Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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TRUST PAYMENTS (UK) LTD
CONTENTS
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TRUST PAYMENTS (UK) LTD
COMPANY INFORMATION
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TRUST PAYMENTS (UK) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their Strategic Report for the year ended 31 December 2023.
The directors are satisfied with the performance of company for the year, which built on the investment made in prior years.
The directors consider Gross Revenue, Gross Profit, merchant retention and Adjusted EBITDA to be the primary Key Performance Indicators.
(1) Adjusted EBITDA is calculated as Loss before interest, taxation, depreciation, amortisation, foreign exchange gains and losses and impairment.
In 2023 the company has seen gross revenue grow by 5.3%, in line with the overall growth strategy of the group. The gross profit margin has remained stable. Adjusted EBITDA has increase by 21.7% due to effective cost management and the additional volume being accommodated by the existing operational structure.
Net merchant volume retention was over 100% (2022: over 100%).
The principal risks and uncertainties facing the business are set out below. These risks are regularly monitored and consider by the Board and the Group Audit Committee.
Product risk
The turnover of the company consists of income from the provision of payment services, including merchant services and associated services, as well as data.
Sales are dependent on the wider group being able to continually offer its customers cost effective, versatile and reliable products while complying with ever changing demands of the environment in which it operates, including changes in global government and regulatory policies, and consumer behaviours. The group, as it adapts to global changes in its markets, needs to ensure that it can maintain strong internal controls and procedures.
Customer risk
The company is also exposed to the impact of changes in relationships with its customers and suppliers. It is a key task for the operational management in each business to maintain and develop relationships with customers and suppliers during the initial transition period and further into the future.
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TRUST PAYMENTS (UK) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Liquidity risk
Liquidity risk is the risk that the business cannot meet its financial obligations when they fall due. It includes funding risk which is the risk that the business does not have sufficient stable sources of funding to meet its financial obligations when they fall due or can do so only at excessive cost.
The group finances its operations through a mixture of share capital, income from sales and secured debt.
Liquidity risk is monitored at group level using a liquidity gap model which calculates the net cash flows of the group or of individual companies over time in order to detect any critical points in the expected liquidity. The total liquidity requirement is calculated as the sum of the negative gaps (outflows greater than inflows) recorded for each individual time period. Any positive gaps found in a time period are used to reduce negative gaps in subsequent periods.
Credit risk
Trade receivables are managed in respect of credit and cash flow risk by policies concerning the credit offered to purchasing authorities and the regular monitoring of amounts outstanding for both time and credit limits.
New contracts are imposing standard direct debit mandates to ensure that the company’s trade receivables are collected in a monthly direct debit automated process and reduces the company’s overall debit merchant balances.
Trade payables liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Foreign currency risk
Foreign currency risk is not substantial at company level given that the majority of all operational and processing of transactions are conducted in GBP.
Foreign exchange differences in the year are driven by movements on intercompany balances.
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.
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TRUST PAYMENTS (UK) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
Future developments The company continues to execute its growth plans in traditional low risk retail verticals. Statement by the directors on performance of their statutory duties in accordance with S172 (1) Companies Act 2006
Section 172 (1)(a) to (f) requires the directors to act in the way they consider would be most likely to promote the success of the company for the benefit of its members, as a whole, with regard to the matters set out below. The company considers these matters are part of the wider group strategy, objectives and plans.
a) The likely consequences of any decision in the long-term
The directors believe that they have acted in the way they consider, in good faith, to promote the long term success of the company. Governance of the business is formalised in regular board meetings, with input from appropriate strategic advisors. Financial budgets and longer term financial planning and forecasts have been prepared allowing local and group management to assess the long term impact of operational and strategic decisions.
b) The interests of the company's employees
The directors consider our people to be a key and critical asset to the business and their interests are considered when decisions are being taken. The directors take care over the wellbeing and competency of staff via regular on the job training and consultations with employees. Significant investment in people and HR systems to promote good management, assessment and career development of people continues to be made by the group.
During 2023 Trust Payments has joined the 30% Club and the directors are delighted to be able to contribute to this vital agenda, which aims to brings us much closer to reflecting the reality of our society and ensuring that women of all backgrounds are fully represented across our industry.
c) The need to foster the company's business relationships with suppliers, customers and others
The directors aim to work in partnership with customers and suppliers who also share similar values and behaviours to the company. Significant resources are focused on good customer service, as well as strategic partnership roles for managing the relationships with key stakeholders and suppliers at group level. These resources include the development of group social, ethical and environmental responsibility policies to ensure improved long term position of the business and foster a leading culture.
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TRUST PAYMENTS (UK) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
d) The impact of the company's operations on the community and environment
The directors are mindful of the communities in which the business operates. The group has developed social and environmental policies which are designed to reduce the impact of the group's activities on the environment. A standing committee looks at these issues regularly and puts best practice recommendations forward as appropriate.
For example during the year the group has supported sponsorship of Greener and Cleaner in Bromley, where the group’s office is located, and supports a range of volunteering schemes available to all staff.
e) The desirability of maintaining a reputation for high standards of business conduct
As part of the financial services community, it is of vital importance that high standards of professional business conduct are maintained. Strong ethical and business rigour is embedded via onboarding training for new employees, and continued professional development programmes, delivered online, for existing employees. All employees are required to pass appropriate courses, such as anti money laundering and data protection. The directors' intentions are to behave responsibly and ensure that management operate the business in a responsible manner, whilst adhering to the high standards of business conduct and good governance expected.
f) The need to act fairly between members of the group
The group has a number of subsidiary entities. As such, communication between the geographic locations, and the interplay between services or functions offered by different locations is vital.
Part of the business strategy is to support a group wide deployment of our services seamlessly to the end customer, regardless of which entity or geography they are deployed from. This is also of huge benefit to global enterprises or customers wishing to expand overseas.
Each member of the group is regularly updated about the performance of the group and provided with equivalent financial and strategic reports and updates. Quarterly townhalls and regular monthly department meetings with the executive teams ensures that our people and well informed and kept up to date with the direction and overall objectives of the organisation. An executive management team, representing different areas of the business operates at a group level and meet regularly to ensure the strategic path and long term objectives are executed.
In addition to this the group has appointed members to each subsidiary board to ensure that their interests are fairly reflected at this level and decisions made by the group are in line with the strategic aim of all members.
This report was approved by the board and signed on its behalf.
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TRUST PAYMENTS (UK) 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.
The directors who served during the year were:
On 03 October 2024, L Booth was appointed as a director.
As permitted by s414c(11) of the Companies Act 2006, the directors have elected to disclose information, required to be in the directors' report by Schedule 7 of the 'Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008', in the strategic report.
This report was approved by the board and signed on its behalf.
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TRUST PAYMENTS (UK) LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
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 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 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.
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TRUST PAYMENTS (UK) LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TRUST PAYMENTS (UK) LTD
FOR THE YEAR ENDED 31 DECEMBER 2023
We have audited the financial statements of Trust Payments (UK) 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 policies. The 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).
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.
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.
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TRUST PAYMENTS (UK) LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TRUST PAYMENTS (UK) LTD (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
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.
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TRUST PAYMENTS (UK) LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TRUST PAYMENTS (UK) LTD (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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 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, anti money laundering legislation, Payment Card Industry Data Security Standards (PCI DSS), taxation legislation, GDPR and employment 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;
∙tested journal entries to identify unusual transactions;
∙assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias; 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;
∙reading the minutes of meetings of those charged with governance;
∙enquiring of management as to actual and potential litigation and claims; and
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TRUST PAYMENTS (UK) LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TRUST PAYMENTS (UK) 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 directors 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.
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
Chartered Accountants
Statutory Auditor
16 Great Queen Street
Covent Garden
WC2B 5AH
Date:
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TRUST PAYMENTS (UK) LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
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TRUST PAYMENTS (UK) LTD
BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 36 form part of these financial statements.
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TRUST PAYMENTS (UK) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Trust Payments (UK) Limited is a private company limited by shares and is incorporated in England and Wales. The registered office is 1 Royal Exchange, London, England, EC3V 3DG.
The company's principal activity consist of the provision of integrated payment processing and merchant acquiring services and data management. The company's financial statements are presented in Sterling (£), which is also the company's functional currency.
2.Accounting policies
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:
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 requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases. The requirements of paragraph 58 of IFRS 16, provided that the disclosure of details in indebtedness relating to amounts payable after 5 years required by company law is presented separately for lease liabilities and other liabilities, and in total
∙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 73(e) of IAS 16 Property, Plant and Equipment;
- 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
IAS 24 requires the disclosure of key management personnel compensation and amounts incurred by the entity for key management personnel services that are provided by a separate management entity. The company has taken exemption under FRS 101 paragraph 8(j) not to disclose this information.
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
The principal accounting policies applied in the presentation of the financial statements are set out below. These policies have been consistently applied for all the years presented, unless otherwise stated.
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.
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
IFRS 15 Revenue from Contracts with Customers establishes a comprehensive framework for determining whether, how much and when revenue is recognised. 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 commissions 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. Transaction fees The company provides a secure value-added payment gateway facility. The company recognises revenue when performance obligations have been satisfied and for the company this is once a transaction has been authorised and processed. The company bills its clients at the end of each month for any transactions that have been authorised and processed during that period. POS terminal fees Revenue on distribution of POS terminals is recognised when the terminal is provided to the customer. Management fees The company provides payment gateway management services for fellow group companies for a fixed monthly fee. The company recognises revenue on a straight-line basis over a period of time as the performance obligations are satisfied. Billing of customers The company bills its customers at the end of each month for the transactions that have been authorised and processed during that period. Contract assets Contract assets primarily relate to the company's right to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional.
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.
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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 19
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Computer software
Acquired computer software is capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised through administrative expenses on a straight-line basis over their estimated useful lives of three years. Costs associated with maintaining computer software programmes are recognised as an expense as incurred. 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. 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 probable 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. 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.
Page 20
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (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:
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.
At each reporting date, the group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the group estimates the recoverable amount of the cash generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with an indefinite useful life are tested for impairment at least annually and whenever there is an indication at the end of a reporting period that the asset may be impaired.
Page 21
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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; and
∙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.
Page 22
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Financial instruments (continued)
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost. 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.
Page 23
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Financial instruments (continued)
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. 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.
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.
Page 24
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
At inception of a contract, the group assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The assets are depreciated to the earlier of the end of the useful life of the right-of-use asset or the lease term using the straight-line method. The lease term includes periods covered by an option to extend if the company is reasonably certain to exercise that option. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Generally, the company uses its incremental borrowing rate as the discount rate. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising in rate, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The group has elected to apply the practical expedient not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments associated with these leases are recognised as an expense on a straight line basis over the lease term.
The Trust Payments Holdings Limited ("TPHL") group, to which this company belongs, has adopted long term incentive plans whereby share based awards, over TPHL's equity, have been granted to certain employees of the group and company.
The fair value of shares with specific share appreciation rights is recognised as an employee benefits expense, with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted. The awards granted do not have any performance based vesting conditions and vest on the sale, asset sale, IPO or winding up of the group (‘the exit event’). The equity settled share based payment expense has been recognised over the likely timescale to an exit event.
Page 25
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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: See note 11 for the net carrying amount of internally generated intangibles recognised in the year. Judgement is required on whether the recognition criteria have been met and estimate as to the percentage of staff salaries spent of eligible development. The company makes an estimate of the recoverable value of internally generated intangible assets. When assessing impairment, management considers factors including the discounted value of future cash flows. Revenue projections, for an early stage product, are inherently uncertain due to the nature of the company's business and unstable market conditions. See note 11 for the net carrying amount of internally generated intangibles, there has been no impairment recognised in the year.
Page 26
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 27
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 28
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 29
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 30
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Taxation (continued)
Page 31
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Taxation (continued)
At the end of the year the company had net unrecognised tax losses to carry forward against future profits of £11,179,360 (2022: £5,809,472) but no deferred tax asset (2022: £Nil) has been recognised due to uncertainty on the timing of the utilisation of the losses.
Page 32
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 33
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 34
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
Profit and loss account
The company has given security over its assets in respect of its immediate parent company's loan facilities of up to an amount of £148.4m (2022: £126.1m).
This contains fixed and floating charges that cover all of the property and undertakinings of the company.
The company has historically capitalised licence fees relating to the hire of POS terminals as part of tangible fixed assets. Upon review of the underlying contracts, it was agreed that these licence fees should have been expensed in the profit and loss account instead.
The comparative information presented in the financial statements for the year ended 31 December 2022 has been restated to correct this error, with each affected financial statement line item for the prior period restated as follows: The restatement decreased the net book value of tangible fixed assets by £410,729. The restatement increased cost of sales by £609,581. The restatement decreased administrative expenses by £198,852. The combination of the above resulted in a increase in the loss before taxation from of £410,729. The impact on opening reserves as at 1 January 2022 was £nil.
Page 35
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TRUST PAYMENTS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The immediate parent undertaking is
There is no one controlling party. The ultimate parent company is CORDET Direct Lending SCSp, an entity incorporated in Luxembourg.
Page 36
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