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Company registration number: 01283512







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


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)






































img3dac.png                     

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


 
COMPANY INFORMATION


Directors
J. H. Chhaya 
V. Robu 




Company secretary
J. H. Chhaya



Registered number
01283512



Registered office
Baronsmede
The Avenue

Egham

England

TW20 9AB




Independent auditors
Menzies LLP
Chartered Accountants & Statutory Auditor

Ashcombe House

5 The Crescent

Leatherhead

Surrey

KT22 8DY





 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 



CONTENTS



Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditors' report
7 - 10
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Notes to the financial statements
14 - 35

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their strategic report for the year ended 31 December 2023.
XBP Europe Limited, (the Company), is a leader in providing business process outsourcing services (BPO), integrated solutions and support services to most business sectors including financial services, banking, telecommunications and utilities. Its portfolio of products includes systems for payments, document content management, data capture, mortgage processing, pre-paid card servicing, metals trading and the development of turn-key imaging systems. Maintenance and support services are provided via a nationwide network of support staff.

Business review
 
The Company's recurring revenues remain strong and provide a firm basis for it to continue to develop products and services.
The Company will continue to invest in all parts of the business to develop and provide products and solutions that align with this strategy.
The Company operates a branch in the Republic of Ireland 
Key performance indicators used by management are structured around growth, profitability and efficiency of service.

Principal risks and uncertainties
 
The Company's activities expose it to a number of financial risks including credit risk, cash flow risk and liquidity risk. The Company does not use financial derivatives.
Credit risk
The Company's principal financial assets are bank balances, cash, trade and other receivables.
Any exposure to credit risk arises primarily from the Company's trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The credit risk is limited as the Company's major customers are banks with high credit ratings assigned by international credit rating agencies. The Company trades with a varied spread of customers mainly from diverse blue chip sectors and therefore has no significant concentration of credit risk.
Cash flow risk
The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The Company does not use foreign exchange forward contracts.
Liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Company actively monitors its cash flows, expected liabilities and ensures that it has the resources to meet its liabilities as they fall due at all times.

Page 1

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 



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

Financial key performance indicators

2023
2022
      £ 000
      £ 000
Revenue

26,677

27,028
 
Gross profit margin

25.53%

25.97%
 
EBITDA

1,162

2.805
 
Adjusted EBITDA

1,162

2,805
 
Cash at bank

426

5,472
 

Page 2

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 



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

Section 172 (1) statement and statements on engagement with employees, suppliers, customers and others
 
We report here on how the Company's directors have performed their duty under Section 172 (S.172) of the Companies Act 2006. S.172 sets out a series of matters to which the directors' must have regard in performing their duty to promote the success of the Company for the benefits of its shareholders while also having due regard to other stakeholders.
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Page 3

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 



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

Streamlined Energy and Carbon Reporting (SECR) Disclosure
 
The company reports its carbon emissions following the Greenhouse Gas Protocol methodology. It reports carbon dioxide (CO2) emissions resulting from energy use in its buildings and employees business travel. No comparatives have been reported since this is the first year the company is publishing its Energy and Carbon Reporting Disclosure under SECR.
UK Greenhouse gas emissions and energy use data for the period 1 January 2023 and 31 December 2023:
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Emission factors are based on Government published 2020 GHG conversion factors
XBP Europe Limited - SECR Methodology Statement 2021
The SECR submission has been compiled using the 2019HM Government Environmental Reporting Guidelines. We have used the following data sources for the report:
Energy and fuel data - Energy supplier billind data
Transport data - Company mileage records
CO2 emissions have been calculated using 2020 UK Government Convernsion Factors for company reporting.


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




J. H. Chhaya
Director

Date: 27 September 2024
Page 4

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES 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 Strategic report, the Directors' 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 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 of the profit or loss of the Company for that period.

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


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

make judgments 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;

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 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 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 £112,358 (2022 - profit £1,298,070).

No dividends will be distributed for the year (2022: £nil). 

Directors

The directors who served during the year were:

J. H. Chhaya 
V. Robu 

Future developments

There are several customers in the pipeline with long term contracts for growth of business along with the continuity of  existing customers which are mainly banks.

Streamlined Energy and Carbon Reporting (SECR) Disclosure

Methodology
The Company reports its carbon emissions following the Greenhouse Gas Protocol methodology. It reports carbon dioxide
(CO2) emissions resulting from energy use in its buildings and employees business travel. No comparatives have been
reported since this is the first year the Company is publishing its Energy and Carbon Reporting Disclosure under SECR.

Page 5

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

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'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's auditors are aware of that information.

Post balance sheet events

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

Going concern
The financial statements have been prepared on a going concern basis.
The directors have prepared the financial statements on the going concern basis, having obtained a signed letter of financial support from the ultimate parent company for a period of at least 12 months from the date of signing these financial statements. The directors have relied on the financial ability of the ultimate parent company to be able to provide financial support for a period of at least 12 months from the date of signing these financial statements.
For this reason, the directors continue to adopt the going concern basis for financial statements. Accordingly, these financial statements do not include any adjustments to the carrying amount or the classification of assets and liabilities that would result if the company were unable to continue as a going concern.
 
Auditor

The auditorsMenzies LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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





J. H. Chhaya
Director

Date: 27 September 2024
Page 6

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)

Opinion


We have audited the financial statements of XBP Europe Limited (formerly Exela Technologies Limited) (the 'Company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity 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 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; 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 Company 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 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 7

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)



 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES 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 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 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 Company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, 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
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 5, 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.

Page 8

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)



 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES 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 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. We determined that the following laws and regulations were most significant including;

The Companies Act 2006;
Financial Reporting Standard 102;
UK Employment Legislation; and
General Data Protection Regulations; and
UK Tax Legislation.

We assessed the extent of compliance with these 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 relevant documentation.

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 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 judgements 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:

The application of inappropriate judgements or estimation to manipulate the Company's financial position;
Posting of unusual journals and complex transactions; and
The use of management override of controls to manipulate results, or to cause the Company to enter into transactions not in its best interests.

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
Page 9

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)



 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED) (CONTINUED)

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.

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.




Andrew Hookway FCA (Senior statutory auditor)
for and on behalf of
Menzies LLP
Chartered Accountants
Statutory Auditor
Ashcombe House
5 The Crescent
Leatherhead
Surrey
KT22 8DY

27 September 2024
Page 10

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 3 
26,677,151
27,027,486

Cost of sales
  
(19,867,444)
(20,009,755)

Gross profit
  
6,809,707
7,017,731

Administrative expenses
  
(10,416,862)
(8,600,181)

Other operating income
 4 
4,312,062
3,833,219

Operating profit
 5 
704,907
2,250,769

Interest receivable and similar income
 8 
813,711
701,879

Interest payable and similar expenses
 9 
(1,736,763)
(1,166,376)

(Loss)/profit before tax
  
(218,145)
1,786,272

Tax on (loss)/profit
  
105,787
(488,202)

(Loss)/profit for the financial year
  
(112,358)
1,298,070

Other comprehensive income for the year
  

Movement of deferred tax relating to pension surplus
  
471,000
-

Net defined benefit, less income tax
  
1,413,000
3,014,000

Other comprehensive income for the year
  
1,884,000
3,014,000

Total comprehensive income for the year
  
1,771,642
4,312,070

The notes on pages 14 to 35 form part of these financial statements.
Page 11

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
REGISTERED NUMBER:01283512



STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 12 
3,089,085
3,259,719

  
3,089,085
3,259,719

Current assets
  

Stocks
 13 
614,977
670,445

Debtors: amounts falling due after more than one year
 14 
3,562,160
3,863,566

Debtors: amounts falling due within one year
 14 
57,598,630
58,108,459

Cash at bank and in hand
 15 
426,296
5,471,958

  
62,202,063
68,114,428

Creditors: amounts falling due within one year
 16 
(34,662,915)
(24,844,484)

Net current assets
  
 
 
27,539,148
 
 
43,269,944

Total assets less current liabilities
  
30,628,233
46,529,663

Creditors: amounts falling due after more than one year
 17 
(10,025,760)
(23,920,773)

Provisions for liabilities
  

Other provisions
 20 
(342,500)
(264,887)

  
 
 
(342,500)
 
 
(264,887)

Pension liability
 23 
(7,948,948)
(11,333,620)

Net assets
  
12,311,025
11,010,383


Capital and reserves
  

Called up share capital 
 21 
100,000
100,000

Profit and loss account
  
12,211,025
10,910,383

  
12,311,025
11,010,383


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




J. H. Chhaya
Director

Date: 27 September 2024

The notes on pages 14 to 35 form part of these financial statements.
Page 12

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 



STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
100,000
6,598,313
6,698,313


Comprehensive income for the year

Profit for the year

-
1,298,070
1,298,070

Net defined benefit, less income tax
-
3,014,000
3,014,000


Other comprehensive income for the year
-
3,014,000
3,014,000


Total comprehensive income for the year
-
4,312,070
4,312,070


Total transactions with owners
-
-
-



At 1 January 2023
100,000
10,910,383
11,010,383


Comprehensive income for the year

Loss for the year

-
(112,358)
(112,358)

Net defined benefit, less income tax
-
1,413,000
1,413,000


Other comprehensive income for the year
-
1,413,000
1,413,000


Total comprehensive income for the year
-
1,300,642
1,300,642


Total transactions with owners
-
-
-


At 31 December 2023
100,000
12,211,025
12,311,025


The notes on pages 14 to 35 form part of these financial statements.
Page 13

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

1.


General information

XBP Europe  Limited (the "Company") is a company limited by shares and incorporated and domiciled in the UK.
The Company is exempt by virtue of s401 of the Companies Act 2006 from the requirement to prepare group financial statements. These financial statements present information about the Company as an individual undertaking and not about its group.
The Company's immediate parent company is XBP Europe Holdings, Inc, incorporated in the USA, whose principal place of business is at 2701 E Grauwyler Road, Irving, Texas 7506. The Company's ultimate parent undertaking, Exela Technologies, Inc., incorporated in the USA, whose principal place of business is at 2701 E Grauwyler Road, Irving, Texas 75061 includes the Company in its consolidated financial statements. The group accounts of Exela Technologies, Inc. prepared in accordance with US GAAP can be obtained from this address or www.sec.gov. In these financial statements, the company is considered to be a qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 102 in respect of the following disclosures:
- Reconciliation of the number of shares outstanding from the beginning to end of the period;
- Cash Flow Statement and related notes;
- Disclosures in respect of transactions with wholly owned subsidiaries; and
- Key Management Personnel compensation.
As the consolidated financial statements of intermediate parent undertaking include the equivalent disclosures, the Company has also taken the exemptions under FRS 102 available in respect of the disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in respect of financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.

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 management to exercise judgment in applying the Company's accounting policies.

The following principal accounting policies have been applied:

 
2.2

Going concern

The financial statements have been prepared on a going concern basis.
The directors have prepared the financial statements on the going concern basis, having obtained a signed letter of financial support from the ultimate parent company for a period of at least 12 months from the date of signing these financial statements.The directors have relied on the financial ability of the ultimate parent company to be able to provide financial support for a period of at least 12 months from the date of signing these financial statements.
For this reason, the directors continue to adopt the going concern basis for financial statements. Accordingly, these financial statements do not include any adjustments to the carrying amount or the classification of assets and liabilities that would result if the company were unable to continue as a going concern.

Page 14

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP and are roundest to the nearest £.

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.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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:

The Company recognises hardware and software revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is probable. For those transactions that involve acceptance certificates, the Company recognises revenue upon receipt of the acceptance certificate, or when it can be objectively demonstrated that acceptance criteria have been met. For hardware transactions where software is considered incidental, or no software is included, revenue is recognised when the product has been delivered and all obligations have been fulfilled.
The Company recognises revenue from sales of equipment and supplies upon delivery and transfer of title or upon customer acceptance.
The Company undertakes to maintain customers' software under maintenance contracts for which the Company receives payment quarterly, half-yearly and annually in advance. Such income is released to the profit and loss account on a straight-line basis over the life of the contract. Where contracts consist of multiple elements, revenue is allocated based on the fair value of the individual elements. Maintenance costs are expensed as they are incurred.
The Company's service revenue is primarily billed based on contractual rates and terms, and the Company generally recognises revenue as these services are performed which, in some cases, is rateably over the contract term. Certain customers advance funds prior to the performance of the services. The Company recognises revenue related to these advances rateably over the contract term.

  
2.5

Finance lease

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability using the rate implicit in the lease. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in the periods in which they are incurred.

Page 15

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

2.Accounting policies (continued)

 
2.6

Operating leases: the Company as lessee

Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit and loss account on a straight-line basis over the term of the lease.
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.

 
2.7

Research and development

Expenditure on research activities is recognised in the profit and loss account as an expense as incurred. Expenditure on development activities is capitalised if the product or process is technically and commercially feasible and the Company intends and has the technical ability and sufficient resources to complete development, future economic benefits are probable and if the Company can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve design for, construction or testing of the production of new or substantially improved products or processes.
The capitalised development costs are amortised over the period during which the Company is expected to benefit. This period is between three and five years. The Company reviews the amortisation period and method when events and circumstances indicate that the useful life may have changed since the last reporting date.
Intangible assets are tested for impairment when there is an indication that an intangible asset may be impaired.

 
2.8

Interest receivable and Interest payable

Interest payable and similar charges include interest payable to bank and finance leases recognised in profit or loss using the effective interest method, unwinding of the discount on provisions.
Interest income and interest payable are recognised in profit or loss as they accrue, using the effective interest method.

 
2.9

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.

Page 16

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

2.Accounting policies (continued)

 
2.10

Pensions

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 Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

Defined benefit pension plan

The Company operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The liability recognised in the Statement of financial position in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of plan assets at the reporting date (if any) out of which the obligations are to be settled.

The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').

The fair value of plan assets is measured in accordance with the FRS102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.

The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:

a) the increase in net pension benefit liability arising from employee service during the period; and

b) the cost of plan introductions, benefit changes, curtailments and settlements.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.

Page 17

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

2.Accounting policies (continued)

 
2.11

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 operates and generates 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; 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 reporting date.

 
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.

Computer software is being amortised evenly over the period over which its benefit is expected to arise.

 
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.

Page 18

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

2.Accounting policies (continued)


2.13
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Leasehold improvements
-
25 years
Plant and machinery
-
3 years
Motor vehicles
-
4 years
Fixtures and fittings
-
3-5 years

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

Investments in subsidiaries

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 weighted average 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.

 
2.16

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Statement of financial position when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include 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
Page 19

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

2.Accounting policies (continued)


2.16
Financial instruments (continued)

discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company'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.

Non-financial assets
The carrying amounts of the Company's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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 the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit").
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.
An impairment loss is reversed if and only if the reasons for the impairment have ceased to apply.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Page 20

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

2.Accounting policies (continued)


2.16
Financial instruments (continued)

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.


Turnover

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


2023
2022
£
£

Business Process Outsourcing
19,030,863
18,818,978

Hardware Maintenance
743,085
948,545

Software Maintenance
2,765,686
2,570,373

Professional Services and Consumables
3,909,061
4,439,450

Intercompany
228,456
250,140

26,677,151
27,027,486


All turnover arose within the United Kingdom.



4.


Other operating income

2023
2022
£
£

Other operating income
4,312,062
3,833,219

4,312,062
3,833,219



5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation- owned assets
456,622
553,810

Amortisation expense
-
160,889

Auditor's remuneration
80,745
82,308

Foreign exchange (gain)/loss
1,377,914
(215,908)

Page 21

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors and their associates:


2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
133,885
124,302

Fees payable to the Company's auditors and their associates in respect of:

Taxation compliance services
3,935
1,500


7.


Employees

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
12,127,030
11,442,410

Social security costs
1,156,310
1,213,464

Cost of defined benefit scheme
243,344
256,060

Cost of defined contribution scheme
86,965
95,531

13,613,649
13,007,465


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


        2023
        2022
            No.
            No.







Sales
6
4



Software and customer care
318
331



Administration
20
16



Human Resources
4
4

348
355


8.


Interest receivable

2023
2022
£
£


Other interest receivable
813,711
701,879

813,711
701,879

Page 22

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

9.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
1,220,763
878,376

Other loan interest payable
516,000
288,000

1,736,763
1,166,376


10.


Taxation


2023
2022
£
£


Foreign tax


Foreign tax on income for the year
63,807
-

63,807
-

Total current tax
63,807
-

Deferred tax


Origination and reversal of timing differences
(169,594)
3,203,510

Changes to tax rates
-
(2,715,308)

Total deferred tax
(169,594)
488,202


Tax on (loss)/profit
(105,787)
488,202
Page 23

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


(Loss)/profit on ordinary activities before tax
(218,145)
1,786,272


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
(54,536)
339,392

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
31,080
44,462

Fixed asset differences
33,878
-

Foreign tax credits
42,265
-

Remeasurement of deferred tax for changes in tax rates
11,120
-

Movement in deferred tax not recognised
(169,594)
-

Adjustments to tax charge in respect of prior periods
-
(9,425)

Effect of overseas tax rates
-
71,120

Tax rate changes
-
83,797

Other tax adjustments
-
(41,144)

(105,787)
488,202

In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income, deferred tax arising on actuarial differences recognised on defined benefit pension scheme assets £471,000 (2022: nil).


Page 24

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

11.


Intangible assets




Computer software

£





At 1 January 2023
8,153,667


Disposals
(8,153,667)



At 31 December 2023

-





At 1 January 2023
8,153,667


On disposals
(8,153,667)



At 31 December 2023

-



Net book value



At 31 December 2023
-



At 31 December 2022
-



Page 25

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

12.


Tangible fixed assets





Freehold property
Plant and machinery
Fixtures and fittings
Other fixed assets
Total

£
£
£
£
£



Cost or valuation


At 1 January 2023
3,555,235
7,997,554
6,489,816
1,139,500
19,182,105


Additions
4,016
4,800
272,380
4,792
285,988



At 31 December 2023

3,559,251
8,002,354
6,762,196
1,144,292
19,468,093



Depreciation


At 1 January 2023
850,148
7,859,325
6,201,278
1,011,635
15,922,386


Charge for the year on owned assets
144,059
36,585
275,978
-
456,622



At 31 December 2023

994,207
7,895,910
6,477,256
1,011,635
16,379,008



Net book value



At 31 December 2023
2,565,044
106,444
284,940
132,657
3,089,085



At 31 December 2022
2,705,087
138,229
288,538
127,865
3,259,719




The net book value of land and buildings may be further analysed as follows:


2023
2022
£
£

Freehold
2,565,044
2,705,087

2,565,044
2,705,087


The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2023
2022
£
£



Furniture, fittings and equipment
-
125,000

-
125,000



Page 26

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

13.


Stocks

2023
2022
£
£

Raw materials and consumables
614,977
670,445

614,977
670,445



14.


Debtors

As restated
2023
2022
£
£

Due after more than one year

Deferred tax asset
3,562,160
3,863,566

3,562,160
3,863,566


As restated
2023
2022
£
£

Due within one year

Trade debtors
3,931,822
3,180,522

Amounts owed by group undertakings
52,227,840
53,558,851

Other debtors
284,928
208,320

Prepayments and accrued income
1,154,040
1,160,766

57,598,630
58,108,459


During the preparation of the financial statements it was identified that £427,425 of accrued income was incorrectly mapped to trade debtors. This has been reallocated to prepayments and accrued income, there is no impact on result, taxation or retained earnings. 
It was also identified that £12,188,000 of amounts owed by group undertakings due within one year was incorrectly mapped to amounts grouped to amounts owed by group undertakings due after more than one year. This has been reallocated to due within one year, there is no impact on result, taxation, or retained earnings.
Amounts due from group undertakings are interest bearing. Interest rates used for the current year are 0.00% to 6.00%. Amounts are repayable on demand.

Page 27

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

15.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
426,296
5,471,958

Less: bank overdrafts
(75,416)
-

350,880
5,471,958



16.


Creditors: Amounts falling due within one year

As restated
2023
2022
£
£

Bank overdrafts
75,416
-

Bank loans
2,976,683
740,000

Trade creditors
2,974,585
2,840,633

Amounts owed to group undertakings
20,319,852
12,731,611

Corporation tax
63,807
133,857

Other taxation and social security
2,003,210
1,453,073

Obligations under finance lease and hire purchase contracts
-
109,832

Accruals and deferred income
6,249,362
6,835,478

34,662,915
24,844,484


During the preparation of the financial statements it was identified that £264,887 was incorrectly included within accruals and deferred income. This has been reallocated to provisions, there is no impact to retained earnings. 


17.


Creditors: Amounts falling due after more than one year

2023
As restated 2022
£
£

Bank loans
10,025,760
11,921,093

Net obligations under finance leases and hire purchase contracts
-
28,280

Amounts owed to group undertakings
-
11,971,400

10,025,760
23,920,773


Page 28

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

18.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
2,976,683
740,000


Amounts falling due 2-5 years

Bank loans
10,025,760
11,921,093


13,002,443
12,661,093


The bank loans within one year and more than one year are secured on the freehold property held by the Company. 
The above loans are repayable between the one year and 4 years. The interest rate is charges at LIBOR + Margin.  


19.


Deferred taxation




2023


£






At beginning of year
3,863,566


Charged to profit or loss
169,594


Charged to other comprehensive income
(471,000)



At end of year
3,562,160

The deferred tax asset is made up as follows:

2023
2022
£
£


Accelerated capital allowances
255,105
331,424

Short term timing differences
2,140,106
2,900,907

Capital losses
42,066
42,066

Losses and other deductions
1,124,883
589,169

3,562,160
3,863,566

Page 29

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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

20.


Provisions




Dilapidation

£





At 1 January 2023
264,887


Charged to profit or loss
77,613



At 31 December 2023
342,500

Provision has been made for dilapidation works that are required at the end of the lease. Timing of payments will be due on lease expiry. The unwinding of the provision has been recognised in the profit and loss account, within 'interest payable and similar expenses'.

21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



100,000 (2022 - 100,000) Ordinary shares of £1.00 each
100,000
100,000



22.


Reserves

Profit and loss account

This reserve records retained earnings and accumulated losses.

23.


Pension commitments



The Company operates a Defined benefit pension scheme.

At 31 December 2023, the Company operated pension plans provided through both defined benefit and defined contribution arrangements.
The Company sponsors the Exela Technologies Limited Retirement Benefit Scheme which is a defined benefit arrangement, and additionally five defined contribution schemes. The costs charged for the defined contribution schemes in the year amounted to £516,000 (2022 - £288,000). At the end of the financial year, outstanding pension contributions amounted to £479,697 (2022 - £138,232).
The Exela Technologies Limited Retirement Benefit Scheme provides benefits based on final pensionable pay, contributions being charged to the profit and loss account so as to spread the cost of pensions over employees' working lives with the Company. The contributions are determined by a qualified actuary.
The assumptions which have the most significant effect on the results of the valuation are those relating to the rate of return on investments and the rates of increase in salaries and pensions. As the scheme is closed to new entrants, the current service cost as a percentage of pensionable payroll is likely to increase as the membership ages, although it will be applied to a decreasing pensionable payroll.
The regular contributions payable by the employee over the latest financial year were £nil (2022 - £nil).
 
Page 30

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
23.Pension commitments (continued)


 In addition, XBP Europe  Limited contributed payments of £2,017,000 (2022 - £1,967,000) for the financial year. The Company also meets the costs of death in service benefits and administration expenses.
The trustees' most recent actuarial valuation as at 30 June 2018 showed a deficit of £28,841,000. The Company has agreed with the trustees that it will aim to eliminate the deficit over a period of 9 years and 3 months from 30 June 2019.
The best estimate of contributions to be paid paid by the Company to the scheme for the period commencing 1 January 2024 is £2,017,000 (2023 - £1,967,000).
The amounts recognised in the balance sheet are as follows:



Reconciliation of present value of plan liabilities:


2023
2022
£
£

Reconciliation of present value of plan liabilities


Present value of funded obligations
46,686,000
46,959,000

Fair value of plan assets
(38,737,052)
(35,625,380)

At the end of the year
7,948,948
11,333,620

Page 31

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
23.Pension commitments (continued)


Composition of plan assets:


2023
2022
£
£


Equities
27
26

Others
20
27

Liability driven investments
53
47

Total plan assets
100
100

2023
2022
£
£


Present value of plan liabilities
(7,948,948)
(11,333,620)

Net pension scheme liability
(7,948,948)
(11,333,620)


The amounts recognised in profit or loss are as follows:

2023
2022
£
£


Net interest from net defined benefit asset/ liability
516,000
288,000

Total
516,000
288,000


Actual return on scheme assets
1,787,000
1,173,000

1,787,000
1,173,000
Page 32

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
23.Pension commitments (continued)


Changes in the present value of the defined benefit obligation are as follows:

2023
2022
£
£


Opening defined benefit obligation
46,959,000
81,847,000

Interest cost
2,303,000
1,461,000

Obligation and remeasurement
(798,000)
(35,037,000)

Benefits paid and expenses
(1,778,000)
(1,312,000)

Closing defined benefit obligation
46,686,000
46,959,000

Changes in the fair value of scheme assets are as follows:

2023
2022
£
£


Opening fair value of scheme assets
35,625,000
64,815,000

Contributions by employer
2,017,000
1,967,000

Expected return
1,787,000
1,173,000

Benefits paid and expenses
(1,778,000)
(1,312,000)

Return on plan assets (excluding interest income)
1,086,052
(31,018,000)

38,737,052
35,625,000


The cumulative amount of actuarial gains and losses recognised in the Statement of comprehensive income was £1,884,000 loss (2022 - £4,019,000 loss).


Page 33

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
23.Pension commitments (continued)





Principal actuarial assumptions at the reporting date (expressed as weighted averages):

2023
2022
%
%
Discount rate


4.80

5.00
 
Inflation (RPI)


3.10

3.10
 
Inflation (CPI)


2.30

2.30
 



 
Allowance for revaluation of deferred pensions of CPI or 5% p.a. if less


2.30

2.30
 
Allowance for revaluation of deferred pensions of CPI or 2.5% p.a. if less


2.30

2.30
 
Allowance for revaluation of deferred pensions of RPI or 5% p.a. if less


2.90

2.90
 


Mortality assumptions used are consistent with those recommended by the scheme actuaries and reflect the latest
available tables. The tables used indicate a further life expectancy for a male/female pensioner currently aged 65 of
21.7/23.6 years (2022 - 23.1/24.9 years) and a further life expectancy from aged 65 for a male/female nonpensioner
member currently aged 24.4/26.4 years (2022 - 45 of 24.4/26.4 years).
The assumptions use by the actuary are the best estimates chosen from a range of possible actuarial assumptions
which, due to the timescale covered, may not be borne out in practice.
The Company has proposed that RPI continues to be set in line with market break even expectations less the inflation risk premium. The inflation risk premium has been set at 0.3%, compared with 0.3% in the prior year. The
company explained that the change is set to allow for anticipated changes to RPI. For CPI, the Company has proposed reducing the long term gap between RPI and CPI by 80 basis points, based on observed market movements, compared with the prior year methodology.



Page 34

 


XBP EUROPE LIMITED (FORMERLY EXELA TECHNOLOGIES LIMITED)
 


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


24.


Commitments under operating leases

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

2023
2022
£
£


Not later than 1 year
320,747
200,000

Later than 1 year and not later than 5 years
1,238,073
1,558,820

1,558,820
1,758,820


25.


Related party transactions

The Company has taken advantage of the exemption under FRS 102 not to disclose related party transactions with other 100% owned subsidiary undertakings within the same group.


26.


Controlling party

The directors regard XBP Europe Holdings, Inc as being the immediate parent and controlling undertaking, copies of whose group financial statements are available from its registered office, 2701 East Grauwyler Road, Irving, Texas, United States, 75061. The financial statements of Exela Technologies Inc is the ultimate parent company and ultimate controlling undertaking, copies of whose group financial statements are available from its registered office, 2701 East Grauwyler Road, Irving, Texas, United States, 75061.
 
Page 35