |
|
|
Rendering of services |
|
|
The analysis of the group's turnover for the year by market is as follows:
|
2019 |
2018 |
|
|
UK |
|
|
|
Rest of world |
|
|
|
|
|
|
Other gains and losses |
The analysis of the group's other gains and losses for the year is as follows:
|
2019 |
2018 |
|
|
Gain on disposal of property, plant and equipment |
|
|
|
Operating loss |
Arrived at after charging/(crediting):
|
2019 |
2018 |
|
|
Depreciation expense |
|
|
|
Amortisation expense |
|
|
|
Foreign exchange losses |
|
|
|
Operating lease expense - property |
|
|
|
Profit on disposal of property, plant and equipment |
( |
( |
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
|
Other interest receivable and similar income |
|
2019 |
2018 |
|
|
Other finance income |
|
- |
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2019 |
2018 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
|
2019 |
2018 |
|
|
Sales |
|
|
|
|
|
The directors received no remuneration from the company during the year (2018 - £Nil) and no pension contributions were paid on behalf of the directors during the year (2018 - £Nil). Directors' remuneration was borne by Navisite LLC, a fellow group company.
|
Auditors' remuneration |
|
2019 |
2018 |
|
|
Audit of the parent financial statements and consolidation |
2,000 |
2,000 |
|
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
12,191 |
12,285 |
|
|
|
|
|
Other fees to auditors |
||
|
Taxation compliance services |
|
|
|
All other non-audit services |
|
|
|
|
|
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
|
Taxation |
Tax charged/(credited) in the profit and loss account:
|
2019 |
2018 |
|
|
Current taxation |
||
|
UK corporation tax |
- |
- |
|
- |
- |
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2018 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2019 |
2018 |
|
|
Loss before tax |
( |
( |
|
Corporation tax at standard rate |
( |
( |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
( |
( |
|
Deferred tax expense from unrecognised tax loss or credit |
|
|
|
Tax decrease from effect of capital allowances and depreciation |
- |
( |
|
Total tax charge/(credit) |
- |
- |
The group has estimated tax losses of £15,434,524 (2018 - £11,903,655) available to carry forward against future trading profits. There is an unprovided deferred tax asset of £4,394,902 (2018 - £4,046,819). The asset has not been recognised due to uncertainty regarding the timing of future profits.
The standard rate of corporation tax in the UK was due to reduce from 19% to 17% from 1 April 2020. However, the change to the main UK corporation tax rate, announced in the Budget on 11 March 2020, was substantively enacted for UK GAAP purposes on 17 March 2020. The rate applicable from 1 April 2020 now remains at 19%, rather than the previously enacted reduction to 17%.
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
|
Intangible assets |
Group
|
Computer software |
Total |
|
|
Cost or valuation |
||
|
At 1 January 2019 |
|
|
|
At 31 December 2019 |
|
|
|
Amortisation |
||
|
At 1 January 2019 |
|
|
|
Amortisation charge |
|
|
|
At 31 December 2019 |
|
|
|
Carrying amount |
||
|
At 31 December 2019 |
|
|
|
At 31 December 2018 |
|
|
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
|
Tangible assets |
Group
|
Fixtures, fittings & office equipment |
Long leasehold improvements |
Computer hardware |
Total |
|
|
Cost or valuation |
||||
|
At 1 January 2019 |
|
|
|
|
|
Additions |
|
|
|
|
|
Disposals |
( |
- |
( |
( |
|
At 31 December 2019 |
|
|
|
|
|
Depreciation |
||||
|
At 1 January 2019 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
Eliminated on disposal |
( |
- |
( |
( |
|
At 31 December 2019 |
|
|
|
|
|
Carrying amount |
||||
|
At 31 December 2019 |
|
|
|
|
|
At 31 December 2018 |
|
|
|
|
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
|
Investments |
Company
|
Subsidiaries |
Share in group undertakings |
|
Cost or valuation |
|
|
At 1 January 2019 |
|
|
At 31 December 2019 |
|
|
Impairment |
|
|
At 1 January 2019 |
|
|
At 31 December 2019 |
|
|
Carrying amount |
|
|
At 31 December 2019 |
- |
Details of undertakings
Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
|
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
||||
|
2019 |
2018 |
||||||
|
Subsidiary undertakings |
|||||||
|
|
Business Control Ltd England |
|
|
|
|||
|
Subsidiary undertakings |
|
Navisite Europe Limited The loss for the financial period was £1,991,409 and the aggregate amount of capital and reserves at the end of the period was £(1,979,162). |
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
|
Debtors |
|
Group |
Company |
|||
|
2019 |
2018 |
2019 |
2018 |
|
|
Trade debtors |
|
|
- |
- |
|
Other debtors |
|
|
- |
- |
|
Prepayments |
|
|
- |
- |
|
|
|
- |
- |
|
Details of non-current trade and other debtors
Group
£1,121 (2018 - £14,530) of prepayments and accrued income is classified as non current.
|
Cash and cash equivalents |
|
Group |
Company |
|||
|
2019 |
2018 |
2019 |
2018 |
|
|
Cash at bank |
|
|
- |
- |
|
Creditors |
|
Group |
Company |
||||
|
Note |
2019 |
2018 |
2019 |
2018 |
|
|
Due within one year |
|||||
|
Trade creditors |
|
|
- |
- |
|
|
Amounts due to related parties |
|
|
- |
- |
|
|
Social security and other taxes |
|
|
- |
- |
|
|
Outstanding defined contribution pension costs |
- |
|
- |
- |
|
|
Other creditors |
|
|
|
|
|
|
Accruals |
|
|
- |
- |
|
|
|
|
|
|
||
|
Due after one year |
|||||
|
Accruals and deferred income |
|
|
- |
- |
|
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
|
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Contributions totalling £Nil (2018 - £
|
Share capital |
Allotted, called up and fully paid shares
|
2019 |
2018 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
1,033 |
|
1,033 |
Rights, preferences and restrictions
|
Ordinary shares have the following rights, preferences and restrictions: |
|
Reserves |
Group and company
Share capital
Reflects the nominal value of share capital issued by the group.
Share premium
Consideration received for shares issued above their nominal value net of transaction costs.
Capital contribution reserve
The capital contribution reserve represents cash injections from other group companies. Contributions in the year totalled £1.6m (2018 - £4.6m).
Profit and loss account
Cumulative profit and loss net of distributions to owners.
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
|
Obligations under leases and hire purchase contracts |
Group
Operating leases
The total of future minimum lease payments is as follows:
|
2019 |
2018 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
Later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
|
Analysis of changes in net debt |
Group
|
At 1 January 2019 |
Financing cash flows |
Foreign exchange movements |
At 31 December 2019 |
|
|
Cash and cash equivalents |
||||
|
Cash |
2,860,951 |
459,335 |
(246,073) |
3,074,213 |
|
|
|
( |
|
|
|
Related party transactions |
Group
Summary of transactions with other related parties
|
Financial instruments |
Group and company
Categorisation of financial instruments
|
2019 |
2018 |
|
|
Financial assets measured at amortised cost |
|
|
|
Financial liabilities measured at amortised cost |
( |
( |
Interliant UK Holdings Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
|
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
The most senior parent entity producing publicly available financial statements is
The ultimate controlling party is
|
Non adjusting events after the financial period |
|
|