The directors present the strategic report for the year ended 31 December 2024.

In its fifth full year of trading, the company has focused on its UK customer base and continued to grow its customer base using the agreements with large merchants within the industry. This has been supported by further investment into E-wallet functionality and the Luxon Pay Mastercard which has been the top request from customers.

The reductions in turnover, and expenses, from the previous year are in line with management’s expectations as some customers are now using the services of other related parties.

During the period the company incurred and capitalised £573k of development costs and this has been financed through long term group funding from the ultimate parent company, Luxon Group Limited.

The company is registered with the Financial Conduct Authority (the FCA) reference number 900929 and is authorised to issue electronic money and provide payment services.

The following risks represent the major challenges facing the business, however no specific risk gives any cause for concern.

Business Risk

The company's principal business risks are the normal trading risks such as losing major customers and the increase of competition. The directors are confident that through maintaining a high level of service and investment in new technology, the company can retain its clients and remain competitive in the marketplace.

Liquidity Risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

Foreign currency Risk

The company's principal foreign currency exposures arise from the holding of client funds and cash balances in foreign currencies. The company's foreign currency risk is offset by holding both assets and liabilities in a variety of currencies. The company policy permits but does not demand that derivative foreign exchange products are used to eliminate undue risks contained in these cash flows.

Credit Risk

The company places its cash with creditworthy institutions and performs ongoing credit evaluations of its debtors' financial position. Trade debtors are reviewed on a regular basis and provision is made for doubtful debts when necessary. The carrying amount of cash and debtors represent the maximum credit risk that the company is exposed to.

Compliance Risk

As an entity regulated by the FCA, the company is required to comply with the rules and regulations as set out in the FCA handbook and a firm of external consultants assists the company in ensuring it is fully compliant.

The directors have the following comments regarding the performance of their duties to promote the success of the company:

Interests of members of the company

The company was privately owned during the period under review and the company's majority shareholders are represented on the board of the ultimate parent company. In common with many private companies the interests of the board and the shareholders are broadly aligned in that the company should create value by generating strong and sustainable results, providing a return to shareholders through either dividend income or capital growth.

The company reports to and is regulated by the FCA. It is the directors' responsibility to ensure that the company is fully compliant with FCA rules.

The interests of employees

The company focuses on training and supporting its employees in the understanding that a well informed and trained workforce is essential for the company's ongoing success. Regular staff meetings are held, attended by members of the Board, and annual appraisals of staff performance are carried out. Feedback is encouraged from staff and where possible, practical suggestions are implemented to improve procedures and the working environment.

The average number of staff for the period was 4 (2023: 16), excluding directors.

The company offers its employees competitive remuneration packages and all staff members have the opportunity to join the company's pension plan.

The interests of our customers

It is imperative that customers are provided with an excellent level of customer service and the company's ethos is that the work performed must be of the highest quality to ensure this.

The interests of our suppliers

Due to the nature of the company's activities it is not reliant on suppliers in order to generate revenue as this is achieved through the staff base. Suppliers are used to provide auxiliary services to offices and for adhoc services.

The impact of the Company's operations on the community and the environment

The nature of the company's business means its activities are largely undertaken online and therefore direct impact on the environment is minimal. The company endeavours to use its technological resources wherever possible to reduce unnecessary travel by staff.

Maintaining a reputation for high standards of business conduct

The company is committed to maintaining a reputation of the high standards of business conduct associated with FCA regulated firms. The company has a number of policies for all employees to follow and externally prepared compliance reviews are undertaken in respect of any regulated activities.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The principal activity of the company in the year under review was that of the provision of electronic money services.

No dividends will be distributed for the year ended 31st December 2024.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

In accordance with the company's articles, a resolution proposing that Hentons be reappointed as auditor of the company will be put at the forthcoming Annual General Meeting.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.

A review of business for the financial period and a summary of the principal risks and uncertainties are included in the strategic report.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of Luxon Payments Ltd (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our 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.

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.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, and non-compliance with laws and regulations, our procedures included the following: enquiring of management concerning the company's policies with regards identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; enquiring of management concerning the company's policies detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; enquiring of management concerning the company's policies in relation to the internal controls established to mitigate risks related to fraud or non- compliance with laws and regulations; discussing among the engagement team where fraud might occur in the financial statements and any potential indicators of fraud; and obtaining an understanding of the legal and regulatory framework that the company operates in and focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. The key laws and regulations we considered in this context included the UK Companies Act 2006, Financial Reporting Standard 102, the Financial Services and Markets Act 2000 and applicable tax legislation.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance concerning compliance with such laws and regulations and any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

The company was authorised and regulated by the Financial Conduct Authority ('the FCA') throughout the period and non-compliance with the rules of the FCA was an area of focus. Our procedures to respond to risks identified in relation to regulatory compliance included the following; enquiries of management and those charged with governance; reviewing the firm's higher level standards, returns submitted to and correspondence with the regulator and external compliance reports.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK). We are not responsible for preventing non-compliance and cannot be expected to detect non compliance with all laws and regulations..

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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 11 to 21 form part of these financial statements.

The notes on pages 11 to 21 form part of these financial statements.

The notes on pages 11 to 21 form part of these financial statements.

Luxon Payments Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Strelley Hall, Strelley, Nottingham, England, NG8 6PE.

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

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 £.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

• the requirements of Section 7 Statement of Cash Flows;

• the requirement of paragraph 33.7 Related party transactions

The financial statements of the company are consolidated in the financial statements of Luxon Group Limited. These consolidated financial statements are available from its registered office, Strelley Hall, Strelley, Nottingham, NG8 6PE.

At 31 December 202true4 the company has net liabilities of £1,385,588 (2023: £1,204,224) which are supported by a group loan repayable in 2029. The directors are confident that the development of the company's projects will result in future growth that will assist the company in meeting its debts as they fall due.

The directors have a reasonable expectation that the company will have adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Turnover is recognised at the fair value of the consideration received or receivable from electronic money

services provided during the period, excluding value added tax.

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are amortised over the project's estimated useful life starting from the date that the project is available for use.

Development costs

Costs in relation to internally generated development projects are capitalised when all of the following can be demonstrated:

a) The development is technically feasible

b) The company has an intention to complete and use or sell the development and the ability to do so

c) The development will generate future economic benefits

d) The company has sufficient technical and financial resources to complete the development

e) Expenditure relating to the development can be measured reliably

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Debt instruments like loans and other accounts receivable and payable are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method; Debt instruments that are payable or receivable within one year, typically trade creditors or trade debtors are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and subsequently, at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the best estimate, which is an approximation, of the amount that the company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Client funds

The company is regulated by the Financial Conduct Authority (the "FCA") and authorised to hold funds on behalf of its clients and to provide services enabling payments and withdrawals from these funds. Funds are held in multiple currencies by the company in designated client accounts with reputable financial institutions and consequently are held and owed by the company. Periodic timing differences that occur between payments and withdrawals from client accounts and funds held are shown separately within cash and cash equivalents.

Related party exemption

The company has taken advantage of the exemption in Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', to not disclose related party transactions with wholly owned subsidiaries within the group.

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities at the balance sheet date and the amounts reported for revenues and expenses during the year. The nature of estimation means that actual outcomes could differ from those estimates. The following estimates have had a significant effect on amounts recognised in the financial statements:

Useful life of capitalised development costs

Development costs are capitalised according to the accounting policy as described under the respective paragraph below. In order for the company to account for the amounts to be capitalised, amortised or impaired, management has made certain assumptions in relation to expected future cash inflows generated from the asset, discount rates and expected future periods in which benefits will inflow to the company.

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

Reconciliation of total tax credit included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

The company has approximately £3.60m (2023: £4.54m) of losses available to carry forward against future taxable profits and gains. A deferred tax asset is provided for in relation to the losses and is offset against other deferred tax liabilities.

100% of applicable development costs were capitalised during the period in accordance with the company's accounting policies. No expenditure was incurred in relation to research costs.

Included in capitalised development costs are the following assets:

e-wallet payment service

The e-wallet payment service has been developed to provide an easy to use online cash transfer system. The carrying value of this asset at the period end was £8,068,644 (2023: £8,820,721) with a remaining amortisation period of 4 years 11 months.

Exchange service

The Exchange service allows users to exchange, send and request money across multiple currencies around the world. The carrying value of this asset at the period end was £3,851,991 (2023: £4,381,551). This project was launched in January 2022 and an amortisation period of 7 years remains.

At 31st December 2024 the company held £15,124,508 (2023: £23,750,936) in designated client fund bank accounts across multiple currencies which was not available for use by the entity and as such has been derecognised in these financial statements.

Included in cash at bank on the balance sheet is £16,099 (2023: £847,961) representing the periodic timing differences between payments and withdrawals from client funds.

The parent company loan is accruing interest at 2% per annum and is repayable on 31st December 2029.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Luxon Payments Holdings Limited has been the parent company and Luxon Group Limited has been the ultimate parent company throughout the current and the previous year. No single party had ultimate control of the company during the current or the previous year.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

During the year the company entered into the following transactions with related parties not covered by related party transactions exemption:

The following amounts were outstanding at the reporting end date: