HFD_DATAVITA_LIMITED - Accounts

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

HFD Datavita Limited is a private company limited by shares incorporated in Scotland. The registered office is Fortis Datacentre, York Road, Chapelhall, Airdrie, ML6 8HW.

The directors have changed the year end of the company from 23 June to 30 June. As such, the directors present financial statements for the period 1 July 2022 to 30 June 2023 utilising the 7 day variation to statutory year end for administrative purposes. The prior period accounts are drawn up for the period from 24 June 2021 to 30 June 2022, again utilising the 7 day variation to statutory year end for administrative purposes. Comparative amounts presented in the financial statements (including the related notes) are therefore not entirely comparable.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purpose of FRS 102, being a member group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 'Statement of Cash Flows': Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instrument Issues': Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 'Related Party Disclosures': Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of HFD Group Limited. These consolidated financial statements are available from its registered office, 177 Bothwell Street, Glasgow G2 7ER.

The directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. In satisfaction of this responsibility the directors have considered the group's ability to meet its liabilities as they fall due.true

The company meets its day to day working capital requirements through its day to day trading. Support from group undertakings has been utilised to fund the purchase of Fortis Datacentre. The company closely monitors and manages its funding position and liquidity risk throughout the year to ensure that it has access to sufficient funds to meet forecast cash requirements.

The current and future financial position of the company, its cash flows and liquidity position have been reviewed by the directors. The directors are confident that the existing funding facilities will provide sufficient headroom to meet forecast cash requirements.

The financial statements have been prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future. The validity of this assumption depends on the continued support of its parent, HFD Group Limited, who have confirmed ongoing support. Turnover continues to grow and the directors expect the company to continue to achieve profitability in the future.

The parent company, HFD Group Limited, has confirmed that it will satisfy any debts owed by HFD Datavita Limited in the event of the company not being able to repay debts. This undertaking is given for a period of twelve months from directors signing the financial statements. There is currently no intention to withdraw this support subsequent to that date.

On 11 November 2022 the company repaid in full the outstanding loan of £4.7m outstanding at 30 June 2022. The repayment was financed through the intercompany loan facility with HFD Group Limited following a decision by the directors to refinance the company.

The directors therefore believe it is appropriate to prepare the financial statements on a going concern basis.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

The turnover shown in the profit and loss account represents amounts receivable during the year in respect of co-location, connect, cloud infrastructure and related services, (exclusive of Value Added Tax) and is recognised on the provision of these services.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

A provision for impairment is established when there is objective evidence that, as a result of one or more events that occurred after the initial recognition, the estimated future cash flows have been impacted.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

The bank loan was repaid in full during the year.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

A defined contribution pension scheme is operated for all qualifying employees through HFD Payroll Limited and all expenses recharged to HFD Datavita Limited. The assets of the scheme are held separately from those of the group in an independently administered fund.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the company’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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

An independent valuation of land and buildings was undertaken in March 2021 by a RICS regulated practice on a market value basis. The valuation conformed to International Valuation Standards and was based on recent market data transactions performed on arm's length terms as at March 2021.

The valuation report has been used by management to inform the measurement of the carrying value of land and buildings in these financial statements as at 30 June 2023. No depreciation has been charged during the year ended 30 June 2023 in relation to the building as the facility is not yet at full capacity, therefore the directors consider the net book value to be representative of the residual value as at 30 June 2023.

The average monthly number of persons (including directors) employed by the company during the year was:

Contractually all employees of HFD Datavita Limited sit within HFD Payroll Limited. However an average of 29 employees were dedicated to providing services on behalf of HFD Datavita Limited during the year ended 30 June 2023 (2022: 21 employees).

Remuneration costs were borne by HFD Payroll Limited and recharged to HFD Datavita Limited.

Other debtors due within one year includes amounts due from related parties of £42,922.

The other debtors due out with one year balance of £28,214,721 represents an advance payment in the purchase of Fortis Datacentre. The balance is deemed intercompany with the advance payment made to a fellow subsidiary of HFD Group Limited.

During the year, the bank loan was repaid in full.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The revaluation reserve represents the cumulative gain or loss on the revaluation of tangible fixed asset properties and related deferred tax.

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

The following amounts were outstanding at the reporting end date:

The company has taken advantage of the exemption available in FRS 102 1A whereby it has not disclosed transactions with the immediate parent or any wholly owned subsidiary undertaking of the group.

Following 30 June 2023, the company exercised its option to purchase the landlords' interests, effectively converting its ownership interests in Fortis Datacentre from long leasehold to freehold (for £1 for each of the two titles).

The parent of the smallest group for which consolidated financial statements are drawn up is HFD Group Limited, whose registered office is 177 Bothwell Street, Glasgow, G2 7ER.

The prior period financial statements have been restated to recognise an advance payment in the purchase of Fortis Datacentre. The cost of this advanced payment was £28,214,721. Recognition should have resulted in an increase to the deferred tax provision by £7,053,680, with the revaluation reserve increasing by £21,161,041. The deferred tax will unwind as the Newhouse North Construction Limited contractual obligations progress.

The impact of the corrections at 24 June 2021 and 30 June 2022 is outlined above and both the debtors and deferred tax notes to these accounts have been restated accordingly.