Unaudited Financial Statements
Upstream Working Capital Ltd
For the year ended 31 December 2023
Registered number: NI607293
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Upstream Working Capital Ltd
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Company Information
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Alan Wardlow (resigned 14 April 2023)
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12 - 15 Donegall Square West
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Upstream Working Capital Ltd
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Contents
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Notes to the financial statements
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Independent Accountant's Report to the directors of the unaudited financial statements of Upstream Working Capital Ltd for the year ended 31 December 2023
In order to assist you fulfil your duties under the Companies Act 2006, we have compiled the financial statements
of Upstream Working Capital Ltd for the year ended 31 December 2023, which comprise the Statement of
comprehensive income, the Balance sheet and the related notes to the financial statements, including a summary of
significant accounting policies, from the company's accounting records and from information and explanations you
have given to us.
The financial statements have been prepared on the basis set out in the notes to the financial statements.
This report is made solely to the directors of directors, as a body, in accordance with the terms of our engagement letter. Our work has been undertaken solely that we might compile the financial statements that we have been engaged to compile, report to the company's directors that we have done so and state those matters that we have agreed to state to the directors of directors, as a body, in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than directors and its directors, as a body, for our work or for this report.
We have carried out this engagement in accordance with the technical guidance issued by Chartered Accountants Ireland ("the Institute") and have complied with the ethical guidance laid down by the Institute relating to members undertaking the compilation of financial statements.
You have approved the financial statements for the financial year ended has and you have acknowledged on the Balance sheet as at has your duty to ensure that directors has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view in accordance with the FRS102. You consider that directors is exempt from the statutory audit requirement for the financial year ended has.
We have not been instructed to carry out an audit or review the financial statements of directors. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.
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Chartered Accountants
12 - 15 Donegall Square West
Belfast
BT1 6JH
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Date: 24 September 2024
Page 1
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Upstream Working Capital Ltd
Registered number:NI607293
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Balance sheet
As at 31 December 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Page 2
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Upstream Working Capital Ltd
Registered number:NI607293
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Balance sheet (continued)
As at 31 December 2023
The directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 September 2024.
The notes on pages 4 to 11 form part of these financial statements.
Page 3
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Upstream Working Capital Ltd
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Notes to the financial statements
For the year ended 31 December 2023
Upstream Working Capital Ltd is a company limited by shares and is incorporated in Northern Ireland. The registered office is Suite B, Ground Floor, 40 Linenhall Street, Belfast, BT2 8BA.
The principal activity of the company is that of providing debt factoring and invoice discounting facilities.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of 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 management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has made a profit £84,448 during the period (2022: loss £51,963), and has net liabilities of £920,586 as at 31 December 2023 (2022: £1,005,034). The Company receives financial support from its funders. The Director is confident the support will continue for a period of at least 12 months from the date of approval of these financial statements. On this basis these financial statements therefore continue to be prepared on the going concern basis.
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Foreign currency translation
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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.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Page 4
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Upstream Working Capital Ltd
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
In January 2021, the company entered into a receivables purchase agreement ("RPA") with Cubitt Trade Capital LLC (the "purchaser") and other parties, under which the company will sell its receivables to the Purchaser who will immediately resell to the issuer on the same terms and conditions. Pursuant to the RPA, the company sells, conveys, and assigns to the purchaser all its rights, title, and interest in these receivables. The company earns a management fee from the purchaser for its services, which is included as turnover within these accounts.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
The Company has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 01 January 2022 to continue to be charged over the period to the first market rent review rather than the term of the lease.
Interest income is recognised in profit or loss using the effective interest method.
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.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company 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 Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
Page 5
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Upstream Working Capital Ltd
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
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Current and deferred taxation
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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 balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet 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; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
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 balance sheet date.
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.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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.
Depreciation is provided on the following 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.
Page 6
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Upstream Working Capital Ltd
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
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.
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Cash and cash equivalents
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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.
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.
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Estimates and judgements are required when applying accounting policies. These are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The company makes estimates and assumptions concerning the future, which can involve a high degree of judgement or complexity. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:
a) Recoverability of debtors
Estimates are made in respect of the recoverable value of trade and other debtors. When assessing the level of provisions required, factors including current trading experience, historical experience and the aging profile of debtors are considered.
b) Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on future investments, economic utilisation and the physical condition of the assets.
Page 7
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Upstream Working Capital Ltd
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Notes to the financial statements
For the year ended 31 December 2023
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The average monthly number of employees, including the directors, during the year was as follows:
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Page 8
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Upstream Working Capital Ltd
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Notes to the financial statements
For the year ended 31 December 2023
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Redeemable preference shares
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The cumulative preference dividend on the preference shares amounts to a fixed rate of 6% of the issue price per preference share. The preference shares do not entitle the holders to receive notice of, to attend, to speak at or to vote at any general meeting of the Company. The preference shares may be redeemed in full at any time on or after the 19 June 2020 by either the shareholder or the company. On the redemption date, the Company shall pay:
-The issue price on each of the preference shares being redeemed;
-An additional dividend of 3% of the issue price per preference share; and
-Any arrears or accruals of the preferred dividend due and unpaid on any preference shares, calculated down to and including the redemption date.
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Page 9
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Upstream Working Capital Ltd
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Notes to the financial statements
For the year ended 31 December 2023
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Creditors: Amounts falling due after more than one year
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Amounts owed to group undertakings
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Details of security provided:
Petra Capital PLC holds a fixed and floating charge over the undertaking and all assets of the Company.
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Shares classified as equity
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Authorised, allotted, called up and fully paid
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63,493 (2022 - 63,493) Ordinary shares of £1.00 each
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Shares classified as debt
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Authorised, allotted, called up and fully paid
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800,000 (2022 - 800,000) Preference shares of £0.80 each
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Share premium account
The share premium represents the premium received on shares issued by the company.
Profit and loss account
This includes all current and prior period retained profits and losses.
Page 10
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Upstream Working Capital Ltd
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Notes to the financial statements
For the year ended 31 December 2023
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Commitments under operating leases
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At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The company had the following related party transactions during the year:
The company has availed of the exemption under FRS102 section 33 which does not require disclosure of transactions entered into between any subsidiary undertaking which is wholly owned by a member of that group.
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The immediate parent company of Upstream Working Capital Ltd is Lamasom Limited.
Cubitt Trade Holdings (Europe) LCC is considered to be the ultimate controlling party by virtue of it's shareholding in Lamasom Limited.
Page 11
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