Caseware UK (AP4) 2022.0.179 2022.0.179 2023-04-302023-04-30truetrue2022-08-09false30truefalse 14284836 2022-08-08 14284836 2022-08-09 2023-04-30 14284836 2021-08-09 2022-08-08 14284836 2023-04-30 14284836 1 2022-08-09 2023-04-30 14284836 d:CompanySecretary1 2022-08-09 2023-04-30 14284836 d:Director1 2022-08-09 2023-04-30 14284836 d:Director1 2023-04-30 14284836 d:Director2 2022-08-09 2023-04-30 14284836 d:Director2 2023-04-30 14284836 d:Director3 2022-08-09 2023-04-30 14284836 d:Director3 2023-04-30 14284836 d:RegisteredOffice 2022-08-09 2023-04-30 14284836 c:CurrentFinancialInstruments 2023-04-30 14284836 c:Non-currentFinancialInstruments 2023-04-30 14284836 c:CurrentFinancialInstruments c:WithinOneYear 2023-04-30 14284836 c:Non-currentFinancialInstruments c:AfterOneYear 2023-04-30 14284836 c:ShareCapital 2022-08-09 2023-04-30 14284836 c:ShareCapital 2023-04-30 14284836 d:OrdinaryShareClass1 2022-08-09 2023-04-30 14284836 d:OrdinaryShareClass1 2023-04-30 14284836 d:FRS102 2022-08-09 2023-04-30 14284836 d:Audited 2022-08-09 2023-04-30 14284836 d:FullAccounts 2022-08-09 2023-04-30 14284836 d:PrivateLimitedCompanyLtd 2022-08-09 2023-04-30 14284836 2 2022-08-09 2023-04-30 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 14284836










UNCAPPED FINANCE III LTD










DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD FROM 9 AUGUST 2022 TO 30 APRIL 2023

 
UNCAPPED FINANCE III LTD
 
 
COMPANY INFORMATION


Directors
A Sternberg 
CSC Directors (No.1) Limited 
CSC Directors (No.2) Limited 




Company secretary
CSC Corporate Services (UK) Limited



Registered number
14284836



Registered office
10th Floor
5 Churchill Place

London

E14 5HU
United Kingdom




Independent auditors
MHA
Statutory Auditors

6th Floor

2 London Wall Place

London

EC2Y 5AU





 
UNCAPPED FINANCE III LTD
 

CONTENTS



Page(s)
Directors' Report
1 - 3
Independent Auditors' Report
4 - 7
Statement of Comprehensive Income
8
Statement of Financial Position
9
Statement of Changes in Equity
10
Notes to the Financial Statements
11 - 19

 
UNCAPPED FINANCE III LTD
 
 
 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 APRIL 2023

The directors present their report and the financial statements for the period ended 30 April 2023.

The company was incorporated on 09 August 2022 and this is the first reporting period for the company. These financial statements have been prepared for the period from 09 August 2022 to 30 April 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 the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The company was incorporated on 09 August 2022 and the company is a special purpose company acting as a funding intermediary for the Uncapped Group of Companies.
The company has entered into a funding arrangement with a Funding Facility Provider. The proceeds from this funding arrangements are used to acquire a portflio of loans issued by Uncapped Finance Ltd.
The loans acquired by the company have not been recognised in the balance sheet of the coampany since these have not met the de-recognition criteria in the financial statements of Uncapped Ltd. The amount paid by the company to acquire the loan portfolio is therefore classified as a deemed loan to Uncapped Ltd in the financial statements of the company.

Results and dividends

The profit for the period, after taxation, amounted to £NIL.

No dividend was declared in the period ended 30 April 2023.

Page 1

 
UNCAPPED FINANCE III LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023


Directors

The directors who served during the period were:

A Sternberg (appointed 9 August 2022)
CSC Directors (No.1) Limited (appointed 9 August 2022)
CSC Directors (No.2) Limited (appointed 9 August 2022)

Principal and financial risk management

The principal risk arising from the Company’s financial instruments are reviewed below.
Credit Risk
Credit risk reflects the risk that the underlying borrows or other transaction parties will not meet their obligations as they fall due.
The Group seeks to manage these risks by employing a range of credit assessment checks on all applicants together with ongoing reviews and the assessment of credit performance of the loans.
Liquidity Risk
Liquidity risk reflects the risk that the Company may encounter difficulty in meeting its obligations associated with its financial liabilities. The purchase of the loans is financed by drawings under the Funding facility and the subordinated loan. The repayment terms of the Funding Facilities substantially reduces the Company’s liquidity risk by matching the payment profile of the company’s funding to the payment profile of its Loans.
Interest rate risk
Interest rate risk exists where interest rates on assets and liabilities are either set according to different bases or reset at different times.
The Company is exposed to interest rate risk because a portion of the Company's Funding Facilities are variable rate. There is a risk that a continued increase in the base rates could reduce the profitability of the Group, the risk is borne by Uncapped Ltd via the deferred consideration and the subordinated funding mechanisms. The Group would not initially increase interest rates on the Loans and absorb any increases in costs. However, should the impact become materiality to the Group over time, then a rate rise could be passed onto customers.

Directors' indemnity insurance

Directors' liability and indemnity insurance was in force throughout the period to cover the directors and officers of the company against actions brought against them in their personal capacities. Cover is not provided where the individual has acted fraudulently or dishonestly. 

Disclosure of information to auditors

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 auditors are 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 auditors are aware of that information.

Page 2

 
UNCAPPED FINANCE III LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023

Auditors

MHA MacIntyre Hudson was appointed as auditor of the company by the directors during the year. Following a rebranding exercise on 15 May 2023, the trading name of the company's independent auditor changed from MHA MacIntyre Hudson to MHA. MHA offer themselves for re-election.

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.

The Company has taken advantage of the disclosure exemption from the requirements of Statement of Cash Flows in accordance with FRS 102.
The Company has taken advantage of the small companies' exemption in preparing the Strategic Report in accordance with the small companies regime.

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





Oreoluwa Salu per pro CSC Directors (No.1) Limited, as Director
Director

Date: 28 February 2024
Page 3

 
UNCAPPED FINANCE III LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF UNCAPPED FINANCE III LTD
 

Opinion


We have audited the financial statements of Uncapped Finance III Ltd (the 'Company') for the period from 09 August 2022 to 30 April 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 30 April 2023 and of its result for the period 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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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


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.


Page 4

 
UNCAPPED FINANCE III LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF UNCAPPED FINANCE III LTD (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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 course of 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 this gives rise to 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.


Opinion 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 Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Directors' Report has been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

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 Directors' Report.


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; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Directors' Report and from the requirement to prepare a Strategic Report.


Page 5

 
UNCAPPED FINANCE III LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF UNCAPPED FINANCE III LTD (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities 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, 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.


Auditors' 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 Auditors' 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. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Obtaining an understanding of the legal and regulatory framework that the company operates in;
Reviewing key correspondence with regulatory authorities;
Enquiry of management to identify any instances of non-compliance with laws and regulations;
Enquiry of management around actual and potential litigation claims;
Enquiry of management to identify any instances of known or suspected instances of fraud; and
Discussing and reviewing among the engagement team regarding how and where fraud might occur.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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 Auditors' Report.


Page 6

 
UNCAPPED FINANCE III LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF UNCAPPED FINANCE III LTD (CONTINUED)


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 2006Our 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 Auditors' 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.





Rakesh Shaunak FCA, CTA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
London, United Kingdom

29 February 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales
(Registered number OC312313).
Page 7

 
UNCAPPED FINANCE III LTD
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 APRIL 2023

2023
Note
£

  

Interest receivable
  
2,365,156

Interest expense
  
(1,012,826)

Net interest income
  
1,352,330

Administrative expenses
 7 
(1,352,330)

Profit before tax
  
-

Taxation
 10 
-

Profit for the financial period
  
-

There was no other comprehensive income for 2023.

The notes on pages 11 to 19 form part of these financial statements.

Page 8

 
UNCAPPED FINANCE III LTD
REGISTERED NUMBER: 14284836

STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2023

2023
Note
£

Non-current assets
  

Deemed loan to Uncapped Ltd due after more than one year
 11 
599,932

  
599,932

Current assets
  

Deemed loan to Uncapped Ltd due within one year
 11 
11,676,243

Other debtors
 11 
96,985

Cash and cash equivalents
 12 
2,826,746

  
14,599,974

Creditors: amounts falling due within one year
 13 
(14,463,339)

Net current assets
  
 
 
136,635

Total assets less current liabilities
  
736,567

Creditors: amounts falling due after more than one year
 14 
(736,566)

  

Net assets
  
1


Capital and reserves
  

Called up share capital 
 15 
1

  
1



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




Oreoluwa Salu per pro CSC Directors (No.1) Limited, as Director
Director

Date: 28 February 2024

The notes on pages 11 to 19 form part of these financial statements.

Page 9

 
UNCAPPED FINANCE III LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD FROM 9 AUGUST 2022 TO 30 APRIL 2023


Called up share capital
Total equity

£
£


Comprehensive income for the period
Total comprehensive income for the period
-
-


Contributions by and distributions to owners

Shares issued during the period
1
1


Total transactions with owners
1
1


At 30 April 2023
1
1

The notes on pages 11 to 19 form part of these financial statements.

Page 10

 
UNCAPPED FINANCE III LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

1.


General information

Uncapped Finance III Ltd a private company limited by shares, incorporated in England and Wales, registration number is 14284836. The registered office is 10th Floor, 5 Churchill Place, London, E14 5HU, United Kingdom.
The company was incorporated on 09 August 2022. These financial statements have been prepared for the period from 09 August 2022 to 30 April 2023.

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 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 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 functional and presentational currency is GBP and the financial statements are rounded to the nearest £1.

The following principal accounting policies have been applied:

 
2.2

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 the 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 Section 3 Financial Statement Presentation paragraph 3.17(d).

This information is included in the consolidated financial statements of Uncapped Ltd as at 30 April 2023 and these financial statements may be obtained from Companies House.

 
2.3

Going concern

The company has not traded during the year. The directors have considered the appropriateness of the preparation of these financial statements on a going concern basis.
The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and to meet its financial obligations as they fall due for at least 12 months from the date of signing these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Page 11

 
UNCAPPED FINANCE III LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
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.

 
2.5

Interest income and expense

Interest income and expense are recognised within ‘interest receivable and similar income’ and ‘interest payable and similar expenses’ in Statement of Comprehensive Income. Accrued interest income and accrued interest expense are recognised in other debtors and creditors on the Statement of Financial Position.
The Company accounts for interest income and interest expense on an effective interest rate basis. The effective interest method is a method of calculating the amortised cost of a financial asset or liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Company estimates cashflows considering all contractual terms of the financial instrument but does not consider future credit losses.

 
2.6

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

 
2.7

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.8

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

Page 12

 
UNCAPPED FINANCE III LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.9

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

  
2.10

Funding facility

Borrowings under the funding facility are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds and the redemption amount is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method. 
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. 

  
2.11

Deemed loan

For the receivables bought by the company from Uncapped Ltd, under the Group's funding arrangements, the threshold for recognition is not considered to have been met as the seller has retained significant risk and rewards of ownership in the form of the subordinated loan and the entitlement to deferred consideration. 
The company's financial statements are therefore prepared on the basis that its purchase of the beneficial interest in the loans is recognised as a collateralised non-recourse loan to Uncapped Ltd. 
The deemed loan was initially recognised at the amount corresponding to the consideration paid by the Company in respect of the purchase of the pool of loans, net of the funding facility, known as the subordinated loan. 
The deemed loan is subsequently adjusted for the principal receipts from the underlying loans which represent repayments of the deemed loan and other payments between the company and Uncapped that arise as a direct result of the funding arrangement. 
The subordinated loan is incorporated with the deemed loan as, although it has separate legal form, it was entered into at the same time and in contemplation of the sale of the loans, relates to the same risk and there is no apparent economic need or substantive business purpose for structuring the transaction separately that could not have been accomplished as a single transaction 
The interest income on the deemed loan represents the amount of interest receivable and fees on the underlying receivables that the Company is entitled to retain either as a retained profit or in order to settle its obligations to third parties.       
The Group regularly reviews the underlying loans to determine the need for loan impairment provisions. The Group uses objective factors such as the time since a customer's last payment or other indicators to consider whether a loan is impaired. The Company uses this, alongside a capital adequacy assessment of Uncapped Ltd, and it's ability to cover any impairment losses through the subordinated loan and Funding Facility mechanism.

Page 13

 
UNCAPPED FINANCE III LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.12

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.

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

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

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

Page 14

 
UNCAPPED FINANCE III LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

2.Accounting policies (continued)


2.12
Financial instruments (continued)

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The estimates an associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying values of assets and liabilities that are not readily apparent for other sources. The estimates and underlying assumptions are reviewed on an ongoing basis.


4.


Financial risk management

Credit Risk
Credit risk reflects the risk that the underlying borrows or other transaction parties will not meet their obligations as they fall due.
The Group seeks to manage these risks by employing a range of credit assessment checks on all applicants together with ongoing reviews and the assessment of credit performance of the loans.
Liquidity Risk
Liquidity risk reflects the risk that the Company may encounter difficulty in meeting its obligations associated with its financial liabilities. The purchase of the loans is financed by drawings under the Funding facility and the subordinated loan. The repayment terms of the Funding Facilities substantially reduces the Company’s liquidity risk by matching the payment profile of the company’s funding to the payment profile of its Loans.
Interest rate risk
Interest rate risk exists where interest rates on assets and liabilities are either set according to different bases or reset at different times.
The Company is exposed to interest rate risk because a portion of the Company's Funding Facilities are at a variable rate. There is a risk that a continued increase in the base rates could reduce the profitability of the Group, the risk is borne by Uncapped Ltd via the deferred consideration and the subordinated funding mechanisms. The Group would not initially increase interest rates on the Loans and absorb any increases in costs. However, should the impact become materiality to the Group over time, then a rate rise could be passed onto customers. 

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UNCAPPED FINANCE III LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

5.


Interest receivable

2023
£



Deemed Loan interest receivable
2,365,156


6.


Interest expense

2023
£



Interest expense on Funding facility
1,012,826


7.


Administrative expenses

The administrative expenses include the following:

2023
£

Amounts recharged from parent
1,352,330


8.


Auditors' remuneration

During the period, the Company obtained the following services from the Company's auditors:


2023
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
50,000


The auditors’ remuneration was recharged to Uncapped Ltd during the period. 





9.


Employees

The average monthly number of employees, including the directors, during the period was as follows:


        2023
            No.






Directors
3

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UNCAPPED FINANCE III LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

10.


Taxation


2023
£



Total current tax
-

Deferred tax

Total deferred tax
-


Taxation
-

Factors affecting tax charge for the period

There were no factors that affected the tax charge for the period which has been calculated on the profits on ordinary activities before tax at the standard rate of corporation tax in the UK of  19%.



Factors that may affect future tax charges

An increase in the UK corporation tax rate from 19% to 25% was substantively enacted in June 2021 and has taken effect from 1 April 2023 for profits over £250,000. For profits under £50,000 the tax rate will remain the same at 19% and for profits between these figures it will be subject to 25% but reduced by a marginal relief providing a gradual increase in the effective corporation tax rate.


11.


Debtors

2023
£

Due after more than one year

Deemed loan to Uncapped Ltd
599,932


2023
£

Due within one year

Deemed loan to Uncapped Ltd
11,676,243

Cash in transit
96,985

11,773,228


The Directors have considered the maturity profile of the underlying loans, and concluded that the deemed loan is recoverable within 12 months. The deemed loan is therefore classified as a current asset.

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UNCAPPED FINANCE III LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

12.


Cash and cash equivalents

2023
£

Cash at bank
2,826,746



13.


Creditors: Amounts falling due within one year

2023
£

Funding facility
14,380,666

Accruals and deferred income
82,673

14,463,339



14.


Creditors: Amounts falling due after more than one year

2023
£

Funding facility
736,566


The funding facility had a maturity date of 30 November 2024. In November 2023, an extension was signed for the facility to mature at 30 May 2025.
The facility is secured against the underlying assets held within the group. Uncapped Ltd retain exposure for the performance of the loans, however the facility is structured to align cash flows of the underlying assets with the repayments of the facility.


15.


Share capital

2023
£
Allotted, called up and fully paid


1 Ordinary share of £1.00
1


On incorporation, the company issued 1 Ordinary share with a nominal value of £1.00 each.


16.


Related party transactions

Included in debtors at the period end, is an amount owed of £12,276,175 from Uncapped Ltd, the associate parent entity. This amount are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

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UNCAPPED FINANCE III LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023

17.


Post balance sheet events

There have been no post balance sheet events since the Statement of Financial Position date which require disclosure in these financial statements. 


18.


Parent entity and controlling party

CSC Corporate Services (UK) Limited is the parent entity, registered in England and Wales with the registered number 10831084, with a registered office of 10th Floor, 5 Churchill Place, London, E14 5HU, United Kingdom.
The smallest and the largest group in which the Company is consolidated is Uncapped Ltd, registered in England and Wales with the registered number 12258266, with a registered office of International House, 36-38 Cornhill, London, EC3V 3NG. Financial statements are available from the Registrar of Companies, Companies House, Cardiff, CF14 3UZ.
Uncapped Ltd is considered to exert control over the activities of Uncapped Finance III Ltd.
 
Page 19