REGISTERED NUMBER: |
European Servicing Company Limited |
Directors' Report and |
Financial Statements |
for the Year Ended 31 July 2023 |
REGISTERED NUMBER: |
European Servicing Company Limited |
Directors' Report and |
Financial Statements |
for the Year Ended 31 July 2023 |
European Servicing Company Limited (Registered number: 09707697) |
Contents of the Financial Statements |
for the year ended 31 July 2023 |
Page |
Company Information | 1 |
Directors' Report | 2 |
Independent Auditors' Report | 3 |
Income Statement | 6 |
Other Comprehensive Income | 7 |
Balance Sheet | 8 |
Statement of Changes in Equity | 9 |
Notes to the Financial Statements | 10 |
European Servicing Company Limited |
Company Information |
for the year ended 31 July 2023 |
Directors: |
Secretary: |
Registered office: |
Registered number: |
Auditors: |
Statutory Auditor |
New Derwent House |
69-73 Theobalds Road |
London |
WC1X 8TA |
European Servicing Company Limited (Registered number: 09707697) |
Directors' Report |
for the year ended 31 July 2023 |
The directors present their report with the financial statements of the Company for the year ended 31 July 2023. |
Dividends |
The total distribution of dividends for the year ended 31 July 2023 was £Nil (2022 - £5,349,496). |
Directors |
The directors shown below have held office during the whole of the period from 1 August 2022 to the date of this report. |
Auditors |
The audit business of Haines Watts London LLP was acquired by Cooper Parry Group Limited on 14 November 2023. Haines Watts London LLP has resigned as auditor and Cooper Parry Group Limited has been appointed in its place. |
Statement of directors' responsibilities |
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 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: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements 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 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 as to disclosure of information to auditors |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information. |
Auditors |
The auditors, Cooper Parry Group Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
On behalf of the board: |
Independent Auditors' Report to the Members of |
European Servicing Company Limited |
Opinion |
We have audited the financial statements of European Servicing Company Limited (the 'Company') for the year ended 31 July 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the Company's affairs as at 31 July 2023 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 directors are responsible for the other information. The other information comprises the information in the Directors' Report, but does not include the financial statements and our Auditors' Report thereon. |
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. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit: |
- | the information given in the Directors' Report for the financial year 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. |
Independent Auditors' Report to the Members of |
European Servicing Company Limited |
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 where 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' exemption from the requirement to prepare a Strategic Report. |
- the directors were not entitled to take advantage of the small companies exemption from the requirement to prepare a strategic report. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities, 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 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. |
We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates, and considered the risk of acts by the Company that were contrary to applicable laws and regulations, including fraud. We discussed with management the policies and procedures in place regarding compliance with laws and regulations. We discussed amongst the audit team the identified laws and regulations, and remained alert to any indications of non-compliance. |
During the audit we focused on laws and regulations which could reasonably be expected to give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. |
Our procedures in relation to fraud included but were not limited to: inquiries of management whether they have any knowledge of any actual, suspected or alleged fraud, and discussions amongst the audit team regarding the risk of fraud such as opportunities for fraudulent manipulation of financial statements. We determined that the principal risks related to posting manual journal entries to manipulate financial performance and management bias through judgements in accounting estimates. We also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. Our tests include agreeing the financial statement disclosures to underlying supporting documentation. |
Independent Auditors' Report to the Members of |
European Servicing Company Limited |
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 regulations. 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. In assessing the potential risks of material misstatement we obtained an understanding of; the entities operations, including the nature of its revenue sources and services and of its objectives and strategies to understand the classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement. We did not identify any matters relating to non-compliance with laws and regulations relating to fraud. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our 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. |
for and on behalf of |
Statutory Auditor |
New Derwent House |
69-73 Theobalds Road |
London |
WC1X 8TA |
European Servicing Company Limited (Registered number: 09707697) |
Income Statement |
for the year ended 31 July 2023 |
2023 | 2022 |
Notes | £ | £ |
Turnover |
Cost of sales | ( |
) |
Gross profit |
Administrative expenses | ( |
) | ( |
) |
Operating profit |
Interest receivable and similar income |
Profit before taxation | 4 |
Tax on profit | ( |
) | ( |
) |
Profit for the financial year |
European Servicing Company Limited (Registered number: 09707697) |
Other Comprehensive Income |
for the year ended 31 July 2023 |
2023 | 2022 |
Notes | £ | £ |
Profit for the year |
Other comprehensive income | - | - |
Total comprehensive income for the year |
European Servicing Company Limited (Registered number: 09707697) |
Balance Sheet |
31 July 2023 |
2023 | 2022 |
Notes | £ | £ |
Current assets |
Debtors | 5 |
Cash at bank |
Creditors |
Amounts falling due within one year | 6 |
Net current assets |
Total assets less current liabilities |
Capital and reserves |
Called up share capital | 8 |
Retained earnings | 9 |
Shareholders' funds |
The financial statements were approved by the Board of Directors and authorised for issue on |
European Servicing Company Limited (Registered number: 09707697) |
Statement of Changes in Equity |
for the year ended 31 July 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 August 2021 |
Changes in equity |
Total comprehensive income | - |
Dividends | - | ( |
) | ( |
) |
Balance at 31 July 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 July 2023 |
European Servicing Company Limited (Registered number: 09707697) |
Notes to the Financial Statements |
for the year ended 31 July 2023 |
1. | Statutory information |
European Servicing Company Limited is a |
2. | Accounting policies |
Basis of preparing the financial statements |
The financial statements have been prepared under the historical cost convention. |
The financial statements have not been prepared on going concern basis as explained within the 'basis other than going concern' paragraph of this note. |
Set out below is a summary of the principal accounting policies, all of which have been applied consistently (except as otherwise stated). The financial statements are presented in British Pound Sterling (£). |
Related party exemption |
The Company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Significant judgements and estimates |
In applying the Company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ. |
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, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. |
Critical judgements in applying the Company's accounting policies |
The critical judgement that the directors have made in the process of applying the company's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below: |
(i) Assessing indicators and impairment |
In assessing whether there have been any indicators or impairment assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience or recoverability. There have been no indicators or impairments identified during the current financial year. |
Key sources of estimation uncertainty |
The key assumptions concerning the future, and other key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: |
(i) Recoverability of receivables |
The Company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the ageing of the receivables, past experience and recoverability, and the credit profile of individual or groups of customers. |
European Servicing Company Limited (Registered number: 09707697) |
Notes to the Financial Statements - continued |
for the year ended 31 July 2023 |
2. | Accounting policies - continued |
Turnover |
Turnover is derived from the provision of services to structured finance entities for the administration and management of securitised receivables, net of value added tax and trade discounts and is recognised when services are rendered. |
Foreign currencies |
Foreign currency transactions are translated into functional currency using the exchange rate prevailing at that date the transaction took place. Where this is not possible to determine, income and expense items are translated using an average exchange rate for the period. |
Monetary assets and liabilities denominated in foreign currencies at the reporting date are reported at the rates of exchange prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the reporting date of monetary assets and liabilities are reported in the income statement. |
Provisions |
Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that the obligation will be required to be settled, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period taking into account the risks and uncertainties surrounding the obligation. Provisions are discounted when the time value of money is material. |
Equity |
Equity instruments are classified in accordance with the substance of contractual agreement. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. |
Equity instruments issued by the Company are recorded at the fair value of the cash or other resources received or receivable, net of direct costs of issuing the equity instruments. |
Financial instruments |
Financial assets and liabilities are recognised when the Company becomes party to the contractual provisions of the financial instrument. The Company holds basic financial instruments which comprise cash at bank, trade and other receivables, and trade and other payables. The Company has chosen to apply the provisions of Section 11 Basic Financial Instruments in full. |
Financial assets - classified as basic financial instruments |
(i) Cash at bank and in hand |
Cash at bank and in hand include cash in hand, deposits held with banks, and other short-term highly liquid investments with original maturities of three months or less. |
(ii) Trade and other receivables |
Trade and other receivables are initially recognised at the transaction price, including any transaction costs. Amounts that are receivable within one year are measured at the undiscounted amount of the cash expected to be received, net of any impairment. |
At the end of each reporting period, the Company assesses whether there is objective evidence that an receivable amount may be impaired. A provision for impairment is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of the estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised immediately in profit or loss. |
European Servicing Company Limited (Registered number: 09707697) |
Notes to the Financial Statements - continued |
for the year ended 31 July 2023 |
2. | Accounting policies - continued |
Financial Liabilities - classified as basic financial instruments |
(iii) Trade and other payables and loans and borrowings |
Trade and other payables and loans and borrowings are initially measured at the transaction price, including any transaction costs, and subsequently measured at amortised cost using the effective interest method. Amounts that are payable within one year are measured at the discounted amount of the cash expected to be paid. |
Going concern |
These financial statements have been prepared on a going concern basis. |
The current economic conditions present increased risks for all businesses. The directors have reviewed and considered relevant information, including the annual budget in making their assessment. In response to such conditions, the directors have carefully considered these risks including an assessment on uncertainty on future trading projection for a period of at least 12 months from the date of signing the financial statements, and the extent to which they might affect the preparation of the financial statements on a going concern basis. |
Based on assessment, the directors consider that the Company maintains an appropriate level of liquidity, including the ability to realise further assets, sufficient to meet the demands of the business including any capital and servicing obligations and external debt liabilities. |
In addition, the Company's assets are assessed for recoverability on a regular basis, and the directors consider that the Company is not exposed to losses on these assets, which would affect their decision to adopt the going concern basis. |
The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and that there are no material uncertainties that lead to significant doubts upon the Company's ability to continue as a going concern. Thus, the directors have continued to adopt the going concern basis of accounting in preparing these financial statements. |
3. | Employees and directors |
The average number of employees during the year was 0 (2022 - 1). |
4. | Profit before taxation |
The profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Auditors' remuneration |
Foreign exchange differences | ( |
) |
5. | Debtors: amounts falling due within one year |
2023 | 2022 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Tax |
VAT |
Accrued income |
Amounts owed by group undertakings relates to a treasury agreement with the parent company to sweep excess cash, interest of 1% (2022: Euribor plus 2%) is received. The amount is repayable on demand. |
European Servicing Company Limited (Registered number: 09707697) |
Notes to the Financial Statements - continued |
for the year ended 31 July 2023 |
6. | Creditors: amounts falling due within one year |
2023 | 2022 |
£ | £ |
Trade creditors |
Tax |
Social security and other taxes |
VAT | - | 6 |
Accruals and deferred income |
7. | Financial instruments |
The Company’s financial instruments may be analysed as follows: |
2023 | 2022 |
£ | £ |
Financial assets |
Financial assets that are measured at amortised cost | 1,063,973 | 932,227 |
Financial liabilities |
Financial liabilities measured at amortised cost | 164,653 | 163,585 |
Financial assets measured at amortised cost comprise cash, trade debtors, amounts owed by group undertakings, other debtors and accrued income. |
Financial liabilities measured at amortised cost comprise trade creditors, other creditors and accruals. |
8. | Called up share capital |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 300,000 | 300,000 |
9. | Reserves |
Retained |
earnings |
£ |
At 1 August 2022 |
Profit for the year |
At 31 July 2023 |
European Servicing Company Limited (Registered number: 09707697) |
Notes to the Financial Statements - continued |
for the year ended 31 July 2023 |
10. | Ultimate controlling party |
The ultimate controlling party is |
Ultimate parent company |
The registered address is: |
Corporation Financiére Européenne S.A. |
32 Boulevard Royal |
L-2449 Luxembourg |
A copy of the group accounts can be requested from here. |