Registration number:
for the
Period from 9 August 2022 to 31 December 2023
YL II A Limited
Contents
Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Profit and Loss Account |
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Balance Sheet |
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Statement of Changes in Equity |
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Statement of Cash Flows |
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Notes to the Financial Statements |
YL II A Limited
Company Information
Directors |
C Friedrich E M M Lifford |
Registered office |
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Auditors |
|
YL II A Limited
Strategic Report for the Period from 9 August 2022 to 31 December 2023
The directors present their strategic report for the period from 9 August 2022 to 31 December 2023.
Principal activity
The principal activity of the company is was the provision of Merchant Cash Advance (“MCA”) financing to small and medium-sized businesses in the UK, Ireland and the Netherlands. The Company uses the services of Youlend Limited including its technology platform to source and service these MCAs. In July 2023, the company sold its MCA loan book thereafter the Company's principal activity changed from being a lender to arranging and introducing loan debtors to a securtisation vehicle incorporated in Luxembourg
Fair review of the business
In July 2023, YL IIA Limited entered into a Receivables Sale Agreement with CLYL SV sarl, a Luxembourg securitisation vehicle, acting in respect of its compartment YLMCA, to facilitate the sale of all loan receivables originated by the Company to CLYL SV sarl.
During the period ending in December 2023, the Company recognised £23,505,752 of interest from MCA financing. The sale of the MCA loan book realised a loss of £18,986,086, and exceptional income of £11,090,758arising from loan waivers from the immediate parent, CL VI Lux S.a.r.l, was recognised after the loan book was sold.The Company’s net loss for the period to December 2023 was £252,255.
Principal risks and uncertainties
The principal risk and uncertainties surrounding the business are set out in the directors report. The directors have significant experience in the industry and are satisified that the systems and controls in place are adequate to mitigate the principal risk and uncertainties.
Approved by the
Director
YL II A Limited
Directors' Report for the Period from 9 August 2022 to 31 December 2023
The directors present their report and the financial statements for the period from 9 August 2022 to 31 December 2023.
Incorporation
The company was incorporated on
Directors of the company
The directors who held office during the period were as follows:
Financial instruments
Objectives and policies
The directors have close involvement in the day to day running of the business and, as such, have a detailed knowledge of the financial risks the business is subject to. The objectives of financial risk management are to ensure the company has sufficient working capital and resources to be able to continue the business' growth strategy. The directors have put in systems and controls which monitor financial risk and highlight when potential issues may occur. Management has a good awareness of the importance of managing financial risk and a detailed knowledge of the business and industry.
Price risk, credit risk, liquidity risk and cash flow risk
Credit risk - The Company defines this as the risk of financial losses as a result of the non-recoverability of monies owed to it. The risk is considered minimised as the loss resulting from any defaulted loans made by the Company is ultimately borne by CL VI Lux S.a.r.l, the immediate parent, as a result of the financing provided by the parent to the Company. Effective July 2023, the Company entered into a Receivables Sale Agreement pursuant to which the MCA receivables are sold to a Luxembourg securitisation vehicle. In the event of subsequent insolvency of a loan debtor after sale to the securitisation vehicle, the company would be obliged to repurchase the debtors, however it has a 'back to back' agreement with Youlend Limited who in such circumstances will simultaneously acquire the debt from the Company, such that the Company has negligible exposure to future credit risk.
Liquidity risk - The Company defines this as the risk of failing to meet financial obligations as they fall due. The risk arises from unexpected (in terms of size and timing) cash outflows or expected inflows which fail to materialise. The Company monitors the liquidity position on a regular basis and has the support of its sole shareholder, CL VI Lux S.a.r.l. to support any liquidity needs that might arise.
Market Risk - The Company defines this as the risk of financial losses from changes in market factors such as foreign exchange rates and interest rate changes. The Company has some exposure to foreign currency movement as it operates both in the UK, Ireland and Netherlands. After the sale of the MCA loan book, the Company has no risk or reward on loans passed to the securitisation vehicle.
Operational Risk - The Company defines this as the risk of losses from inadequate or failed processes, systems, people, or from external events. The Company outsources the day-to-day management of its operations, and monitors these arrangements on a continuous basis.
Future developments
The Company will continue only to arrange and introduce MCA loans to the Luxembourg securitisation vehicle.
Going concern
The company now only operates to introduce loans to the securitisation vehicle using funds provided by the securitisation vehicle. Directors prepare the accounts on a going concern basis on the assumptions that the company will continue to provide these services to the securitisation vehicle. The parent company has indicated they will provide further funding as necessary to cover any net deficit arising on net assets from time to time..
YL II A Limited
Directors' Report for the Period from 9 August 2022 to 31 December 2023
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Approved by the
Director
YL II A Limited
Statement of Directors' Responsibilities
The directors are responsible for preparing the Strategic Report, 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and apply them consistently; |
• | make judgements and accounting estimates that are reasonable and prudent; |
• | state whether applicable UK Accounting Standards has 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. They 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.
YL II A Limited
Independent Auditor's Report to the Members of YL II A Limited
Qualified opinion
We have audited the financial statements of YL II A Limited (the 'company') for the period from 9 August 2022 to 31 December 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, 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 period 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 qualified 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 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 qualified 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 original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
YL II A Limited
Independent Auditor's Report to the Members of YL II A Limited
Except for the misstatements in the strategic report referred to below we have nothing further to report in this regard.
Opinion on other matter 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 Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements; and |
• |
Except for the misstatement of interest receivable and the exceptional loss referred to above the Strategic Report has been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
As described in the Basis for qualified opinion section of our report, our opinion on the financial statements is qualified in relation to the inappropriate accounting policy adopted in relation to the recognition of interest receivable on loans advanced, resulting in an overstatement of both income and the exceptional loss on the disposal of debt instruments. The Strategic Report refers to amounts in respect of interest receivable and the exceptional loss on disposal as reported in the financial statements, therefore these amounts are also materially misstated in the Strategic Report.
Except for the matter described above in relation to misstatements of interest receivable and the exceptional loss on disposal in the Strategic Report, in the light of our 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 and the Directors' Report .
We have nothing to report in respect of the following matters where 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 Statement of Directors' Responsibilities 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.
YL II A Limited
Independent Auditor's Report to the Members of YL II A Limited
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.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
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 framework 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, including the UK Companies Act and tax legislation, and, those that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.
We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.
In common with all audits carried out in accordance with ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgments made in 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 misstatements due to fraud; |
• |
enquiring of management 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. |
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
YL II A Limited
Independent Auditor's Report to the Members of YL II A Limited
Use of this 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.
For and on behalf of
Staverton Court
Staverton
GL51 0UX
YL II A Limited
Profit and Loss Account for the Period from 9 August 2022 to 31 December 2023
Note |
2023 |
|
Interest receivable |
|
|
Margin on re sale of loan instruments and recharges receivable |
|
|
Administrative expenses |
( |
|
Exceptional income |
11,090,758 |
|
Exceptional loss on disposal of loan portfolio |
(18,986,086) |
|
Operating profit |
7,732,305 |
|
Interest payable and similar charges |
( |
|
Loss before tax |
( |
|
Taxation |
- |
|
Loss for the financial period |
( |
The above results were derived from continuing operations.
The company has no other comprehensive income for the period.
YL II A Limited
(Registration number: 14285867)
Balance Sheet as at 31 December 2023
Note |
31 December 2023 |
|
Current assets |
||
Debtors |
|
|
Cash at bank and in hand |
|
|
|
||
Creditors: Amounts falling due within one year |
( |
|
Net liabilities |
( |
|
Capital and reserves |
||
Called up share capital |
|
|
Profit and loss account |
( |
|
Total equity |
( |
Approved and authorised by the
Director
YL II A Limited
Statement of Changes in Equity for the Period from 9 August 2022 to 31 December 2023
Share capital |
Profit and loss account |
Total |
|
Loss for the period |
- |
( |
( |
New share capital subscribed |
|
- |
|
At 31 December 2023 |
|
( |
( |
YL II A Limited
Statement of Cash Flows for the Period from 9 August 2022 to 31 December 2023
Note |
2023 |
|
Cash flows from operating activities |
||
Loss for the period |
( |
|
Adjustments to cash flows |
||
Finance costs |
|
|
Net issue of financial receivable |
(62,760,246) |
|
Proceeds on sale of loan book |
54,822,757 |
|
Loan waiver - exceptional income |
(11,143,101) |
|
( |
||
Working capital adjustments |
||
Increase in trade debtors |
( |
|
Increase in trade creditors |
|
|
Net cash flow from operating activities |
( |
|
Cash flows from financing activities |
||
Interest paid |
( |
|
Repayment of borrowings |
(49,856,899) |
|
Intercompany loan advances |
61,000,000 |
|
Net advances received from securitisation vehicle to fund operating activities |
17,599,253 |
|
Net cash flows from financing activities |
|
|
Net increase in cash and cash equivalents |
|
|
Cash and cash equivalents at 9 August |
- |
|
Cash and cash equivalents at 31 December |
9,562,874 |
YL II A Limited
Notes to the Financial Statements for the Period from 9 August 2022 to 31 December 2023
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
England
Accounting policies |
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).
Basis of preparation
These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.
The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.
Tax
Taxation for the year comprises current tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
Current assets and liabilities are not discounted.
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.
Going concern
The company now only operates to introduce loans to the securitisation vehicle using funds provided by the securitisation vehicle. Directors prepare the accounts on a going concern basis on the assumptions that the company will continue to provide these services to the securitisation vehicle. The parent company has indicated they will provide further funding as necessary to cover any net deficit arising on net assets from time to time.
Interest income
Debt instrument assets acquired from Youlend Limited are basic financial instruments. Interest receivable in respect of each instrument is recognised immediately in profit and loss and added to the carrying value of each debt instrument asset on the date of acquisition. The amount of interest recognised reflects the total finance income expected to be received over the term of the debt instrument. The effective interest rate method has therefore not been applied to allocate interest over the expected term of the loan.
Profit on sale of loan instruments and recharges
From 4 July 2023, the Company acquires loans on the authorisation of the securitisation vehicle for immediate re-sale to it, receiving in return a margin from the securitisation vehicle along with a charge to cover the costs associated with acquisition of the loan. This margin and receiving of costs is recognised as revenue at the time the loan is assigned to the securitisation vehicle.
YL II A Limited
Notes to the Financial Statements for the Period from 9 August 2022 to 31 December 2023
Revenue |
The analysis of the company's revenue derived from its lending activities on the loan portfolio for the period is as follows:
2023 |
|
Interest receivable |
|
Profit on re sale of loan instruments and recharges receivable |
|
|
Staff costs |
The company employed no staff in the period and consequently no payroll costs incurred in the period.
Exceptional income |
9 August 2022 to 31 December 2023 |
Year ended 8 August 2022 |
|
Parent company loan waiver |
11,090,758 |
- |
During the the period, CL VI S.a.r.l waived £11,090,758 of the loan advanced to the company. The waiver was compensation for £7,559,974 defaulted MCA loans which CL VI S.a.r.l guaranteed and £3,530,784 waiver of the remaining loan balance following the sale of the MCA loan book in July 2023.
Exceptional items |
9 August 2022 to 31 December 2023 |
Year ended 8 August 2022 |
|
Loss on sale of loan book |
18,986,086 |
- |
On 3 July 2023, the company sold all of its debt instruments to CL YL S.a.r.l. recognising a loss on disposal of £18,986,086, being the difference between the carrying value of the debt instrument at the date of disposal, having recognised interest receivable applying the Company’s accounting policy and the amount received from the related party entity.
Interest payable and similar expenses |
2023 |
|
Interest expense on loan from parent company |
|
Auditors' remuneration |
2023 |
|
Audit of the financial statements |
|
YL II A Limited
Notes to the Financial Statements for the Period from 9 August 2022 to 31 December 2023
Taxation |
The tax on profit before tax for the period is higher than the standard rate of corporation tax in the UK of
The differences are reconciled below:
2023 |
|
Loss before tax |
( |
Corporation tax at standard rate |
( |
Tax increase from unrelieved losses |
|
Total tax charge/(credit) |
- |
Debtors |
31 December 2023 |
|
Other debtors |
|
Creditors |
31 December 2023 |
|
Due within one year |
|
Trade creditors |
|
Other creditors |
|
Accrued expenses |
|
|
Related party transactions |
The Company has taken advantage of the exemption within FRS1
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is