The directors present the strategic report for the year ended 31 March 2024.
Amplifi Holding Ltd, via its wholly owned subsidiary Amplifi Capital (U.K.) Limited ("Amplifi”), operates a consumer lending platform which offers unsecured personal loans to near prime consumers who may not otherwise have access to credit from traditional high street banks. Amplifi provides loans directly under its Reevo brand as well as providing platform brokerage services to two of the largest credit unions in the United Kingdom. The platform seeks to build a leading position in consumer finance, currently offering personal loans, with ambitions to launch a credit card operation in the future. The principal activities of the company include brokerage, credit and data analytics, technology services, and loan portfolio servicing.
Despite significant headwinds faced by the Group over the past 12 months impacting our customers and the markets we operate in, we remained resilient and focused on long-term priorities. While the results reflect these challenging conditions, with a loss before taxation of £0.4m (2023: £5.6m profit) the Group continued to make progress in key strategic areas. The results for the year are set out in the Group’s Statement of Comprehensive Income. No dividend is proposed (2023: £nil).
Risk management is overseen by Amplifi’s Risk Committee, which is responsible for the monitoring and oversight over legal, regulatory, financial and operational risks and requirements.
There are a number of potential risks and uncertainties which could have a material impact on the Group’s long-term performance:
Regulatory Risk - The Group defines this as the risk of failure to comply with regulatory requirements applying to business arrangements and activities.
Amplifi is regulated by the Financial Conduct Authority (FCA) (ref:718749) in relation to consumer credit origination and servicing operations. It is specifically authorised for credit broking and debt administration and trades under the names “Reevo”, “Reevo Money” and "My Community Finance” as well as its own name, Amplifi Capital.
Failure to comply with relevant regulations could result in regulatory censure leading to suspension or termination of the Group’s ability to conduct business and could lead to financial loss. The long term on-going success of the business is supported by pro-actively monitoring compliance with the regulatory requirements, maintaining a pro-active and open relationship with the FCA and a commitment to strengthening the Group’s governance and compliance framework.
On 31 July 2023 the FCA’s final rules and guidance on New Consumer Duty rule came in to force and the Group has undertaken a major review of all its policies and procedures during the period since the rules were published to ensure ongoing compliance.
Strategic Risk - The Group defines this as the risk that the Group does not devise and implement a business strategy that meets the objectives of its shareholders and other stakeholders.
The Group’s strategy is primarily based on the future provision of credit products to consumers, primarily in the near prime market. Changes in economic conditions could impact the ability of the Group to maintain and grow market demand as per its strategic plans. Also, competitors may develop new products which may disrupt the Group’s market share. The Group continually re-evaluates strategy based on periodic evaluation of consumer needs, market demand and the approach to strategy execution.
Reputational Risk - The Group defines this as the risk of a fall in market share and customer demand due to reputational reasons.
In particular, as part of this strategy, Amplifi strives to maintain a high standard in customer service. Amplifi continually considers the needs and priorities of existing and potential customers in its decision making. The Group remains committed to maintaining high standards of service to its customers through investment in its staff and processes. This is reflected in the 4.8 Trustpilot rating which the Group holds across all its customer facing channels.
Credit Risk - The Group defines this as the risk of financial losses as a result of the non-recoverability of monies owed to it.
The Group’s core credit risk exposure arises from its outstanding loan book receivables from customers. Credit risk on the loan book is primarily managed and monitored by the Group’s loan decision systems and credit scoring tools. These rules and the lending strategies from which they are derived are continually re-evaluated.
Liquidity Risk - The Group defines this as the risk of failing to meet financial obligations as and when they fall due. The risk arises from unexpected cash outflows or expected inflows which fail to materialise. The Group operates a policy of prudent liquidity management to ensure it maintains sufficient cash reserves to facilitate its needs.
The Group continually monitors and reforecasts the liquidity position to ensure it has sufficient cash to meet its projected requirements.
Market Risk - The Group defines this as the risk of financial losses from changes in market factors such as foreign exchange rates and interest rate changes. The Group has little exposure to foreign currency movement as its operations are solely based in the United Kingdom. The Group’s primary market risk exposure is to changes in interest rates. The Group continually evaluate the need to formulate a mitigation strategy and implement hedging strategies from time to time.
Operational Risk - The Group defines this as the risk of losses from inadequate or failed processes, systems, people, or from external events. The Group manages this risk through management and Board oversight. There are a number of operating committees that regularly meet to monitor and take action to mitigate or address any risks.
Capital Management – The Group’s capital comprises its ordinary share capital and accumulated reserves. The objective of the directors of the Group when managing capital is to safeguard the Group’s ability to continue as a going concern in order to provide long-term returns for the shareholders. The Group is not currently subject to any specific externally imposed capital requirements.
The results of the Group for the year show an increase in revenue of 86% to £40.7m (2023: £21.8m), and a loss taken to equity of £1.2m (2023: £4.7m profit). The Group's net assets have decreased by 16% to £6.2m (2023: £7.4m). The loss in the year and reduction in net reflect a non-cash impairment charge mentioned below.
During the year, the Group drew amounts under its secured loan facility with a resultant increase in borrowing of £17.0m, resulting in a liability at March 2024 of £47.0m (2023: £30.0m).
Amplifi continues to make significant investments in its technology, risk management, customer service and compliance functions as well as providing capital to the credit union sector.
In particular, the Group has significantly increased its number of employees in the year. Amplifi understands that attracting, motivating and retaining talent at all levels is vital to the continuing success and growth of the business. The Group invests in its employees through various benefits schemes and wellbeing initiatives as well as providing opportunities for training and development.
The subsidiary has continued its R&D efforts to develop an innovative platform aimed at automating and streamlining financial services processes for Credit Unions and Community Development Finance Institutions (CDFIs). Collaborating with Gojoko Marketing Ltd, the project incorporates cutting-edge technologies to improve data processing, operational efficiency, and system scalability. This ongoing R&D investment supports Amplifi’s commitment to delivering ethical, responsible financial products while driving long-term value and efficiency improvements.
As part of our commitment to prudent and transparent financial reporting, the Group has recognised a non-cash impairment charge in relation to its deferred share investments held with certain Credit Unions. This accounting adjustment, while reducing reported profit before tax to a loss of £0.4m for the year (from a pre-adjustment profit of £5.2m), reflects a forward-looking reassessment of the recoverable value of these investments in light of evolving market conditions. Importantly, this adjustment does not impact the Group’s strong underlying operational performance.
The Group uses key performance indicators. The performance of the main indicators in this reporting period were:
Loss before tax £0.4m (2023: £5.6m profit)
Total assets £127.9m (2023: £42.8m)
Net current assets £85.4m (2023: £12.5m)
Net assets £6.2m (2023: £7.4m)
Own loan book £63.2m (2023: £6.5m)
Bad debts provision £4.1m (2023: £0.2m)
Amplifi is committed to becoming a leading provider of accessible and affordable credit. We enable our customers to responsibly structure their personal finances by offering access to affordable fixed-rate finance. Amplifi remains confident in its long-term strategy and continues to actively support the Credit Union sector and its Reevo customers as a key part of its mission to deliver inclusive financial services.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2024.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
We have audited the financial statements of Amplifi Holding Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Material uncertainty relating to going concern
We draw attention to note 1.4 in the financial statements which indicates that the group is reliant on two significant undertakings for a significant proportion of its revenue. Since the year end, these significant undertakings have reported losses in their financial year ended 30 September 2024, which has resulted in a reduction in loan originations in the credit unions and therefore fee income earned by the group over the period.
These events or conditions, along with the other matters as set out in note 1.4, indicate that a material uncertainty exists which may cast significant doubt on the group's ability to continue as a going concern.
Our opinion is not modified in respect of this matter. 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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
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.
As part of our planning process:
We enquired of management the systems and controls the group and company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The group and company did not inform us of any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the group and company. We determined that the following were most relevant: FCA regulations, FRS 102 and Companies Act 2006.
We considered the incentives and opportunities that exist in the group and company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the group and company, together with the discussions held with the group and company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to deferred remuneration due in more than one year, recoverability of other receivables, adequacy of the bad debt provision within trade receivables and impairment of fixed asset investments.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
Performing a proof in total of revenue for evidence of management bias.
Testing key revenue lines, in particular cut-off, for evidence of management bias.
Obtaining third-party confirmation of material bank and loan balances.
Documenting and verifying all significant related party and consolidated balances and transactions.
Reviewing documentation such as the group and company’s board minutes, for discussions of irregularities including fraud.
Testing all material consolidation adjustments.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £242,765 (2023 - £88,505 profit).
Amplifi Holding Ltd ("the company") is a private company limited by shares incorporated in England and Wales. The registered office is 30 Churchill Place, London, E14 5RE, England.
The group consists of Amplifi Holding Ltd, its subsidiary Amplifi Capital (UK) Limited and Castor Financing Limited, which Amplifi Holding Ltd is considered to be the ultimate controlling parent.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures
The consolidated group financial statements consist of the financial statements of the parent company Amplifi Holding Ltd together with its subsidiary (ie an entity that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits) and an entity which Amplifi Holding Ltd is considered to be the ultimate controlling parent.
All financial statements are made up to 31 March 2024. Where necessary, adjustments are made to the financial statements of its subsidiary to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Whilst the group has made an operating profit in the year and had net current assets of £85.4m as at 31 March 2024, it is reliant on two significant undertakings (Brent Shrine Credit Union Limited (t/a My Community Bank) and North Edinburgh and Castle Credit Union Limited (t/a Castle Community Bank)) for a significant proportion of its revenue. Since the year end, these significant undertakings have reported losses in their financial year ended 30 September 2024, which has resulted in a reduction in loan originations in the credit unions and therefore fee income earned by the group over the period. These factors have created some uncertainty over the funding requirements and forecast liquidity position of the group.
In light of the challenging trading position of the group, the directors have been prioritising initiatives to deliver increased origination volumes across its channels whilst ensuring that new business is written in line with the company’s risk appetite. The directors have also taken actions to improve the operational efficiency of the group. Additionally, in January 2025, the group pro-actively entered into discussions with its senior lender to explore options to restructure its external debt obligations. As part of this process, the senior lender has agreed a period of forbearance in respect of its 31 March 2025 interest coupon.
Based on the above, the directors consider that there is a material uncertainty that may cast doubt on the group’s ability to continue as a going concern. Notwithstanding the uncertainty, the directors have a reasonable expectation that the group will have adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements and thus consider it appropriate to continue adopting the going concern basis in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business.
Turnover is income in respect to sourced loans, paid to the group as a percentage of the originated loan as an introduction fee. Turnover is recognised according to the period in which the loan was made.
Service fees includes underwriting placement fees being commission on investments in deferred shares made by the group and a company under common control.
Interest and fee income on trade receivables is calculated on a straight-line method and this is not materially different from the effective interest method. Default fees and any interest are charged to customers when they fail to make a repayment within the agreed terms and such fees and interest are recognised as revenue when these amounts are expected to be recovered.
The intangible assets under development relate to a credit card platform in development but not yet in use.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Investments in deferred shares are initially measured at cost and are assessed for impairment at each reporting date, and any impairment losses or reversals of impairment losses are recognised immediately in the profit and loss account.
At each reporting period end date, the group reviews the carrying amounts of its tangible 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 in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
The group classifies its financial assets into the following categories: cash and cash equivalents and trade and other receivables. The classification is determined by management upon recognition, and is based on the purpose for which the financial assets were acquired.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including trade and other payables, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Government grants
Government grants, which include amounts received from the Bounce Back Loan Scheme that cover interest and fees payable to the lender, are recognised at the fair value of the grant received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. The income is recognised in other income on a systematic basis over the period in which the associated costs are incurred, using the accrual model.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
At the year-end, the group holds deferred shares in two significant undertakings with a coupon rate ranging from 13.5% to 18%. Management have assessed whether indicators of impairment existed at the year-end in relation to these investments, through review of the significant undertakings results for the period to 31 March 2024 and following the year-end. In assessing the recoverable amount of the investments, the directors have deemed that a net asset value as at 31 March 2024 approach is most appropriate. Management have relied upon the 31 March 2024 management accounts provided by the significant undertakings as a best estimate of the carrying value of the investments at that date. This has resulted in an impairment loss of £5,562,115 being recognised, with carrying value of the deferred share investments being £37,210.585.
Deferred remuneration due in more than one year
Included within other creditors due in more than one year is deferred remuneration payable to key management personnel and staff. The amount has been deferred as it is due for payment in June 2025 on the basis that the individual is still employed by the group. The directors have made a judgement that it is probable the employees entitled to this remuneration will be employed by the group in June 2025 therefore the full amount should be provided for.
Recoverability of other debtors
At the year end the group was owed £13,368,966 (2023: £4,496,102) included in other debtors due from a company under common control. The directors assess the recoverability of these debts based on the actual and forecast financial results of the company under common control. At the year end the directors consider the amounts included in other debtors to be recoverable. Following the year end, £12,573,076 of this balance has been recovered, with the remaining amount considered recoverable due to a right to offset agreement with the company under common control.
Bad debt provision
At the year end a bad debt provision of £4,124,534 (2023: £225,176) was included within trade receivables against short term loans made to consumers. Management have assessed the recoverability of the loans on a line by line basis with reference to arrears information at the balance sheet date and following the year end. This is achieved by categorising each loan into a risk band which varies depending on the number of days that payments are in arrears. As there are no historic trends available for reference due to the scaling up of the consumer lending business, and due to the nature of the loans, the provision involves a high degree of uncertainty.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 2).
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
During the year, £159,694 of intangible assets under development were transferred to a company under common control.
During the year, tangible fixed assets with cost and accumulated depreciation of £61,074 were transferred to a company under common control.
The group holds £42,772,700 of deferred shares at the year-end date (2023: £25,417,700) with a coupon rate ranging from 13.5% to 18%. During the year, impairment losses of £5,562,115 have been recognised.
Following the year-end, the group has acquired £6,349,738 deferred shares with a coupon rate ranging from 6% to 18.47%.
Included in other investments is a £600,000 subordinated investment in a significant undertaking. The subordinated debt has a coupon rate ranging between 13% and 24% and is due for repayment on 21 March 2029. Following the year-end, the £600,000 subordinated investment was redeemed.
Amplifi Holding Ltd is considered to be the controlling party of Castor Financing Limited, a company incorporated in the United Kingdom whose registered office is 10th Floor, 5 Churchill Place, London, E14 5HU, England, United Kingdom.
Details of the company's subsidiaries at 31 March 2024 are as follows:
The group also has significant holdings in undertakings which are not consolidated.
The investments in the below significant undertakings do not give the group control over voting rights. Furthermore, this assists the undertakings to facilitate their activities, which in turn assists the group with its operations.
The direct shareholdings noted below relate to the deferred share class of the significant undertakings and the group has two voting shares for each entity:
The above financial results are for the year ended 30 September 2024 and shareholding percentages are as at 31 March 2024 for both entities.
Included in other debtors is an amount of £13,368,966 (2023: £4,496,102) owed from a company under common control.
During the year, two fixed and floating charges and negative pledges over the assets of the company in favour of a shareholder of the company were satisfied. Two new charges were registered in favour of agent and trustee on behalf of a lender to its subsidiary undertaking, containing a fixed charge, floating charge and negative pledge.
During the year, there was a fixed and floating charge over the assets of the group in favour of a shareholder of the company was satisfied. Three new charges were registered in favour of the agent and trustee on behalf of a lender to a subsidiary undertaking containing a fixed charge, floating charge and negative pledge.
Other creditors relate to a loan facility of up to £50,000,000 which comprises of a £30,000,000 fixed rate facility at 14.5% and a £20,000,000 accordian facility at a variable rate of 10.5% + SONIA. At the year-end, £47,000,000 has been drawn down on this facility. There are loan arrangement fees of £664,202 included within prepayments and accrued income.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Following the year-end, the immediate parent company have subscribed for 272,014 ordinary shares of £0.1p each.
Group
During the year, the group incurred software costs of £5,760,000 (2023: £4,758,000), recruitment fees and recharged staff expenses of £nil (2023: £87,628) which were paid to a company under common control.
At the year-end, the group was owed £13,368,966 (2023: £4,496,102) from a company under common control, which is included in other debtors. The group received interest of £600,467 (2023: £319,624) during the year on the amounts owed by the company under common control at an interest rate of 6.25% per annum (2023: 10%).
As described in the fixed asset investments and significant undertakings notes above, the group holds deferred share investments in Brent Shrine Credit Union Limited (t/a My Community Bank) and North Edinburgh and Castle Credit Union Limited (t/a Castle Community Bank) with 76% (2023: 81%) and 82% (2023: 75%) direct ownership of the deferred shares in issue at the year-end, respectively. The group holds deferred share investments with a carrying value of £37,210,585 (2023: £25,417,700) at the year-end with coupon rates ranging from 13.5% to 18%. During the year, the group received deferred share interest receivable of £6,059,313 (2024: £3,434,500) and underwriting fees of £300,000 (2023: £478,750) on the deferred share investments held. Furthermore, the group received upfront and base brokerage fee income of £31,908,603 (2023: £19,935,305) and enhanced fee income of £nil (2023: £529,883) from the credit unions in accordance with the service agreements.
During the year, the group paid gross salary of £97,167 (2023: £67,837) to a shareholder and spouse of one of the directors.
CSC Capital Markets UK Limited entered into an agreement with the group to certain corporate administrative services, bookkeeping and accounting services to the group. During the period the group incurred fees of £34,644 from CSC Capital Markets UK Limited. No fees were paid to Directors by the administrator as a directors’ fee.
Company
At the year-end, the company was owed £795,890 (2023: £817,214) from a company under common control and £59,138 (2023: £nil) by a group undertaking, which is included in other debtors. The company received interest of £46,840 (2023: £59,758) during the year on the amounts owed by a group undertaking at an interest rate of 6.25% per annum (2023: 10%).
The company hold deferred share investments in Brent Shrine Credit Union Limited (t/a My Community Bank) and North Edinburgh and Castle Credit Union Limited (t/a Castle Community Bank). The company holds deferred share investments with a carrying value of £779,296 (2023: £1,050,000) at the year-end with coupon rate ranging from 13.5% to 15%. During the year, the company received deferred share interest receivable of £151,389 (2023: £150,975) on the deferred share investments held.
During the year, the company entered into a commission agreement with a director in relation to the introduction of the provider of the term facility to the company. £507,000 was paid in the year to 31 March 2024, of which £120,000 was paid by a company under common control. Furthermore, the company have paid the director £85,000 by way of a commission payment in relation to a funding agreement for a company under common control. The director has resigned following the year-end.
Following the year end, the group has drawn down £1.5m on the loan facility referred to in Note 19.