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Company registration number: 08270892







ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023


NETPAY SOLUTIONS GROUP LIMITED






































img632c.png                        

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
COMPANY INFORMATION


Directors
N Motyer (resigned 1 March 2023)
A Baninajar (appointed 17 October 2022)
S Kilkelly (appointed 19 May 2023, resigned 24 May 2024)




Registered number
08270892



Registered office
Janus House
Endeavor Drive

Basildon

Essex

SS14 3WF




Independent auditors
Menzies LLP
Chartered Accountants & Statutory Auditor

3000a Parkway

Whiteley

Hampshire

PO15 7FX





 


NETPAY SOLUTIONS GROUP LIMITED
 



CONTENTS



Page
Group strategic report
1 - 2
Directors' report
3 - 4
Independent auditors' report
5 - 8
Consolidated statement of income and retained earnings
9
Consolidated statement of financial position
10 - 11
Company statement of financial position
12
Consolidated statement of cash flows
13
Consolidated analysis of net debt
14
Notes to the financial statements
15 - 32


 


NETPAY SOLUTIONS GROUP LIMITED
 


 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
NetPay Solutions Group Limited (“NetPay”) is a management holding company incorporating two principal trading businesses, NetPay Merchant Services Limited (“NPMS”) and Technologi Worldwide Limited (“technologi”). The group is a provider of payment services and associated technology infrastructure. 
NPMS provides face to face and online payment services through strategic partnerships across a number of sectors including telecoms, IT, utilities, cash and carry and convenience. NPMS services customers across the UK.
technologi is a provider of payments infrastructure including merchant on-boarding, AML/KYC, credit risk assessment/underwriting and transaction settlement/instructional funding and billing services to acquiring banks, payment facilitators and ISO’s across the world. 

Business review
 
On 15th November 2021 100% of the share capital of NetPay Solutions Group Limited was acquired by FDR UK Limited a subsidiary of Fiserv Inc (NASDAQ: FISV) having previously owned a 40% minority share since December 2018. The acquisition also included 100% of all shares in both NPMS and technologi.
The shorter reporting period in prior year of May 21 to December 21 was to align with the wider Fiserv Inc reporting period. Post-acquisition, FDR UK Limited incorporated the acquired NetPay business within its pre-existing operations with a clear focus on internal priorities and initiatives, broadening the proposition for strategic customers and maximising the performance of the business. 
NetPay continues as a going concern whilst integration options are reviewed, and the merchant base is migrated in future reporting periods.

Principal risks and uncertainties
 
The increase in inflation and interest rates and the rising cost of living for households as well as the cost pressures on businesses was the main risk as the economic recovery post pandemic slowed down. 
We anticipate a reduction in both inflationary pressures and interest rates in 2024 and economic growth which impacts consumer spend and drives up merchant applications.

Financial key performance indicators
 
For the year ended 31 December 2023 the business delivered revenue of £3.3m (2022: £9.9m). Operating loss was £2m (2022: profit of £1.6m) driven by a continued harmonisation in accounting approach with the wider Fiserv Inc business and as the business sought to exit a small number of non-core, non-strategic customer projects.

Other key performance indicators
 
For technologi, other than revenue the key measures of performance are the volume of merchant applications boarded through the platform throughout the period and the aggregate number of merchant applications serviced by the capability delivered to customers. During the year ended 31 December 2023  technologi boarded 69,261 new merchants (2022: 77,676) through its platforms, increasing the total number of merchants serviced to 469,937 (2022: 400,676). 
As the business becomes more seamlessly integrated within the FDR UK Limited business there are likely to be changes in future revenue and profitability based on the outcome of the integration decisions. 

Page 1

 


NETPAY SOLUTIONS GROUP LIMITED
 



GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Future Developments (Research and Development)

Through its subsidiary technologi, there is significant research and development of new technology that could enable payments businesses to capitalise on growing market opportunities, reduce the overhead of bringing new customers on-board (both commercially and operationally), identify and reduce risk (credit and fraud risk), empower the customers of those payments businesses to manage their services proactively as well as support complex funding and settlement requirements through leading payments and financial technology. 
technologi continues to create leading merchant boarding, AML, credit risk assessment and monitoring and money movement solutions for payments businesses globally.


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



A Baninajar
Director

Date: 10 September 2024

Page 2

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation, amounted to £2,016,505 (2022 - profit £1,254,379).

Directors

The directors who served during the year were:

N Motyer (resigned 1 March 2023)
A Baninajar (appointed 17 October 2022)
S Kilkelly (appointed 19 May 2023, resigned 24 May 2024)

Future developments

Please refer to the strategic report.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Page 3

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Auditors

Under section 487(2) of the Companies Act 2006Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

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





A Baninajar
Director

Date: 10 September 2024

Page 4

 


NETPAY SOLUTIONS GROUP LIMITED
 

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NETPAY SOLUTIONS GROUP LIMITED

Opinion


We have audited the financial statements of NetPay Solutions Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated statement of income and retained earnings, the Consolidated statement of financial position, the Company statement of financial position, the Consolidated statement of cash flows and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's loss 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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent 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 Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Page 5

 


NETPAY SOLUTIONS GROUP LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NETPAY SOLUTIONS GROUP LIMITED (CONTINUED)

Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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:


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.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, 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 Group's and 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 directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 


NETPAY SOLUTIONS GROUP LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NETPAY SOLUTIONS GROUP LIMITED (CONTINUED)

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 Group 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:

The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation, and general regulations such as health and safety, general data protection regulation and copyright law. There are no industry specific laws and regulations which would be deemed to have a significant impact on the financial statements. We assessed the extent of compliance with the appropriate laws and regulations as part of our procedures on the related financial statement items.
We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of Board minutes.
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
- Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
- Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
- Challenging assumptions and judgments made by management in its significant accounting estimates; and
- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
- Posting of unusual journals and complex transactions;
- Misappropriation of funds through fraudulent supplier ledger and payroll activity; and
- Manipulation of amounts subject to significant judgement or estimate.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.


Page 7

 


NETPAY SOLUTIONS GROUP LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NETPAY SOLUTIONS GROUP LIMITED (CONTINUED)

Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





James Hadfield FCA (Senior statutory auditor)
  
for and on behalf of
Menzies LLP
 
Chartered Accountants
Statutory Auditor
  
3000a Parkway
Whiteley
Hampshire
PO15 7FX

10 September 2024
Page 8

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 3 
3,310,752
9,898,687

Cost of sales
  
(1,731,449)
(2,840,400)

Gross profit
  
1,579,303
7,058,287

Administrative expenses
  
(3,578,243)
(5,687,336)

Exceptional administrative expenses
  
(9,796)
(29,587)

Other operating income
 4 
-
277,369

Operating (loss)/profit
 5 
(2,008,736)
1,618,733

Interest receivable and similar income
 8 
150
844

Interest payable and similar expenses
 9 
(211,761)
(27,737)

(Loss)/profit before tax
  
(2,220,347)
1,591,840

Tax on (loss)/profit
 10 
203,842
(337,461)

(Loss)/profit after tax
  
(2,016,505)
1,254,379

  

  

Retained earnings at the beginning of the year
  
1,238,185
(16,194)

  
1,238,185
(16,194)

(Loss)/profit for the year attributable to the owners of the parent
  
(2,016,505)
1,254,379

Retained earnings at the end of the year
  
(778,320)
1,238,185

  

The notes on pages 15 to 32 form part of these financial statements.

Page 9

 


NETPAY SOLUTIONS GROUP LIMITED
REGISTERED NUMBER:08270892



CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
6,049,707
7,524,952

Tangible assets
 13 
128,933
203,182

  
6,178,640
7,728,134

Current assets
  

Stocks
 15 
5,343
3,710

Debtors: amounts falling due within one year
 16 
787,872
1,672,863

Cash at bank and in hand
 17 
192,707
464,997

  
985,922
2,141,570

Creditors: amounts falling due within one year
 18 
(669,351)
(5,031,103)

Net current assets/(liabilities)
  
 
 
316,571
 
 
(2,889,533)

Total assets less current liabilities
  
6,495,211
4,838,601

Creditors: amounts falling due after more than one year
 19 
(3,962,991)
(45,293)

Provisions for liabilities
  

Deferred taxation
 21 
(254,953)
(518,123)

Other provisions
 22 
(104,587)
(86,000)

  
 
 
(359,540)
 
 
(604,123)

  

Net assets
  
2,172,680
4,189,185

Page 10

 


NETPAY SOLUTIONS GROUP LIMITED
REGISTERED NUMBER:08270892


    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Called up share capital 
 23 
68
68

Share premium account
 24 
2,950,887
2,950,887

Capital redemption reserve
 24 
45
45

Profit and loss account
 24 
(778,320)
1,238,185

  
2,172,680
4,189,185


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




A Baninajar
Director

Date: 10 September 2024

The notes on pages 15 to 32 form part of these financial statements.

Page 11

 


NETPAY SOLUTIONS GROUP LIMITED
REGISTERED NUMBER:08270892



COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 13 
1,643
5,904

Investments
 14 
99
99

  
1,742
6,003

Current assets
  

Debtors: amounts falling due within one year
 16 
4,661,366
4,477,512

Cash at bank and in hand
 17 
7,225
5,917

  
4,668,591
4,483,429

Creditors: amounts falling due within one year
 18 
(26,260)
(1,967,532)

Net current assets
  
 
 
4,642,331
 
 
2,515,897

Total assets less current liabilities
  
4,644,073
2,521,900

  

Creditors: amounts falling due after more than one year
 19 
(2,209,104)
-

  

Net assets
  
2,434,969
2,521,900


Capital and reserves
  

Called up share capital 
 23 
68
68

Share premium account
 24 
2,950,887
2,950,887

Capital redemption reserve
 24 
45
45

Profit and loss account brought forward
  
(429,100)
(238,165)

Loss for the year
  
(86,931)
(190,935)

Profit and loss account carried forward
  
(516,031)
(429,100)

  
2,434,969
2,521,900


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


A Baninajar
Director

Date: 10 September 2024

The notes on pages 15 to 32 form part of these financial statements.

Page 12

 


NETPAY SOLUTIONS GROUP LIMITED
 



CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(2,016,505)
1,254,379

Adjustments for:

Amortisation of intangible assets
1,882,441
1,199,851

Depreciation of tangible assets
92,980
142,506

Loss on disposal of tangible assets
299
2,071

Interest paid
211,761
27,737

Interest received
(150)
(844)

Taxation charge
-
6,237

(Increase)/decrease in stocks
(1,633)
18,845

Decrease/(increase) in debtors
273,832
(26,895)

Decrease/(increase) in amounts owed by groups
398,493
(398,493)

(Decrease) in creditors
(1,834,543)
(181,630)

Increase in amounts owed to groups
1,405,216
1,407,775

(Decrease)/increase in provisions
(244,583)
417,224

Corporation tax received
212,666
(140,580)

Net cash generated from operating activities

380,274
3,728,183


Cash flows from investing activities

Purchase of intangible fixed assets
(407,196)
(4,050,818)

Purchase of tangible fixed assets
(19,030)
(26,640)

Interest received
150
844

Net cash from investing activities

(426,076)
(4,076,614)

Cash flows from financing activities

Interest paid
(211,761)
(27,737)

Net cash used in financing activities
(211,761)
(27,737)

Net (decrease) in cash and cash equivalents
(257,563)
(376,168)

Cash and cash equivalents at beginning of year
450,270
826,438

Cash and cash equivalents at the end of year
192,707
450,270


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
192,707
464,997

Bank overdrafts
-
(14,727)

192,707
450,270


The notes on pages 15 to 32 form part of these financial statements.

Page 13

 


NETPAY SOLUTIONS GROUP LIMITED
 



CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023





At 1 January 2023
Cash flows
Repayment of hire purchase leases
At 31 December 2023
£

£

£

£

Cash at bank and in hand

464,997

(272,290)

-

192,707

Bank overdrafts

(14,727)

14,727

-

-

Hire purchase leases

(133,297)

-

88,004

(45,293)


316,973
(257,563)
88,004
147,414

The notes on pages 15 to 32 form part of these financial statements.

Page 14

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

NetPay Solutions Group Limited is a private company limited by shares incorporated in England and Wales. The Address of its registered office is disclosed on the company information page.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of income and retained earnings in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of income and retained earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 30 April 2018.

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Page 15

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.8

Borrowing costs

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

Page 16

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.9

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.11

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

Page 17

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.12

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Development expenditure
-
10
years
Trademarks
-
10
years

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis or straight line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
over the term of the lease
Short-term leasehold property
-
over the term of the lease
Fixtures and fittings
-
20%
reducing balance
Office equipment
-
33%
reducing balance
Computer equipment
-
33%
reducing balance or straight line basis

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.14

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.15

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Page 18

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.16

Debtors

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

 
2.17

Cash and cash equivalents

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

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.18

Creditors

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

 
2.19

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 19

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.20

Financial instruments

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 Statement of financial position when the Group becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

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

Impairment of financial assets

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

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

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

Financial liabilities

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

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

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

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

Page 20

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sale of goods
3,310,752
9,898,687

3,310,752
9,898,687


All turnover arose within the United Kingdom.


4.


Other operating income

2023
2022
£
£

Other operating income
-
277,369

-
277,369



5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2023
2022
£
£

Depreciation
92,980
142,506

Research & development charged as an expense
-
47,973

Exchange differences
6,540
28,910

Amortisation
1,882,442
1,199,851


6.


Auditors' remuneration

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


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
23,000
22,000

Page 21

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees

Staff costs were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
728,334
2,958,390
-
-

Social security costs
110,070
314,157
-
-

Cost of defined contribution scheme
29,204
132,236
-
-

867,608
3,404,783
-
-


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



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Staff
8
125
-
-



Directors
2
3
2
3

10
128
2
3


8.


Interest receivable

2023
2022
£
£


Other interest receivable
150
844

150
844


9.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
224
1,210

Intra-group loan interest payable
205,643
8,649

Finance leases and hire purchase contracts
4,694
11,042

Other interest payable
1,200
6,836

211,761
27,737

Page 22

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
59,328
6,237


Total current tax
59,328
6,237

Deferred tax


Origination and reversal of timing differences
(296,056)
251,743

Changes to tax rates
(18,897)
117,164

Adjustments in respect of prior years
51,783
(37,683)

Total deferred tax
(263,170)
331,224


Taxation on (loss)/profit on ordinary activities
(203,842)
337,461

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


(Loss)/profit on ordinary activities before tax
(2,220,347)
1,591,841


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
(521,782)
302,450

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
(418)
1,993

Adjustmenst to corporation tax in respect of prior periods
59,328
6,237

Adjustments to deferred tax charge in respect of prior periods
51,783
(37,683)

Impact of tax rate change on deferred tax
(18,897)
117,164

Non-taxable income
-
(52,700)

Effects of Group relief
226,144
-

Total tax charge for the year
(203,842)
337,461


Factors that may affect future tax charges


Page 23

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
10.Taxation (continued)

Changes to the UK corporation tax rates were enacted as part of Finance Act 2021 and included a change to the main rate of UK corporation tax to increase the rate to 25% from 1 April 2023. 
At the end of the period the Group has recognised a deferred tax liability of £254,953 (31 December 2022: £518,123). Deferred tax assets and liabilities have been measured using the enacted tax rate at the balance sheet date of 25%.


11.


Exceptional items

2023
2022
£
£


Irrecoverable VAT due to partial exemption status
9,796
29,587

9,796
29,587


12.


Intangible assets

Group and Company





Development expenditure
Trademarks
Total

£
£
£



Cost


At 1 January 2023
10,337,384
4,538
10,341,922


Additions
407,196
-
407,196



At 31 December 2023

10,744,580
4,538
10,749,118



Amortisation


At 1 January 2023
2,815,132
1,837
2,816,969


Charge for the year on owned assets
1,882,047
395
1,882,442



At 31 December 2023

4,697,179
2,232
4,699,411



Net book value



At 31 December 2023
6,047,401
2,306
6,049,707



At 31 December 2022
7,522,252
2,701
7,524,953



Page 24


NETPAY SOLUTIONS GROUP LIMITED
  
 
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023



13.


Tangible fixed assets


Group







Long-term leasehold property
Short-term leasehold property
Fixtures and fittings
Office equipment
Computer equipment
Total

£
£
£
£
£
£



Cost or valuation


At 1 January 2023
29,790
36,830
66,383
353,527
253,188
739,718


Additions
-
-
-
19,030
-
19,030


Disposals
-
-
-
-
(299)
(299)



At 31 December 2023

29,790
36,830
66,383
372,557
252,889
758,449



Depreciation


At 1 January 2023
29,790
36,830
45,713
195,676
228,527
536,536


Charge for the year on owned assets
-
-
4,077
79,110
9,793
92,980



At 31 December 2023

29,790
36,830
49,790
274,786
238,320
629,516



Net book value



At 31 December 2023
-
-
16,593
97,771
14,569
128,933



At 31 December 2022
-
-
20,670
157,851
24,661
203,182

Page 25

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Company






Computer equipment

£

Cost or valuation


At 1 January 2023
109,866



At 31 December 2023

109,866



Depreciation


At 1 January 2023
103,962


Charge for the year on owned assets
4,261



At 31 December 2023

108,223



Net book value



At 31 December 2023
1,643



At 31 December 2022
5,904






Page 26

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
99



At 31 December 2023
99






Net book value



At 31 December 2023
99



At 31 December 2022
99


Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

NetPay Merchant Services Limited
Janus House, Endeavour Drive, Basildon, Essex, England, SS14 3WF
Ordinary
100%
Technologi Worldwide Limited
Janus House, Endeavour Drive, Basildon, Essex, England, SS14 3WF
Ordinary
100%
NetPay Finance Limited
Janus House, Endeavour Drive, Basildon, Essex, England, SS14 3WF
Ordinary
100%

The aggregate of the share capital and reserves as at 31 December 2023 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£
£

NetPay Merchant Services Limited
(1,708,198)
(973,291)

Technologi Worldwide Limited
1,446,008
(956,287)

NetPay Finance Limited
1
-

Page 27

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Stocks

Group
Group
2023
2022
£
£

Finished goods and goods for resale
5,343
3,710

5,343
3,710


The difference between purchase price or production cost of stocks and their replacement cost is not material.


16.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
132,225
421,219
-
-

Amounts owed by group undertakings
-
398,493
4,536,403
4,353,886

Other debtors
44,523
16,107
5,500
2,839

Prepayments and accrued income
161,107
174,361
35,500
36,824

Tax recoverable
450,017
662,683
-
-

Deferred taxation
-
-
83,963
83,963

787,872
1,672,863
4,661,366
4,477,512



17.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Cash at bank and in hand
192,707
464,997
7,225
5,917

Less: bank overdrafts
-
(14,727)
-
-

192,707
450,270
7,225
5,917


Page 28

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank overdrafts
-
14,727
-
-

Trade creditors
61,480
361,375
13,810
46,484

Amounts owed to group undertakings
-
2,557,775
-
1,916,378

Other taxation and social security
52,753
457,402
-
-

Obligations under finance lease and hire purchase contracts
45,293
88,004
-
-

Other creditors
63
53,748
-
-

Accruals and deferred income
509,762
1,498,072
12,450
4,670

669,351
5,031,103
26,260
1,967,532



19.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Net obligations under finance leases and hire purchase contracts
-
45,293
-
-

Amounts owed to group undertakings
3,962,991
-
2,209,104
-

3,962,991
45,293
2,209,104
-





20.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
Group
2023
2022
£
£

Within one year
45,293
88,004

Between 1-5 years
-
45,293

45,293
133,297

Page 29

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Deferred taxation


Group



2023


£






At beginning of year
(518,123)


Charged to profit or loss
263,170



At end of year
(254,953)

Company


2023


£






At beginning of year
83,963



At end of year
83,963

The provision for deferred taxation is made up as follows:

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Accelerated capital allowances
(1,107,774)
(1,378,140)
-
-

Tax losses carried forward
816,579
825,081
83,963
83,963

Provisions
36,242
34,936
-
-

(254,953)
(518,123)
83,963
83,963

Page 30

 


NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Provisions


Group



Dilapidations Provision

£





At 1 January 2023
86,000


Charged to profit or loss
18,587



At 31 December 2023
104,587


23.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



67,720 (2022 - 67,720) Ordinary A shares of £0.001 each
68
68

Each Ordinary A share holds equal voting and dividend rights.



24.


Reserves

Share premium account

This reserve records the amount above the nominal value received for shares sold, less transaction costs.

Capital redemption reserve

This reserve represents the book value of Preference shares cancelled.

Profit and loss account

This reserve records retained earnings and accumulated losses.


25.


Pension commitments

The company operates a defined contribution pension scheme. The assets of the scheme are held seperatly from
those of the company in an independently administered fund. The pension cost charge represents contributions
payable by the company to the fund and amounted to £29,204 (2022 - £132,236). Contributions totalling £nil (2022 -
£53,747) were payable to the fund at the statement of financial position date and are included in other creditors.

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NETPAY SOLUTIONS GROUP LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

26.


Commitments under operating leases

At 31 December 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Not later than 1 year
70,693
106,040
70,693
106,040

Later than 1 year and not later than 5 years
-
74,228
-
74,228

70,693
180,268
70,693
180,268

During the year an expense of £106,040 (2022: £136,200) was recognised as rent expense related to these leases.


27.


Controlling party

The directors are of the opinion that the ultimate controlling party is FDR U.K. Limited. The company's registered
office of FDR U.K. Limited is Legal Department, Janus House, Endeavour Drive, Basildon, Essex, SS14 3WF.

 
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