Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2024
FREEDOMPAY WORLD EUROPE LIMITED
CONTENTS
FREEDOMPAY WORLD EUROPE LIMITED
COMPANY INFORMATION
Page 1
FREEDOMPAY WORLD EUROPE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their strategic report on the company for the year ended 31 December 2024.
Principal activity
Principal activity
FreedomPay World Europe Limited (“the company”) is a wholly owned subsidiary of its ultimate and immediate parent company; FreedomPay, Inc., a company incorporated in the United States of America. FreedomPay, Inc. and its subsidiaries operate together as the “FreedomPay” group.
FreedomPay provides customers with an advanced, secure and unified commerce platform. Accessible, fully integrated, omni-channel and capable of handling volumes of any scale; FreedomPay’s patented secure switching streamlines processes and transactions while dramatically reducing compliance scope by leveraging solutions which are PCI-P2PE, GDPR and PSD2-SCA compliant. These world class solutions enable businesses to gain a strategic edge; optimising performance, engagement and security whilst simultaneously remaining omnichannel ready. The platform is designed to serve businesses of all sizes; capable of handling the needs of enterprise-level merchants with complex, multi-regional businesses and a nexus of requirements, facilitating seamless transactions and real-time data insights.
FreedomPay also offers a wide range of device and hardware manufacturers featuring the latest functionality to suit the requirements of different businesses and industries. Using FreedomPay provides choice to merchants, evidenced by both its platform and hardware flexibility.
During the financial year, the company achieved strong operational performance towards its ambition of building a foundation of operations for its customer base within the United Kingdom. This was underpinned by a growing customer need for seamless and secure payment solutions. The business saw growth into new markets, introduced new capabilities and tools within its platform and maintained high levels of client satisfaction and service reliability.
Platform Enhancements:
Deployment of improved analytics tools for enhanced business intelligence and real-time decision making.
Strategic Partnerships:
Continued to strengthen relationships with global acquirers, POS systems and payment device manufacturers to offer fully integrated commerce solutions.
Customer Growth:
Successful onboarding of several UK-based multi-site retailers and hospitality groups, contributing towards an 82% increase in transaction volume year-on-year.
Profit and Loss Account:
Turnover for the year ended 31 December 2024 decreased to £14.3m compared with £20.2m in the prior year due to significant contracts being won in 2023. Recurring revenue has increased in 2024 compared to 2023. The company has a strong sales order pipeline for the next financial year.
In line with the company’s strategic business plan the company recognised an operating loss of £2.3m in the year (2023: operating loss of £2.5m). The operating losses incurred in both financial years reflect the company’s ongoing investment in people and infrastructure.
Profit and Loss Account:
Turnover for the year ended 31 December 2024 decreased to £14.3m compared with £20.2m in the prior year due to significant contracts being won in 2023. Recurring revenue has increased in 2024 compared to 2023. The company has a strong sales order pipeline for the next financial year.
In line with the company’s strategic business plan the company recognised an operating loss of £2.3m in the year (2023: operating loss of £2.5m). The operating losses incurred in both financial years reflect the company’s ongoing investment in people and infrastructure.
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FREEDOMPAY WORLD EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Business review (continued)
Balance Sheet:
Excluding intragroup balances, the company has net current assets of £4.8m (2023: £2.4m). Subsequent to the year end on 1 May 2025, the parent undertaking capitalised £15.2m of amounts owed by the company. The group continues to support the company where required.
Future developments
FreedomPay World Europe Limited’s long term growth strategy is underpinned by continued innovation by the FreedomPay group; maintaining a customer-centric delivery and the further development of scalable infrastructure.
Balance Sheet:
Excluding intragroup balances, the company has net current assets of £4.8m (2023: £2.4m). Subsequent to the year end on 1 May 2025, the parent undertaking capitalised £15.2m of amounts owed by the company. The group continues to support the company where required.
Future developments
FreedomPay World Europe Limited’s long term growth strategy is underpinned by continued innovation by the FreedomPay group; maintaining a customer-centric delivery and the further development of scalable infrastructure.
Platform & Solution Development
FreedomPay aims to develop its array of integrations through continued innovation and technological advancement. FreedomPay remains focused on continuing to improve operational efficiency and committed to making investments towards innovative solutions in order to sustain its long-term competitive advantage.
Expansion into new markets
FreedomPay aims to continue to grow and further penetrate new and existing industries, alongside further ecommerce connectivity.
Credit Risk
Credit risk arises from cash and cash equivalents with banks and financial institutions as well as the potential failure of a customer to meet its obligation to settle outstanding amounts. The company’s credit risk exposure is managed in accordance with group credit policies, as well as through continued monitoring and reviews.
Cyber Risk
The company faces cyber risk inherent to the payment platform sector. The uninterrupted operation of information systems, as well as the confidentiality of the customer information within these systems is vital to the success of the company. Robust data protection and incident response protocols are in place to prevent these risks and address concerns should they arise.
As a global commerce platform, FreedomPay is committed to the security and privacy of its customers’ data. FreedomPay’s solutions are PCI-P2PE, GDPR and PSD2-SCA Compliant. Transactions are protected by cutting-edge encryption and fraud prevention technologies, which eliminates the need for merchants to handle sensitive payment information directly, minimising security risks and simplifying compliance requirements. With tokenization, cardholder data is completely removed from the POS system and replaced with surrogate values, rendering the data useless to cybersecurity threats.
FreedomPay’s fully integrated, PCI-validated point-to-point encryption solution protects data from the point of interaction and throughout transport.
The company further manages this risk by ensuring controls and policies are continuously reviewed and monitored as well as providing staff awareness training and customer support.
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FREEDOMPAY WORLD EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Principal risks and uncertainties (continued)
Regulatory Risk
Regulatory Risk
The payment industry is subject to complex and evolving regulations globally. Changes in data privacy laws, payment regulations or anti-money laundering standards have the potential to impact operations.In order to mitigate this risk, FreedomPay maintains compliance with its regulatory obligations through a range of controls, including but not limited to the ongoing investment into compliance, maintenance of policies, staff training, risk assessments as well as the ongoing monitoring and development of its systems and frameworks.
Foreign Currency Risk
The international operations of the group are conducted using various currencies. Conducting business in currencies other than the functional currency of the group can give rise to fluctuations in foreign currency exchange rates which could negatively impact results. The group manages this risk by monitoring fluctuations in foreign currency exchange rates, and considers the use of hedging strategies to reduce the potential exposure to this risk.
Economic Conditions
Fluctuations in global economic conditions, inflation and consumer spending trends have the potential to affect merchant volumes and client demand. This risk is mitigated through FreedomPay having a customer footprint across a range of varied industries, as well as its key pricing structure being tied to transaction volume; giving merchants a flexible pricing structure in accordance with their own business performance.
Technological Risk
The company operates in a rapidly evolving technology sector where the pace of innovation can create competitive challenges. This gives rise to the risk that existing platform features become obsolete in consideration to emerging market needs. To mitigate this risk, the company benefits from ongoing investment towards research and development at group level, and maintains regular engagement with clients to ensure its platform continues to meet functional and commercial requirements. The company also monitors industry standards and regulatory changes to ensure technological compliance and future readiness.
Financial key performance indicators
The company is part of a group that analyses performance based on principal market segments in which the group operates. KPIs are generally measured on the performance of these market segments rather than at company level.
Financial key performance indicators
The company is part of a group that analyses performance based on principal market segments in which the group operates. KPIs are generally measured on the performance of these market segments rather than at company level.
This report was approved by the board and signed on its behalf.
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FREEDOMPAY WORLD EUROPE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The loss for the year, after taxation, amounted to £2,290,386 (2023: £2,514,432).
The directors do not recommend a dividend.
The directors who served during the year were:
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.
Subsequent to the year end on 1 May 2025, the company allotted 1 ordinary share at £0.01 per share for consideration of £15,223,307.
This report was approved by the board and signed on its behalf.
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FREEDOMPAY WORLD EUROPE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
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 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the company's financial statements 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 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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FREEDOMPAY WORLD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FREEDOMPAY WORLD EUROPE LIMITED
FOR THE YEAR ENDED 31 DECEMBER 2024
We have audited the financial statements of Freedompay World Europe Limited (the 'company') for the year ended 31 December 2024, which comprise the profit and loss account, the balance sheet, the statement of changes in equity, the statement of cash flows 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 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (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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FREEDOMPAY WORLD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FREEDOMPAY WORLD EUROPE LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
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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FREEDOMPAY WORLD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FREEDOMPAY WORLD EUROPE LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
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 company's 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, taxation legislation, data protection and employment;
∙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 a sample of journal entries to identify unusual transactions;
∙assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
∙investigated the rational 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, and
∙enquiring of management as to actual and potential litigation and claims.
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FREEDOMPAY WORLD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FREEDOMPAY WORLD EUROPE LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
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.
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
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FREEDOMPAY WORLD EUROPE LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
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FREEDOMPAY WORLD EUROPE LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2024
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 28 form part of these financial statements.
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FREEDOMPAY WORLD EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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FREEDOMPAY WORLD EUROPE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The company provides comprehensive payment management solutions, enabling organisations to improve the way they send, receive and settle payments. The FreedomPay Product Suite provides a fully integrated, hosted global infrastructure for managing payments ranging from point-of-sale ("POS") hardware to cashless, electronic payment services to processing.
FreedomPay World Europe Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is 16 Great Queen Street, Covent Garden, London, WC2B 5AH. The company's principal place of business is 26th Floor, 40 Bank Street, Canary Wharf, London, E14 5NR.
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
FreedomPay World Europe Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is 16 Great Queen Street, Covent Garden, London, WC2B 5AH. The company's principal place of business is 26th Floor, 40 Bank Street, Canary Wharf, London, E14 5NR.
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies.
The following principal accounting policies have been applied:
The financial statements have been prepared on a going concern basis notwithstanding the fact that company had a deficiency on shareholders' funds of £3,656,841 and has recorded losses in both the current and prior years.
The directors consider this basis to be appropriate as the company has received a letter of financial support from its parent company, FreedomPay, Inc., confirming financial support for a period of at least 12 months from the date of approval of the financial statements. FreedomPay, Inc. is funded by way of equity and also a revolving line of credit, which is subject to annual review, and is subject to the achievement of certain covenants. The group anticipates that the revolving line of credit will continue to remain in place and that covenants will continue to be met for the foreseeable future.
The directors have also received a letter from the parent undertaking agreeing to not seek repayment of amounts owed to them within a period of at least twelve months from the date that these financial statements were approved. Furthermore, subsequent to the year end, the parent undertaking has capitalised the intercompany balance of £15,223,207 (refer to note 19).
The post year end trading results and revised forecasts of the parent company show they are able to continue to support the subsidiary. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.
The directors consider this basis to be appropriate as the company has received a letter of financial support from its parent company, FreedomPay, Inc., confirming financial support for a period of at least 12 months from the date of approval of the financial statements. FreedomPay, Inc. is funded by way of equity and also a revolving line of credit, which is subject to annual review, and is subject to the achievement of certain covenants. The group anticipates that the revolving line of credit will continue to remain in place and that covenants will continue to be met for the foreseeable future.
The directors have also received a letter from the parent undertaking agreeing to not seek repayment of amounts owed to them within a period of at least twelve months from the date that these financial statements were approved. Furthermore, subsequent to the year end, the parent undertaking has capitalised the intercompany balance of £15,223,207 (refer to note 19).
The post year end trading results and revised forecasts of the parent company show they are able to continue to support the subsidiary. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.
General principles:
Where customer arrangements contain multiple elements (e.g. hardware, services, software access, transaction processing), the company identifies separate components where they are capable of being distinct and allocates the total consideration accordingly. Revenue is recognised either at a point in time or over time depending on the nature of the obligation.
Transaction fees:
Revenue from transaction processing is recognised in the period in which the transactions occur. Fees are typically based on a fixed amount per transaction, per location, or as a percentage of transaction value. Revenue is recognised at a point in time as the service is consumed. Tiered pricing is applied prospectively once thresholds are met.
Hardware:
Revenue from hardware sales is recognised at the point control passes to the customer, usually upon shipment (F.O.B shipping point), in accordance with the contract terms. The company is the principal in these arrangements, despite limited inventory risk, as it manages fulfilment and pricing.
Where hardware is provided under Secure Switching Product (SSP) services, it may be combined with software or services. Any installation or configuration is billed separately and recognised as service revenue. Customer deposits collected in advance of shipment are recognised as contract liabilities until delivery occurs.
Services:
Service revenue includes professional, account management and launch services. Revenue is recognised over time using the percentage of completion method based on cost inputs against Statements of Work (SOWs). Milestone payments received in advance are recognised as contract liabilities and reclassified to revenue as work progresses.
Launch services that are not distinct from other services are recognised over the life of the related agreement.
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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.
The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument.
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 company after deducting all of its liabilities.
The company’s policies for its major classes of financial assets and financial liabilities are set out below.
Financial assets
Basic financial assets, including trade and other debtors and cash and bank balances, intercompany working capital balances, and intercompany financing are initially recognised at transaction price, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.
Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument.
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 company after deducting all of its liabilities.
The company’s policies for its major classes of financial assets and financial liabilities are set out below.
Financial assets
Basic financial assets, including trade and other debtors and cash and bank balances, intercompany working capital balances, and intercompany financing are initially recognised at transaction price, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Financial instruments (continued)
Financial liabilities
Basic financial liabilities, including trade and other creditors and loans from fellow group companies 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Financial liabilities
Basic financial liabilities, including trade and other creditors and loans from fellow group companies 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Impairment of financial asset
Financial assets 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 profit and loss account.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the 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.
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.
Derecognition of financial assets and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Offsetting of financial assets and financial liabilities
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.
Financial assets 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 profit and loss account.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the 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.
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.
Derecognition of financial assets and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Offsetting of financial assets and financial liabilities
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.
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Ordinary shares are classified as equity.
The share premium reserve includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
The share premium reserve includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
Capital contributions received from the parent company are classified as equity in other reserves.
Functional and presentation currency
Transactions and balances
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account.
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.
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 timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing 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 timing 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 is 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.
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Analysis of turnover by country of destination:
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Share premium account
Other reserves
Profit and loss account
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
During the year ended 31 December 2024, it was identified that revenue recognised in the prior year in respect of certain hardware sales had been recognised prematurely. This related to contracts where the company was holding hardware on behalf of customers at the reporting date, and the related software installation service had not taken place by the year-end. As the associated performance obligations had not yet been fulfilled, the corresponding revenue should have been deferred.
As a result, a prior year adjustment has been recognised to defer revenue of £397,903 as at 31 December 2023. Deferred income within creditors falling due within one year has increased by £397,903 with a corresponding reduction in revenue. This adjustment results in an increase to loss before tax for the year ended 31 December 2023 and an increase in net liabilities of £397,903 as at 31 December 2023. There is no impact on opening reserves at 1 January 2023 and no impact on the company’s tax position.
The comparative figures for the year ended 31 December 2023 have been restated to reflect this adjustment.
The impact of the prior year adjustment has been summarised in the table below:
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FREEDOMPAY WORLD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The smallest group for which consolidated financial statements are drawn up is headed by the company's immediate parent undertaking, FreedomPay, Inc., whose registered office is Floor 14, FMC Tower at Cira Centre South, 2929 Walnut Street, Floor 14, Philadelphia, PA 19104, USA.
In the opinion of the directors the ultimate controlling party is FreedomPay, Inc.
In the opinion of the directors the ultimate controlling party is FreedomPay, Inc.
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