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Registered number: 12283499












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

 

TRUSTUK PAYMENTS LTD

CONTENTS



Page
Company information
 
1
Directors' report
 
2
Directors' responsibilities statement
 
3
Independent auditor's report
 
4 - 7
Profit and loss account
 
8
Balance sheet
 
9
Statement of changes in equity
 
10
Notes to the financial statements
 
11 - 23


 

TRUSTUK PAYMENTS LTD
 
COMPANY INFORMATION


Directors
R Hawley 
D I Holden 




Company secretary
Elemental Company Secretary Ltd



Registered number
12283499



Registered office
1 Royal Exchange

London

EC3V 3DG




Independent auditor
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor

16 Great Queen Street

Covent Garden

London

WC2B 5AH




Page 1

 

TRUSTUK PAYMENTS LTD

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

The directors who served during the year were:

R Hawley 
D I Holden 

Disclosure of information to auditor

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 auditor is 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 auditor is aware of that information.

Post balance sheet events

Post year end there has been continuous communication and dialogue with the card schemes and Visa have notified the management team of their intention to increase diligence across certain verticals. The management team and shareholders confirm they are open to this and wish to ensure continued collaboration and dialogue with the card schemes.
There have been no other significant events affecting the company since the year end.

Small companies note

In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

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





R Hawley
Director

Date: 18 October 2024

Page 2

 

TRUSTUK PAYMENTS LTD
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors are responsible for preparing 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 101 ‘Reduced Disclosure Framework’. 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 then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent; 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 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.

Page 3

 

TRUSTUK PAYMENTS LTD

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TRUSTUK PAYMENTS LTD
 FOR THE YEAR ENDED 31 DECEMBER 2023

Opinion


We have audited the financial statements of TrustUK Payments Ltd (the 'company') for the year ended 31 December 2023, which comprise the profit and loss account, the balance sheet, the statement of changes in equity and the 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 101 ‘Reduced Disclosure Framework’ (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 profit 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 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 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.


Page 4

 

TRUSTUK PAYMENTS LTD

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TRUSTUK PAYMENTS LTD (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Other information


The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual 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.


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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has 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 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; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the directors' report and from the requirement to prepare a strategic report.


Responsibilities of directors
 

As explained more fully in the directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the 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 5

 

TRUSTUK PAYMENTS LTD

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TRUSTUK PAYMENTS LTD (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

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.


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 engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with the directors and other management, and from our commercial knowledge and experience of the technology sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, Payment Services Regulations, Financial Conduct Authority (FCA) regulations, anti money laundering legislation, GDPR and taxation legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:
 
performed analytical procedures to identify any unusual or unexpected relationships:
assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 3 were indicative of potential bias;
performing testing of revenue streams;
tested a sample of journal entries to identify unusual transactions; and
investigated the rationale behind significant or unusual transactions.
 
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
 
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC and the Financial Conduct Authority.
Page 6

 

TRUSTUK PAYMENTS LTD

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TRUSTUK PAYMENTS LTD (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Auditor's responsibilities for the audit of the financial statements (continued)

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.


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 auditor's 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 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.





Jacqueline Oakes (senior statutory auditor)
  
for and on behalf of
Blick Rothenberg Audit LLP
 
Chartered Accountants
Statutory Auditor
  
16 Great Queen Street
Covent Garden
London
WC2B 5AH

 
Date: 
18 October 2024
Page 7

 

TRUSTUK PAYMENTS LTD
 
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Revenue
 4 
75,098,785
24,446

Cost of sales
  
(55,988,526)
(72,688)

Gross profit/(loss)
  
19,110,259
(48,242)

Administrative expenses
5
(16,317,847)
(123,469)

Profit/(loss) before taxation
  
2,792,412
(171,711)

Tax on profit/(loss)
 7 
-
-

Profit/(loss) for the financial year
  
2,792,412
(171,711)

There are no items of other comprehensive income for either the year or the prior year other than the profit for the year. Accordingly, no statement of other comprehensive income has been presented.

Page 8


 
REGISTERED NUMBER:12283499
TRUSTUK PAYMENTS LTD

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

  

Fixed assets
  

Intangible assets
 8 
153,324
177,613

Current assets
  

Debtors: amounts falling due within one year
 9 
221,748,376
196,464

Cash at bank and in hand
 10 
18,413,213
449,493

  
240,161,589
645,957

Creditors: amounts falling due within one year
 11 
(237,249,393)
(900,462)

Net current assets/(liabilities)
  
 
 
2,912,196
 
 
(254,505)

Total assets less current liabilities
  
3,065,520
(76,892)

  

Net assets/(liabilities)
  
3,065,520
(76,892)


Capital and reserves
  

Called up share capital 
 12 
108,328
108,328

Other reserves
 13 
350,000
-

Profit and loss account
 13 
2,607,192
(185,220)

Total equity
  
3,065,520
(76,892)


The company's financial statements have been prepared in accordance with the provisions applicable to entities subject to the small companies regime.

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




R Hawley
Director

Date: 18 October 2024

The notes on pages 11 to 23 form part of these financial statements.

Page 9

 

TRUSTUK PAYMENTS LTD

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


Called up share capital
Capital contribution reserve
Profit and loss account
Total equity

£
£
£
£


At 1 January 2022
108,328
-
(13,509)
94,819


Comprehensive income for the year

Loss for the year
-
-
(171,711)
(171,711)
Total comprehensive income for the year
-
-
(171,711)
(171,711)



At 31 December 2022 and 1 January 2023
108,328
-
(185,220)
(76,892)


Comprehensive income for the year

Profit for the year
-
-
2,792,412
2,792,412
Total comprehensive income for the year
-
-
2,792,412
2,792,412


Contributions by and distributions to owners

Capital contribution
-
350,000
-
350,000


At 31 December 2023
108,328
350,000
2,607,192
3,065,520


Page 10

 

TRUSTUK PAYMENTS LTD

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

1.


General information

TrustUK Payments Limited is a private company limited by shares incorporated in England and Wales. Its registered office is 1 Royal Exchange, London, EC3V 3DG.
The company's principal activity consists of the provision of integrated payment processing and merchant acquiring services and data management. The company became a Payment Services Directive (PSD) Agent on 28 April 2022. 
 
The company's financial statements are presented in Sterling (£), which is also the company's functional currency.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 101 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of IFRS 7 Financial Instruments: Disclosures
the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers
the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
 - paragraph 79(a)(iv) of IAS 1;
 - paragraph 118(e) of IAS 38 Intangible Assets;
the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements
the requirements of IAS 7 Statement of Cash Flows
the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member

The company is included in the consolidated financial statements of Trust Payments Limited for the year ended 31 December 2023 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.

Page 11

 

TRUSTUK PAYMENTS LTD

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

2.Accounting policies (continued)

 
2.3

Going concern

The company is a subsidiary of Trust Payments Holdings Limited. Trust Payments Holdings Limited, and its subsidiaries (together “the Group") are under the control of Cordet Direct Lending SCSp, managed by CORDET Capital Partners LLP as its’ investment manager ("Cordet"). Cordet have arranged and provided finance to the group of approximately £148m at the balance sheet date.
 
In December 2023 the existing borrowing facilities were extended with the same terms and interest rates as the original contractual obligations. Facility A of approximately £58m is now repayable on 31 March 2025 and Facility C of approximately £90m is now repayable on 30 April 2025. As such the borrowings are shown as long-term liabilities.
The Group has prepared detailed forecasts and cashflow projections to December 2025. These forecasts show that the Group can continue to meet its working capital requirements and settle its operational liabilities as they fall due for at least 12 months from the date of approval of the accounts.
The forecasts do not allow for the repayment of the debt facilities. The directors are confident that a satisfactory resolution will be achieved through a deleveraging or refinancing event. The investors and lenders have demonstrated their continued willingness to support the growth trajectory of the business through loan extensions and additional facilities where they have been required historically. Cordet has provided written confirmation to the Board of Trust Payments Limited that they have the ability and are willing to support the Group.
As the Group has determined that sufficient cash flows exist for a period of at least twelve months from the date of signing these accounts and that the debt facilities can be extended if not refinanced prior to their due date, the directors continue to adopt the going concern basis in the preparation of the financial statements.

Page 12

 

TRUSTUK PAYMENTS LTD

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

2.Accounting policies (continued)

  
2.4

Revenue

IFRS 15 Revenue from Contracts with Customers establishes a comprehensive framework for determining whether, how much and when revenue is recognized. Under IFRS 15, revenue is recognized when a customer obtains control of the goods or service and is measured on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. Determining the timing of the transfer of control – at a point in time or over time – requires judgement.
Revenue, which consists principally of fees priced as a percentage of transaction value and specified fees per transaction generated from processing of electronic payment services transactions, comprises the fair value of the consideration received or receivable for the sale of services in the ordinary course of the company’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts.
The company’s performance obligations are the carrying out of onboarding procedures, the processing of credit or debit card payments on behalf of merchants and the processing of chargebacks and refunds. The three performance obligations are considered as distinct performance obligations. Revenue for onboarding procedures is recognized at a point in time. The revenue arising out of the second and third performance obligation mentioned above is recognized over-time but the company applies the invoiced amount practical expedient to measure progress since the company has the right to invoice its customers in an amount that corresponds directly with its performance to date. The service is deemed to have been rendered and completed once a transaction has been authorized and processed and the company bills its clients and recognizes revenue as soon as this event takes place. Monthly fees are billed prior to month-end. Charges are either netted off from the value of the transactions processed or accumulated and collected following month-end depending on the model chosen by the client. The model is specified on the contract entered with the merchant together with the pricing. 

  
2.5

Capital Management

The company adopts a capital management policy that aims to ensure that the company’s capital balance is sufficient at all times to support its business operations.
The company achieves this objective by regularly monitoring its capital balance in consideration of current economic conditions and the minimum capital requirements imposed by the FCA. If forecasted developments highlight increased capital needs, the company may choose to request an additional capital infusion from its shareholders. The company has complied with externally imposed capital requirements.

Page 13

 

TRUSTUK PAYMENTS LTD

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

2.Accounting policies (continued)

 
2.6

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is Sterling (£).

Transactions and balances

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

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

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the profit and loss account within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'administrative expenses'.

  
2.7

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, 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.
Current tax is the amount of income tax payable in respect of taxable profit for the year or prior years.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax arises from temporary differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These temporary differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.
Deferred tax balances are recognised in respect of all temporary differences that have originated but not reversed by the balance sheet date, except that:
 
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
 
Deferred tax balances are not recognised in respect of permanent differences. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 14

 

TRUSTUK PAYMENTS LTD

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

2.Accounting policies (continued)

 
2.8

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.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Expenditure on research activities is recognised as an expense in the period in which it is incurred. 
Development expenditure
Internally generated intangible assets arising from development (or the development phase of an internal project) is recognised if, and only if all of the following conditions have been demonstrated:
 
the technical feasibility of completing the intangible asset so that it will be available for use of sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probably future economic benefit;
the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development. 

Project development costs are capitalised on the basis of the costs incurred from suppliers. These costs are amortised through administrative expenses on a straight-line basis over the estimated project development cycle of three years.
The assets' carrying amounts and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

 
2.9

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. 

Page 15

 

TRUSTUK PAYMENTS LTD

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

2.Accounting policies (continued)

  
2.10

Financial instruments

Initial recognition
Financial assets and financial liabilities are recognised in the company’s statement of financial position when the company becomes a party to the contractual provisions of the instrument. 
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. 
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. 
Classification of financial assets
The company only has financial assets classified at amortised cost. 
The company classifies its financial assets at amortised cost only if both of the following criteria are met:
• The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows 
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding 
Subsequent measurement of financial assets  
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. 
Amortised cost and effective interest method 
The amortised cost of a financial asset is defined as the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount and adjusted for any loss allowance.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. 
For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are credit-impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition. 
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost. 
 
Page 16

 

TRUSTUK PAYMENTS LTD

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

2.Accounting policies (continued)

Financial instruments (continued)

Interest income is recognised in profit or loss and is included in the "finance income - interest income" line item. 
Foreign exchange gains and losses 
The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. Specifically, for financial assets measured at amortised cost that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss in the ‘Other gains and losses’ line item.
Impairment of financial assets 
The company recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised cost, trade receivables and contract assets. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. 
The company always recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected credit losses on these financial assets are estimated using a provision matrix based on the company historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. 
Derecognition of financial assets 
The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the company retains substantially all the risks and rewards of ownership of a transferred financial asset, the company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
 
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.
 
Financial liabilities and equity
Classification as debt or equity 
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. 
Equity instruments 
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the company are recognised at the proceeds received, net of direct issue costs. 
 
Page 17

 

TRUSTUK PAYMENTS LTD

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

2.Accounting policies (continued)

Financial instruments (continued)
Financial liabilities 
The company only has financial liabilities measured subsequently at amortised cost using the effective interest method. 
The amortised cost of a financial liability is defined as the amount at which the financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. 
Foreign exchange gains and losses 
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the ‘Other gains and losses’ line item in profit or loss for financial liabilities that are not part of a designated hedging relationship. 
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. 
Derecognition of financial liabilities 
The company derecognises financial liabilities when, and only when, the company’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Impairment of trade receivables
The company makes an estimate of the recoverable value of trade and other receivables. When assessing impairment of trade and other receivables, management considers factors including the credit rating of the receivable, the ageing profile of receivables and historical experience. The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. See Note 9 for the net carrying amount of the receivables and associated impairment provision.

Page 18

 

TRUSTUK PAYMENTS LTD

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

4.


Turnover

Revenue represents amounts receivable for services provided in the normal course of business. Revenue is recognised in line with accrual accounting based on fees received for services provided during the financial year.
The total revenue of the company for the year has been derived from contracts with customers.
The total revenue of the company for the year has been derived from its principal activity, wholly undertaken in the United Kingdom.
An analysis of revenue by class of business is as follows:

2023
2022
£
£

Goods and services transferred over time
75,098,785
24,446



5.


Administrative expenses

2023
2022
£
£



Consultancy
6,000
-

Postage
2,459
-

Legal and professional fees
10,483
5,170

Auditor's fees
137,000
30,400

Movement in expected credit loss provision
2,222,432
-

Difference on foreign exchange
(2,160,436)
7,898

Rent
5,976
-

Management recharges
15,852,443
-

Repairs and maintenance
70,388
-

Amortisation
86,165
62,483

Fines and penalties
750
-

Other asset costs
1,706
-

VAT expensed
56,505
-

Other expenses
6,621
17,518

Risk management
19,355
-

16,317,847
123,469


6.


Employees




The Company has no employees other than the directors, who did not receive any remuneration (2022 - £NIL).

Page 19

 

TRUSTUK PAYMENTS LTD

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

7.


Taxation


2023
2022
£
£



Current tax on profit/(loss) for the year
-
-


Total current tax
-
-


Origination and reversal of timing differences
-
-

Total deferred tax
-
-


Tax on loss
-
-

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 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit/(loss) before taxation
2,792,412
(171,711)


Profit/(loss) multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
656,775
(32,625)

Effects of:


Expenses not deductible for tax purposes
507,430
-

Movement in deferred tax not recognised
(46,305)
-

Remeasurement of deferred tax for changes in tax rates
2,778
-

Unrelieved tax losses carried forward
-
32,625

Group relief
(1,120,678)
-

Total tax charge for the year
-
-



Factors that may affect future tax charges
At the end of the year the company had unrecognised tax losses to carry forward against future profits of £nil (31 December 2022: £185,220).

Page 20

 

TRUSTUK PAYMENTS LTD

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

8.


Intangible assets




Development expenditure

£



Cost


At 1 January 2023
240,096


Additions
61,876



At 31 December 2023

301,972



Amortisation


At 1 January 2023
62,483


Charge for the year
86,165



At 31 December 2023

148,648



Net book value



At 31 December 2023
153,324



At 31 December 2022
177,613

Intangible additions in the year were not internally generated.





9.


Debtors

2023
2022
£
£


Trade debtors
2,715,513
4,821

Receivables from contracts with customers
3,876,788
-

Amounts owed by group undertakings
151,666,809
54,729

Other debtors
1,439
-

Prepayments
663,014
54,844

Amounts due from schemes
62,582,934
40,220

Funds advanced as collateral
241,879
41,850

221,748,376
196,464


Page 21

 

TRUSTUK PAYMENTS LTD

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

9.Debtors (continued)

Amounts owed by group undertakings are interest free, have no fixed repayment date and are repayable on demand.
Trade debtors are stated after provisions for impairment of £2,222,432 (2022: £Nil).


10.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
18,413,213
449,493



11.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
483,309
112,168

Refund liabilities
161,522
-

Amounts owed to group undertakings
132,396,369
675,798

Merchant liabilities
102,301,771
80,496

Accruals
1,906,422
32,000

237,249,393
900,462


Amounts owed to group undertakings are interest free, have no fixed repayment date and are repayable on demand.


12.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



108,328 (2022 - 108,328) Ordinary shares of £1.00 each
108,328
108,328



13.


Reserves

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses.


14.


Capital contribution reserve

The capital contribution reserve is free from any claims, charges, liens, equities and encumbrances and is made up of a contribution into the distributable reserves by the parent company.

Page 22

 

TRUSTUK PAYMENTS LTD

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

15.


Ultimate parent undertaking and controlling party

The immediate parent undertaking is Trust Payments Limited which is the parent undertaking of the smallest group of undertakings for which group financial statements, whose registered office is at 1 Royal Exchange, London, England, EC3V 3DG. Copies of the group financial statements are available to the public from Companies House, Crown Way, Cardiff, CF14 3UZ.
There is no one controlling party. The ultimate parent company is CORDET Direct Lending SCSp, an entity incorporated in Luxembourg.

 
Page 23