Company Registration No. 10743074 (England and Wales)
etika Finance UK Loans SPV One Limited
Financial statements
for the year ended 31 December 2023
Pages for filing with the registrar
etika Finance UK Loans SPV One Limited
Contents
Page
Statement of financial position
1
Notes to the financial statements
2 - 6
etika Finance UK Loans SPV One Limited
Statement of financial position
As at 31 December 2023
31 December 2023
1
2023
2022
Notes
£
£
£
£
Current assets
Debtors
4
58,179,031
25,176,548
Cash at bank and in hand
15,462
127,540
58,194,493
25,304,088
Creditors: amounts falling due within one year
5
(26,501,912)
(11,557,308)
Net current assets
31,692,581
13,746,780
Creditors: amounts falling due after more than one year
6
(35,857,118)
(16,807,288)
Provisions for liabilities
(44,629)
Net liabilities
(4,164,537)
(3,105,137)
Capital and reserves
Called up share capital
1
1
Profit and loss reserves
(4,164,538)
(3,105,138)
Total equity
(4,164,537)
(3,105,137)
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 31 May 2024 and are signed on its behalf by:
John Sean Watherston
Director
Company Registration No. 10743074
etika Finance UK Loans SPV One Limited
Notes to the financial statements
For the year ended 31 December 2023
2
1
Accounting policies
Company information
etika Finance UK Loans SPV One Limited is a private company limited by shares incorporated in England and Wales. The registered office is Colony Suite 2.01, Colony, One Silk Street, Ancoats, Manchester, M4 6AG.
1.1
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The directors acknowledge the company is in a net liability position. However, as described in the Directors report, the company has the support of its parent company. As a result the directors continue to adopt a going concern basis of accounting for the preparation of the financial statements. true
1.3
Turnover
Turnover represents interest received and fees charged in the company's principal activity of providing credit finance.
1.4
Cash at bank and in hand
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.
1.5
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 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 debtors, 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.
etika Finance UK Loans SPV One Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
3
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.
1.6
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.7
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation 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 reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
etika Finance UK Loans SPV One Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
4
2
Critical accounting 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 have had the most significant effect on amounts recognised in the financial statements.
Bad debt provision
Trade debtors are recognised at the transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method. Where necessary, provisions for bad debts are considered when there is payment delinquency. Calculation of these provisions includes a model which takes into account the historical data of loan defaults and uses this data to calculate a probability of default for the loans that are in delinquency. This probability is then used and applied to the principle balance of each loan that has evidence of impairment to calculate the bad debt provision.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was 2 (2022 - 2).
2023
2022
Number
Number
Total
2
2
4
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
57,685,890
25,004,717
Other debtors
493,141
171,831
58,179,031
25,176,548
etika Finance UK Loans SPV One Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
5
5
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,228
2,452
Amounts owed to group undertakings
22,557,424
9,662,457
Other creditors
3,943,260
1,892,399
26,501,912
11,557,308
6
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
35,857,118
16,807,288
The above bank loan is due to National Westminster Bank Plc (NatWest). The loan carries an annual interest rate which is the aggregate of the applicable margin and SONIA reference rate (sterling overnight index average). The original loan was agreed on 27 November 2019 and was due to be repaid in 36 months. The bank loan facility was renegotiated on 29 June 2023 and is now due to be repaid 48 months from the seventh amendment date of the agreement which was 14 January 2022.
NatWest has a fixed and floating charge over the assets of Etika Finance UK Loans SPV One Limited. Post year end the loan is being repaid and the balance outstanding to NatWest is £8,000,000 as at the signing date. The surplus available facility has been cancelled.
7
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Lucy Brennan
Statutory Auditors:
Saffery LLP
8
Parent company
The parent company is etika Finance UK Limited and its registered office is Colony Suite 2.01 Colony, One Silk Street, Ancoats, Manchester, England, M4 6AG
etika Finance UK Loans SPV One Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
6
9
Prior period adjustment
A prior year restatement has been disclosed to reclassify the non-utilisation fee of £268,609 and bank interest of £282,045 from Cost of sales in the Income Statement to the Interest payable and similar expenses in the Income Statement. In addition to the above, amortisation costs of £94,212 have been reclassified from Interest payable and similar expenses in the Income Statement to Administrative expenses in the Income Statement.
Adjustments to equity
The prior period adjustments do not give rise to any effect upon equity.