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Registered number: 09883437
PAYRNET LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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PAYRNET LIMITED
COMPANY INFORMATION
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I M Jordan (appointed 15 March 2024)
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T J Hazleton (appointed 15 March 2024, resigned 15 May 2025)
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P Morel (appointed 15 March 2024, resigned 7 November 2025)
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L M Murray (resigned 15 March 2024)
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S Couttie (resigned 15 March 2024)
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D R Gagie (appointed 18 September 2025)
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I A I Strafford-Taylor (appointed 27 November 2025)
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3rd Floor, Vintners' Place 68 Upper
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Chartered Accountants & Statutory Auditor
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PAYRNET LIMITED
CONTENTS
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Independent auditors' report
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Statement of comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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PAYRNET LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
PayrNet Limited ("the Company") is a private company limited by share capital, incorporated and domiciled in the United Kingdom. The Company is a wholly owned subsidiary of Embedded Finance Limited ("EFL") and is regulated by the Financial Conduct Authority (FCA) as an Electronic Money Institution. The Directors aim to present a balanced and comprehensive review of the development and performance of the Company’s business during the year and its position at the year end. This review is consistent with the size and nature of the business and is written in the context of the risks and uncertainties that the Company faces.
The year ended 31 December 2024 marked a period of stabilisation and renewed momentum for PayrNet Limited following the restructuring undertaken in 2023.
In May 2024, the FCA modified the Voluntary Requirement (VREQ) restrictions previously placed on the Company, allowing PayrNet to resume onboarding new customers in the UK. This milestone followed a comprehensive transformation of the Company’s governance, risk, and compliance frameworks under new leadership. A Skilled Person Review was conducted during the year, and the FCA has confirmed its completion, further validating the Company’s strengthened operational and regulatory position.
The Company continued to invest in its products and talent, positioning itself to scale operations and support the broader strategic ambitions of its parent company.
On 28 April 2025, subsequent to the year end, Embedded Finance Limited was acquired by Alakazam Holdings Limited, a newly formed entity controlled by a consortium of existing EFL investors, and new investors TowerBrook Capital Partners and JC Flowers & Co. This acquisition coincided with the merger of EFL and Equals Money PLC, creating one of the largest Embedded Finance offerings in Europe. The merger is expected to unlock significant synergies and enhance the Company’s ability to deliver innovative financial services across multiple markets.
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PAYRNET LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Principal risks and uncertainties
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The Company is required to manage a broad array of risks including, but not limited to, technology risk, operational risk, and liquidity risk. The process of risk identification and management is addressed through a framework of policies, procedures and internal controls. All policies are subject to Board approval and on-going review by management. Compliance with regulation, legal and ethical standards is a high priority for the Company, and the Board has put in place an appropriate governance structure to monitor this.
The Company manages its liquidity through detailed cash flow forecasts; these include foreseeable revenue projections, normal recurring operational costs and known capital expenditure requirements.
The Company is working within a highly regulated industry; such regulation is felt through a network of compliance requirements from national regulators, payment schemes, card schemes and banking partners, all of whom monitor closely the financial health of all market participants.
The Company’s most significant risks are described below:
Operational Risk: the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. All key business processes are subject to periodic reviews by the Group’s Risk team.
Cyber/Technological Risk: the Company is exposed to the risk of operational disruption, customer detriment, financial loss or reputational damage arising from cyber attacks that may result in unauthorised access, or denial of access to PayrNet systems and information. The Company manages this risk through a range of controls including system monitoring and alerts, staff awareness training, customer support, and incident management guidelines.
Foreign Exchange (FX) Risk:the risk that the Company generates non-sterling profit and loss volatility. This is monitored by Treasury to avoid the accumulation of material positions.
Financial Risk: financial risk covers a number of risk categories including capital risk, funding risk and liquidity risk. Financial risk is monitored on a regular basis and is supported by intercompany facilities and arrangements by the Company’s parent entity.
Regulatory Risk: the risk that the Company does not comply with its legal and regulatory requirements. Compliance risk is managed at a Group level and is mitigated through oversight by the Compliance team and reported to the Company’s Board.
Going Concern
The financial statements have been prepared using the going concern basis of accounting. Further details regarding the adoption of the going concern convention can be found in the accounting policy 2.2 in the Notes to the financial statements.
Financial key performance indicators
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The Company concluded the year with a loss of £3,468,346 (2023 as restated: profit of £1,991,175) and total capital and reserves of £9,107,255 (2023 as restated: £12,575,601). No dividends have been paid or declared in the current or prior year.
Revenue: £17,103,965 (2023 as restated: £17,674,966)
Gross Profit: £9,966,557 (2023 as restated: £12,937,336)
Gross Margin: 58.3% (2023 as restated: 73.2%)
Operating (loss)/profit: (£4,502,543) (2023 as restated: £2,010,804)
Net (loss)/profit before tax: (£3,883,304) (2023 as restated: £2,407,262)
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PAYRNET LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Section 172 Statement
Directors' statement of compliance with duty to promote the success of the Company
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The Directors of the group are aware of the requirement to act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefits of its shareholders, customers, suppliers and other stakeholders. In considering this duty, the Directors consider the following stakeholders:
Employees
The Company does not have any employees, all staff are provided by the Group and its subsidiary undertakings and an element of their cost is recharged to the Company through Group recharges. The Group considers people to be our greatest asset and the interests of all employees are considered when decisions are made. The Directors and Executive Team keep the business informed about important business news through a variety of media including regular All Hands updates.
Shareholders
The Directors have regular contact with the shareholders in order to maximise the Group’s long-term growth prospects.
Customers
The Directors prioritise compliance with regulation and best practice to ensure the funds of relevant customers are protected while ensuring each customer’s best interests are served in accordance with their risk appetite and commercial agreements. The Directors and senior leadership team work closely with customers to build long term relationships and contact customers for feedback. The Board reviews customer feedback on a regular basis to monitor progress and address any significant customer issues, reviewing service performance indicators across a variety of measures including net promoter scores.
Regulators
The Directors prioritise compliance with regulations and best practice to ensure the funds of customers are protected. As an authorised EMI in the UK, the Directors work closely in partnership with regulators to ensure a strong working relationship and adequate capital controls. The Company works closely with the regulators and external parties to ensure all regulatory matters are being addressed and processes strengthened.
Suppliers
The Company has various key supplier relationships, which work more as a partnership to ensure the smooth running of the business. Clear lines of communication foster a mutually beneficial relationship based on trust and transparency.
The Environment
The Company is committed to minimising the environmental impacts of the business operations. The Board seeks to reduce, where possible, our environmental footprint.
This report was approved by the board and signed on its behalf.
I A I Strafford-Taylor
Director
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PAYRNET 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.
Directors' responsibilities statement
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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 judgments 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.
The loss for the year, after taxation, amounted to £3,468,346 (2023 as restated - profit £1,991,175).
There were no dividends declared or paid during the year.
The directors who served during the year were:
I M Jordan (appointed 15 March 2024)
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T J Hazleton (appointed 15 March 2024, resigned 15 May 2025)
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P Morel (appointed 15 March 2024, resigned 7 November 2025)
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L M Murray (resigned 15 March 2024)
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S Couttie (resigned 15 March 2024)
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The merger of EFL Group and Equals Money PLC during 2025 is expected to unlock significant synergies and enhance the Company’s ability to deliver innovative financial services across multiple markets and geographies.
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PAYRNET LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Research and development activities
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The Company did not incur any research and development cost in the financial year ended 31 December 2024.
Financial Risk management objectives and policies
The Company’s activities expose it to a number of financial risks including market risk, liquidity risk and credit risk. The Company does not use any derivative financial instruments to manage these risks.
The Company considers its primary market risk to be interest rate risk arising from financial instruments. To mitigate this, the Company monitors this on a daily basis. As the interest rate is linked to the Bank of England base rate, it is less volatile and therefore lower risk.
In terms of liquidity risk, the Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. In addition, the Company has a guarantee from its parent, Embedded Finance Limited to provide funds if required.
The Company’s principal financial assets are cash, receivables and intercompany which are exposed to credit risk. The receivables balance is presented net of any allowances for doubtful receivables, allowances are determined at a customer level on a monthly basis to ensure any impairments are recognised.
Qualifying third party indemnity provisions
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The Company has granted indemnity to one or more of its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in Section 234 of the Companies Act 2006. Such qualifying third-party indemnity provision remains in force as at the date of approving the directors’ report.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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On 28 April 2025 the Company's immediate parent undertaking, Embedded Finance Limited, was acquired by Alacazam Holdings Limited, a newly formed entity controlled by a consortium of existing EFL investors, and new investors TowerBrook Capital Partners and JC Flowers & Co. This acquisition coincided with the merger of EFL and Equals Money PLC, creating one of the largest Embedded Finance offerings in Europe. This event does not require a change or additional disclosure in the financial statements.
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PAYRNET LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The auditors, BKL Audit LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
I A I Strafford-Taylor
Director
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PAYRNET LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PAYRNET LIMITED
We have audited the financial statements of Payrnet Limited (the 'Company') for the year ended 31 December 2024, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of cash flows, the Statement of changes in equity and the related 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).
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.
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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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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PAYRNET LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PAYRNET LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
Opinion on other matters prescribed by the Companies Act 2006
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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.
Matters on which we are required to report by exception
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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.
Responsibilities of directors
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As explained more fully in the Directors' responsibilities statement set out on page 4, 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.
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PAYRNET LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PAYRNET LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' 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:
∙Enquiring of management and those charged with governance around actual and potential litigation and claims;
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
∙Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
∙Enquiring of company staff in finance, legal and regulatory and compliance functions to identify any instances of non-compliance with laws and regulations;
∙Reviewing minutes of board meetings to identify any issues which may impact the financial statements
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
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PAYRNET LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PAYRNET LIMITED (CONTINUED)
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 Auditors' 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.
Michael Wedge FCA (Senior statutory auditor)
for and on behalf of
BKL Audit LLP
Chartered Accountants
Statutory Auditor
London
5 December 2025
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PAYRNET LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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Interest receivable and similar income
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(Loss)/profit for the financial year
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There was no other comprehensive income for 2024 (2023:£NIL).
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The notes on pages 15 to 27 form part of these financial statements.
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PAYRNET LIMITED
REGISTERED NUMBER: 09883437
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
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Debtors: amounts falling due within one year
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Creditors: Amounts Falling Due Within One Year
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Safeguarded funds liability
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Total assets less current liabilities
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Provisions for liabilities
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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 27 form part of these financial statements.
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PAYRNET LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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At 1 January 2023 (as previously stated)
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Prior year adjustment - correction of error (Note 4)
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At 1 January 2023 (as restated)
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Total comprehensive income for the year
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Shares issued during the year
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At 1 January 2024 (as previously stated)
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Prior year adjustment - correction of error (Note 4)
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At 1 January 2024 (as restated)
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Total comprehensive income for the year
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The notes on pages 15 to 27 form part of these financial statements.
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PAYRNET LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Cash flows from operating activities
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(Loss)/profit for the financial year
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Decrease/(increase) in debtors
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(Increase)/decrease in amounts owed by groups
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Increase/(decrease) in amounts owed to groups
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Net cash (used in)/ generated from operating activities
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Cash flows from investing activities
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Net cash from investing activities
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Cash flows from financing activities
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Net cash used in financing activities
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Net (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 15 to 27 form part of these financial statements.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The principal activity of Payrnet Limited ("the Company") is the provision of electronic money services.
The Company is a private company, limited by shares, and is incorporated in England and Wales.
The address of its registered office is 3rd Floor, Vintners' Place, 68 Upper Thames Street, London, England, EC4V 3BJ.
2.Accounting policies
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Basis of preparation of financial statements
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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 judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The financial statements are prepared on the going concern basis, which assumes that the Company will continue to trade for the foreseeable future, being at least twelve months from the date of approval of these financial statements.
The Company has used the most recent projections and other qualitative considerations in evaluating whether the going concern basis of preparation continue to be appropriate. The directors are confident that the Company has sufficient resources to meet its debt obligations as they fall due for a period of at least twelve months from the approval of the financial statements.
The directors also believe that they will have sufficient capital to meet its safeguarding requirements into the future and has forecasted the estimated position of capital throughout the lookout period to December 2026, which demonstrates that at no point will capital requirements be in breach of the FCA requirements.
Therefore, the directors consider the use of the going concern basis appropriate.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
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. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Subscription Income
The Company operates a subscription model for its customers in which customers are charged a fixed fee for access to its platform. For these services revenue is recognised on a time basis over the subscription period. Advances collected for future access to the platform are carried as deferred income.
Usage based income
Certain services within the Company are charged based on the level of activity that the customer generates at an agreed item price. For these services, revenue is recognised when the volume of transactions is processed.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Incentives and other income
∙Incentive income recognised is from payment schemes for volumes of transactions processed based on agreed criteria. Revenue is recognised when it is reasonably certain that the performance objectives have been met.
∙Other income includes fees earned to offboard customers. Revenue is recognised over the period of offboarding.
∙The Company undertakes certain activities on behalf of other group companies and incurs cost in the process. The Company recharges this cost to group entities when they are incurred.
Interest revenue
Interest revenue is generated as a result of customer balances that are invested in low risk, short term instruments such as Money Market Funds. These customer balances have arisen as a result of business operations. The Company holds these balances as part of its safeguarding obligations to customers due to the Banking as a Service and Cards as a Service propositions it offers.
Interest income is recognised in profit or loss using the effective interest method.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an intergral part of the Company's cash management.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.
The Company only enters into basic financial instruments and transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to and from related parties and investments in non-puttable ordinary shares.
(i) Financial assets
Basic financial assets, including trade and other debtors, and amounts due from related companies, 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.
Such assets are subsequently carried at amortised cost using the effective interest method. At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Statement of Comprehensive Income.
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) 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.
(ii) Financial liabilities
Basic financial liabilities, including the Safeguarded Relevant Funds liability, trade and other creditors and accruals, 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 receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors 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.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iii) Offsetting
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.
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In the application of the Company'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
Critical judgements in applying the Company's accounting policies
The following are the critical judgements that the directors have made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognised in the financial statements:
Trade Debtors– Impairment allowance
The Company reviews its impairment provision, that is reported within Trade Debtors (note 9) to assess whether an individual impairment loss should be recorded in the statement of comprehensive income. Management’s judgement is required in the estimation of the amount and timing of future cash flows when determining the impairment loss. These estimates are based on assumptions about cash recovery and actual results may differ, resulting in future changes to the impairment balance included in Trade Debtors.
Provision for legal fees
The Company has recognised a provision of £3,580,000 in respect of anticipated legal costs, claims and settlements arising from ongoing or potential litigation and regulatory matters. The provision reflects management’s best estimate of the expenditure required to settle these matters, based on advice from external legal counsel and the current status of proceedings.
The timing and amount of any outflows are subject to uncertainty and will depend on the outcome of the legal processes. The provision will be reviewed regularly and adjusted as necessary to reflect new information or developments.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The comparative information in these financial statements has been restated from the figures as previously reported to reflect timing differences and remeasurement of assets and liabilities which were identified following improvements in systems and enhanced data quality. The impact of this prior year adjustment is as follows:
- increase in other debtors of £273,582
- decease in safeguarded funds held of £2,801,876
- decrease in other creditors of £3,229,476
- increase in customer safeguarded liability of £2,828,048
- increase in other operating charges of £2,700,347
- increase in other operating income of £165,058
- increase in retained earnings brought forward of £408,423
The above restatements have decreased net assets as previously reported by £2,126,867.
Separately, during the year the firm changed its accounting policy in relation to interest income and has been applied retrospectively. The impact of this adjustment has been to increase turnover by £9,735,270 and decrease interest received by the same amount, and to increase cost of sales by £4,131,488 and decrease interest paid by the same amount. More details can be found in the turnover accounting policy note 2.4.
This restatement has had no impact on net assets as previously reported.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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An analysis of turnover by class of business is as follows:
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Subscription and usage fees
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Passthrough and other income
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Analysis of turnover by country of destination:
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The operating loss is stated after the following charges:
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Amounts paid under interest sharing arrangements
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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During the year, the Company obtained the following services from the Company's auditors:
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Fees payable to the Company's auditors for the audit of the Company's financial statements
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Fees payable to the Company's auditors for the Prior year audit of the Company's financial statements
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Audit-related assurance services
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All non-audit services not included above
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Auditors' remuneration is disclosed within Administrative expenses.
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Current tax on profits for the year
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Adjustments in respect of previous periods
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
8.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2023 - lower than) the standard rate of corporation tax in the UK of 25% (2023 - 23.5%). The differences are explained below:
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(Loss)/profit on ordinary activities before tax
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(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23.5%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Adjustments to tax charge in respect of prior periods
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Other timing differences leading to a decrease in taxation
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Unrelieved tax losses carried forward
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Total tax charge for the year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings for trading purposes are interest free and repayable on demand. Intercompany loans are interest-bearing and repayable on demand.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The Company holds monies on behalf of clients in accordance with the Electronic Money Regulations of its regulator, the Financial Conduct Authority. Included within creditors due within one year is the corresponding liability of monies owed back to clients of the Company.
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Cash and cash equivalents
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The Company has an off balance sheet arrangement for segregated bank accounts controlled by VISA and Mastercard. These accounts are not included within cash and cash equivalents in these financial statements.
Restriction
Included in the cash balances at year end is an amount of £4,000,000 held by National Westminister Bank Plc. The Company shall not, without the bank's prior written consent, permit or create any mortgage, charge or lien on the deposit, nor dispose of, assign and make any withdrawal from the deposit.
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are interest-free and repayable on demand.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Safeguarded funds liability
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Safeguarded funds liability
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The Company holds monies on behalf of clients in accordance with the Electronic Money Regulations of its regulator, the Financial Conduct Authority. Safeguarded funds held is the corresponding cash of monies owed back to clients of the Company.
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Financial assets measured at fair value through profit or loss
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Financial assets measured at fair value through profit or loss comprise investments in money market funds. £245,022,468 is invested in GBP currency and €17,000,000 is invested using Euro currency.
Information regarding the Company’s exposure to and management of financial risk i.e. credit risk, liquidity risk, market risk, cash flow interest rate risk, and foreign exchange risk is included in the Strategic report.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Provision for legal claims
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Provision for legal claims
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The Company has recognised a provision of £3,580,000 in respect of anticipated legal costs arising from ongoing or potential litigation and regulatory matters. The provision reflects management’s best estimate of the expenditure required to settle these matters, based on advice from external legal counsel and the current status of proceedings.
The timing and amount of any outflows are subject to uncertainty and will depend on the outcome of the legal processes. The provision will be reviewed regularly and adjusted as necessary to reflect new information or developments.
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7,000,000 (2023 - 7,000,000) Ordinary shares of £0.001 each
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1,675,000 (2023 - 1,675,000) Regulatory preference shares of £0.001 each
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Share premium account
Includes amounts paid for shares in excess of their nominal value.
Profit and loss account
Includes all current and prior period retained profits and losses less dividends paid.
18.Financial commitments
The Company has given an unlimited guarantee to Visa Europe Limited for any default by any of its customers in settling e-money transactions.
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PAYRNET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Related party transactions
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The Company has taken advantage of the exemption conferred by FRS 102 Section 33.1A not to disclose transactions between wholly owned group undertakings.
Included within expenses is an amount of £nil (2023 as restated: £8,306,367) which represents amounts written off owed by entities which were formerly in the group before the acquisition by Embedded Finance Limited on 9 March 2023.
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The immediate parent company is Embedded Finance Limited, a company registered in England and Wales, acquired the company on 9 March 2023 and since then has been the immediate parent company. The registered office of the parent company is 3rd Floor, Vintners' Place, 68 Upper Thames, London, EC4V 3BJ.
On 28 April 2025 Alakazam Holdings Midco Limited became the ultimate parent .
There is no ultimate controlling party.
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