Company registration number 03997432 (England and Wales)
EPASSI UK LIMITED
(FORMERLY 'INCORPORE LIMITED')
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
EPASSI UK LIMITED
COMPANY INFORMATION
Directors
Y E Rantala
(Appointed 1 April 2023)
R Duzanskaja
(Appointed 30 October 2023)
A Wei Yin
(Appointed 30 October 2023)
A J Shillaker
(Appointed 30 October 2023)
E Vivo
(Appointed 30 October 2023)
Company number
03997432
Registered office
14 Mill Road
Burgess Hill
RH15 8DR
Auditor
Gerald Edelman LLP
73 Cornhill
London
EC3V 3QQ
Business address
14 Mill Road
Burgess Hill
RH15 8DR
EPASSI UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
EPASSI UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The company has bounced back strong into a full year of trading in 2023, after recovery from the pandemic in 2022. Revenue for the year increased in 2023 driven by a combination of obtaining new clients, and increasing engagement to generate more transactions in 2023, which results in more gross merchandise value.

 

Overall performance of the company is strong in 2023, achieving 47% growth in gross profit, and 40% growth in adjusted EBITDA, showing the company’s ability to generate more revenue and engagement without negatively impacting the company’s profitability.

Principal risks and uncertainties

The risk implications of business decisions affecting the company are considered by the director. The director assesses these risks on a regular basis to ensure that any risks arising from changes in the company’s operations to the external environment are identified and appropriately managed. The individual risks have been categorised into the following areas:

- market competition;

- technology and advancement

- laws and regulations;

- taxation;

- financing;

- economic climate;

- health and safety

The nature of the specific risk areas and related controls are as follows:


Market competition

The directors assess the risk of competitors on a regular basis as the company competes in a dynamic market driven by innovation, brand strength, customer service, and technological solutions. Competition is expected to intensify, but confidence remains in maintaining a competitive edge through innovation, and the strength in our merchant and customer network.

Technology and advancement

The company leverages cutting edge technology to drive innovation and enhance operational efficiency. This is only set to continue as we innovate new technologies and solutions for the UK employee well being sector.

Laws and regulations risk

The adherence to laws and regulations are a priority of the company. The company ensures that it complies with the requirements of required laws and regulations..

Taxation risk

The company is exposed to financial risks from increases in tax rates and changes to the basis of taxation including

corporation tax and VAT.

 

Financing risk
The company's principal financial instrument is cash. The main purpose of this instrument is to manage the company's funding and liquidity requirements. The company has other financial assets and liabilities such as trade debtors and trade creditors, which arise directly from its operations.
Economic climate
The directors have identified and evaluated risks and uncertainties and has controls in place to mitigate these. Responsibility for management of each key risk is identified and delegated. The company has limited exposure to the risks of the current economic climate that could lower the company's revenues and operating results in the future.
EPASSI UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Health and safety
Health and safety are taken as a priority by the company. The risk of non-compliance with health and safety legislation is minimised through training, development and review policies and procedures to maintain higher standards.
Development and performance

The company is committed to continuous development and performance, not only to drive competitive edge through innovation, but also to improve operational efficiencies. New IT systems, cloud based software and processes are being implemented to develop more efficient operational workflows, and there are further developments and product innovations in the pipeline following the acquisition from Epassi.

Key performance indicators

The company considers revenue growth and gross profit margins as its key performance indicators. It continuously tracks specific metrics to gauge performance and progress toward its KPIs Typical financial metrics, such as revenue growth rate, profit margins, and current ratios, are monitored regularly to ensure that the company’s financial position remains healthy.

 

In addition, typical SaaS metrics are monitored, including customer acquisition cost, customer retention rate, and customer lifetime value. The business also monitors staff numbers and employs an experienced management team who ensure that the company will perform profitably in the future and provide quality service to its customers.

On behalf of the board

Y E Rantala
Director
11 March 2024
EPASSI UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present the annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company during the year was that of the provision of employee benefits.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

A J Shillaker
(Resigned 1 April 2023)
E Vivo
(Resigned 1 April 2023)
Y E Rantala
(Appointed 1 April 2023)
R Duzanskaja
(Appointed 30 October 2023)
A Wei Yin
(Appointed 30 October 2023)
A J Shillaker
(Appointed 30 October 2023)
E Vivo
(Appointed 30 October 2023)
Auditor

The auditor, Gerald Edelman LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

EPASSI UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Going conern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Y E Rantala
Director
11 March 2024
EPASSI UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EPASSI UK LIMITED
- 5 -
Opinion

We have audited the financial statements of Epassi UK Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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:

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 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

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 interim report other than the financial statements and our auditors' 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 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.

Opinions on other matters prescribed by the Companies Act 2006

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

EPASSI UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EPASSI UK LIMITED
- 6 -
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 strategic report or 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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The auditors' explanation of its audit response will depend on the risks identified but may include:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but are not limited to:

EPASSI UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EPASSI UK LIMITED
- 7 -

The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned and performed in accordance with ISAs (UK). Furthermore, the more removed that laws and regulations are from financial transactions, the less likely that we would become aware of non-compliance. Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the directors.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' 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 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.

Hiten Patel FCCA
Senior Statutory Auditor
For and on behalf of Gerald Edelman LLP
11 March 2024
Chartered Accountants
Statutory Auditor
73 Cornhill
London
EC3V 3QQ
EPASSI UK LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Year
Period
ended
ended
31 December
31 December
2023
2022
Notes
£
£
Turnover
3
28,323,215
4,540,944
Cost of sales
(24,288,770)
(3,793,592)
Gross profit
4,034,445
747,352
Administrative expenses
(3,108,094)
(664,153)
Other operating expenses
(3,132)
(358)
Operating profit
5
923,219
82,841
Interest payable and similar expenses
8
(3,796)
(3,824)
Profit before taxation
919,423
79,017
Tax on profit
9
(243,571)
(33,166)
Profit for the financial year
675,852
45,851

The profit and loss account has been prepared on the basis that all operations are continuing operations.

EPASSI UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Year
Period
ended
ended
2023
2022
£
£
Profit for the year
675,852
45,851
Other comprehensive income
-
-
Total comprehensive income for the year
675,852
45,851
EPASSI UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
85,224
-
0
Tangible assets
11
66,746
62,600
Investments
12
100
100
152,070
62,700
Current assets
Debtors
14
20,206,338
14,838,674
Cash at bank and in hand
2,824,403
1,501,590
23,030,741
16,340,264
Creditors: amounts falling due within one year
15
(22,478,966)
(16,199,971)
Net current assets
551,775
140,293
Total assets less current liabilities
703,845
202,993
Creditors: amounts falling due after more than one year
16
-
0
(175,000)
Provisions for liabilities
Deferred tax liability
18
13,122
13,122
(13,122)
(13,122)
Net assets
690,723
14,871
Capital and reserves
Called up share capital
20
116
116
Share premium account
45,384
45,384
Capital redemption reserve
20
20
Profit and loss reserves
645,203
(30,649)
Total equity
690,723
14,871

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true

The financial statements were approved by the board of directors and authorised for issue on 11 March 2024 and are signed on its behalf by:
Y E Rantala
Director
Company registration number 03997432 (England and Wales)
EPASSI UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 October 2022
116
45,384
20
(76,500)
(30,980)
Period ended 31 December 2022:
Profit and total comprehensive income
-
-
-
45,851
45,851
Balance at 31 December 2022
116
45,384
20
(30,649)
14,871
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
675,852
675,852
Balance at 31 December 2023
116
45,384
20
645,203
690,723
EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Epassi UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 14 Mill Road, Burgess Hill, RH15 8DR.

1.1
Comparative reporting period

In the prior period, the company changed its accounting period to 31 December 2022 in order to align with its parent company's year end. As such the comparative period is for the three months to 31st December 2022.

1.2
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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

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

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

 

 

The financial statements of the company are consolidated in the financial statements of Epassi Group OY. These consolidated financial statements are available from its registered office, Linnoitustie 11, 02600 Espoo, Vaasanpuistikko 14 A 19 65100 Vaasa, Finland.

The company has taken advantage of the exemption under section 405 of the Companies Act 2006 not to prepare consolidated accounts. This is on the basis that the Incorpore Gymflex Limited (fully owned subsidiary) is dormant and its inclusion is not material for the purpose of giving true and fair view. The financial statements present information about the company as an individual entity and not about its group.

1.3
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.4
Turnover

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

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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

Development costs
33% on cost
1.6
Tangible fixed assets

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

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

Plant and machinery
25% on reducing balance
Fixtures and fittings
25% on reducing balance
Computer equipment
33% on reducing balance

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

1.7
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.8
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Cash and cash equivalents

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

1.10
Financial instruments

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

 

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

 

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

Basic financial assets

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

EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

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

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

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

1.12
Taxation

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

EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Current tax

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

Deferred tax

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

 

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

1.13
Employee benefits

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

 

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

 

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

1.14
Retirement benefits

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

1.15
Leases

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

1.16
Foreign exchange

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

EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Development cost

The company recognises development costs as intangible assets which represent staff costs incurred for the enhancement of the company website. The costs incurred for the maintenance of the website are recognised in the profit and loss account. This requires estimation by management to allocate the staff costs between enhancement and maintenance tasks. Management have based their estimate on internal data, diligently categorising each task and designating them as either maintenance or enhancement tasks. The cost split is to be reviewed on a yearly basis.

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Gymflex sales
26,436,141
4,171,126
Non-Gymflex sales
1,727,746
366,236
Other income
159,328
3,582
28,323,215
4,540,944
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional item - Admin costs
127,209
30,564

The exceptional cost included within admin expenses relates to one-off costs incurred by the company in relation to the sale of shareholding to Epassi Group Oy.

EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
5
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Exchange losses
3,132
358
Fees payable to the company's auditor for the audit of the company's financial statements
35,000
30,000
Depreciation of owned tangible fixed assets
22,608
3,102
Amortisation of intangible assets
22,776
6,366
Operating lease charges
78,885
23,718
6
Employees

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

2023
2022
Number
Number
Customer support
16
15
Sales & Marketing
12
11
HR & Administration
13
12
Total
41
38

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,724,644
324,117
Social security costs
188,507
52,789
Pension costs
75,948
13,351
1,989,099
390,257
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
637,705
182,673
Company pension contributions to defined contribution schemes
9,318
2,250
647,023
184,923
EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 19 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
345,586
37,256

The directors are considered to be the key management personnel of the company.

8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
3,796
3,824
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
243,571
10,207
Adjustments in respect of prior periods
-
0
18,724
Total current tax
243,571
28,931
Deferred tax
Origination and reversal of timing differences
-
0
4,235
Total tax charge
243,571
33,166
EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 20 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
919,423
79,017
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
216,248
15,013
Tax effect of expenses that are not deductible in determining taxable profit
29,015
1,518
Permanent capital allowances in excess of depreciation
(7,014)
(1,952)
Depreciation on assets not qualifying for tax allowances
5,322
2,315
Under/(over) provided in prior years
-
0
16,272
Taxation charge for the year
243,571
33,166
10
Intangible fixed assets
Development costs
£
Cost
At 1 January 2023
2,123,450
Additions - internally developed
108,000
At 31 December 2023
2,231,450
Amortisation and impairment
At 1 January 2023
2,123,450
Amortisation charged for the year
22,776
At 31 December 2023
2,146,226
Carrying amount
At 31 December 2023
85,224
At 31 December 2022
-
0
EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
11
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2023
84,533
59,426
153,441
297,400
Additions
3,359
387
23,008
26,754
At 31 December 2023
87,892
59,813
176,449
324,154
Depreciation and impairment
At 1 January 2023
57,204
38,620
138,976
234,800
Depreciation charged in the year
6,614
5,270
10,724
22,608
At 31 December 2023
63,818
43,890
149,700
257,408
Carrying amount
At 31 December 2023
24,074
15,923
26,749
66,746
At 31 December 2022
27,329
20,806
14,465
62,600
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
100
100
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Incorpore Gymflex Limited
United Kingdom
Ordinary
100.00
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
8,184,951
6,326,410
Amounts owed by group undertakings
-
0
423
Other debtors
8,875
61,756
Prepayments and accrued income
12,012,512
8,450,085
20,206,338
14,838,674
EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
-
0
216,667
Trade creditors
2,396,238
2,186,942
Amounts owed to group undertakings
433,820
-
0
Corporation tax
272,498
51,532
Other taxation and social security
875,726
379,950
Other creditors
6,980
80,109
Accruals and deferred income
18,493,704
13,284,771
22,478,966
16,199,971
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
-
0
175,000
17
Loans and overdrafts
2023
2022
£
£
Bank loans
-
0
391,667
Payable within one year
-
0
216,667
Payable after one year
-
0
175,000

The company fully repaid bank loans during the year.

18
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
13,122
13,122
There were no deferred tax movements in the year.

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

EPASSI UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
75,948
13,351

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share capital of £1 each
116
116
116
116
21
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
58,000
58,000
Between two and five years
152,000
160,333
In over five years
190,000
199,500
400,000
417,833
22
Related party transactions

Included within creditors is £nil (2022: £52,998) owed from former shareholders.

 

The company has taken advantage of the exemption under paragraph 33 of FRS 102 not to disclose transactions entered into between two or more members of a group where the subsidiary which is party to the transaction is wholly owned by the other party. The company is a wholly owned subsidiary undertaking of Epassi Group OY which is the other party to the transactions.

23
Ultimate controlling party

On 1 April 2023, the entity was acquired by Epassi Group Oy, a company incorporated in Espoo, Finland. As a result, the ultimate parent company is now Epassi Group Oy.

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