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Company No: 13197633 (England and Wales)

TIDE CAPITAL II LIMITED

Annual Report and Financial Statements
For the financial year ended 31 December 2023

TIDE CAPITAL II LIMITED

Annual Report and Financial Statements

For the financial year ended 31 December 2023

Contents

TIDE CAPITAL II LIMITED

COMPANY INFORMATION

For the financial year ended 31 December 2023
TIDE CAPITAL II LIMITED

COMPANY INFORMATION (continued)

For the financial year ended 31 December 2023
DIRECTORS Scott Donnelly (Appointed 22 August 2024)
Rebecca Louise Marriott
Dr Oliver Rainer Andreas Prill
Ian Mackenzie Sutherland (Resigned 27 June 2024)
SECRETARY Eliza Haskell
REGISTERED OFFICE 4th Floor The Featherstone Building
66 City Road
London
EC1Y 2AL
England
United Kingdom
COMPANY NUMBER 13197633 (England and Wales)
AUDITOR Deloitte LLP
5 Callaghan Square
Cardiff
CF10 5BT
United Kingdom
TIDE CAPITAL II LIMITED

DIRECTORS' REPORT

For the financial year ended 31 December 2023
TIDE CAPITAL II LIMITED

DIRECTORS' REPORT (continued)

For the financial year ended 31 December 2023

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

The Company has taken advantage of the exemption in Section 414 A(2) of the Companies Act 2006 from the requirement to prepare a Strategic Report on the basis that it would be entitled to prepare financial statements for the year in accordance with the small companies regime but for being a member of an ineligible group. On the same basis, this Directors' Report has been prepared in accordance with the provisions applicable to companies entitled to the small companies' exemption provided by section 415A of the Companies Act 2006.

PRINCIPAL ACTIVITIES

The principal activity of the Company during the year was to provide proprietary credit products to Tide Platform Ltd's UK SME members. Credit Line, a short-term revolving credit facility, forms the majority of the balance sheet loan receivables. The Company has no employees and outsources all administrative, management and oversight activities to Tide Platform Ltd.

GOING CONCERN

The directors have prepared the financial statements on the going concern basis. Further details are provided in note 1 to the financial statements.

DIRECTORS

The directors, who served during the financial year and to the date of this report except as noted, were as follows:

Scott Donnelly (Appointed 22 August 2024)
Rebecca Louise Marriott
Dr Oliver Rainer Andreas Prill
Ian Mackenzie Sutherland (Resigned 27 June 2024)

DIRECTORS' INDEMNITIES

The Group has made qualifying third party indemnity provisions for the benefit of the directors of the Company on its behalf which were made during the financial year and remain in force at the date of this report.

SHARE ISSUE

The Company issued 500,000 Ordinary shares of £1 each during the year (2022: 750,000 Ordinary shares of £1 each) following an investment of capital by the Company's parent, Tide Holdings Limited.

AUDITOR

Each of the persons who is a director at the date of approval of this report confirms that:

* So far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware; and

* The director has taken all the steps that they ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.


Deloitte LLP have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditors in the absence of an Annual General Meeting.



Approved by the Board of Directors and signed on its behalf by:

Dr Oliver Rainer Andreas Prill
Director
4th Floor The Featherstone Building
66 City Road
London
EC1Y 2AL
England
United Kingdom

24 September 2024

TIDE CAPITAL II LIMITED

DIRECTORS' RESPONSIBILITIES STATEMENT

For the financial year ended 31 December 2023
TIDE CAPITAL II LIMITED

DIRECTORS' RESPONSIBILITIES STATEMENT (continued)

For the financial year ended 31 December 2023

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 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 of the profit or loss of the Company for that financial period.

In preparing these financial statements, the directors are required to:
* Select suitable accounting policies and then apply them consistently;
* Make judgements and accounting estimates that are reasonable and prudent;
* State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
* Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. The directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in annual reports may differ from legislation in other jurisdictions.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TIDE CAPITAL II LIMITED

For the financial year ended 31 December 2023

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TIDE CAPITAL II LIMITED (continued)

For the financial year ended 31 December 2023

Report on the audit of the financial statements

Opinion

In our opinion the financial statements of Tide Capital II Limited (the ‘company’):
* give a true and fair view of the state of the company’s affairs as at 31 December 2023 and of its loss for the year then ended;
* have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland; and
* have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements which comprise:
* the profit and loss account;
* the balance sheet;
* the statement of changes in equity; and
* the related notes 1 to 15.

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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

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 considered the nature of the company’s industry and its control environment, and reviewed the company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory frameworks that the company operates in, and identified the key laws and regulations that:
* had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Companies Act and tax legislation; and
* 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.

We discussed among the audit engagement team including relevant internal specialists such as tax, IT and fraud specialistsregarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

As a result of performing the above, we identified the greatest potential for fraud or non-compliance with laws and regulations in the following areas, and our procedures performed to address it are described below:
* Loan Loss Provisioning: A significant risk identified in the audit was the risk of fraud in the accuracy of loan loss provisioning. We pinpointed the risk to the LGD assumption, and the PD applied to performing loans. We addressed this risk by calculating the recovery rate on historic loans in default to determine if the LGD assumption was appropriate. We also performed our own roll rate analysis for both rescheduled and non-rescheduled loans to assess if the PD used by management for performing loans was appropriate. We tested the underlying data using analytics specialists and tracing a sample of transactions to bank statements.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:
* reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
* performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
* enquiring of management and in-house legal counsel concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and
* reading minutes of meetings of those charged with governance and reports and reviewing correspondence with the Financial Conduct Authority.

Report on other legal and regulatory requirements

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:
* the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; an
* the directors’ report has been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any material misstatements in the directors’ report.

Matters on which we are required to report by exception

Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion:
* adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
* the financial statements are not in agreement with the accounting records and returns; or
* certain disclosures of directors’ remuneration specified by law are not made; or
* the directors were not entitled to take advantage of the small companies’ exemption from the requirement to prepare a strategic report; or
* we have not received all the information and explanations we require for our audit.

We have nothing to report in respect of these matters.

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.

David Rozier (Senior Statutory Auditor)
For and on behalf of
Deloitte LLP
Senior Statutory Auditor

5 Callaghan Square
Cardiff
CF10 5BT
United Kingdom

24 September 2024

TIDE CAPITAL II LIMITED

PROFIT AND LOSS ACCOUNT

For the financial year ended 31 December 2023
TIDE CAPITAL II LIMITED

PROFIT AND LOSS ACCOUNT (continued)

For the financial year ended 31 December 2023
Note 2023 2022
£ £
Turnover 3 1,227,740 1,176,169
Cost of sales 8 ( 2,583,683) ( 2,626,866)
Gross loss ( 1,355,943) ( 1,450,697)
Administrative expenses ( 124,160) ( 142,718)
Operating loss and loss before taxation 4 ( 1,480,103) ( 1,593,415)
Tax on loss 7 0 0
Loss for the financial year ( 1,480,103) ( 1,593,415)

All amounts relate to continuing operations.

There were no items of other comprehensive income or losses for the current or prior year other than those included in the Profit and Loss Account, accordingly no Statement of Comprehensive Income is presented.

The notes on pages 13 to 21 form an integral part of these financial statements.

TIDE CAPITAL II LIMITED

BALANCE SHEET

As at 31 December 2023
TIDE CAPITAL II LIMITED

BALANCE SHEET (continued)

As at 31 December 2023
Note 2023 2022
£ £
Current assets
Debtors 9 3,676,840 5,946,274
Cash at bank and in hand 1,365,488 5,584,486
5,042,328 11,530,760
Creditors: amounts falling due within one year 10 ( 111,654) ( 142,030)
Net current assets 4,930,674 11,388,730
Total assets less current liabilities 4,930,674 11,388,730
Creditors: amounts falling due after more than one year 11 ( 2,507,144) ( 7,985,097)
Net assets 2,423,530 3,403,633
Capital and reserves 13
Called-up share capital 5,750,000 5,250,000
Profit and loss account ( 3,326,470) ( 1,846,367)
Total shareholder's funds 2,423,530 3,403,633

The notes on pages 13 to 21 form an integral part of these financial statements.

The financial statements of Tide Capital II Limited (registered number: 13197633) were approved and authorised for issue by the Board of Directors on 24 September 2024. They were signed on its behalf by:

Dr Oliver Rainer Andreas Prill
Director
TIDE CAPITAL II LIMITED

STATEMENT OF CHANGES IN EQUITY

For the financial year ended 31 December 2023
TIDE CAPITAL II LIMITED

STATEMENT OF CHANGES IN EQUITY (continued)

For the financial year ended 31 December 2023
Called-up share capital Profit and loss account Total
£ £ £
At 01 January 2022 4,500,000 ( 252,952) 4,247,048
Loss for the financial year 0 ( 1,593,415) ( 1,593,415)
Total comprehensive loss 0 ( 1,593,415) ( 1,593,415)
Issue of share capital 750,000 0 750,000
At 31 December 2022 5,250,000 ( 1,846,367) 3,403,633
At 01 January 2023 5,250,000 ( 1,846,367) 3,403,633
Loss for the financial year 0 ( 1,480,103) ( 1,480,103)
Total comprehensive loss 0 ( 1,480,103) ( 1,480,103)
Issue of share capital 500,000 0 500,000
At 31 December 2023 5,750,000 ( 3,326,470) 2,423,530

The notes on pages 13 to 21 form an integral part of these financial statements.

TIDE CAPITAL II LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
TIDE CAPITAL II LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.

General information and basis of accounting

Tide Capital II Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is 4th Floor The Featherstone Building, 66 City Road, London, EC1Y 2AL, United Kingdom.

The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 (FRS 102) applicable in the UK and Republic of Ireland issued by the Financial Reporting Council and the requirements of the Companies Act 2006.

The functional currency of Tide Capital II Limited is considered to be pounds sterling because that is the currency of the primary economic environment in which the Company operates.

Tide Capital II Limited meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it. Exemptions have been taken in relation to financial instruments, presentation of a Cash Flow Statement, related party transactions and remuneration of key management personnel. The Company's financial statements are consolidated into the financial statements of Tide Holdings Limited, a company incorporated in the United Kingdom and copies of the financial statements can be obtained from the address disclosed in note 15.

Going concern

In adopting the going concern basis of preparing the financial statements, the directors have considered the business activities and outlook, as well as the Company’s principal risks and uncertainties. Based on cash flow forecasts and financial projections, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least twelve months from when the financial statements are authorised for issue. Thus, they continue to adopt the going concern basis in preparing the annual financial statements.

The Company provides proprietary credit products to Tide Platform Ltd's UK SME members. Credit Line, a short-term revolving credit facility, forms the majority of the balance sheet loan receivables. The credit risk associated with Credit Line is monitored closely, and there are ongoing improvements being made to enhance members credit risk profiling and reduce credit risk. The Company has sufficient liquidity to meet its financial obligations.

The directors continue to monitor key risk metrics as well as the situation regarding the economic environment. The Directors do not consider there to be any geopolitical or climate risks that will have a material impact on the entity.

Turnover

Turnover relates to interest income on loans to customers. Interest income is recognised in the profit and loss account using the effective interest method. Other income relates to the supply of services and is recognised when the significant risks and rewards are considered to have been transferred to the buyer.

Finance costs

Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so 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.

Interest payable on funding is recognised through cost of sales. This finance cost is directly attributable to provision of the Credit Line loan product and not general financing for the company.

Taxation

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the Company's financial statements. Deferred tax is provided in full on timing differences which result in an obligation to pay more or less tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws. Deferred tax assets and liabilities are not discounted.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each Balance Sheet date. If there is objective evidence of impairment, an impairment loss is recognised in the Profit and Loss Account as described below.

Non-financial assets
At each balance sheet date, the company reviews 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). The recoverable amount of an asset is the higher of its fair value less costs to sell and its 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.

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. 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.

Financial assets
An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

For financial assets carried at amortised cost, the amount of impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

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

Financial assets and liabilities are only offset in the Balance Sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

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

Financial assets are derecognised when and only when the contractual rights to the cash flows from the financial asset expire or are settled, or the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

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

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

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

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

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the Balance Sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

Loan loss provisioning is considered a risk charge directly attributable to revenue and presented within cost of sales as part of impairment of loans receivable. Any recovered amounts are offset within this cost. Recovery costs associated with recovered amounts are also presented within cost of sales.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Impairment of loans receivable

The value of loan receivables on the Balance Sheet have been reduced by a loan loss provision. The loan loss provision is calculated by applying the applicable provision coefficients to the exposure at risk for each days-past-due bucket. The exposure at risk is the sum of the outstanding loan principal, interest and fees.

The provision coefficients are the probability of loss (%) expected for each DPD bucket. The probability of a loan migrating from one days-past-due (DPD) bucket to the next is calculated from historical data. The probability of loss (%) for each DPD bucket is the product of the migration probabilities.

2. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described in note 1, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 financial year in which the estimate is revised if the revision affects only that financial year, or in the financial year of the revision and future financial years if the revision affects both current and future financial years.

Critical judgements in applying the Company’s accounting policies

The directors do not consider that any critical judgements have been made in the application of the Company’s accounting policies in these financial statements.

Key source of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

**Recognition of loan loss provision**
A loan loss provision has been recognised in the financial year and significant estimates are made in determining the timing and measurement of the expected loss. The level of impairment provision required is determined through credit risk algorithms and probability of defaults based on historical credit losses for individual credit products. There are different provision coefficients for each loan bucket, not overdue (1.86%), DPD 1-30 (51.47%), DPD 31-60 (91.94%), DPD 61-90 (94.03%), DPD 91-120 (94.09%), DPD 121-150 (95.15%), DPD 151-180 (95.87%), DPD 181+ (96.79%).

The directors have reviewed the impairment provision sensitivity. Loans in arrears of greater than 181 days are most sensitive to changes in the provisions coefficient. An overall 1% relative increase/decrease in the probability of default would lead to a material increase/decrease in the impairment provision of 1%. An overall 1% relative increase/decrease of the loss given default would lead to a material increase/decrease in the impairment provision of 1%.

The impairment provision is offset against trade debtors and disclosed within note 9. The movement in the impairment provision is reflected in the profit and loss in the year.

**Recognition of deferred tax assets**
The extent to which deferred tax assets can be recognised is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forwards can be utilised.

No deferred tax asset has been recognised at 31 December 2023 to the extent that it is not considered probable that a deferred tax asset would be recovered against future profits. The Company has not recognised deferred tax assets of £831,618 in respect of losses amounting to £3,326,471 that can be carried forward against future taxable income.

3. Turnover

Turnover represents the fair value of goods/services provided to customers during the financial year excluding value added tax.

Breakdown by business class

An analysis of the Company's turnover by class of business is set out below.

2023 2022
£ £
Interest received on loans and advances 1,135,534 896,559
Other income 92,206 279,610
1,227,740 1,176,169

Turnover is wholly attributable to the principal activity of the Company and arises solely within the United Kingdom.

4. Operating loss and loss before taxation

Operating loss and loss before taxation is stated after charging/(crediting):

2023 2022
£ £
Impairment of loans receivable 1,498,196 1,784,277

5. Auditor's remuneration

An analysis of the auditor's remuneration is as follows:

2023 2022
£ £
Fees payable to the Company’s auditor and its associates for the audit of the Company's annual financial statements: 31,966 56,416
Total audit fees 31,966 56,416

6. Staff number and costs

2023 2022
Number Number
The average monthly number of employees (including directors) was: 4 5

The employees numbers above include only the directors of the Company. No directors' remuneration was paid in the year or prior period. The directors are the only key management personnel of the Company. The Company has no other employees and outsources all administrative, management and oversight activities to Tide Platform Ltd.

7. Tax on loss

2023 2022
£ £
Current tax on loss
UK corporation tax 0 0
Total current tax 0 0
Total tax on loss 0 0
Tax reconciliation

The tax assessed for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK:

2023 2022
£ £
Loss before taxation (1,480,103) (1,593,415)
Tax on loss at standard UK corporation tax rate of 19.00% (2022: 19.00%) ( 281,220) ( 302,749)
Effects of:
Effects of group relief / other reliefs 281,220 302,749
Total tax charge for year 0 0

8. Cost of sales

2023 2022
£ £
Interest payable on funding (957,217) (694,772)
Impairment of loans receivable (1,498,196) (1,784,277)
Recovery costs (128,270) (147,817)
(2,583,683) (2,626,866)

9. Debtors

2023 2022
£ £
Trade debtors 3,676,672 5,943,630
Amounts owed by Group undertakings 168 324
Prepayments 0 2,320
3,676,840 5,946,274

Included in trade debtors are loans and advances of £3,269,385 (2022: £5,763,942) which fall due within one year.

Trade debtors is presented net of an impairment provision of £3,411,534 (2022: £2,041,853).

Amounts owed to Group undertakings are receivable on demand and do not bear interest.

10. Creditors: amounts falling due within one year

2023 2022
£ £
Trade creditors 0 22,021
Amounts owed to Group undertakings 53,111 20,299
Accruals 58,543 99,710
111,654 142,030

Tide Platform Limited provides engineering and support services to Tide Capital II Limited under an intercompany services agreement. Amounts owed to Group undertakings relate to amounts owed to Tide Platform Limited under this arrangement and are repayable on demand and do not bear interest.

11. Creditors: amounts falling due after more than one year

2023 2022
£ £
Other loans 2,507,144 7,985,097

Loans to the Company are secured by way of a fixed and floating charge over the assets of the Company.

12. Financial instruments

The carrying values of the Company’s financial assets and liabilities are summarised by category below:

2023 2022
£ £
Financial assets
Debt instruments measured at amortised cost
Loans receivable 3,566,619 5,883,525
Measured at undiscounted amount receivable
Trade debtors (note 9) 110,221 60,429
Cash 1,365,488 5,584,486
5,042,328 11,528,440
Financial liabilities
Measured at amortised cost
Bank loans and other loans ( 2,507,144) ( 7,985,097)
Measured at undiscounted amount payable
Trade creditors (note 10) 0 ( 22,021)
Amounts owed to Group undertakings (note 10) ( 53,111) ( 20,299)
(2,560,255) (8,027,417)

13. Called-up share capital and reserves

2023 2022
£ £
Allotted, called-up and fully-paid
5,750,000 Ordinary shares of £ 1.00 each (2022: 5,250,000 shares of £ 1.00 each) 5,750,000 5,250,000
Presented as follows:
Called-up share capital presented as equity 5,750,000 5,250,000

The Company's other reserves are as follows:

The profit and loss reserve represents cumulative profits or losses, net of dividends paid and other adjustments.

14. Related party transactions

The Company has availed of the exemption provided in FRS 102 Section 33 Related Party Disclosures not to disclose transactions entered into with fellow group companies that are wholly owned within the group of companies of which the Company is a wholly owned member.

15. Controlling party

The ultimate parent company and the ultimate controlling party is Tide Holdings Limited. The parent undertaking of the smallest and largest group, which includes the Company and for which group financial statements are prepared, is Tide Holdings Limited, a company incorporated in the United Kingdom and registered at 4th Floor The Featherstone Building, 66 City Road, London, England, EC1Y 2AL.