Company registration number:
ITS Technology Group Limited
for the Year Ended 31 December 2021
ITS Technology Group Limited
Contents
Company Information |
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Statement of Directors' Responsibilities |
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Balance Sheet |
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Statement of Changes in Equity |
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Notes to the Financial Statements |
ITS Technology Group Limited
Company Information
Directors |
Mr D A S Baythorpe Mr K D Gaskell Mr I Shervell Mr S K McLachlan Mr A Simpson |
Company secretary |
Mr C S Kameen |
Registered office |
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Auditors |
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ITS Technology Group 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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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.
ITS Technology Group Limited
(Registration number: 08786229)
Balance Sheet as at 31 December 2021
Note |
2021 |
2020 |
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Fixed assets |
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Intangible assets |
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Tangible assets |
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|
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Investments |
|
|
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Debtors: amounts falling due after more than one year |
2,633,613 |
- |
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|
|
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Current assets |
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Stocks |
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- |
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Debtors |
|
|
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current (liabilities)/assets |
( |
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Total assets less current liabilities |
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|
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Creditors: Amounts falling due after more than one year |
( |
( |
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Net liabilities |
( |
( |
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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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Revaluation reserve |
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Retained earnings |
( |
( |
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Shareholders' deficit |
( |
( |
These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.
These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.
Approved and authorised by the
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ITS Technology Group Limited
Statement of Changes in Equity for the Year Ended 31 December 2021
Share capital |
Share premium |
Revaluation reserve |
Profit and loss account |
Total |
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At 1 January 2021 |
|
|
|
( |
( |
Loss for the year |
- |
- |
- |
( |
( |
Other comprehensive income |
- |
- |
|
- |
|
Total comprehensive income |
- |
- |
|
( |
( |
At 31 December 2021 |
|
|
|
( |
( |
Share capital |
Share premium |
Revaluation reserve |
Profit and loss account |
Total |
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At 1 January 2020 |
|
|
- |
( |
( |
Loss for the year |
- |
- |
- |
( |
( |
Other comprehensive income |
- |
- |
|
- |
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Total comprehensive income |
- |
- |
|
( |
( |
At 31 December 2020 |
|
|
|
( |
( |
ITS Technology Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
England
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 have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the notes to the accounts, certain items are shown at their fair value. The financial statements are prepared in sterling, which is the functional currency of the entity.
Group accounts not prepared
Going concern
The financial statements have been prepared on a going concern basis the validity of which depends on future profitable trading, the support of the directors, and certain other long term creditors disclosed in note 10. Should the company be unable to continue trading, adjustments would be necessary to reduce the value of assets to their recoverable amount, to provide for further liabilities which might arise and to reclassify fixed assets as current assets. Further details are included in note 11.
Audit report
ITS Technology Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, rebates and discounts.
Government grants
Grants are credited to deferred revenue. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Any tangible assets carried at revalued amounts are recorded at their fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
An increase in the carrying amount of an asset as a result of a revaluation is recognised on other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of a revaluation is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is charged so as to write off the cost or valuation of assets less their residual value, over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Plant and machinery -Passive network |
5% straight line |
Plant and machinery -Active network |
20% straight line |
Fixtures and fittings |
20% straight line |
Computer equipment |
20% straight line |
Motor vehicles |
20% straight line |
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business.
Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made the life is presumed not to exceed 5 years.
ITS Technology Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Research and development costs
Research expenditure is written off in the period in which it is incurred.
Development costs are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and 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:
Asset class |
Amortisation method and rate |
Goodwill |
5 years |
Development costs |
5 years |
Computer software |
5 years |
Investments
Fixed asset investments are stated at cost less provision for impairment in value.
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.
Defined contribution pension obligation
Contributions to defined contribution plans are recognised as an expense in the period in which they are paid.
Staff numbers |
The average number of persons employed by the company (including directors) during the year, was
ITS Technology Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Intangible assets |
Goodwill |
Development costs |
Internally generated software development costs |
Total |
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Cost or valuation |
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At 1 January 2021 |
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Additions acquired separately |
- |
- |
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At 31 December 2021 |
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Amortisation |
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At 1 January 2021 |
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Amortisation charge |
- |
- |
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At 31 December 2021 |
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Carrying amount |
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At 31 December 2021 |
- |
- |
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At 31 December 2020 |
- |
- |
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Tangible assets |
IP Addresses |
Fixtures and fittings |
Plant and machinery |
Computer equipment |
Motor vehicles |
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Cost or valuation |
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At 1 January 2021 |
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Revaluations |
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- |
- |
- |
- |
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Additions |
- |
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At 31 December 2021 |
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Depreciation |
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At 1 January 2021 |
- |
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Charge for the year |
- |
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At 31 December 2021 |
- |
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Carrying amount |
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At 31 December 2021 |
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At 31 December 2020 |
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- |
ITS Technology Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Total |
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Cost or valuation |
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At 1 January 2021 |
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Revaluations |
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Additions |
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At 31 December 2021 |
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Depreciation |
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At 1 January 2021 |
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Charge for the year |
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At 31 December 2021 |
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Carrying amount |
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At 31 December 2021 |
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At 31 December 2020 |
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Revaluation
The fair value of the company's IP Addresses were revalued on
Had this class of asset been measured on a historical cost basis, the carrying amount would have been £
Investments |
2021 |
2020 |
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Investments in subsidiaries |
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Investments in joint ventures |
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- |
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Subsidiaries |
£ |
Cost or valuation |
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At 1 January 2021 |
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Provision |
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At 1 January 2021 |
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Carrying amount |
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At 31 December 2021 |
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At 31 December 2020 |
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ITS Technology Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Joint ventures |
£ |
Cost |
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Additions |
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Provision |
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Carrying amount |
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At 31 December 2021 |
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Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) 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 |
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2021 |
2020 |
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Subsidiary undertakings |
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6600 Cinnabar Court
England and Wales |
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6600 Cinnabar Court
England and Wales |
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6600 Cinnabar Court
England and Wales |
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6600 Cinnabar Court
England and Wales |
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Joint ventures |
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6600 Cinnabar Court
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Ordinary |
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ITS Technology Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
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England and Wales |
Debtors: mounts falling due after more than one year |
Included in fixed assets is a loan to Liverpool City Region Digital Limited of £2,633,613 that is repayable 15 years from February 2021.
ITS Technology Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Debtors |
Current |
2021 |
2020 |
Trade debtors |
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Prepayments and accrued income |
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Other debtors |
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Creditors |
Creditors: amounts falling due within one year
2021 |
2020 |
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Due within one year |
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Trade creditors |
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Taxation and social security |
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Accruals and deferred income |
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Other creditors |
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Creditors: amounts falling due after more than one year
2021 |
2020 |
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Due after one year |
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Other creditors |
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2021 |
2020 |
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Due after more than five years |
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After more than five years not by instalments |
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Creditors includes a loan facility agreement which is secured by a debenture over all assets of the company totalling £34,890,072 ( 2020 - £18,364,665 ) .
Related party transactions |
Included in creditors due after more than one year as at 31 December 2021 is £34,890,072 (2020 - £18,364,665) due to Aviva Investors Infrastructure Income No.6B Limited, the majority shareholder of the ultimate parent company ITS (Holdco) Ltd. Interest payable during the year at 9% was £3,624,910 (2020 - £1,142,394) and these amounts are included within creditors.
The company had the following transactions and balances with joint venture company, Liverpool City Region Digital Limited, Sales £595,626, Loan receivable £2,633,613 and Trade debtor £19,200.
ITS Technology Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Going concern |
During 2022 ITS Technology Group Limited (ITS) secured additional significant investment from Aviva Investors, the global asset management business of Aviva Plc, to fund and accelerate the company's full fibre roll out plan. The need for fibre in the UK is now at the forefront of the political agenda and ITS has a team, the capability and now the financial means to realise this market opportunity. The Aviva facility provides ITS with capital investment to fund the network build and working capital to cover financial losses whilst ITS grows and matures as a business. ITS is in the early stages of its development and the directors are satisfied with the progress to date, notwithstanding current year losses before tax totalling £3,051,861 sustained and net liabilities as at 31 December 2021 of £13,150,515 ( 2020 £10,401,500) . The directors have received written notification from Aviva that the facility agreement, of which £34,890,072 had been utilised as at 31 December 2021, enables the company to meet its obligations for at least 12 months from the date these financial statements are signed. On this basis the directors have concluded that the company will be able to meet its liabilities as they fall due for the foreseeable future and hence it is appropriate to continue to adopt the going concern basis in the preparation of these financial statements.
Non adjusting events after the financial period |
Since the year end the company acquired a wholly owned subsidiary company on 9th September 2022, for a total consideration of £16.5m in cash and acquisition costs. The cost of the acquisition was funded out of ITS Technology Groups existing facility agreement.