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Registered number: 08633289









PAYPOINT PAYMENT SERVICES LIMITED









DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
COMPANY INFORMATION


Directors
A Dale 
A Conaty 
N Young 
C Paul 
D Vant 
R Harding (appointed 14 August 2023)




Company secretary
B McLelland



Registered number
08633289



Registered office
1 The Boulevard, Shire Park

Welwyn Garden City

Hertfordshire

AL7 1EL




Independent auditor
KPMG LLP, Statutory Auditor
Chartered Accountants

15 Canada Square

Canary Wharf

London

E14 5GL





 
PAYPOINT PAYMENT SERVICES LIMITED
 

CONTENTS



Page
Directors' Report
1 - 3
Independent Auditor's Report to The Members of Paypoint Payment Services Limited
4 - 8
Statement of Comprehensive Income
9
Statement of Financial Position
10
Statement of Changes in Equity
11
Notes to the Financial Statements
12 - 18


 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year.  Under that law they have elected to prepare the financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework.  
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.  

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


select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to
          going concern; and

use the going concern basis of accounting unless they either intend to liquidate the Company or to cease
          operations, or have no realistic alternative but to do so.

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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.  

Principal activity

The principal activity of the company is provision of regulated payment and ancillary services.

Results and dividends

The profit for the year, after taxation, amounted to £926k (2022 - £406k).

No dividends were paid during the year (2022: £nil).

Directors

The directors who served during the year were:

A Dale 
A Conaty 
N Young 
C Paul 
D Vant 
Page 1

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023


Future developments

The Company is a key subsidiary of the PayPoint Group and Group priorities for financial year 2023/24 impact the Company. The key ones are set out in the Group annual report and accounts and relevant ones include:

Payments & Banking Division

Grow integrated payments services.

Build on strong momentum in Open Banking to expand services for existing and new clients.

Reinforce PayPoint’s position as the leader in disbursement services for central and local government

PayPoint Group

Underpinning the PayPoint Group’s future success is the continued development and investment in our people, systems and organisation.

Deliver secure and resilient technology platform and services to all partners and launch improvements to core billing/settlement systems.

Make further progress on our ESG approach across the enlarged business to deliver responsible and sustainable value for shareholders.

Continue our ‘Welcoming Everyone’ programme

Execute with intensity and accountability.

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditor

KPMG LLP have confirmed that they will be resigning as auditors after the completion of this years audit as part of the Group's rotation of auditors. Their resignation will be accepted at the forthcoming annual general meeting and a resolution to appoint Pricewaterhouse Coppers LLP will be proposed.

Small companies note

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

Page 2

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

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





D Vant
Director

Date: 26 October 2023

1 The Boulevard, Shire Park
Welwyn Garden City
Hertfordshire
AL7 1EL

Page 3

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PAYPOINT PAYMENT SERVICES LIMITED
 



Page 4

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PAYPOINT PAYMENT SERVICES LIMITED
 


We have audited the financial statements of PayPoint Payment Services Limited (“the Company”) for the year ended 31 March 2023,which comprise the Statement of comprehensive income, Statement of financial position, Statement of changes in equity and related notes, including the accounting policies in note 2

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 profit for the year then ended; 

have been properly prepared in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework; 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 are described below.  We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard.  We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.  

Going concern  

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).

In our evaluation of the directors’ conclusions, we considered the inherent risks to the Company’s business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern.
 
Our conclusions based on this work:

we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;

we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period.


However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation. 

Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

Enquiring of directors and inspection of policy documentation as to the Company’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Company’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.

Reading Board minutes.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud
Page 5

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PAYPOINT PAYMENT SERVICES LIMITED
 


throughout the audit. 

As required by auditing standards, and taking into account possible pressures to meet profit targets, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because of the low complexity and judgement involved in revenue recognition.

We did not identify any additional fraud risks.

We performed procedures including: 

Identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation. These included those posted by senior finance management, those posted without a user ID or a seldom user ID, those containing certain words in journal description, those posted to unusual accounts, those with rounded amounts reversals of accruals and provisions.

Identifying and responding to risks of material misstatement related to compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience ,and through discussion with the directors and others management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations.  

As the Company is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements. 

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation, and taxation legislation, and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.  

Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation.  We identified the following areas as those most likely to have such an effect: payment service regulations, consumer credit regulations, health and safety, anti-bribery, employment law, and certain aspects of company legislation, recognising the nature of the Company’s activities to provide payment services.  Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. 
 
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

Page 6

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PAYPOINT PAYMENT SERVICES LIMITED
 


Directors’ report  

The directors are responsible for the directors’ report.  Our opinion on the financial statements does not cover that report and we do not express an audit opinion thereon.  

Our responsibility is to read the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge.  Based solely on that work: 
 
we have not identified material misstatements in the directors’ report; 

in our opinion the information given in that report for the financial year is consistent with the financial statements; and  

in our opinion that report has been prepared in accordance with the Companies Act 2006.  


Matters on which we are required to report by exception  

Under the Companies Act 2006 we are required to report to you if, in our opinion: 

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

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

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

we have not received all the information and explanations we require for our audit; or  

the directors were not entitled to take advantage of the small companies exemption from the requirement to prepare a strategic report.  


We have nothing to report in these respects.  

Directors’ responsibilities  

As explained more fully in their statement set out on  page 1, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; 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 they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.  

Auditor’s responsibilities  

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 our opinion in an auditor’s report.  Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.  
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditscopeukprivate.

The purpose of our audit work and to whom we owe our responsibilities  

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.


Page 7

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PAYPOINT PAYMENT SERVICES LIMITED
 



James Tracey (Senior statutory auditor)

  
for and on behalf of

KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
Canary Wharf
London
E14 5GL

1 November 2023

Page 8

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
Note
£000
£000

  

Revenue
 4 
2,155
1,227

Cost of revenue
  
(397)
(112)

Gross profit
  
1,758
1,115

Administrative expenses
  
(655)
(642)

Operating profit
  
1,103
473

Interest receivable and similar income
  
40
28

Profit before tax
  
1,143
501

Tax on profit
  
(217)
(95)

Profit for the financial year
  
926
406

Other comprehensive income
  
-
-

  

Total comprehensive income for the year
  
926
406

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

The notes on pages 12 to 18 form part of these financial statements.

Page 9

 
PAYPOINT PAYMENT SERVICES LIMITED
REGISTERED NUMBER:08633289

STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023

2023
2022
Note
£000
£000

  

Current assets
  

Debtors: amounts falling due after more than one year
 6 
2,269
1,097

Debtors: amounts falling due within one year
 6 
307
-

Cash at bank and in hand
 7 
690
898

  
3,266
1,995

Creditors: amounts falling due within one year
 8 
(522)
(177)

Net current assets
  
 
 
2,744
 
 
1,818

Total assets less current liabilities
  
2,744
1,818

  

  

  

Net assets
  
2,744
1,818


Capital and reserves
  

Called up share capital 
  
1,280
1,280

Profit and loss account
  
1,464
538

  
2,744
1,818


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

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




A Dale
Director

Date: 26 October 2023

The notes on pages 12 to 18 form part of these financial statements.

Page 10

 
PAYPOINT PAYMENT SERVICES LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023


Called up share capital
Profit and loss account
Total equity

£000
£000
£000

At 1 April 2022
1,280
538
1,818


Comprehensive income for the year

Profit for the year
-
926
926
Total comprehensive income for the year
-
926
926


At 31 March 2023
1,280
1,464
2,744



STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022


Called up share capital
Profit and loss account
Total equity

£000
£000
£000

At 1 April 2021
1,280
132
1,412


Comprehensive income for the year

Profit for the year
-
406
406
Total comprehensive income for the year
-
406
406


At 31 March 2022
1,280
538
1,818


The notes on pages 12 to 18 form part of these financial statements.

Page 11

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


General information

PayPoint Payment Services Limited is a private Company, limited by shares, and incorporated in England and Wales under the Companies Act 2006. The address of the registered office is given on the Company Information page.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework'  and the Companies Act 2006.
In the transition to FRS 101 from UK-adopted IFRS, the Company has made no measurement and recognition adjustments.

The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 101 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share-based payment
the requirements of IFRS 7 Financial Instruments: Disclosures
the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement
the requirements of IAS 7 Statement of Cash Flows
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
the requirements of paragraph 74A(b) of IAS 16
the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.
   the requirement of new but not yet effective IFRS's

This information is included in the consolidated financial statements of PayPoint plc as at 31 March 2023 and these financial statements may be obtained from 1 The Boulevard, Shire Park, Welwyn Garden City, Hertfordshire, AL7 1EL.

Page 12

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.3

Going concern

At 31 March 2023, the Company had cash and cash equivalents of £690k. The Company has a resilient statement of financial position, with net assets of £2,744k as at 31 March 2023, having made a profit for the year of £926k.
The Directors have prepared cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements which indicate that, taking account of reasonably possible downsides, the Company will have sufficient funds, to meet its liabilities as they fall due for that period.
Consequently, the directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
The Company’s position in relation to the recent claim by Utilita Energy Limited and Utilita Services Limited (“Utilita”) relating to issues addressed by commitments proposed by PayPoint Plc and other companies in the PayPoint group and accepted by Ofgem as a resolution of its competition law concerns, is disclosed in Note 10.
The Directors have also considered the matters described in note 10 and concluded that it is not appropriate to extend the going concern assessment beyond 12 months on the basis that the timing of conclusion of the legal proceedings is so uncertain.

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

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

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

Page 13

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable and comprises the value of sales of services (excluding value added taxes) in the normal course of business. Revenue is attributable to the operation of regulated cash out, net settlements schemes and open banking and has arisen solely in the United Kingdom.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

Finance costs

Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.8

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Company can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.9

Debtors

Trade receivables are initially recorded at fair value and represent the amount of commission due from clients or fees from retailers for which payment has not been received, less an allowance for doubtful accounts that is estimated based on factors such as the credit rating of the customer, historical trends, the current economic environment and other information.

Page 14

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.10

Cash and cash equivalents

For the purpose of the Statement of Financial Position, cash and cash equivalents comprise cash at bank  and short-term deposits with original maturity of less than three months and are subject to insignificant risk of changes in value.

 
2.11

Creditors

Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

 
2.12

Financial instruments

The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instruments transactions are explained below:

Financial assets and financial liabilities are initially measured at fair value. 

Financial assets

All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.

Impairment of financial assets

The Company always recognises lifetime ECL for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

Financial liabilities

At amortised cost

Financial liabilities which are neither contingent consideration of an acquirer in a business combination, held for trading, nor designated as at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. This is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or where appropriate a shorter period, to the amortised cost of a financial liability.

Page 15

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The directors have assessed that, in preparing the Company's financial statements, there are no critical accounting judgements on key sources of estimation uncertainty.


4.


Revenue

The whole of the revenue is attributable to the operation of regulated CashOut, net settlement schemes and open banking and has arisen solely in the United Kingdom.


5.


Employees

The Company has no employees other than the directors, who did not receive any remuneration (2022 - £nil).


6.


Debtors

2023
2022
£000
£000

Due after more than one year

Amounts owed by group undertakings
2,269
1,097

2,269
1,097


Interest on intercompany balances is charged between 3% and 3.5% per annum (2022: 2%)

2023
2022
£000
£000

Due within one year

Other debtors
290
-

Prepayments and accrued income
17
-

307
-



7.


Cash and cash equivalents

2023
2022
£000
£000

Cash at bank
690
898

690
898


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PAYPOINT PAYMENT SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

8.


Creditors: Amounts falling due within one year

2023
2022
£000
£000

Trade creditors
58
1

Amounts owed to group undertakings
132
11

Corporation tax
217
95

Accruals and deferred income
115
70

522
177



9.


Financial instruments

2023
2022
£000
£000

Financial assets


Cash and cash equivalents measured at fair value
690
898

Loans and receivables
2,269
1,097

2,959
1,995


Financial liabilities


Financial liabilities measured at amortised cost
(305)
(82)


Financial assets comprise cash and cash equivalents, trade and other receivables.


Other financial liabilities comprise trade creditors and other payables.

Page 17

 
PAYPOINT PAYMENT SERVICES LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

10.


Contingent liabilities

As announced in PayPoint Plc’s results for the year ended 31 March 2023, included in its RNS on 28 July 2023, PayPoint Plc and a number of other companies in the PayPoint group were served with a claim by Utilita Energy Limited and Utilita Services Limited (“Utilita”) on 16 June 2023.  The claim relates to issues addressed by commitments proposed by PayPoint Plc and other companies in the PayPoint group, not including the Company, and accepted by Ofgem as a resolution of Ofgem’s competition law concerns raised in its Statement of Objections in September 2020. The Ofgem resolution to the case did not include any infringement findings.  The Utilita claim has been served on the Company, which also provides services to Utilita, in addition to the other companies in the PayPoint group which provided commitments to Ofgem.
The relevant PayPoint group companies, including the Company, have responded robustly to Utilita’s claim and filed a defence on 14 July 2023. The PayPoint group, including the Company, is continuing to take legal advice with regard to this claim.
Consideration has been given, in these financial statements, to the possibility of any liabilities of the Company arising from this claim. The Company is confident that it will successfully defend the claim by Utilita, which does not provide any clear evidence to support the cause of action or the amount claimed.  As a result, no provision has been recognised by the Company in respect of this claim. The PayPoint group, including the Company, intends to continue to robustly defend its position in this claim. However, if the PayPoint group was unable to successfully defend either claim, any liabilities could have a material adverse impact on the Company.


11.


Controlling party

The immediate and ultimate controlling party of the Company is PayPoint plc, a company registered at 1 The Boulevard, Shire Park, Welwyn Garden City, Hertfordshire, AL7 1EL.
The largest and smallest group in which the results of the Company are consolidated is that headed by PayPoint plc. These accounts can be obtained from the registered office at 1 The Boulevard, Shire Park, Welwyn Garden City, Hertfordshire, AL7 1EL. No other group accounts include the results of the Company.

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