The director presents the strategic report for the year ended 31 December 2023.
The principal activity of Tribe Payments Limited ("Tribe") is providing payments technology to financial services businesses globally. This includes, but is not limited to, solutions for processing payments (both issuing and acceptance), digital wallets, gateways, banking services and risk management.
Tribe and its subsidiaries have seen a continued growth in both investment, technology and skilled staffing as it looks towards a bright future in 2024 and beyond. Tribe is now gaining recognition from its partners, clients and the market generally as a “future ready” technology solution for use by banks and fintechs, alike, empowering them to offer innovative payments solutions to their clients.
Employees
The company and the group companies have offices in the UK, Lithuania and Moldova.
Tribe had 177 staff and board members across the group at December 2023. Tribe is cognisant of and committed to equality and diversity.
The overall make up of staff at the financial reporting date was 115 male and 62 female. The Senior Management team consists of 5 males and 3 females.
Like other companies in the payments industry Tribe encounters various risks and uncertainties related to growth management, facing competitive pressures, past net losses and dependence on relationships with issuers and card networks. These factors could impact our future growth rates, ability to compete effectively, and achievement of business objectives.
The business has and will continue to grow rapidly, management of the operational and financial risks inherent in this growth are monitored and assessed on a regular basis.
Financial Performance
Due to new business wins, an increase in customer projects going live and successful cross selling, Tribe experienced a 68% growth in revenue, rising from £2,971,924 in 2022 to £5,005,849 in 2023. As part of the maturation of the business, we continue to adapt accounting policies to reflect the reality of the business. Consequently we saw a significant increase in the cost of sales. Despite this, Tribe managed to boost its Gross Profit by 42%, achieving a Gross Margin of 78.3%.
Tribe remains very much a growth stage business, but is rapidly driving towards profitability. Tribe significantly reduced its EBITDA loss from £1,725,580 in 2022 to £383,758 in 2023. Additionally, the loss before taxation was maintained with only a slight increase of 5.7%, from £5,214,201 in 2022 to £5,509,892 in 2023.
Tribe has continued to acquire new customers at a positive rate concurrent with 2023. It continues to invest in its technology and products ensuring that it is extremely well placed to capitalise on the existing customer base and market opportunities that 2024 provide. Fintech, banking and the payments space in general remains an area of global importance and interest.
Product Development
Tribe has grown it’s employee base, focussed on building technology capability and bringing in more experienced payments specialists as it readies itself for success in 2024 and beyond.
Product development has focussed both on building scalability and resilience on the core system ISAAC. It has also allowed Tribe to deliver new products and features both to its customers and to the market, these are beginning to monetise.
Tribe anticipates continuing to invest in both staff and technology as it further proves itself in the market both in Europe and continues to capitalise on its early expansion into other regions. With its connectivity into a multitude of payment schemes including Visa, Mastercard, Union Pay International, Discover, AMEX and JCB alongside its banking connectivity and Open Banking module, Tribe is well equipped to accelerate its growth and capitalise on new opportunities as its platform scales.
Tribe's international expansion strategy saw it enable further scheme connectivity in the form of Discover certification enabling it to expand into Asia-Pacific (APAC).
In addition to its Asia expansion, Tribe has also formed a strategic partnership with American Express in Latin America which has enabled it to certify for both its Issuing and Acquiring services. Through 2023 this saw it win several pieces of business in the region.
During 2023 Tribe also expanded its capabilities in payments acceptance with the creation of a POS application enabling face to face payments for its acquiring customers. This initial development will be expanded through 2024 to enable soft POS and mobile acceptance putting Tribe at the forefront of payments acceptance.
Whilst Tribe continues to focus on product development it saw a 46% increase in transaction volume demonstrating the elastic scalability of the platform. It has doubled its transactions per second to enable continued growth whilst also focusing on upgrading it’s security and stability to offer peace of mind to its customers.
Tribe has always been a cloud first environment, it has been supporting customers using a mixture of inhouse and external environments. A decision was made in 2023 to move all customers to external cloud environments to further enhance scalability and resilience, this currently is on track for delivery in 2024.
Additionally Tribe is continuing to invest in security of its products and internal processes. In Q1 2024, Tribe achieved the ISO 27001 certification.
The company uses key performance indicators (“KPIs”) to measure itself against past performance as well as the performance of its competitors.
Internal KPIs
Management continues to monitor KPI's including turnover, expenditure, working capital , debt, number of live clients, total contractual value and platform uptime and use these as benchmarks to ascertain how the business is performing against historical results.
Underlying KPIs are then analysed by senior management to understand the reasons for any variance to ensure it is able to identify opportunities or threats to the business model.
These underlying KPIs include average time in implementation, average time to close client raised tickets, transaction volume and various others.
The use of internal KPIs are preferable as the results can be reliably measured and are not subject to external fluctuations in reporting.
External KPIs
The purpose of monitoring and analysing external data is to allow management to measure the performance of the business against the performance of competitors and the market as a whole.
Primarily external KPIs are used by management to plot trends in the market to assist the business in targeting areas of growth in the industry. By using KPIs such as average spend by sector and cross border spending activity, management can see which areas are in growth or in decline and allocate resources accordingly.
Environmental Impact
The company actively looks at ways of reducing its carbon footprint and the amount of waste it generates during its course of business. It has introduced a number of policies to enable this to happen, such as recycling all “recyclables” and digital document signatures to reduce print volumes.
The company has a policy of minimising travel, especially air travel, where possible and encourages the use of technology for internal and external meetings.
In 2023, Tribe is continuing to invest in its core technology platform in an efficient and scalable manner as well as developing further product features that will be coming to the market in the near future.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 December 2023.
The group's head office is located in the UK with subsidiary companies based in Lithuania and Moldova.
The results for the year are set out on page 11.
No ordinary dividends were paid. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The group's finance department are responsible for managing the liquidity, interest and foreign currency risks associated with the group’s activities.
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
The group is exposed to fair value interest rate risk on its fixed rate borrowings. The group utilises fixed rate debt so as to reduce its exposure to changes in interest rates.
The group’s principal foreign currency exposures arise from trading with overseas companies. The group holds bank accounts in multiple currencies in order to mitigate against this risk.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Anova Chartered Accountants were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
We have audited the financial statements of Tribe Payments Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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).
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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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.
Material uncertainty related to going concern
We draw attention to note 1.3 in the financial statements, which indicates that the group continues to prepare accounts on a going concern basis despite a loss being incurred, and the net liability position. As stated in note 1.3, these events or conditions, along with other matters as set forth in note 1.3, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the director's assessment of the entity's ability to continue to adopt the going concern basis of accounting included review of management accounts and forecasts which indicate ongoing trading and increased sales generation from new and existing customers and regions, as well as support pledged by the company's main lender in the form of further loan finance.
Our responsibilities and the responsibilities of the director 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 annual report other than the financial statements and our auditor's report thereon. The director is 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:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the parent 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 director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
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 auditor's 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.
We identify and assess risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non- compliance with laws and regulations, we considered the following:
the nature of the industry and sector, control environment and business performance;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
any matters we identified having obtained and reviewed the company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the company operates in. The key laws and regulations we considered in this context included the UK Companies Act, tax legislation and Data Protection.
In addition we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.
As a result of performing the above, we did not identify any key matters related to the potential risk of fraud or non- compliance with laws and regulations.
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reviewing minutes of meetings of those charged with governance, reviewing internal reports and reviewing correspondence with HMRC, and;
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are indicative of a potential bias and evaluating the business rationale for any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indication of fraud or non-compliance with laws and regulations throughout the audit.
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 auditor's 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 auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £4,405,167 (2022 - £3,926,750 loss).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Tribe Payments Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 18 King William Street, London, England, EC4N 7BP.
The group consists of Tribe Payments Limited and all of its subsidiaries.
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.
The consolidated group financial statements consist of the financial statements of the parent company Tribe Payments Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Tribe Payments UAB & Tribe Payments SRL have been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of Tribe Payments UAB & Tribe Payments SRL for the 12 month period. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.
These financial statements are prepared on the going concern basis. The director has a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the director is aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.
Despite the loss incurred during the year the director continues to prepare the accounts on a going concern basis not withstanding the net liability balance sheet position. Due to the nature of its business, the company requires sufficient funding from its creditors in order to develop its technology for licensed sale. Since the balance sheet date it has increased its customer base and is making recurring revenue, and forecasts prepared for 2024 and beyond show significant improvements including a number of new customers acquired in Q1. The ultimate beneficial owner has also pledged his support to the company for at least the next 12 months, from the date of the director's report.
Turnover is recognised at the fair value of the consideration received or receivable for set-up and recurring technology-based services provided in the normal course of business, and is shown net of VAT. The fair value of consideration takes into account trade and settlement discounts.
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.
Revenue relating to the development of software for customers is recognised in the period in which the development work is carried out by the company's implementation team.
Revenue from the provision of monthly services is recognised in the month in which the software is provided for use by the customer, and revenue from transaction based fees is recognised in the period in which the transactions took place within the customer's software.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
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 recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. 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 group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
The expense in relation to options over the parent company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
In the application of the group’s accounting policies, the director is 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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The Senior Management team have reviewed the useful lives of database costs and consider that a period of 5 years continues to be suitable for this type of asset.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
The number of directors who are entitled to receive shares under long term incentive schemes during the year was 1 (2022 - 0).
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 December 2023 are as follows:
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above relates to the utilisation of tax losses against future expected profits and the accelerated capital allowances.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The options outstanding at 31 December 2023 had an exercise price of either £0.0001, £3.63 or £2.28, and an average remaining contractual life of 3.45 years.
Share options under the company's Unapproved Share Option Scheme vest quarterly over a vesting period of 48 months. Once exercised, the employee will receive one B Ordinary (Non-Voting) share per option with a par value of £0.0001 each.
Options can be exercised semi-annually between 1 January to 15 January and 1 July to 15 July during employment with the company, or within 45 days of leaving the company.
The options outstanding at 31 December 2023 had an exercise price of either £0.0001, £3.63 or £2.28, and an average remaining contractual life of 3.45 years.
Share options under the company's Unapproved Share Option Scheme vest quarterly over a vesting period of 48 months. Once exercised, the employee will receive one B Ordinary (Non-Voting) share per option with a par value of £0.0001 each.
Options can be exercised semi-annually between 1 January to 15 January and 1 July to 15 July during employment with the company, or within 45 days of leaving the company.
The company approved a new class of share - B Ordinary (Non-Voting) shares with a par value of £0.0001 during the previous financial year, and are reserved for issue under the company's share option schemes. As at 31 December 2023 the company had granted 43,761 shares under these schemes.
During the year ended 31 December 2023, the company made an allotment of shares to issue 18 B Ordinary shares with a par value of £0.0001 each.
The equity reserve represents the capital contribution following the discounting of the company's loan borrowings to net present value. This will be unwound over the period until full repayment by 31 December 2026.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel (excluding directors) is as follows.
Tribe Technology APS - Related party under common control
During the year under review, the company traded with Tribe Technology under normal commercial terms and purchased services amounting to £nil (2022: -£616). As at the balance sheet date, the company owed £nil (2022: £nil).
Moorwand Ltd - Related party under common control
During the year under review, the company traded with Moorwand Ltd under normal commercial terms and purchased services amounting to £101,193 (2022: £86,112), sold services amounting to £349,077 (2022: £354,852). As at the balance sheet date, the company was owed £26,170 (2022: £18,456).
UPC Media SRL - Related party under common control
During the year under review, the company and subsidiaries traded with UPC Media SRL under normal commercial terms and purchased services amounting to £15,432 (2022: £1,050,724). As at the balance sheet date, the company was owed £nil (2022: £nil).
Olianco Ltd - Related by virtue of significant financial interests in the company, as a large creditor
During the year under review, the company traded with Olianco Ltd and was provided funding amounting to £5,472,653 (2022: £4,751,588). Interest of £965,871 (2022: £351,878) was charged on the loan. As at the balance sheet date, the company owed £27,471,254 (2022: £21,506,535). Interest is accruing at 4% per annum from 1 January 2023, up to a maximum loan of €35,000,000 and 0% thereafter.
Justine Emmett - Shareholder of former ultimate parent company
During the year under review, the company traded with Justine Emmett under normal commercial terms and purchased services amounting to £72,000 (2022: £60,000). As at the balance sheet date, the company owed £7,000 (2022: £nil).
Wael Almaree - Ultimate Beneficial Owner
During the year under review, the company and subsidiaries employed Wael Almaree as a Technical Director under normal commercial terms and paid total salaries amounting to £413,952 (2022: £174,510). As at the balance sheet date, the company owed £nil (2022: £nil).