Six Degrees Technology Group Limited - Limited company accounts 23.2

REGISTERED NUMBER: 03036806 (England and Wales)

Strategic Report, Report of the Directors and

Audited Financial Statements

for the Year Ended 31 March 2023

for

Six Degrees Technology Group Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

10

Independent Auditor's Report

13

Statement of Comprehensive Income

17

Balance Sheet

18

Statement of Changes in Equity

19

Notes to the Financial Statements

20

DIRECTORS:

S Crawley-Trice

D Manuel

REGISTERED OFFICE:

Commodity Quay

St Katharine Docks

London

E1W 1AZ

REGISTERED NUMBER:

03036806 (England and Wales)

AUDITOR:

Grant Thornton UK LLP

Chartered Accountants and Statutory Auditors

17th Floor

103 Colmore Row

Birmingham

B3 3AG

The directors present their Strategic Report, the report of the Directors and the audited financial statements of Six Degrees Technology Group Limited ("the Company") for the year ended 31 March 2023.

REVIEW OF BUSINESS

Six Degrees Technology Group Limited is the main trading entity within the CB-SDG Midco Limited group of companies ("the group") that trades in the market under the brand Six Degrees.

Throughout the period under review, the Group has retained focus on achieving its objective of being the UK's number one provider of secure, integrated cloud services. To continually strive towards this objective, the Group works to enable organisations to thrive in the cloud through secure solutions, powered by our passionate people.

At the start of this financial year, the business had embarked on a wide ranging, multi-year transformation programme that underpinned its 3 year plan and that included:

- Changes to the Executive team;

- Investments in sales and service delivery management capabilities;

- Investment in, and launch of, new products;

- Standardisation and simplification of our products, systems, processes and data.

This was all underpinned by a commitment to an improvement in day to day customer service.

In order to allow management to fully achieve their ambitious plans, the scope of the transformation programme has been extended in the year. The external environment saw the Group needing to address the cost-of-living crisis for our employees, at the same time as dealing with higher interest rates, and rising inflation.

The combined impact of this has been that the Group's financial performance has been below expectation, particularly for the second half of the year under review. Whilst the Group has been broadly successful in halting the 4-year decline in revenue, EBITDAE has roughly halved compared to the prior year due to the impact of a slowdown in the Group's professional services business, which has a relatively fixed cost base, a shift in sales mix to lower margin products and cost inflation. The investment in the period under review, has inevitably reduced EBITDA but is expected to help drive long-term growth.

In response to this, the Group has undertaken a review of its capital structure to ensure that the business is best placed to deliver its objectives moving forward. Critically, in FY24 the Group has undertaken a further Capital Restructure, with the support of its stakeholders, to reset the level of external debt within the Group. This Capital Restructure has seen long term debt reduced to £100m, a reset of facility covenants and an injection of £10m of cash. The Directors believe this puts the Group on a solid financial foundation to deliver its ambitious growth plans.

KEY PERFORMANCE INDICATORS

The directors use key performance indicators (KPIs) to monitor and assess the company's performance.

The figures in the table below provide the performance of the company for the year ended 31 March 2023 and for the comparative year-ended 31 March 2022.

The Company's principal KPIs are shown in the following table:

2023

% of turnover

2022

% of turnover

£'000

Turnover

79,717

79,447

Gross Profit

39,982

50%

42,328

53%

EBITDAE*

1,693

2%

2,025

3%

*Earnings before Interest, Tax, Depreciation, Amortisation and Exceptional items (EBITDAE)

The Group was broadly successful in stopping the 4-year plus decline in turnover. The main reasons behind this were the steps taken to improve bookings, reduce churn and make tactical changes to pricing. The Group also had a record-breaking year for Mobile bookings, which positively impacted revenue and gross margin.

Gross profit has declined in the year due to three reasons. Firstly, the Group has incurred higher rental costs for the Datacentre that was included in the sale and leaseback agreement in the prior year. Secondly, the product mix of new sales has been at a lower margin as customers have migrated to recurring monthly revenue contracts. Thirdly, there was a slow down in the demand for professional services, the Group took the decision to retain staff through this slow down which had a short term impact on profitability but was in the Group's long term best interest.

The increase in the level of inflation in the UK has specifically required the Group to respond with cost-of-living increases for its people. The Group is proud of its response and the support offered to its people, but this has inevitably affected operating margins and profitability. Whilst this was partially offset by the price changes introduced in the year, not all additional spending to address the cost-of-living crisis was able to be fully offset. This, in turn, has reduced both gross profit and operating profit year on year.

EBITDAE has fallen in the year, but this reflects management's commitment to investing in the Group and its people. As highlighted above, additional costs have been incurred in relation to property, rising energy costs and implementing a cost-of-living increase.

During the year, the Group saw significant improvements in cash management, which allowed the previously fully drawn down RCF of £15.0m to be wholly repaid during the year. The Group also saw particularly strong results for cash collections, with a particular focus on the resolution of old and disputed debt. Whilst liquidity initially appears weaker than in the prior year, much of the reason for FY22 being so strong was driven by one off events relating to the Group restructure and the sale and leaseback of a previous freehold property.

As at 31 March 2023, net assets of the Company were £40.2m (2022: £42.8m). This was driven by a provision against intercompany balances of £3.8m. This provision is considered necessary since it is no longer recoverable from the fellow group undertaking, due to the overall performance of the group being below expectation. As part of the wider Capital Restructure undertaken in FY24, there are plans to review all intercompany transactions to ensure that all balances are recoverable and remain appropriate.

Secure, Integrated Cloud Services

The Group trades in the market as the brand "Six Degrees". The Group remains a Microsoft Azure Expert MSP and is very proud that it is one of the few UK organisations to be awarded this accreditation. Six Degrees also has an Azure-aligned Cyber Security Organisations Centre (CSOC), enabling customers to enhance their cyber maturity by quickly identifying and addressing cyber threats. The Group is also a proud member of the Microsoft Intelligent Security Association (MISA), which is an exceptionally difficult accreditation to achieve. With its unrivalled range of secure cloud services, and Microsoft Azure Expert MSP status, Six Degrees continues to offer an unrivalled coupling of managed services with high-calibre security expertise to UK businesses.

Six Degrees is a secure, integrated cloud services provider. It works as a collaborative technology partner to businesses making a digital transition. Always placing clients at the heart of its strategy, Six Degrees' passionate teams combine technical expertise and deep sector-specific knowledge to innovate, craft and manage the right solutions to power our clients' businesses.

Six Degrees works collaboratively and builds long-term partnerships through exceptional services that match its clients' needs. It continually innovates to deliver solutions that go beyond the norm and that enable clients to take their organisations to the next level.

The Group is one of the UK's largest independent providers of secure cloud-led converged technology managed services, selling primarily to a UK large and mid-market customer base. It provides technology services that leverage both its own technology assets, including data centres, cloud platforms and networks, and partner infrastructure so that it can address its clients' outsourcing needs. It has capabilities across multiple product categories, including but not limited to:

1. Cloud

The Group delivers and manages best-of-breed cloud services as one of the core pillars of its business. Since inception, the Group has built an expansive range of internal expertise to assist customers on their journey to the cloud. Highly scalable enterprise-grade cloud environments are hosted in the Group's own data centre and utilise the Group's own Next Generation Network ("NGN") infrastructure. The Group provides customisable cloud solutions on cutting-edge, high-performance Dell and HP hardware. The cloud infrastructure has been designed to offer clients the flexibility, scalability and performance required to support their business solutions. Beyond the core Infrastructure as a Service (Iaas) capabilities, the Group offers additional services such as Backup as a Service (BaaS), Disaster Recovery as a Service (DRaaS) as well as a range of managed service offerings.

Six Degrees has recently made Public Sector Private Cloud and Hyperscale Public Cloud a key focus area. The Group works closely with organisations throughout the UK public sector, and our Public Sector Private Cloud is trusted by Central Government departments, Local Authorities and more to host services that keep Britain running. The Group's Microsoft Azure Expert status and unique cloud adoption methodology builds on Microsoft's established Cloud Adoption Framework and introduces mature cyber security capabilities to deliver secure, high performance Microsoft Azure deployments that are purpose built to align with its client's cloud drivers.

2. Cyber Security

Organisations face an increasingly complex and ever-changing security landscape with an escalating rate of cyber-attacks from an ever-more professional and organised cybercrime fraternity. Malicious attackers are increasingly treating security as a business by seeking out and leveraging weaknesses in organisations' holistic security ecosystems to steal and monetise stolen information. Using cybersecurity expertise and experience, and those of our best-in-class partners, the Group offers the soundest approach - a multi-layered security strategy, which provides multiple redundant safeguards to secure clients' organisations.

3. Connectivity

At the centre of the business is the carrier-class 100Gb capable NGN. This network underpins every Group client. As the NGN is owned and operated by the Group, it allows the Group to deliver standard solutions whilst being nimble enough to deliver bespoke, customer-designed and complex solutions. The Group offers cost-effective solutions from single site Direct Internet Access (DIA) connectivity to private Wide Area Network (WAN) L3VPN and on-net L2VPN solutions. The Group provides Foundational Connectivity Services such as Dedicated Internet Access, MPLS and Virtual Point to Point Services. The NGN also used to support the Group SD-WAN service, offering Secure Network Generation networking to support customer Cloud and Software as a Service Adoption.

4.Agile Workspace

The Group's aim is to enhance clients' working practices by ensuring they can communicate, collaborate and work more efficiently. It provides full end-to-end visibility of the complete call path rather than relying on third parties. These networks enable the Group to offer market-leading availability times for all Agile Workspace services. Due to the breadth of the product portfolio, the Group is in a great position to help clients migrate from their legacy platforms to new cutting-edge technologies.

5. Colocation

Underpinning all the core services are the Group's geographically diverse data centres. The Group operates two UK data centres and it sublets additional space in a number of third party data centres specifically designed to meet its clients' cloud data and physical asset storage requirements and provide the highest levels of availability and security. From hybrid cloud to dedicated, high-security cages, the data centres offer clients the flexibility they need in order to meet their business requirements. The data centres are connected to the Groups NGN, providing clients with cost-effective, fast and low latency connectivity to the majority of data centres in the UK and Europe, as well as to the public cloud providers including AWS, Azure and Google. All the data centres are supported by a 24x7 Service Management Centre and dedicated on-site facilities engineering teams, providing experienced technical expertise whenever required.

6. Managed Services

The Group offers a comprehensive suite of end-to-end IT Managed Services, covering Hybrid Cloud, Cyber Security, Connectivity, Voice, Moder Work and Mobile technology, allowing the Group to deliver a truly holistic service to clients. The Managed Services offerings allow clients to choose between last-line expert support services and fully outsourced IT solutions, enabling them to focus on their core business deliverables, safe in the knowledge that their systems are secure and running optimally. The Group's centralised Service Desk and Security Operations Centre can deliver IT incident resolution to businesses throughout the world, operating on a 24x7 basis and staffed by a team of highly qualified and experienced engineers. The IT Managed Services suite delivers continuity and security through a range of best-in-class vendors, all managed by specialist product teams. The Group implements and manages antivirus, backup, disaster recovery, mail and web security, mobile device management and remote system monitoring and management on behalf of clients, coupled with extensive professional service offerings to support transformation and migration projects of any size. These offerings integrate seamlessly, allowing clients to benefit from the highest levels of performance, uptime, security and availability, all with minimal management overheads.

7. Mobile

The Group's mobile offering has been providing clients with the right mobile solutions for their business with a personal touch, far beyond what the networks could offer directly. The Group advises, administers, and monitors clients' accounts in an honest way so that they can get what is best for their business. Further to this, the Group leverages its position in the industry to help reduce costs and consolidate the supply chain by delivering multi-network mobility solutions.

Each of the product groups noted above all contribute turnover across the three different revenue recognition profiles, namely monthly recurring revenue, non-recurring revenue and usage-based charges. Some product groups will be more closely aligned to one revenue type due to the nature of the services provided. For example, subscription-based services delivered within the Cloud and Connectivity product groups are recognised on a recurring basis whereas Security services tend to be recognised on a non-recurring basis. The Group manages turnover at a product group level with the nature of services delivered to clients deriving the contribution to each of the three criteria within reported turnover.

STRATEGY

In the latter part of the previous year, the business identified that it needed to fundamentally overhaul its strategic direction. Several changes were introduced to allow the business to successfully deliver this new strategy. In the current financial year, whilst there have been challenges in delivering this strategy at the pace initially targeted by management, the directors remain confident that the strategic focus of the Group remains appropriate.

The business will focus on several areas to deliver profit growth in FY24 and beyond.

1. Grow Sales Bookings across the Security and Cloud products. The Group has a clear understanding of our capabilities and has an executable roadmap to deliver this.

2. Control and reduce churn. This will be achieved through having strong and mutually beneficial relationships with customers and by improving our service so that the Group can delight customers with the service it delivers.

3. Launch new products, which will be across the Secure Integrated Cloud Services and Intelligence-Led Security Services.

4. Simplify and streamline the cost base to deliver price competitive products at an acceptable level of profitability.

The need to invest in systems, tools and process improvement to drive a level of standardisation and simplification from the organisation has continued to gather momentum through FY23 and is still at the heart of the Group's strategy. Its primary focus remains to "make it easier to get things done".

PRINCIPAL RISKS AND UNCERTAINTIES

Strategic Risks

As part of the refresh of the governance process management have looked at the principal risks faced by the Company. These include:

- A focus on ensuring it has the right product set, for which it has undertaken product portfolio reviews and are planning future product launches. The Group actively seeks regular feedback from both new and existing clients to ensure that it is aware of current market trends and that it is best positioned to respond to changes in the market.

- Retaining, motivating and incentivising talent to help deliver the Group's objectives. In response to the cost of living challenges and inflationary environment, the Group continues to focus on ensuring competitive and rewarding packages for both new and existing employees.

- Ensuring that security is at the heart of everything the Group does to protect both its and its customers' business and data; and maintain its reputation as a cyber-security expert. It continues to invest in its capabilities and people to ensure that it has the resources needed to protect the business from security incidents.

- Embedding risk governance at all levels of the business, to mitigate existing risks and to identify new risks and the necessary controls to mitigate those threats. Operational and technical risk registers are reported on and discussed at the quarterly Audit and Risk Committee meetings held at Board Level.

- Ensuring the continued financial stability of the business in these uncertain economic conditions. As disclosed in the Strategic Report, the Group has recently undertaken a Capital Restructure where it has reset the level of external debt and the associated covenants. The result of this has been to secure the long term financial stability of the business.

- Meeting ESG commitments both for the Group and for its customers. The Group is committed to minimising its carbon footprint and is taking numerous steps to achieve this. It has recently succeeded in ensuring that all its energy is sourced from green-energy sources.

- Retention and compliance with the right capability, equipment, accreditations and reporting required to win and keep business, for example: ISO, Cyber Essentials, MS Expert, Carbon Reduction Plan and D&I. The Group allocates ownership of each accreditation to a member of the leadership team who act as a sponsor throughout the process.

- Ensuring the Group meets its contractual commitments and provides a high level of reliable service. Performance against its contractual obligations is regularly and rigorously monitored through several forums to ensure that the Group holds itself accountable for its clients' innovation.

DUTY TO PROMOTE THE SUCCESS OF THE COMPANY - SECTION 172(1) STATEMENT

Section 172 of the Companies Act 2006 requires the Directors to act in such a way that they consider, in good faith, would be the most likely to promote the success of the Company for the benefits of its members as a whole, and in doing so have regards to:

a) The likely consequences of any decision in the long term

b) The interests of the company's employees

c) The need to foster the company's business relationships with suppliers, customers and others

d) The impact of the company's operations on the community and the environment

e) The desirability of the company maintaining a reputation for high standard of business conduct

f) The need to act fairly as between the members of the company

The Board confirms that, during the year, it has had due regard to the matters set out above. Further details as to how the Directors have fulfilled their duties with reference to relevant areas within these financial statements, are set out below.

Risk Management

The Board recognises the importance of identification, evaluation and management of the Company's risks. Details of the principal risks and uncertainties of the Company are set out elsewhere in this report.

Community and the environment

The Board recognises their responsibilities to making positive contributions to the community and achieving good environmental practices.

Business conduct and relationships

The Board recognises the importance of a strong culture that considers the best interests of its employees, business partners and shareholders alongside other external stakeholders including but not limited to clients, contractors and suppliers.

Clients

The Company maintains strong relationships with its clients that are critical to achieving the long-term sustainable growth and this is demonstrated by the continual monitoring and review of the Net Promoter Score - a universal measure of customer service excellence and our commitment to the maintaining our current ISO accreditations and achieving further accreditations that enhance those relationships.

Suppliers

The Company also maintains strong relationships with its suppliers as this is critical to ensure that both parties work together to deliver the benefit to our clients. The company performs quarterly reviews with key suppliers to discuss the levels of performance for each of the services being provided by those suppliers and to ensure that the Service Level Agreement (SLA) targets are being achieved

The level of engagement for each stakeholder group is set out as follows:

Stakeholder
Group

How the board undertakes to
deliver on its s172 obligations

Why do we engage

Clients

Continual collection, monitoring and
review of the Net Promoter Score
key performance indicator to
ensure service delivery standards
are being maintained and actions
taken to remedy where required

The Group's strong relationships
with its clients are critical to
achieving the long-term sustainable
growth.

Suppliers

The Group performs quarterly
reviews with key suppliers to
discuss the levels of performance
for each of the services being
provided by those suppliers and to
ensure that the Service Level
Agreement (SLA) targets are being
achieved.

To actively promote a business
partnering model whereby all
concerned parties work together to
deliver the benefit to the end user.

ON BEHALF OF THE BOARD:

D Manuel - Director

7 March 2024

The directors present their report with the financial statements of the company for the year ended 31 March 2023.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the provision of managed cloud services for both public and private cloud, agile workspace and cyber security.

RESULTS

The loss before taxation for the period was £2.6m (2022: £1.2m)

The net assets of the Company were £40.2m (2022: £42.8m).

DIVIDENDS

No dividends were distributed for the year ended 31 March 2023 (2022 - £nil).

MATTERS COVERED IN THE STRATEGIC REPORT

The strategic report can be found on pages 2 to 9. This contains the review of business, key performance indicators, strategy, details of the Company's principal risks and uncertainties and section 172 report.

RESEARCH AND DEVELOPMENT

Overall, the Group continually invests in the improvement of existing and development of new products and services to enhance its customer offerings and address existing requirements. In the current year, Management has particularly focused on investing in and launching new products and also standardising and simplifying existing products, systems, processes and data. The need to invest in systems, tools and process improvement has continued to gather momentum through FY23 and is still at the heart of the Group's overall strategy. Its primary focus remains to "make it easier to get things done".

FUTURE DEVELOPMENTS

Management strategy is growth in the coming year, this will be driven by gains in sales from continuing operations. Further details on future developments are provided in the Strategic report.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

S Crawley-Trice has held office during the whole of the period from 1 April 2022 to the date of this report.

Other changes in directors holding office are as follows:

S Karaolis - resigned 11 May 2022

D Manuel - appointed 11 May 2022

GOING CONCERN

The directors have reviewed the 6DG Topco Limited group's future cash forecasts and revenue projections, which have been prepared on the basis of past experience, market information and current and anticipated trading conditions, and believe, based on these forecasts and projections and the formal support available from 6DG Topco Limited, that it is appropriate to prepare the financial statements of the Company on a going concern basis. The consolidated accounts of 6DG Topco Limited provide full and extensive going concern disclosures.

FINANCIAL RISKS AND UNCERTAINTIES

Please refer to the strategic report for the full details in relation to the financial risks and uncertainties.

STREAMLINED ENERGY AND CARBON REPORTING

As a subsidiary entity within the 6DG Topco Limited group of companies, the Company has elected to take the exemption not to disclose the Streamlined Energy and Carbon Reporting (SECR) requirements as these are included within the consolidated financial statements of 6DG Topco Limited.

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", 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 and profit or loss of the company for that period. In preparing the financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;

- state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;

- make judgements and accounting estimates that are reasonable and prudent; and

- 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.

DIRECTORS’ CONFIRMATIONS

In the case of each director in office at the date the Directors' report is approved:

- so far as the director is aware, there is no relevant audit information of which the group and company's auditors are unaware; and

- they have taken all the 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 group and company's auditors are aware of that information.

AUDITOR

The auditor, Grant Thornton UK LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D Manuel - Director

7 March 2024

Opinion

We have audited the financial statements of Six Degrees Technology Group Limited (the 'company') for the year ended 31 March 2023, which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, 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 company's affairs as at 31 March 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 'Auditor's 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 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 are responsible for concluding on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor's opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the company to cease to continue as a going concern.

In our evaluation of the directors' conclusions, we considered the inherent risks associated with the company's business model including effects arising from macro-economic uncertainties such as the situation in Russia and Ukraine, increasing interest rates and increasing cost of living, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the company's financial resources or ability to continue operations over the going concern period.

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.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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.

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 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matter on which we are required to report under the Companies Act 2006

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

- the financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of directors' remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 11, 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.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:

- We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant which are directly relevant to specific assertions in the financial statements are those related to the financial frameworks (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the jurisdictions in which the company operates ;

- We obtained an understanding of the legal and regulatory frameworks applicable to the company and the industry in which it operates through our general and commercial and sector experience and discussions with management. We obtained an understanding of how the company is complying with those legal and regulatory frameworks by making inquiries of management and of those responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes;

- We enquired with management and those charged in governance, whether they were aware of any instances of non-compliance with laws and regulations including health & safety or whether they had any knowledge of actual, suspected or alleged fraud;

- We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, by evaluating management's incentives and opportunities for manipulation of the financial statements. This included the evaluation of the risk of management override of controls. We determined that the principal risks were in relation to:

- potential management bias in determining accounting estimates;

- the occurrence of revenues; and

- journal entries (in particular manual journal entries determined to be large or relating to unusual transactions).

Our procedures included:

- evaluation of the design effectiveness of controls that management has in place to prevent and detect fraud;

- challenging assumptions and judgements made by management in its significant accounting estimates; and

- identifying and testing journal entries with a focus on material manual journals and in particular any journal entries posted affecting earnings before interest, taxes, depreciation and amortisation (EBITDA).

- These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;

- Our assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team's:

- understanding of, and practical experience with, audit engagements of a similar nature and complexity, through appropriate training and participation;

- knowledge of the industry in which the client operates;

- understanding of the legal and regulatory requirements specific to the entity/regulated entity including:

- the provisions of the applicable legislation;

- the regulators rules and related guidance, including guidance issued by relevant authorities that interprets those rules; and

- the applicable statutory provisions.

- We did not identify any matters relating to non-compliance with laws and regulation or relating to fraud.

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.

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.

David White BA FCA (Senior Statutory Auditor)

for and on behalf of Grant Thornton UK LLP

Chartered Accountants and Statutory Auditors

17th Floor

103 Colmore Row

Birmingham

B3 3AG

8 March 2024

TURNOVER

4

79,717

79,447

Cost of sales

(39,735

)

(37,119

)

GROSS PROFIT

39,982

42,328

Administrative expenses

(46,005

)

(44,526

)

(6,023

)

(2,198

)

Other operating income

-

39

OPERATING LOSS

6

(6,023

)

(2,159

)

Interest receivable and similar
income

8

7,437

1,937

1,414

(222

)

Amounts written off investments

9

(1

)

-

1,413

(222

)

Interest payable and similar
expenses

10

(4,062

)

(953

)

LOSS BEFORE TAXATION

(2,649

)

(1,175

)

Tax on loss

11

-

LOSS FOR THE FINANCIAL YEAR

(2,649

)

(1,175

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE LOSS
FOR THE YEAR

(2,649

)

(1,175

)

FIXED ASSETS

Intangible assets

12

22

82

Tangible assets

13

6,360

6,792

Investments

14

-

1

6,382

6,875

CURRENT ASSETS

Debtors

15

81,010

79,144

Cash at bank

3,797

1,120

84,807

80,264

CREDITORS

Amounts falling due within one year

16

(51,024

)

(44,325

)

NET CURRENT ASSETS

33,783

35,939

TOTAL ASSETS LESS CURRENT
LIABILITIES

40,165

42,814

CAPITAL AND RESERVES

Called up share capital

18

-

Retained earnings

19

40,165

42,814

SHAREHOLDERS' FUNDS

40,165

42,814

The financial statements on pages 17 to 32 were approved by the Board of Directors and authorised for issue on 7 March 2024 and were signed on its behalf by:

D Manuel - Director

Called up

share

Retained

Total

capital

earnings

equity

£'000

Balance at 1 April 2021

-

43,989

Changes in equity

Total comprehensive loss

-

(1,175

)

(1,175

)

Balance at 31 March 2022

-

42,814

Changes in equity

Total comprehensive loss

-

(2,649

)

(2,649

)

Balance at 31 March 2023

-

40,165

1.	STATUTORY INFORMATION

Six Degrees Technology Group Limited is a private company, limited by shares, registered and incorporated in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The principal activity of the company is that of the provision of managed cloud services for both public and private cloud, agile workspace and cyber security.

The functional and presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention. The principal accounting policies applied in the preparation of these financial statements are set out below and have been applied consistently to all years presented, unless otherwise stated.

Going concern

The directors have reviewed the 6DG Topco Limited group's future cash forecasts and revenue projections, which have been prepared on the basis of past experience, market information and current and anticipated trading conditions, and believe, based on these forecasts and projections and the formal support available from 6DG Topco Limited, that it is appropriate to prepare the financial statements of the Company on a going concern basis. The consolidated accounts of 6DG Topco Limited provide full and extensive going concern disclosures.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv),
11.48(b) and 11.48(c);

•

the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirement of paragraph 33.7.

Preparation of consolidated financial statements

The financial statements contain information about Six Degrees Technology Group Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its parent, 6DG Topco Ltd, Commodity Quay, St Katharine Docks, London, E1W 1AZ.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the group and value added taxes.

Revenue can only be recognised gross when the inflows of economic benefits received and receivable by the company are of its own account. The company has identified a small number of instances where it acts as an agency, rather than as a principal. In these situations, it recognises only the amount of its commission as revenue and excludes from revenue all amounts that have been collected on behalf of the principal, as these are not revenue of the company.

Where the consideration receivable in cash or cash equivalents is deferred, and the arrangement constitutes a financing transaction, the fair value of the consideration is measured as the present value of all future receipts using the imputed rate of interest.

The company recognises revenue when;

- the significant risks and rewards of ownership have been transferred to the buyer;

- the company retains no continuing involvement or control over the goods;

- the amount of revenue can be measured reliably;

- it is probable that future economic benefits will flow to the entity; and

- the specific criteria relating to each of the company's sales channels have been met.

Subject to the revenue recognition conditions noted above being met, the Company reports revenue within each product group as one of the three following categories:

Monthly Recurring Revenue (MRR) - this relates to an on-going delivery of services over a set period, typically up to 3 years. MRR is contracted and includes a full range of managed support, maintenance, subscription and service agreements. MRR is spread over the agreed duration of the contract as services are provided.

Non-Recurring Revenue (NRR) - this relates to one-time revenue billed under a contractual right and typically is either a provision of a one-time service with no on-going commitments or a sale of assets, NRR is typically recognised at the point at which the service is delivered.

Usage - this relates to revenue that is billed on a contractually agreed per-unit rate, based on actual usage in a period. Revenue is recognised in accordance to actual usage.

Intangible assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives, as follows:

Years

Computer software

3 to 5

Amortisation is charged to administrative expenses in the profit and loss account. Intangible assets are amortised from the date they are available for use.

Where factors such as technological advancement or changes in market price, indicate the residual value, useful life or amortisation rate require adjusting, they are amended prospectively to reflect the new circumstances.

The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired.

Costs associated with maintaining computer software are recognised as an expense as incurred.

Tangible assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Tangible assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the assets to its working condition for its intended use, dismantling and restoration costs.

Depreciation and residual values

Freehold land is not depreciated. Depreciation on other tangible assets is charged to the profit and loss account on a straight line basis so as to write off those assets, adjusted for estimated residual values over the expected useful life of each category shown below. The remaining useful lives of the assets and their residual values are reviewed at the end of each reporting period.

The estimated useful lives are as follows:

Years

Long leasehold

25 (or the remaining term of the lease, if shorter)

Plant and machinery

3 to 7

Computer equipment

3 to 5

Fixtures and fittings

3 to 5

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since last annual reporting date in the pattern by which the company expects to consume an asset's future economic benefit.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost less any provision for impairment.

Subsequently, investments are recognised at cost less any accumulated impairment that has been booked.

Financial instruments

The Company has chosen to adopt Section 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances are initially recognised at transaction price, 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.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the assets are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables, 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 receipts discounted at a market rate of interest.

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

Fees paid on the establishment of loan facilities are recognised as transactions costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case the fee is deferred until the draw down occurs. The fee is amortised over the life of the loan. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a payment for liquidity services and amortised over the period of the facility to which it relates.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

(iii) Offsetting

Financial assets and liabilities are offset and 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 asset and settle the liability simultaneously.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the Balance Sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the Balance Sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

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

Interest receivable and interest payable

Interest payable and similar charges include interest payable and net foreign exchange losses that are recognised in the profit and loss.

Other interest receivable and similar income includes interest receivable on funds invested and net foreign exchange gains.

Interest income and interest payable are recognised in profit and loss as they accrue, using the effective interest method. Dividend income is recognised in the profit and loss account on the date the company's right to receive payment is established. Foreign currency gains and losses are reported on a net basis.

Cash and cash equivalents

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

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

3.	CRITICAL ACCOUNTING JUDGEMENTS & SOURCES OF ESTIMATION UNCERTAINTY

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

Allowance for bad and doubtful debts (Note 15)

Where there are indicators that a balance may not be recoverable, it is considered for inclusion in the bad debt provision. The approach taken to bad debt is wholly specific. Management will review the specific customer balances and perform a risk assessment through consideration of a number of factors, with a provision made accordingly.

Recoverability of intercompany balances (Note 7)

The carrying value of intercompany balances are significant for the Company and the recoverability of these balances are a source of judgement for management. Annually, management consider whether there are indicators that may affect the recoverability of these balances and whether the balance should be impaired. In the current financial year, Management have concluded that an impairment of some intercompany balances is required; this has been disclosed within exceptional costs.

Recognition of deferred tax assets and liabilities (Note 11)

Unutilised tax losses are recognised as a deferred tax asset only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. The Company does not have any deferred tax assets recognised as it is not yet considered probable that will be recovered against a future taxable profit.

4.

TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2023

2022

£'000

United Kingdom

78,343

78,014

Europe

987

514

Other

387

918

79,717

79,446

5.	EMPLOYEES AND DIRECTORS

There were no staff costs for the year ended 31 March 2023 nor for the year ended 31 March 2022.

All staff, including directors, are employed by Six Degrees Holdings Limited and CB-SDG Limited, fellow group undertakings, and their costs are recharged via a management fee.

2023

2022

£

Directors' remuneration

-

6.	OPERATING LOSS

The operating loss is stated after charging/(crediting):

2023

2022

£'000

Operating lease charges

29

232

Depreciation - owned assets

2,702

3,532

Patents and licences amortisation

-

2

Computer software amortisation

43

99

Foreign exchange differences

(15

)

(26

)

Provision against intercompany balances

3,836

-

The total audit fee for the company is £85,000 (2022: £61,514) and is borne on and behalf of the Company by Six Degrees Holdings Limited, a fellow group undertaking.

7.	EXCEPTIONAL COSTS

The Company has incurred the following expenditure that is not considered to be in the normal course of the operational business:-

2023

2022

£'000

Refinancing and restructuring fees

375

-

Property costs

762

-

Impairment of intercompany balances

3,836

-

Other

(2

)

-

4,971

-

8.

INTEREST RECEIVABLE AND SIMILAR INCOME

2023

2022

£'000

Interest due from group undertakings

7,437

1,937

The interest rate charged on inter-company loans was increased to 13.68% in the current financial year (2022: 3.58%)

9.

AMOUNTS WRITTEN OFF INVESTMENTS

2023

2022

£'000

Amounts written off fixed asset
investments

1

-

10.

INTEREST PAYABLE AND SIMILAR EXPENSES

2023

2022

£'000

Interest due to group undertakings

4,062

953

The interest rate charged on inter-company loans was increased to 13.68% in the current financial year (2022: 3.58%)

11.	TAX ON PROFIT

Analysis of the tax charge

No liability to UK corporation tax arose for the year ended 31 March 2023 nor for the year ended 31 March 2022.

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023

2022

£'000

Loss before tax

(2,649

)

(1,175

)

Loss multiplied by the standard rate of corporation tax in the
UK of 19% (2022 - 19%)

(503

)

(223

)

Effects of:

Expenses not deductible for tax purposes

729

-

Other tax adjustments

(19

)

(5

)

Group relief surrendered/(claimed)

-

239

Remeasurement of deferred tax for changes in tax rates

24

-

Movement in deferred tax not recognised

(231

)

(11

)

Total tax charge

-

Factors that may affect future tax charges

In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25% (rather than remaining at 19% as previously enacted). This new law was substantively enacted on 24 May 2021.

Unutilised tax losses

Unutilised tax losses are recognised as a deferred tax asset only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. The Company does not have any deferred tax assets recognised as it is not yet considered probable that will be recovered against a future taxable profit. The Company has no deferred tax liabilities recognised. The Company currently has unrecognised gross tax losses available of £5.4m (2022: £7.5m).

12.	INTANGIBLE ASSETS

Patents

and

Development

Computer

licences

costs

software

Totals

£'000

COST

At 1 April 2022

15

-

1,577

1,592

Reclassification/transfer

(15

)

94

(3

)

76

At 31 March 2023

-

94

1,574

1,668

AMORTISATION

At 1 April 2022

2

-

1,508

1,510

Amortisation for year

-

43

Reclassification/transfer

(2

)

94

1

93

At 31 March 2023

-

94

1,552

1,646

NET BOOK VALUE

At 31 March 2023

-

22

At 31 March 2022

13

-

69

82

13.	TANGIBLE ASSETS

Fixtures

Long

Plant and

and

Computer

leasehold

machinery

fittings

equipment

Totals

£'000

COST

At 1 April 2022

1,387

7,870

340

26,903

36,500

Additions

-

30

26

2,197

2,253

Reclassification/transfer

(1,339

)

2,385

1,426

1,570

4,042

At 31 March 2023

48

10,285

1,792

30,670

42,795

DEPRECIATION

At 1 April 2022

1,371

7,054

308

20,975

29,708

Charge for year

9

328

19

2,346

2,702

Reclassification/transfer

(1,332

)

2,009

1,399

1,949

4,025

At 31 March 2023

48

9,391

1,726

25,270

36,435

NET BOOK VALUE

At 31 March 2023

-

894

66

5,400

6,360

At 31 March 2022

16

816

32

5,928

6,792

14.	INVESTMENTS

Shares in

group

undertakings

£'000

COST

At 1 April 2022

and 31 March 2023

1

PROVISIONS

Impairments

1

At 31 March 2023

1

NET BOOK VALUE

At 31 March 2023

-

At 31 March 2022

1

The company's investments at the Balance Sheet date in the share capital of companies include the following:

Carrenza B.V.

Registered office: Netherlands

Nature of business: Trading

%

Class of shares:

holding

Ordinary

100.00

Carrenza B.V. is registered at Barbara Stozzilaan 101, 1083HN, Netherlands.

Capital Support US Inc

Registered office: United States of America

Nature of business: Trading

%

Class of shares:

holding

Ordinary

100.00

Capital Support US Inc is registered at Suite B 1675 S. State St., Dover, Kent 19901 DE.

15.

DEBTORS

2023

2022

£'000

Trade debtors

11,684

11,203

Amounts owed by group undertakings

60,838

58,889

Other debtors

647

651

Accrued income

5,475

5,738

Prepayments

2,366

2,663

81,010

79,144

Amounts owed by group undertakings are unsecured, repayable on demand and interest is applied at 13.68% (2022: 3.58%).

Trade debtors is shown net of a bad debt provision of £1,914,869 (2022: £1,428,488).

16.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2023

2022

£'000

Trade creditors

5,334

7,282

Amounts owed to group undertakings

34,767

29,906

Social security and other taxes

208

-

Other creditors

1,774

726

Deferred income

3,604

4,118

Accruals

5,337

2,293

51,024

44,325

Amounts owed to group undertakings are unsecured, repayable on demand and interest is applied at 13.68% (2022: 3.58%).

17.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2023

2022

£'000

Within one year

1,300

443

Between one and five years

5,506

1,549

In more than five years

5,162

1,908

11,968

3,900

18.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2023

2022

value:

£

100

Ordinary

1

100

19.	RETAINED EARNINGS

Retained

earnings

£'000

At 1 April 2022

42,814

Deficit for the year

(2,649

)

At 31 March 2023

40,165

20.	RELATED PARTY DISCLOSURES

During the year, the company provided colocation services to Park Place Technologies Limited. The company's ultimate parent, 6DG Topco Limited, and Park Place Technologies Limited share the same ultimate shareholder, Charlesbank Capital Partners LLC. The amount invoiced during the year-ended 31 March 2023 was £139,516 (2022: £187,531), of this, no invoices were outstanding at the year-end (2022: £Nil).

21.	POST BALANCE SHEET EVENTS

In June 2023 the Company committed to the purchase of $5.2 million worth of fixed assets with one supplier. These assets all relate to investment in our core network and an ongoing project to refresh and upgrade our underlying asset infrastructure.

Since the year end Capital Support US Inc, a fixed asset investment has been dissolved.

22.	ULTIMATE CONTROLLING PARTY

The company's immediate parent is Six Degrees Investments Limited; its ultimate parent company is 6DG Topco Limited. The smallest group within which the results of the company are consolidated is CB-SDG Midco Limited and the largest group within which the results of the company are consolidated is 6DG Topco Limited.

Charlesbank Capital Partners LLC, on behalf of funds under its management, is the ultimate controlling party, which is incorporated in the United States of America.