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CAB Payments Holdings plc Annual Report and Accounts 2023
CAB Payments Holdings plc Annual Report and Accounts 2023
CAB Payments Holdings plc
Annual Report and Accounts
2023
CAB Payments Holdings plc | Annual Report and Accounts 2023
Strong record of
financial growth…
Integrity Collaboration Impact Client focus
VISION
Empower communities and partners by moving
money everywhere it’s needed
VALUES
MISSION
Connecting emerging markets to the global economy
through our unparalleled network, cutting-edge
technology, and deep expertise in Foreign Exchange (FX)
and payments.
For more examples / Page 13
TARGET
5%
of financial flows into
Emerging Markets by
2027
…uniquely placed to
capture share of a large
addressable market.
1
2
1
3
4
5
Overview Strategic Report Governance AppendixFinancial Statements
01
What’s Inside
OUR 2023 HIGHLIGHTS
02
Governance Report
70 Chair’s Introduction
72 Board of Directors
74 Board Statements
76 Corporate Governance Statement
86 Nomination Committee Report
90 Audit Committee Report
96 Risk Committee Report
98 Directors’ Remuneration Report
120 Directors’ Report
125 Directors’ Responsibilities Statement
Overview
02 Our 2023 Highlights
04 At a Glance
06 Investment Case
08 Chair’s Statement
CHAIR’S INTRODUCTION
TO GOVERNANCE
70
For the latest investor relations /
www.cabpayments.com/#investors
12
18
OUR
STRATEGY
Strategic Report
12 Chief Executive Officer’s Review
16 Our Business Model
18 Our Strategy
24 Strategic Progress
26 KPIs
28 ESG Report
48 Stakeholder Engagement and s172 Statement
50 Financial Review
55 Risk Management
60 Principal Risks and Uncertainties
65 Going Concern and Viability Statements
67 Non-financial and Sustainability Information
55
CHIEF EXECUTIVE
OFFICER’S REVIEW
RISK
MANAGEMENT
OUR BUSINESS
MODEL
16
See our sustainability report /
www.cabpayments.com/#sustainability
28
ESG
REPORT
Financial Statements
128 Auditor’s Report to the members of
CAB Payments Holdings plc
137 Consolidated Statement of Profit or Loss
138 Consolidated Statement of Other
Comprehensive Income
139 Consolidated Statement of Financial Position
141 Consolidated Statement of Changes
in Equity
142 Consolidated Statement of Cash Flows
143 Company Statement of Financial Position
144 Company Statement of Changes in Equity
145 Company Statement of Cash Flows
146 Notes to the Financial Statements
Appendix
240 Shareholder Information
241 Alternative Performance Measures
243 Glossary
247 Contact Details
2022 £109.4m
2023 £137.1m
2022 £49.2m 2022 £55.0m
2023 £58.7m 2023 £64.6m
CAB Payments Holdings plc | Annual Report and Accounts 202302
Our 2023 Highlights
CAB
Payments
Strong financial performance
underpinned by a focus on serving clients
FINANCIAL HIGHLIGHTS
Gross Income1
£137.1m
Adjusted PBT2
£58.7m
Adjusted EBITDA1
£64.6m
1. See alternative performance measures for definition / Page 241.
2. Adjusted PBT is defined as profit from continuing operations before tax and before non recurring operating expenses.
2022 91% 2022 456 2022 99
2023 88% 2023 509 2023 110
Financial StatementsOverview Strategic Report Governance Appendix
03
moving money
where it’s needed…
Operating Free Cash Flow
88%
Unique Active Clients
509
Number of Currencies Offered
110
See our key performance indicators / Page 26
CAB Payments Holdings plc | Annual Report and Accounts 202304
At a Glance
CAB Payments uses its strength of
network, technology, and expertise to
seamlessly move money to, from, and
across hard-to-reach markets
OUR BUSINESS LINES
CAB Payments Holdings plc and its subsidiaries (CAB Payments or the Group) operate three principal business lines,
addressing various combinations of client groups, distribution networks and services:
FX
A real-time trading platform,
customised for emerging markets,
offered through Empower FX, via the
Group’s Application Programming
Interface (API) or Graphical User
Interface (GUI), multi-dealer platforms
and the Group’s own traders.
FX accounts for around 50% of the
Group’s business.
Payments
An end-to-end, cross-border
payments gateway, where the
Group routes the funds to a
beneficiary’s account and converts
to a local currency as required.
Three distinct platforms are used:
Empower Payments (API or GUI),
Empower Pensions and Empower
Connect (making hard currency
payments in the most efficient way).
Around 25% of incomes are derived
from payment services.
FX accounts for around
50%
of the Group’s business
Around
25%
income is derived from
payment services
Banking contributes around
25%
of our income
OUR MARKET
We specialise in the world’s
emerging markets and
hard-to-reach places.
FINANCIALS
From debt repayments and development funds to emergency relief,
we are the world’s payment partner.
1%-2%
market share
150+
countries
110
currencies
Average payment transaction
£104k
Wholesale FX and
Payment FX volumes 2023
£34.7bn
1 See alternative performance measures for definition / Page 241.
Gross Income
£137.1m
Annual Income
Growth
25%
Banking Services
With a heritage that dates back
to 1833, the Group contains a
UK-regulated provider of FX and
cross-border payments that holds
a UK banking licence. We offer
transaction and deposit accounts,
and earn a net interest margin
between the rate we pay deposit
holders and what we receive in the
money markets. Banking contributes
around 25% of our incomes.
Financial StatementsOverview Strategic Report Governance Appendix
05
WHO WE SERVE
We provide our services to four key client segments:
Non-Bank
Financial
Institutions
(NBFIs)
Fintechs and other
licensed financial services
companies, including
high street and online
remittance companies,
payroll providers and
pension administrators.
International
development
organisations
(IDOs)
Multilateral, Government
and Non-Governmental
Organisations (NGOs)
who send aid and run
development programmes
in the world’s most
challenging environments.
Emerging
Market
Financial
Institutions
(EMFIs)
Banks headquartered in
non-G20 markets who
provide cross border
payments to corporations
and people in these
markets.
Major Market
Banks (MMBs)
Banks headquartered in
G20 markets who provide
cross border payments to
corporations and people in
these markets.
Our income is well diversified, with
no one client representing more than
7%
ON THE GROUND, GLOBALLY
25
central banks
331
FX, pricing and liquidity partners
121
local accounts
c.200
years of integrity and trust
CAB Payments Holdings plc | Annual Report and Accounts 202306
Investment Case
How we are delivering
long-term success
The Group is a significant and
growing operator in a large
and expanding market and has
excelled to this point due to
the strength of its financial and
technology network, along with
strong global relationships, with
both partners and clients.
See our sustainability section /
Page 28
£3.1bn
of aid flows in FY23
Underpinned by
Environmental, Social and
Governance (ESG) leadership
and social impact
Large, fast-
growing market
High-quality
clientbase
Global payments
and licensing
infrastructure
Market-leading
proposition/
platform
Compelling
economics
The payments and FX markets are
undergoing a favourable structural
shift from local banks to global
specialists.
Our highly diversified international
client base includes leading banks,
development organisations and
fintechs.
We collaborate with an extensive
partner network with global coverage
to give market-leading emerging
market footprint.
Our solutions are delivered through
a well-invested scalable technology
platform purpose-built for clients
paying money into emerging markets.
Our financial performance is driving
market-leading growth, profitability
and cash generation.
1%-2%
Market share
509
Active clients
(53 new in FY23)
331
Local and regional bank accounts,
FX settlement partners and
liquidity providers
80%
Digital channels for FX
£137.1m
Gross income1
£64.6m
Adjusted EBITDA1 in FY23
For more information /
Page 23
For more information /
Page 20
For more information /
Page 19
For more information /
Page 22
For more information /
Page 51
Financial StatementsOverview Strategic Report Governance Appendix
07
1. See alternative performance measures for
definition / Page 241.
Large, fast-
growing market
High-quality
clientbase
Global payments
and licensing
infrastructure
Market-leading
proposition/
platform
Compelling
economics
The payments and FX markets are
undergoing a favourable structural
shift from local banks to global
specialists.
Our highly diversified international
client base includes leading banks,
development organisations and
fintechs.
We collaborate with an extensive
partner network with global coverage
to give market-leading emerging
market footprint.
Our solutions are delivered through
a well-invested scalable technology
platform purpose-built for clients
paying money into emerging markets.
Our financial performance is driving
market-leading growth, profitability
and cash generation.
1%-2%
Market share
509
Active clients
(53 new in FY23)
331
Local and regional bank accounts,
FX settlement partners and
liquidity providers
80%
Digital channels for FX
£137.1m
Gross income1
£64.6m
Adjusted EBITDA1 in FY23
For more information /
Page 23
For more information /
Page 20
For more information /
Page 19
For more information /
Page 22
For more information /
Page 51
CAB Payments Holdings plc | Annual Report and Accounts 202308
Chair’s Statement
A year of resilience,
strength and purpose
Ann Cairns
Chair
Biography / Page 72
Our clients include some of the world’s most
important aid organisations and many key
central banks from developing nations.
Feedback consistently shows that these high-
quality clients fully understand the financial
strength of CAB Payments, greatly value the
service we offer and continue to be comfortable
placing their trust in us to move their money
safely and securely. We never take these
relationships for granted and continue to work
hard to make them even stronger.
We remain focused on delivering the potential
of CAB Payments and are very confident about
the value this business is uniquely positioned to
create.
Board and Governance
The Board structure has remained stable since
the Initial Public Offering (IPO) in July 2023, and
meetings have been both regular and ad-hoc.
Your Board is fully engaged in the performance
of CAB Payments and the Non-executive
members of the Board seek to maintain direct
contact with all the members of the Executive
team, to ensure they get a broad and accurate
view of the current challenges and opportunities
and to hear any concerns or suggestions each
individual has to offer.
I am pleased that the Board is diverse, with a
60% female representation and an impressive
range of skills, experience and backgrounds. I do
believe we can continue to improve as we move
forward to ensure we have an even broader
range of cultural and geographic backgrounds,
with a specific focus on the markets we serve.
In February 2024, we announced that Neeraj
Kapur will succeed Bhairav Trivedi as Chief
Executive Officer (CEO), subject to regulatory
approval. The Board would like to express
their sincere gratitude to Bhairav, and we are
delighted he will continue to represent the
Group as a senior adviser to the Board.
I am delighted to present the first annual
results for CAB Payments Holdings plc (CPH
or the Company) as a listed business. CAB
Payments, through its client-facing brand of
Crown Agents Bank, has a rich history and
a recent track record of strong growth. The
business specialises in moving crucial funds into
developing countries, whose growth and future
welfare depend on it.
The Group can trace its history back at least
200 years and has become a vital part of
a financial support eco-system. In 2023
alone, CAB Payments moved c.£9.3 billion to
developing economies to support humanitarian
aid, financial inclusion and remittance flows to
local populations.
2023 was a very eventful year for the Group.
The tremendous effort that went into generating
the strong growth this year was somewhat
overshadowed by events late in the year in two
of our larger markets. These events caused us to
downgrade our short-term guidance on Group
financial performance. This was personally
extremely disappointing. However, the Group
grew its income by 25% this year, an excellent
result under any other circumstances, and a
great springboard for future success.
Financial StatementsOverview Strategic Report Governance Appendix
09
We welcome Neeraj to CAB Payments. He is a very
experienced finance professional and will bring a new
perspective to the Group. Once approvals are complete,
Neeraj will replace Bhairav as an Executive member of
the Board.
Capital Allocation
CAB Payments has significant potential for superior
growth into the medium-to-long-term, and this will
be achieved through the successful execution of
our plans. This will require continued investment in
our operations, our capabilities, our network and
our product development – we will do nothing to
endanger this. The Group generates healthy profits
and cashflow and we are confident this will continue.
By taking advantage of the growth opportunities
ahead and pursuing active cost management and
a capital light business model, the Group expects to
continue to generate significant free cash flow. We
currently anticipate that the majority of the growth
will come through a consistent capturing of market
share in current and new geographies, with a focused
organic approach. The Board will actively manage
capital allocation with an emphasis on growth, but
will also consider distributions to shareholders at
the appropriate time, always seeking to make the
right choice to maximise long-term and sustainable
shareholder value.
Looking Forward
CAB Payments is a leader in a very sizeable niche.
Being able to safely, rapidly and cost-effectively
move funds around the world within the confines
of a complex regulatory environment can be a
daunting task, and it is one best left to the experts.
CAB Payments are experts. Compliance is central to
the business model, and we are exceptionally proud
of our UK banking licence; this sets us apart from the
competition and gives clients and prospective clients
an indication of the attention to detail and level of
service they can expect from us.
Our people are key to our success, and we have great
people. Their hard work and total dedication during
a period of continued growth is a testament to their
abilities, their experience and their talents. I wish to
thank them on behalf of the Board.
Your Board and I remain very positive about the future.
We will focus on building trust and confidence in all
our stakeholders, and on delivering on the promises we
have made.
I want to finish by thanking you, our shareholders,
for your continued support.
Ann Cairns
Chair
25 March 2024
Board engagement
The Non-executive members of the Board seek
to maintain direct contact with all the members
of the Executive team, to ensure they get a broad
and accurate view of the current challenges
and opportunities and to hear any concerns or
suggestions each individual has to offer.
More on Governance / Page 70
Strategic
Report
12 Chief Executive Officer Review
16 Our Business Model
18 Our Strategy
24 Strategic Progress
26 KPIs
28 ESG Report
48 Stakeholder Engagement
and s172 Statement
50 Financial Review
55 Risk Management
60 Principal Risks and
Uncertainties
65 Going Concern and Viability
Statements
67 Non-financial and
Sustainability Information
single platform…
Moving money from a
CAB Payments Holdings plc | Annual Report and Accounts 202310
…to 100+ currencies
in 600+ currency pairs
11
Overview Governance Financial Statements AppendixStrategic Report
Chief Executive Officer Review
An emerging success story
Bhairav Trivedi
Chief Executive Officer
Biography / Page 72
CAB Payments has a number of significant
growth drivers underpinning its long-term
development:
• Large addressable market undergoing a shift
to specialist providers;
• High-quality, diverse client base;
• Global network and infrastructure; and
• Multi-channel emerging market platform.
All of this allows us to move money where it is
needed, resulting in a positive global impact.
Research supports the Group’s view that the
market for cross border payments is shifting
from traditional global banks to specialist
providers like CAB Payments. This provides a
tailwind and an opportunity. CAB Payments
expects to grow from here by exploiting this
transition, increasing its client base rapidly
through new sales channels, gaining market
share and strengthening its presence in
additional geographic currency destinations to
diversify its income streams.
Business Performance
2023 was another year of strong growth for the
Group. While we recognise the business did not
deliver as we had anticipated in the second half
of the year, it was still in absolute and relative
terms a good performance, with healthy growth
in income and profit, and sets the Group up well
for further growth in 2024 and beyond.
Strategic Context
CAB Payments is a market leader in business-
to-business cross-border payments and FX.
The Group has a high-quality and growing client
base, made up of G10 government entities,
some of the world’s best known international
development organisations, global remittance
companies, emerging markets financial
institutions and, increasingly, major market
banks with a global presence. The Group is
a significant and growing operator in a large
and expanding market and has excelled to
this point due to the strength of its financial and
technology network, along with strong global
relationships, with both partners and clients.
While the Group is very capable in developed
markets and more than half its volume
is transacted in these currencies, its core
advantages are most pronounced in hard-
to-reach emerging markets, with a particular
current emphasis on Africa. Continued success
is dependent on a clear focus on what we
do best, providing an unrivalled and cost-
efficient service, and expanding our product
set and geographic reach, in response to
client demands.
CAB Payments Holdings plc | Annual Report and Accounts 202312
Income growth overall and in
Payments and FX
In the year, Group gross income was ahead
of the previous year by 25% at £137.1 million
(2022: £109.4 million). Within this, we did
experience some weakness in the
second half of the year, particularly in
the fourth quarter, with interventions
in two of our key currency corridors.
Income in the first half of the year
came in at £71.8 million (H1 2022:
£37.0 million) and declined in
the second half of the year to
£65.3 million (H2 2022: £72.4 million)
with, as mentioned, the fourth quarter not
delivering as expected, and the Nigeria Naira
(NGN or Naira) corridor significantly down
year-on-year, as was forecast at the time of
the IPO in July 2023. Naira income was down
in 2023 to £18 million (2022: £27.5 million),
with £15.2 million of this coming in the first half.
This was more than offset by the increase in net
interest income from cash management, which
delivered £31.7 million in the year, up from
£10.1 million in 2022.
Importantly, the transactional Wholesale FX and
Payments FX income grew by 7% year-on-year
to £88.4 million (2022: £82.8 million); excluding
the Naira, which experienced well-documented
elevated conditions in 2022, the growth rate
would have been 28%.
Robust profitability and cash flow generation
EBITDA1 was down in 2023 by 12% to
£43.5 million (2022: £49.7 million), due to
non-recurring items of £21.1 million, primarily
costs directly associated with the IPO in July
(2022: £5.3 million). Excluding non-recurring
items, adjusted EBITDA was £64.6 million, up
17% (2022: £55.0 million). Reported profit after
tax from continuing operations in the year was
down 29% at £23.9 million (2022: £33.4 million),
again impacted by non-recurring costs.
We continued to invest in the business
throughout the period, reflecting our confidence
in the growth potential of the Group over the
medium term.
Supporting vital aid
An explosion occurred on 7 December
2023 at an explosives depot on the
island of Mahé in the Seychelles, south of
the capital Victoria. The blast damaged
numerous structures. The explosion took
place during heavy flooding in Seychelles
that killed three people; a state of
emergency was declared following both
events. The Central Bank of the Seychelles
needed to channel emergency aid, and
they put out a flyer to aid organisations
to help them route aid. CAB Payments
provided the infrastructure to send GBP,
EUR and USD, ensuring the timely and
inexpensive arrival of aid.
1 See alternative performance measures for definition / Page 241
Importantly, the
transactional
Wholesale FX and
Payments FX income
excluding the Naira,
grew by 28%.
13
Overview Governance Financial Statements AppendixStrategic Report
CAB Payments continued to
extend its client and network
reach during the year. This
extension will, over time, provide
a greater level of diversification
and growth potential.
Chief Executive Officer Review continued
Operating costs, excluding non-recurring costs,
were up by 30% at £77.9 million, primarily
due to increased headcount and licensing and
support costs associated with the investments
in our IT infrastructure. Capital expenditure in the
year was £7.4 million (2022: £4.9 million). We
continue to estimate that capital investments in
2024 will be around 8% of gross income, based
on projects in progress and in the pipeline, and
that approximately 8-10% going forward would
be the appropriate level to fully support growth.
Stable Business Model Focused on
Areas of Commercial Advantage
CAB Payments continued to extend its client
and network reach during the year. This
extension will, over time, provide a greater level
of diversification and growth potential and
reduce the risk of a single event significantly
impacting financial performance, as we improve
our offering in other geographic regions. In the
year the Group added 83 new clients, of which
around half were active in the year, bringing
the total number of active clients to 509 (2022:
456). Even allowing for the fact that a number
of clients onboarded late in the year wouldn’t
be expected to be active until 2024, the income
contribution from new clients was below historic
averages. We are restructuring the onboarding
and activation process to address this and
remove any friction from the early stages of the
client journey.
In 2023, we added some significant clients.
Specific client relationships and identities are
often considered commercially confidential,
but it is also important to be able to help our
stakeholders understand the general prestige of
those who choose to trust CAB Payments with
their business. In 2023, we onboarded many
high-quality clients, including Barclays, Inpay,
Plan International and SNV Global, joining such
institutions as Save the Children International,
the Norwegian Refugee Council and PagoNxt/
Santander. We are confident they will go on to be
important and valuable long-term relationships.
We are in negotiations with several major
financial institutions and expect some of these
to begin operating with CAB Payments in the
very near future. Successful progress in this client
segment will be an important driver of growth in
the coming years.
We continued to extend our network reach
during 2023 – this is a clear differentiator for
CAB Payments in being able to deliver a cost
effective and reliable service to our clients,
who place an incredible degree of trust in us. In
the year we increased the number of banking
partners, including Nostro accounts, liquidity
providers and payment partners, by 44 to 331.
These partnerships allow us to move client
funds quickly and reliably, whilst retaining
full control of the end-to-end journey. We are
seeking to further deepen our network of Nostros
in geographic regions where complexity and
market size provide an opportunity for the Group
or where our clients require our solutions. CAB
Payments’ credibility and trust is underpinned by
our UK banking licence, and this provides us with
an advantage in developing relationships in other
geographic regions.
The nature of maximising the impact of our
competitive advantages, built up over many
years, means there is
regional concentration in
the income delivery.
CAB Payments
specialises in regions
where regulations are
constantly developing
and where there is a
level of uncertainty. This
is part of the reason
why there is an ongoing
market share shift
from global banking
institutions to specialist
providers like CAB Payments and provides
the opportunity for higher margins and future
volume growth.
In recent years, the Naira has delivered a
disproportionate degree of FX and payments
income, due to CAB Payments’ inherently strong
position in this market. Although this continued
into the first half of 2023, the Naira represented
less than 7% of transactional income in the
second half of the year, returning to a level more
in line with medium-term expectations.
CAB Payments Holdings plc | Annual Report and Accounts 202314
There were negative surprises in the fourth
quarter of the year for two important currencies
for the business, the Central African Franc (XAF)
and the West African Franc (XOF). The central
banks in these regions intervened, in different
ways, in an effort to support the currencies and
shore up the foreign currency reserves. These
interventions had the effect of significantly
reducing the income towards the end of the
year from XAF and XOF, during a period when
we were forecasting significant strength in both
currencies, causing the Group to publicly reduce
its income estimates for 2023. We understand
this reforecast had a significant impact on
shareholder confidence and we are focused
on delivering on the great potential for CAB
Payments and re-establishing shareholder and
broader investor trust.
Looking Forward
We look forward to 2024 with confidence and
expect another year of income growth. This
will be underpinned by further investment in
our sales capabilities, increased share from
the current client base, a concentration on the
activation of new clients onboarded in 2023,
and the development of additional currency
corridors and partnerships.
We are in the final stages of obtaining our EU
licence and continue to expect our US licence to
be granted in the second half of this year. These
licences will open up significant additional sales
channels for CAB Payments among high-quality
development organisations and remittance
providers who move considerable sums into our
key markets. Building out offices in these regions
will have the added advantage of placing
salespeople in closer proximity to major market
banks in both geographies, where cultural or
language similarities can be important in the
sales process. As well as new potential clients,
we have some sizeable clients we have already
signed up who are yet to carry out their first
transaction; we will seek to guide them rapidly
and smoothly through the activation process.
And our concentration on continually improving
our service to current clients remains a focus,
where our net revenue retention remains well in
excess of 100%.
We did finish 2023 on a disappointing note,
with negative surprises in two of our important
markets. While we are not dependent on a
short-term recovery here, we expect these to
be important markets for us over the medium
term. These changes highlighted a requirement
for the Group to be increasingly proactive and
influential at the highest level across the world,
not only predicting change, but helping to shape
effective regulation in the markets we serve.
It is also evident to us that CAB Payments’
capabilities are ahead of its profile, and we
consistently receive feedback from new clients
that we outperform their expectations. Going
forward, I will dedicate my time to raising the
understanding of CAB Payments globally, once I
hand over the reins of CEO to Neeraj Kapur over
the next couple of months. I will do my utmost
to ensure global central banks, regulators, large
money movers and senior industry participants
better understand and recognise just how much
of a force for good CAB Payments is. Success
here will underpin the profitable growth and
value we expect to continue to deliver for all our
stakeholders.
Bhairav Trivedi
Group Chief Executive Officer
25 March 2024
15
Governance AppendixFinancial StatementsStrategic ReportOverview
Our Business Model
Moving money where it’s needed
We enable critical payment flows into emerging economies…
OVERVIEW
CAB Payments streamlines emerging market flows
resulting in quicker and better performance than the
incumbent SWIFT network.
Our key resources and relationships
– We have a wide range of clients who send money to
emerging markets – banks, supranationals, fintechs
and governments.
– We have an extensive network allowing us to send
money quickly, cheaply, and reliably.
– We have a best-in-class platform that allows us to
seamlessly connect our clients and our network.
Traditional SWIFT
Traditional - multiple hops
based on regional bilateral
arrangements
We use a single hop using dedicated
emerging market infrastructure
…through our leading FX and Payments platform
WHAT
MAKES
CAB PAYMENTS
UNIQUE:
Holds a Banking Licence
Focused on emerging markets
B2B only – no retail clients
Focused on larger
transactions
What we do and how we do it
1
1
2
2
3
1
1
3
4
4
5
5
CAB Payments Holdings plc | Annual Report and Accounts 202316
DELIVERING FOR OUR CLIENTS
Cost : competitively priced
Speed : faster payments
Reliability : professional and extensive emerging
markets network
Trust : UK-regulated bank with strong heritage
Ease : can instruct through API, file transfer or
SWIFT
Transparency : ability to track payments
throughout journey
Creating value for our stakeholders and delivering positive social impact
DELIVERING FOR OUR EMPLOYEES
50%
Ethnically diverse
employees
40%
Female employees
DELIVERING FOR OUR INVESTORS
25%
Income growth
£64.6m
Adjusted EBITDA1
WE CONTINUE TO SCALE THE
BUSINESS TO DRIVE FUTURE
LONG-TERM GROWTH
For more details, see our strategy /
Page 18 and our KPIs / Page 26
PROVIDING CLEARING
BACKBONE
to make financial services accessible and
formalise financial markets.
£9.3bn
Flows into and out of Low and
Lower-middle income countries2
For more details, see our ESG section /
Page 28
STRENGTHENING LOCAL
ECONOMIES AND DRIVING
FINANCIAL INCLUSION
by allowing remittance and aid flows to be
more reliable and cost-effective.
£3.1bn
Development aid flows
£1.8bn
Remittance flows
1 See alternative performance measures for definition / Page 241.
2 As defined by the World Bank.
17
Overview Governance Financial Statements AppendixStrategic Report
Our Strategy
We have a proven track record
of performance…
OUR FOUR STRATEGIC AIMS
… and are positioned
to deliver at scale
going forward.
CLIENTS
Target large, new client
segments
Highly diversified international base of clients
who move money into emerging markets.
We have four segments, including developed
and emerging market banks, fintechs and
development organisations, including
multilateral organisations and NGOs.
PLATFORM
Introduce new products
and capabilities
Our tech enabled, multi-channel platform was
built with the challenges of emerging markets
in mind. Its goal is to deliver our network to our
clients while minimising time, risk and cost.
NETWORK
Deepen our
networkglobally
Deep global payments and FX infrastructure
targeting emerging markets. We have a
dedicated team focused on establishing and
maintaining payment and FX relationships.
MARKET
Large and underserved
We focus on a large market of financial flows
into and out of emerging markets. This market is
underserved and growing at a faster rate than
global GDP. Margins are sustainably high due to
the difficulty and perceived risk of the markets.
CAB Payments Holdings plc | Annual Report and Accounts 202318
NETWORK
Deepen our networkglobally
Payment partners
We deliver money into 150+ different
countries using 110 different currencies.
We do this in one of three ways. We
either establish a local bank account with
a local bank (Direct Nostro) which allows
us to make local payments out and
have our liquidity partners pay into the
account. In markets with Direct Nostros
we have full flexibility to source our FX as
we wish and typically have good relative
performance of delivery of payments. We
also have bank accounts with regional or
global providers who are able to provide
access to geographies where we do not
have a local partner (Indirect Nostros).
In theory, an Indirect Nostro can be as
effective as a Direct Nostro, but in general
we prefer to work with local partners
who are able to navigate local nuances
more effectively. Finally, in some markets,
we have FX settlement partners – players
who give us access to make local
payments, but do not allow us to freely
source our local FX.
As of 31 December 2023, we had 171
Nostros (127 Direct), which reflects
growth of 23% on 2022,and 47 FX
Settlement Partner relationships.
Together, this gives us access to 150+
countries and 110 currencies.
Liquidity providers
Within our Emerging market portfolio we have
a robust portfolio of counterparties who have
appetite for inward bound hard currency flows
and have local currency for sale which makes us
highly competitive when servicing our client base.
These are in addition to our Nostro relationships
and consequently supplement the already strong
pricing we receive from them. The vast majority
of our liquidity partners are commercial banks,
but we do also get liquidity from select NBFIs and
central banks. In our target markets, we ideally
have three or more liquidity partners to ensure
the ability to source competitive FX rates.
As of 31 December 2023, we had 113 liquidity
providers, up from 101 in 2022.
We have a strong
roster of banking
partnerships across
the globe which allows
us to make payments
in 110 currencies. The
partnerships consist
of payment partners
and liquidity providers.
Payment partners
help the Group deliver
payments into our chosen
corridors. Our Liquidity
providers ensure we can
competitively price for
our clients. Our Banking
Partnerships network
team onboards, recruits
and maintains these
partnerships.
2021 2022
159
2023
186
218
Payment Partners End of Year
Local Bank Accounts – Direct Nostros
Local Bank Accounts – Indirect Nostros
FX Settlement Partners
98
114
127
17
25
44
44
47
47
19
Governance AppendixFinancial StatementsStrategic ReportOverview
Our Strategy continued
Target large, new client segments
CLIENTS
IDOs
IDOs include multilaterals, NGOs
and development arms of central
governments. Most of the flows we
facilitate are aid flows, either directly
for deployment in the market or for
salaries and operational expenses.
Typically, they will be to support
international development and to finance
humanitarian aid. This means that IDOs
send large scale periodic payments to
some of the world’s most challenging
environments. Because IDOs tend to
make large payments which are aid
flows, they want to make sure that
there is minimal friction. We help them
by ensuring their money arrives as
inexpensively as possible.
One client example is an IDO that is a
set of intergovernmental organisations
with over 37,000 employees across 193
countries. They need to be able to access
funds for peacekeeping, humanitarian
assistance, and development
programmes in all their locations. CAB
Payments’ proprietary technology is
purpose-designed for these markets to
reduce both cost and friction, maximising
the value of urgently needed funds.
This sharp focus on payment and
cost efficiency has made us this IDO’s
largest FX provider for emerging market
currencies, with a tender win-rate well in
excess of the next best provider.
Across all our IDOs in 2023, our average
volume per unique client was 72 million,
and this segment accounted for 26% of
our income.
NBFIs
NBFIs are typically financial services
technology businesses (fintechs) notably
remittance companies, payments
business and FX brokerages. As financial
players, NBFIs have a frequent and
consistent need for FX and payments
services. Some of our NBFI clients make
large wholesale FX transactions to
manage their balance sheet, and others
use us for back-to-back client payments.
As both a bank and an aggregator,
the Group brings immediate scale and
regulatory support.
We have 509 clients
spread across four major
client segments. All four
segments have at least
one client in the top ten,
every one of our top 50
clients from 2022 still
trades with us. Our clients
are some of the most
influential parties sending
money into emerging
markets including
governments, multilateral
organisations, fintechs
and banks.
CAB Payments Holdings plc | Annual Report and Accounts 202320
One of our NBFI clients serves corporate
clients across 140 currencies in 200+
countries. We are able, drawing on our
network and liquidity, to deliver services
more competitively than their historical
banking partners in 22 of those markets
between 2022 and 2023. This has led the
client to increase volumes with the Group
by314%. Clients include several of the
largest remittances players in the world.
Overall, the NBFI segment contributes
around 31% of the Group’s income.
EMFIs
EMFIs are banks headquartered in
emerging markets. Clients include both
regional and local commercial banks,
and correspondent banks. We have a
significant presence in the Caribbean, the
Pacific Islands, sub-Saharan Africa and
in other regions. The Group’s relationships
with financial institutions in emerging
markets dates back to day one of our
business. EMFI clients use the Group
to access global clearing systems and
to make payments on behalf of their
clients in USD, GBP and EUR. Flows from
these clients go the opposite direction
of our other clients – from emerging to
developed markets.
One such client is the central bank of one
of Africa’s ten most populous nations
which is responsible for facilitating
repayment of its foreign debt. Working
with the Group has enabled it to make
payments against the sale of local
currency, while protecting its foreign
reserves at a time when import bills are
at historic highs. In turn, the Group has
captured flows in this corridor from the
development sector that were previously
lost to competitors.
During 2023, the client placed payment
volumes totalling $916 million and overall
the EMFI segment contributed 39% to our
income.
MMBs
MMBs – banks who are headquartered
in G20 markets – is our newest segment.
Banks see us as a cure for the headaches
that are associated with sending money
via traditional bilateral arrangements into
emerging markets. Clients already include
some of the largest banks in the world.
This results in high cost, high
perceived risk and a lack of certainty
and transparency. MMBs use the
Group because we are a trusted
professional counterparty in these
challengingmarkets.
Given the demonstrable cost and
logistical advantages we offer, one such
global bank that was onboarded in late
2021 steadily increased its use of the
Group’s products and services and more
than doubled volumes between 2022
and 2023 to £117million.
During 2023, the MMB segment
contributed 4% to our income.
509
clients spread across four
major client segments
21
Governance AppendixFinancial StatementsStrategic ReportOverview
Introduce new products and capabilities
PLATFORM
All three of our product lines grew in
2023, although banking improved the
most due to increases in both high
quality liquid asset balances and central
bank interest rates, whereas payments
and FX were most effected by NGN
drops.
CAB Payments has three main EM
product platforms, each with a distinct
value proposition:
Real-time access to competitive FX
• Desktop and mobile trading
platform to manage FX exposures
and monitor market fluctuations
• Real-time data feeds and
competitive pricing. CAB
Payments can cover many
currencies which are rarely quoted
• API – enabled solution with third-
party integration
CAB payments have three
main product offerings.
Clients who trade
(typically large ticket) FX
for delivery into their own
accounts. Clients who
use our services to deliver
money to third parties are
deemed to be payment
clients. We also have
clients who wish to use us
for our Banking services,
consisting of access
to USD, GBP and EUR
clearing, the provision of
bank accounts for making
payments and holding
deposits as well as trade
finance.
Our Strategy continued
Clearing, payments and deposits
• Access to global clearing, notably USD/
GBP/EUR for emerging markets players who
struggle to find partners; we help ensure client
risk processes are compliant
• Safe haven for foreign currency deposits
including interest bearing time deposits
• Payments traffic largely same- currency
payments today, but we are helping clients
to send payments more effectively using
local currency
Multichannel emerging markets payment platform
• Competitive payments pricing and unique
settlement capabilities, including last-mile
(SWIFT, local bank, mobile); world class anti-
financial crime capabilities
• Multi-channel delivery including SWIFT,
e-banking and API-enabled solution that
supports cross-border payments to the long tail
of emerging markets
• Multi-currency accounts enabling payments
to be made in a vast array of currencies from a
single base-currency account
CAB Payments Holdings plc | Annual Report and Accounts 202322
Market
Global cross-border
payment flows
Addressable
Developed to
emerging market
flows
$226tn
TAM
Africa, LatAm,
ME&APAC
$7.6tn
Less: Inter-
OECD flow
Less: Flows into /
out of BRICS
1%-2%
Large Addressable Market
Underserved and growing fast
MARKET
The global cross-border payments
market is over $200 trillion in flows.
Roughly $8TN of these flow into
emerging market countries. Roughly 20%
of this is flows into and out of countries
where we focus, our Target Addressable
Market (TAM). Based on SWIFT data, we
estimate that CAB Payments flows are
between 1% and 2% of the flows into
these markets. We believe this puts us in
line with the top players in this market.
Our share has increased over time as we
outgrow the market.
Delivering funds into emerging markets
is complex. They require relationships
with central and local banks and
deep knowledge of local regulatory
requirements. Allowing flows out of
these markets requires a world-class
risk management, notably anti-money
laundering expertise. CAB Payments has
scale in these operations and specialises
in these unique skills, meaning we can do
it more effectively and with less risk.
There is a structural shift from traditional
bilateral banking relationships, because
of these complexities and the fact that
most banks are subscale. This shift is to
specialist players who have the expertise
and scale to make these markets
safe. Primary research undertaken
by the company in 2022 and 2024
indicates that businesses and banks are
increasingly using specialists to move
Emerging markets
payments and FX are the
core of CAB Payments.
We help deliver funds
into and out of the long
tail of emerging markets.
Across the geographies,
markets tend to fall into
two categories: sending,
(involving payments sent
from developed nations),
and receiving, (often by
emerging economies
receiving significant sums
that are urgently needed).
We consider our target
market to be monetary
flows into and out of the
‘long tail’ of emerging
markets.
their money and this trend is likely to continue
for the foreseeable future. This means that
specialists, as a category, are outgrowing the
underlying market by 10-15% per annum.
Unlike the largely commoditised payment
systems for G10 nations and currencies,
emerging markets have high barriers to
entry and higher margins. CAB Payments’
margins reflect the fact that we aggregate
hard currency flows into emerging markets,
making us one of the largest sources of hard
currency in our chosen markets. This, in turn,
allows us to maintain a deep network of
liquidity providers, ensuring we always have
competitive rates. The network effect means
we can achieve good margins while giving
our clients the best rates.
Source: Primary research, CAB Payments projections
23
Governance AppendixFinancial StatementsStrategic ReportOverview
Target large, new client
segments
Deepen our
networkglobally
NETWORK CLIENTS
2023 represented solid progress in building our
emerging market network of payment and FXpartners:
• We enhanced our delivery network with a continued
investment in people, skills and technology.
• We deepened our footprint with five new countries in
Eastern Europe and four in the Pacific region.
• We grew our partnerships network with additional
currencies in various jurisdictions: two in Africa, three
in Oceania, five in Eastern Europe/Central Asia and
one in South East Asia. 16 additional counterparties
were added to strengthen our African liquidity.
• Brazil became a Top 25 corridor based on income
with £54 million in flows as we grew nascent
geographies.
• Licence applications lodged in order to activate sales
functions in Europe and US markets. In anticipation,
key leadership personnel are inplace.
Our dedicated Network team will continue to build our
capabilities in 2024 and 2025:
• Currently focusing on our strong central American aid
flow business to build it into a larger Latin American
footprint.
• Build our strong position in Middle East North Africa
(MENA) into a position of market leadership.
• Fill in smaller market gaps in our delivery coverage.
• Post-licensing, build out sales functions in Europe and
US and expand sales globally.
2023 was a successful year for new business, adding
high-quality clients across each of our four segments:
• New IDO clients including Save the Children
International, Plan International and Norwegian
Refugee Council.
• New major market banks in developed markets.
Several new major markets banks in the world top 50
are currently being onboarded, including Barclays and
PagoNxt/Santander.
• New emerging market banks include new clients in
Africa, South East Asia and the Pacific.
• New NBFIs includes several new top Middle Eastern
exchange houses, UK remittance companies and an
African payroll business.
Our soon-to-be-opened European and US sales
offices will open exciting new markets for the
business. In addition, we are looking to scale our
major market bank segment, building upon a strong
existing pipeline:
• Europe and the US: once licensed, we will be hiring
high-calibre sales professionals, allowing us to solicit
development organisations and fintechs in these
markets.
• Onboarding the pipeline: exciting prospective
business includes several of the world’s largest banks
and financial services businesses who have started
the onboarding process.
Strategic Progress
CAB Payments Holdings plc | Annual Report and Accounts 202324
PLATFORM MARKET
We continued to scale and improve our future-facing
FX, mobile and banking payments platforms in 2023, as
well as strengthening our banking products:
• Expanded volumes and geographies: API transaction
volumes more than doubled vs. 2022, with the
payment gateway now servicing over 60+ currencies.
• Direct integration now embedded with the clearing
system of West Africa.
• 80% of FX fully automated, key for the scalability of
the offering. Our flexibility saw an increased offering
to 600+ currency pairs, and increasing south-south
flows from one emerging market currency to another.
• Deepened systems integration between FX module
and the core banking system to increase scalability
and enhance risk controls.
• Our overdraft facility (Liquidity as a Service) moved
from successful pilot to full operation.
In 2024 and beyond we will continue to develop our
platform, focusing on API delivery channels and last mile
payments infrastructure:
• Rolling out smart routing of USD flows to spread our
emerging market risk more effectively across multiple
clearing partners.
• Local clearing: continue to integrate local banks into
our payment gateway.
• Maximise options with wider access to FX liquidity
and broader distribution, through greater interaction
with other digital market participants such as prime
brokers and electronic currency networks.
• Increase integration between payments and FX
platforms in order to create new API-enabled client
workflows.
• Launching a pilot for short tenor FX forwards, starting
with G20 currencies.
• Launching our avalised promissory note product for
trade finance.
• At the close of the reporting year, CAB Payments
had over 500 clients using our products and services.
All have at least one thing in common: they are
high-quality, reputable players in global or national
banking, government, NGOs, or global charities. All
need to move money, frequently to hard-to-reach
places, and often as a matter of urgency.
• Banks have historically accounted for the lion’s share
(2023: c. 80% to 85%) of cross-border payments to
emerging markets, with the remainder handled by
specialists such as CAB Payments. This is part of a
decline in correspondent banking relationships that
started in 2011, as banks prioritise their traditional
geographies and the core business of lending. In
contrast, they increasingly view FX and payments
to emerging markets as having unattractive risk-
weighted returns.
• CAB Payments believes that this trend will mimic
previous trends in merchant acquiring and speciality
lending which have seen incumbent banks cede
market share to more focused specialists. On this
basis, Banks’ market share projected to fall to c. 60%
to 75% by 2029.
1
Introduce new products
and capabilities
Underserved and
growing fast
1 Prime Research SWIFT, CAB Payments analysis.
20292024
Independent Specialists
(e.g. CAB Payments)
Banks
Structural shift
15–25%
75–85%
25–40%
60–75%
25
Governance AppendixFinancial StatementsStrategic ReportOverview
20212020 2022 2023
64.6
55.0
14.9
1.6
28
5
50
47
2020 2021 2022 2023
137.1
109.4
34.3
53.5
2021 20212020 20202022 20222023 2023
88%
509
69%
423
91%
456
n.m
370
Margin %
2020 2021 2022 2023
34.7
21.0
13.6
35.0
20.7
14.3
19.2
23.1
11.6 12.8
7.7
10.3
Developed
Emerging
Key Performance Indicators (KPIs)
£137.1m
2022: £109.4m
£64.6m
2022: £55.0m
88%
2022: 91%
509
2022: 456
£88.4m
2022: £82.8m
£34.7bn
2022: £35.0bn
1. Gross Income 3. Adjusted EBITDA
andMargin
4. Operating Free Cash
Flow Conversion
5. Number of Unique
Active Clients
2. Wholesale FX and
Payments FX Income
1
6. Wholesale FX and
Payments FX volumes
1
Definition1: Total income, net of interest expense.
Performance: 2023 Gross income has grown
c. 25% year on year, primarily from our FX and
Payments business as a result of widening FX
margins and higher net interest income driven by
global interest rate rises; this is partially offset by
a year-on-year reduction from Naira FX business
after a c. 18 month margin dislocation period.
Definition1: Adjusted EBITDA is defined as profit
before Tax and IFRS16 lease liability interest,
depreciation and amortisation and non-recurring
operating expenses.
Performance: Adjusted EBITDA has experienced
a sharp increase from 2020 as a result of
ongoing growth in Wholesale FX and Payment
FX volumes and margins. In 2023, the growth
slowed down as a result of reduced year-
on-year income with Nigerian Naira margins
contracting. Adjusted EBITDA margin has
reduced 3% from 2022 reflecting the lower
than anticipated H2 income whilst the business
continued to invest in people and systems.
Definition1: Operating free cash flow conversion
is defined as Adjusted EBITDA before the cost
of purchasing property, plant and equipment,
the cost of intangible asset additions and the
cost of lease payments as a percentage of
Adjusted EBITDA.
Performance: Operating Free Cash Flow
remains very strong and above our mid term
target of >80%. Year-on-year reduction driven
by increased level of capital expenditure, as
anticipated, as the Business continues to
invest in its infrastructure to support future
incomegrowth.
1 See alternative performance measures for definition / Page 241.
Definition: We have re-defined how client
numbers are reported to be unique number of
clients, counted at a Group entity level, which
contributed income in the preceding twelve
months across any of the Group’s product
offering.
Performance: Ongoing steady increase in
income generating clients. In 2023, there was a
net increase of 53 new clients, driven by 66 new
to Group clients offset by actively disengaging
with 13 clients for a variety of reasons. There
was a further 41 new clients onboarded in 2023
who have yet to start trading, but are expecting
to do so early in 2024.
Definition: Wholesale FX and Payment FX
income is measured collectively by Group as the
underlying economic drivers are the same. The
income, volume and margins are all measured
and monitored, along with the underlying
currencies, to help the Group understand
broader income performance.
Performance: 2022 was an out-performing year,
driven by the NGN margin dislocation. 2023
demonstrates sustainable underlying income,
with headline growth of 7% and excluding NGN
growth was 28% driven by increased take rates
across Emerging Markets.
Definition: The notional value of Wholesale
FX and Payment FX trades, including the buy
and sell leg, split by Developed and Emerging
markets as defined above.
Performance: The business is demonstrating
sustainable marked increase in volumes since
2020. 2023 volume growth has been curtailed
as a result of various central bank interventions
during the course of the year impacting volumes
across NGN, XOF, XAF, GHS, MWK and KES at
various points of the year.
2020 20222021 2023
88.4
13.0
75.4
82.8
39.5
12.0
5.5
70.8
34.0
19.7
3.9
15.8
Developed
Emerging
CAB Payments Holdings plc | Annual Report and Accounts 202326
2021 20212022 20222023 2023
110 331
99
287
90
241
20212020
20212020 20212020 2021
2022
2022 2022 2022
2023
2023 2023 2023
3,286
3,137
1,758
9.3
22%
2,570
1,992
12.4 24%
2,014
1,040
808
7.8
6.3
21%
110
2022: 99
331
2022: 287
7. Number of Currencies
Offered
8. Number of Banking
Partners
Definition: Currencies where we are able to
undertake an FX/Payment transaction.
Commentary: We are committed to expanding
our global presence and offering our clients a
one-stop shop for FX and payments. Over the
course of the last three years we have added
20 currencies to our capability, showcasing our
commitment to scalability, client satisfaction, and
market leadership.
Definition: Total number of our Nostro and
Payment Partners as they fortify our global
payment capability, and liquidity partners who
support our FX specialism.
Commentary: To fortify our global offering we
have added 90 banking partners over the last
three years. The addition of these partners
enables us to continue to offer competitive
solutions to our clients.
£3,137m
2022: £3,286m
£1,758m
2022: £1,992m
£9.3bn
2022: £12.4bn
22%
2022: 24%
9. Development Aid flows
10. Remittance flows 11. Flows into Lower Income
Countries
12. Gender Diversity In
Management
Definition: FX and Cross Currency Payment
volumes from developed organisations into
Emerging Markets.
Performance: All major development clients
continued to use our services in 2023, but some
of their aid flows varied, driving a lower total
processed volume. Notably reduced flows into
Bangladesh and Nigeria accounted for half of
the shortfall.
Definition: FX and cross-currency payment
volumes into Emerging Markets for NBFI clients
specialising in B2C Remittance.
Performance: All major remittance clients
continued to use our services in 2023, but
variations in their demand accounted for the
drop in flows. More than half of the drop was
USD flows which we de-emphasised as a
corridor for NBFIs.
Definition: Commercial banking flows into Low-
Income and Lower-Middle-Income countries as
defined by the World Bank.
Performance: Decrease of flows into Rwanda,
Mali, Uganda, Niger, and the DRC were offset
by modest increase in flows into Mozambique,
Madagascar, Malawi, Burkina Faso, Chad,
Ethiopia, and Togo, reflective of a global
shrinkage of flows into emerging markets in
2023.
Definition: Number of female Vice President
(VP), Senior Vice President (SVP), Director and
Executive Vice President (EVP) (excludes Board)
as a percentage of all VP, SVP, Director and EVP.
Performance: We have remained vigilant in
ensuring equal gender representation in our
recruitment and promotion processes. Despite
this we have seen a slight reduction in gender
diversity in management. In 2023, 60% of
promotions into SVP level were female, however,
we recognise that with only 20% of promotions
to VP level being female, we need to review our
succession planning and continue to support
them in their progression.
27
Governance AppendixFinancial StatementsStrategic ReportOverview
ESG Report
Shaping the Future:
Our ESG Journey
With a business that specialises in serving the
needs of emerging markets, ESG is central to
our day-to-day activities at CAB Payments
In addition to this external validation of how
we have integrated sustainable practices,
we have also increased our internal rigour
to advance ESG in our business. In 2023 we
established a dedicated ESG Board Sub-
committee to advise the Board on ESG matters
and track our progress. We are also launching
an ESG reporting framework as the disclosure
landscape becomes ever-more demanding. We
expand on these areas in this report.
We believe that a sustainable business is a
better business, so we have ambitious ESG
aspirations for the Group in 2024. We are
focused on continuing to drive ESG value
throughout our organisation, working within our
B Corp framework to catalyse better practice.
Specifically, we will design a comprehensive
net-zero roadmap; fully refresh our materiality
assessment; and launch comprehensive ESG
training initiatives throughout our business.
We will also ramp up activity to communicate
the ESG value embedded within CPH, our
defined commitments to the environment
and society, and our highest standards of
governance.
In these pages, please explore our ESG
initiatives and join us in shaping a more
sustainable and responsible future.
This report outlines our strategic ESG direction
and initiatives as we enter a new chapter
following the listing of the Company on the
London Stock Exchange.
Indeed, 2023 was a pivotal year for the Group,
securing the EcoVadis Gold Sustainability
Rating for a second consecutive year; publicly
disclosing our target to be net zero by 2050;
and achieving B Corp Certification.
The latter is particularly significant as B Corp
recognises organisations that meet the highest
standards of verified social and environmental
performance, public transparency and legal
accountability. This was a key part of navigating
the ESG evolution for the Company as the
business transitioned to PLC status.
It’s been an extraordinary year of transformation and
progress. CAB Payments is set on its sustainability and
corporate responsibility journey, building on a strong
foundation and determined to travel the distance.
Our listing on the London Stock Exchange and B Corp
certification underscore our unwavering commitment
to business growth and ESG.”
Bhairav Trivedi
Group Chief Executive Officer
Introduction to ESG
CAB Payments Holdings plc | Annual Report and Accounts 202328
The Board
ESG Board Sub-committee
Susanne Chishti
(Chair, NED)
Karen Jordan
(NED)
Chris Green
(CRO)
Charlie Bronks
(Head of ESG)
ESG Steering Committee
Governance and culture
ESG in the Boardroom
Our ESG principles are championed at the highest
level of the Group. We demonstrate our commitment
through a dedicated ESG Board Sub-committee,
established in 2023. The Sub-committee is vital in
over-seeing ESG management and advising the
Board on ESG governance. This proactivity reflects
the Company’s pragmatic and efficient management
of ESG, which is essential in a dynamic discipline.
The ESG Steering Committee functions as a central
mechanism of day-to-day management, driving ESG
change and growth from within. Its members are
drawn from a cross-section of the business, bringing
a diverse range of core skills, knowledge, disciplines
and life experiences to the Group. By establishing an
influential committee to drive progress, all business
functions can be involved, informed and influence
ESG outcomes.
The Board and leadership team are as follows:
ESG action is not just a facet of CAB
Payments, it is central to our identity.
Recognising and communicating the
considerable value within our operations
is essential to grow our value proposition
into the future. As we strive towards
our ambitious targets, it is imperative
toemphasise the progress we have
made to date. I am proud to support
the impactful work that CAB Payments
undertakes and to have been recognised
as a BCorp during 2023 validates what
has been accomplished.”
Susanne Chishti
Chair of ESG Board Sub-committee
The ESG Board Sub-committee is not an official committee of the Board but a designated assignment consisting
of two CPH Board members: Susanne Chishti, serving as the Chair, and Karen Jordan, as Non-executive Board
Members, with Chris Green, the Chief Risk and Compliance Officer (CRO) and senior management team, and
Charlie Bronks, Head of ESG, as standing attendees from CAB Payments.
29
Overview Strategic Report Governance AppendixFinancial Statements
ESG Report continued
Our approach
to materiality
In 2021, we conducted our inaugural ESG materiality assessment. The purpose was to define the most vital ESG topics
likely to affect and impact the Group and our stakeholders. The outcome formed the foundation of the ESG strategy,
designed to focus on the highest ESG priorities.
Material topics - Why this is material to the Group Stakeholders impacted
Climate change
We are fully committed to supporting the Paris agreement and aligning with theUN Sustainable
Development Goals (SDGs).
Decreasing our carbon footprint, successfully transitioning to a low carbon environment and
disclosing financial risk relating to climate change are increasingly important to our stakeholders,
including investors and regulators.
We have an important role to play in managing the impact of our business on climate change. We
must mitigate and manage the subsequent risks and opportunities that evolve as a result of climate
change, while enabling a thriving and valuable business.
Clients, employees,
shareholders, communities,
regulatory bodies.
Diversity, equality and inclusion
The success of CAB Payments is dependent on our people. We strive to provide a safe and inclusive
working environment, where differences are embraced and everyone has a platform on which to
reach their full potential. This is material so that the Group can continue to attract and retain the best
talent, build even better external relationships and engage with the communities where we operate.
Employees, shareholders,
communities.
Governance, accountability and risk appetite
Clear governance and accountability structures are necessary for regulatory compliance, stability
and stakeholder confidence. Our ambition is to prioritise strategic decision-making, operational
efficiency and best practice risk management to achieve business goals and targets to deliver broad
stakeholder value.
Clients, employees, investors,
communities, suppliers,
industry bodies, regulatory
bodies, government.
Local communities
CAB Payments must use its experience to support and connect hard-to-reach communities. Our
work is essential to enable communities, businesses and individuals across the globe to access the
international market. The Group strives to provide support for underserved clients across the world.
Clients, employees,
communities, suppliers,
industry bodies, regulatory
bodies, government.
Being transparent
Integrity is a core value and it is vital that we continue to build trust and credibility, maintain
regulatory compliance and manage risk to enhance market confidence and grow business
confidence. This provides a competitive edge and aligns with the values the Group seeks to uphold.
Clients, employees, investors,
communities, suppliers,
industry bodies, regulatory
bodies, government.
Our stakeholders: Clients, employees, investors, communities, suppliers, industry bodies,
regulatory bodies and government.
CAB Payments Holdings plc | Annual Report and Accounts 202330
Board female composition
60%
Female colleagues
40%
Ethnically diverse employees
50%
Strong diversity across the business
CPH gained B Corp certification EcoVadis Gold Rating awarded for
the second year running
The Group enabled
£9.3bn
in global commercial flows into Low
and Lower-Middle income countries
All
environmental
data
externally verified
since
2019
OnHand Partnership
Developing community
engagement
Dedicated ESG
Board Sub-
committee
established
2023 ESG highlights
Chosen Charities - Street Child, PEAS and The Royal Marsden
Cancer Charity
31
Overview Strategic Report Governance AppendixFinancial Statements
Chris Green
CRO
Companies that courageously
pursue stronger growth and
profitability while improving
ESG performance deliver
superior shareholder returns.”
McKinsey and Company
1
Our research suggests that not
only can companies do well
while doing good; they can
perform better because of it.”
Michael Birshan
McKinsey senior partner
1
We actively engage all business
areas, emphasising the broader
strategic nature of ESG. We have
established a Group-wide cross-
functional Steering Committee
and, as with everything, clear
communication is critical.
Why did CAB Payments
choose to pursue B Corp
status?
We were clear we wanted to
align our ESG commitment to a
globally recognised, externally
verified standard. B Corp provided
a comprehensive ESG framework,
offering a structured route for
beginning our ESG journey. The
certification acted as a roadmap for
integrating sustainable practices
across the business and as a platform
for external recognition following
certification. This validation allows
us to showcase our commitment
to responsible business practices
and highlight achievements
in environmental, social and
governance initiatives. It reinforces
our dedication to sustainability and
to realise untapped value across
theorganisation.
And why are you invested in
ESG at CAB Payments?
I believe that a well-developed ESG
strategy makes good business sense
and creates long term shareholder
value. Through our business activity of
moving money where it’s needed, we
ultimately contribute towards financial
inclusion and making a positive social
impact. It’s also vital to have specialist
expertise, so we have a dedicated
team, headed up by Charlie Bronks
who brings technical ESG expertise
to drive our initiatives. So we are
well-equipped to lead and navigate the
Group’s ESG endeavours.
What value does ESG bring
to CAB Payments and the
shareholders?
ESG is a fundamental driver of
medium-to-long-term value at CAB
Payments. Our commitment to ESG
and externally verified credentials play
a vital role in positioning the Group as
an employer of choice, significantly
enhancing our ability to attract,
motivate and retain the best people.
Externally, ESG is important to many
other key stakeholders, such as our
clients, regulators, governments
and central banks. ESG alignment
reflects shared values and ensures
transparency, high standards and
resilience to regulatory changes. This
strategic approach also upholds CAB
Payments’ value proposition and
mitigates financial risks associated
with climate change.
Why does ESG sit within
the risk function at CAB
Payments?
Having ESG as part of the risk and
compliance function seemed a
pragmatic first step to implementing
ESG strategic initiatives, driving
change and adding value to
the business. It also ensures
regulatory compliance and a
structured approach to constantly
evolving standards and regulatory
expectations. It helps us to proactively
manage risks associated with climate
change and supports informed
decision-making.
ESG Report continued
1. How do ESG goals impact a company’s growth
performance? (mckinsey.com)
What is your role?
I am the Group CRO, a Director of
Crown Agents Bank Limited (CAB),
Executive Committee member, and
ESG senior sponsor. With regards
to ESG, my role over recent years
has been to develop and gain Board
level approval for our strategic
plans and targets, and senior level
leadership of executing against these
plans. I am proud of what we have
achieved so far and excited about
our future plans.
CAB Payments Holdings plc | Annual Report and Accounts 202332
ESG growth timeline
H2 2023
• CPH listed on the London Stock Exchange.
• Achieved B Corp certification.
• ESG Board Sub-committee established.
• Susanne Chishti appointed Chair ESG
Board Sub Committee.
• CSR incorporated into ESG.
• Achieved 2023 5% Greenhouse Gas (GHG)
emissions reduction target.
H1 2022
• Calculated Carbon Emissions for
2019 and 2020.
• Certified carbon neutral for 2019 and 2020.
• Baseline emissions reduction targets
established.
• EcoVadis Gold Rating achieved.
• Head of ESG appointed to the UN Global
Compact Network UK Board.
H2 2021
• Materiality assessment conducted.
• ESG Strategy developed.
• Baseline data capture.
• Modern Slavery Statement published.
• Submission of B Corp application.
H2 2022
• Social impact targets established.
• Achieved 2022 5% GHG
emissions reduction target.
H1 2021
• ESG function created.
• B Corp journey commenced.
• Chris Green appointed as Board and
Executive level ESG sponsor.
• ESG Steering Group established.
• Charlie Bronks appointed as inaugural
Head of ESG.
H1 2023
• Second Gold EcoVadis rating achieved.
• ESG preparation for Public Listing.
33
Overview Strategic Report Governance AppendixFinancial Statements
ESG Report continued
Our strategic ESG aim:
to reduce inequality throughout society
Inequality comes in many forms, including financial exclusion, poverty, health, education and
those most impacted by climate change.
Through a rounded and comprehensive ESG strategy, CAB Payments aims to lead by example in
contributing to a more equitable society, both inside and outside our business.
This aim breaks down into three focus areas, each with their own goals and objectives:
2
OUR
Organisation
We champion equal rights,
diversity andinclusion
OUR
Work
We provide access to the financial
market whichbenefits the under-served
and hard-to-reach
UNDERPINNED BY
Governance and Culture
Clear Governance structure, with accountability and transparency
embedded in our internal and external systems and behaviour
OUR
World
We contribute to a thriving and resilient
planet sothat future generations will
be able to meet their needs
31
CAB Payments Holdings plc | Annual Report and Accounts 202334
The UN SDGs and the aims of our B Corp certification are interlinked and align
with our ESG strategy.
SDG 1 – No Poverty by providing access
to financial markets for under-served and
hard-to-reach locations.
SDG 8 – Promote inclusive and sustainable
economic growth, employment, and decent
work for all.
SDG 5 (Gender Equality) and 10 (Reduced
Inequalities), championing equal rights,
diversity and inclusion.
SDG 12 – Responsible Consumption and
Production.
SDG 13 – Climate Action to support the
planet for future generations.
SDG 16 – Peace, Justice and Strong Institutions.
In addition, the Company is focusing on:
Our strategy contributes to:
35
Overview Strategic Report Governance AppendixFinancial Statements
ESG Report continued
1
OUR
Organisation
We champion equal rights, diversity andinclusion
Goal: by 2030, CAB Payments will be a Group whose people truly
reflect the diversity of the geographies in which we operate. We will
recruit, support and empower those who are under-represented in our
sector.
PROGRESS DURING 2023
ACROSS THE FOLLOWING
STRATEGIC GOALS
2023 was a milestone for our organisation.
Alongside our public listing, our continued
growth translates into greater reach and
impact, and it is paramount that our staff,
policies and processes truly reflect the diversity
of our operating geographies. To emphasise
this, we publicly champion equal rights, diversity
and inclusion.
Our growth has resulted in a sharp rise in
the Group’s employee count, including new
colleagues in the US and the Netherlands. We
believe that as we grow, our participation in
community and social impact schemes should
increase accordingly. In 2023, the Group
continued two days of volunteering leave for
all staff members, and boosted this initiative
Contributing to:
by partnering with OnHand; a volunteering
platform and partner who we use to help
find and record our people’s community
contributions.
These initiatives are a priority to continue to
nurture our culture of inclusion, diversity and
equality. Driven by an increasingly diverse
leadership team and senior management, our
chosen initiatives and goals are aligned to
contribute to SDG 5 (Gender Equality) and SDG
10 (Reduced Inequalities).
TARGETS FOR 2024:
• Female representation in senior management
(VP to EVP): 30%.
• Female representation across the Group: 45%.
Gender
equality
Reduce
inequalities
CAB Payments Holdings plc | Annual Report and Accounts 202336
CASE STUDY
Rolling up our sleeves
We find that people who choose CAB Payments
for their career gain a sense of fulfilment from
what we help to achieve each day.
So it’s not surprising that, under our roof, we
have a legion of willing and giving people who
enjoy rolling up their sleeves.
This led us to create a partnership with the
On Hand volunteering platform, founded by
organisations including the NSPCC, Red Cross,
RSPCA and MacMillan Cancer Support.
We provide everyone with two days each
year to put a line through the diary and take
their minds, skills, personalities and muscles
to help people and communities who need a
helpinghand.
Additionally, we collaborate with organisations
such as Street Child, who operate in over 20
countries around the world like Sierra Leone,
Nigeria, Somalia, and Uganda, aiming to ensure
that every child has access to high-quality
education.
In a similar vein, we’re also proud to support
PEAS (Promoting Equality in African Schools),
campaigning to expand secondary education
opportunities for all young people in Africa.
It explicitly ties us to looking after our
clients, looking after our employees
and looking after and considering the
wider environment.”
Michael Ogazi
Financial Controller and member of the
CAB Payments ESG Steering Committee
37
Overview Strategic Report Governance AppendixFinancial Statements
ESG Report continued
2
PROGRESS DURING 2023 ACROSS THE
FOLLOWING STRATEGIC GOAL
In 2023, CAB Payments launched a supplier code of conduct across our supply
base, which included an ESG framework that all our suppliers will need to abide
by. Ultimately, this will enable us to measure our wider impact through our
supply chain and ensure that we align with partners who share our core values.
Our Head of ESG and Senior Vice President, Charlie Bronks, was appointed
to the United Nations Global Compact Network UK Board (UNGCN UK). The
UNGCN UK connects UK-based organisations that are part of the UNGC.
This global movement is dedicated to driving sustainable working across the
business and private sector in the UK, promoting UN SDG-aligned activity.
OUR
Work
We provide access to financial markets to benefit underserved and
hard-to-reach people and communities.
Goal: broaden and deepen our work to ensure
more people, especially those in emerging markets, have
equal rights to financial services.
Contributing to:
Eradicate
all Poverty
CAB Payments Holdings plc | Annual Report and Accounts 202338
CASE STUDY
Ringing the bell for Gender Equality
The UNGCN UK joined International Finance Corporation, Sustainable
Stock Exchanges, UN Women, The World Federation of Exchanges, and Women in Exchange Traded Funds at
Ring the Bell for Gender Equality on International Women’s Day 2023. This campaign brought together stock
exchanges around the world to ring opening or closing bells to celebrate International Women’s Day.
Empowering women in the economy is crucial to achieving the Sustainable Development
Goals by 2030. When more women work, economies grow, leading to increased
productivity and income equality. Achieving gender equality is not just a matter of justice
and human rights but also good business. Gender equality can lead to greater innovation,
higher productivity, improved employee engagement and retention, and stronger financial
performance.’’
Charlie Bronks
Head of ESG, CAB Payments
Ringing the bell for Gender Equality l LinkedIn
The knowing that what I’m doing brings genuine
benefit to the world, becoming a vehicle of change
cements that and enshrines it in everything we
do at CAB Payments. Like lots of companies,
we benefit our shareholders, but unlike lots of
companies, those benefits don’t need to come at
the expense of society and the environment.”
Paddy Howell-Day
Banking and Payment Partnerships Network Manager and
member of the CAB Payments ESG Steering Committee
CASE STUDY
Chosen by charities
Mobile money has proved to be a lifeline in reaching
vulnerable people in Africa, many of whom have no bank
account or even the ability to get one.
However, for not-for-profits such as GiveDirectly, the last
mile of delivery can be a story of opaque information,
delays of urgently needed funds, and a considerable
percentage of donors’ gifts evaporating in fees. Fraud is
also a constant risk.
CAB Payments’ Segovia technology is a mobile payments
gateway purpose-designed for mobile money transfers. It
is fast, secure, cost-efficient and features the transparent
reporting that charities need.
Moreover, their account is never debited until the system
can ensure the payment will reach the intended recipient.
GiveDirectly has also found that working with CAB
Payments has delivered a major financial benefit. For
example, during lockdown, our bulk transaction technology
saved the charity nearly $70,000 – a major sum that
meant more funds reached beneficiaries at a critical time.
39
Overview Strategic Report Governance AppendixFinancial Statements
ESG Report continued
3
OUR
World
We contribute to a thriving and resilient planet so that future
generations will be able to meet their needs.
Goal: by 2030, we will be addressing our impact on the planet across
our entire value chain, as well as our organisation, actively contributing
to practical solutions.
Contributing to:
PROGRESS DURING 2023 ACROSS
THE FOLLOWING STRATEGIC GOAL
Most of our ESG work is focused on stakeholder awareness and social impact.
We believe in creating a positive impact in the communities in which we
operate, enhancing the well-being of our stakeholders and ensuring financial
market access to underserved and hard-to-reach economies. But we also have
a role to play in managing and mitigating our environmental footprint.
This begins with reporting verified emissions data that helps us to better
understand our environmental impact and launch targeted initiatives to
mitigate our footprint. One example is the travel handbook that encourages
employees to avoid flying unless essential, and to select travel options with the
lowest carbon emissions.
Climate
Action
CAB Payments Holdings plc | Annual Report and Accounts 202340
During the year, the Group initiated a project
to investigate an internal carbon tax on air
travel. This aims to equip leaders to assess
all business travel on the dual factors of both
carbon and fiscal cost. This will raise awareness
of the environmental impact of each trip, and
encourage better informed decisions that
contribute to the Group’s ambitions, and aligned
to Science Based Targets Initiative (SBTi) carbon
reduction goals.
The Group has also set a cornerstone GHG
management target to reduce emissions by
5% year-on-year per million sterling of revenue.
In 2023, the Group’s carbon footprint was
54.65% below our 5% year-on-year emissions
reduction target.
For more, see page 43.
By 2030, the Group aims to establish a
governance structure and culture that enables
our work to fulfil:
• Our mission – to serve frontier markets that
others find too difficult; and
• Our vision – believing in the power of
technology to bridge the divide between
emerging markets and the rest of the world.
In doing so, and with transparency and
accountability embedded in everything we do,
we will contribute to both SDG 12 (Responsible
Consumption and Production) and SDG 16
(Peace, Justice and Strong Institutions).
Well ahead of that timeframe, the Group is
helping to make considerable social impacts by
enabling multi-billion pound payments where
they are needed.
Witnessing the powerful impact our
operations have on communities is a
testament to the transformative influence
of our work, embodying the ethos of moving
money where it’s needed.”
Nkosi Moyo
Head of Global Payments & Mobile Sales,
CAB Payments
CASE STUDY
Every day, social impacts
As specialists in serving hard-to-reach emerging markets,
the payments we send typically represent financial
support – whether for development projects, crisis relief
or expats sending home payments to provide for their
families.
In 2023, the social impact the Group helped to deliver ran
into billions of dollars, comprising:
• development aid flows: £3.1 billion
– FX and cross currency payments volume in
Emerging currencies for IDO clients
• flows into low and lower-middle income countries:
$11.5billion
– MT103, cross border SWIFT volumes (in USD); income
level of beneficiary countries is based on World Bank
classification
• remittance flows strengthening local economies:
£1.8billion
– FX and cross currency payments volume in Frontier
and Emerging currencies for NBFI clients specialising
in remittances.
41
Overview Strategic Report Governance AppendixFinancial Statements
Net Zero Statement
In 2023, CAB Payments made significant progress in
managing GHG emissions, marking the initial phase of our
emissions management journey. The Company’s listing on
the London Stock Exchange in July 2023 was a significant
chapter in our story, and was the catalyst for expanding
our ESG capabilities. Throughout the year, we focused on
developing robust foundations, growing a dedicated team,
and enhancing skills across the wider Group.
Looking forward to 2024, the Group’s commitment to
environmental sustainability will include developing a
comprehensive net-zero roadmap in alignment with the
SBTi. This guide will include actionable steps and interim
milestones that reflect our goal to become a net-zero
business by 2050.
to find CAB Payments GHG reduction targets /
Page 46.
Streamlined Energy and Carbon
Reporting (SECR) Disclosures
The GHG emissions have been assessed following the
GHG Protocol Corporate Standard and the 2023 emission
conversion factors published by the Department for
Environment, Food and Rural Affairs (DEFRA) and the
Department for Business, Energy & Industrial Strategy
(BEIS). The assessment follows the GHG Protocol dual
reporting approach for assessing Scope 2 emissions from
electricity usage. The operational control approach has
been used.
ESG Report continued
ESG Progress
In 2024 we will continue to commit to social impact. The
good news is that many of the global macroeconomic
trends mean that being in a strong ESG position will
translate into positive tailwinds. These include:
• ESG and SDGs: which have the potential for significant
flows into emerging markets, sent by governments,
charities and supranational organisations such as the
United Nations, the International Monetary Fund and
the World Bank.
• This is reflected in development aid as well as climate
finance flows to address social inequalities, offer crisis
relief, or help emerging market countries to transition
into greener economies.
• Foreign Direct Investments (FDIs): increasing volumes
in FDIs and remittances as well as flows coming
from IDOs. The increase in FDIs is driven by attractive
opportunities and GDP growth rates are forecast to
be substantially above those of developed markets.
Regional free trade agreements and zones are an
additional tailwind to global cross-border payments.
• Free trade agreements: the African Continental Free
Trade Agreement is expected to increase intra-Africa
cross-border payments flows by two to three times.
Similarly, in Asia, various free trade agreements
may have a positive impact on regional economic
development.
• Payments home: as people migrate from emerging
markets (particularly Africa and Asia) to find better
livelihoods, sending money home is a key driver of FX
transaction volumes.
• Digitalisation of cash markets: is another driver of
global cross-border payment volume expansion. The
Group’s target markets are cash-driven geographies,
with cash transaction volumes about ten to 13 times
the size of digital transactions. As a result, emerging
markets represent a largely untapped market for
digital payments and a material opportunity for future
expansion.
CAB Payments Holdings plc | Annual Report and Accounts 202342
SECR Disclosure
Element 2022 2023
Direct emissions (Scope 1) – Natural gas (tCO
2
e) 27.2 42.9
Indirect emissions (Scope 2) – Purchased electricity (tCO
2
e)* 57. 8 62.3
Other indirect emissions (Scope 3) – Hire car travel (tCO
2
e)** 0.0 0.6
Total energy consumed (kWh)*** 447, 876 533,088
Intensity ratio tCO
2
e (gross Scope 1,2 &3, location-based per £m revenue)* 0.8 0.8
Intensity ratio: tCO
2
e (gross Scope 1, 2 & 3, location-based per employee)* 0.4 0.3
Total gross location-based emissions (tCO
2
e) 85.0 105.7
* Does not include transmission and distribution or WTT.
** Hire car travel only - this is the only scope 3 requirement for SECR.
*** Includes natural gas, electricity, and hire car travel for global operations. Does not include transmission and distribution or WTT.
Overview of our GHG Emissions
Summary of location-based results (tCO
2
e) 2019 2020 2021 2022 2023
Scope 1 (tCO
2
e)*
64.7 13.9 25.3 27.2 42.9
Scope 2 (tCO
2
e)**
85.1 29.5 61.9 57. 8 62.3
Scope 3 (tCO
2
e)
1016.1 39.1 127.8 905.2 1616.3
Total tCO
2
e 1166.0 82.5 215.0 990.2 1721.5
Target (5% reduction from 2019 baseline – tCO
2
e
per £m turnover) 34.1 32.4 30.8 29.2 27. 8
Actual tCO
2
e per £m turnover 34.1 1.5 3.8 9.1 12.6
% difference between actual and target – -95.39% -87.77% -68.93% -54.65%
* Natural gas consumption only.
** Electricity generation only – Does not include transmission and distribution or WTT.
Full Breakdown of Scope 1, 2, and 3
Summary of location-based results Description 2023
Scope 1 1.1 Natural gas* 42.9
Scope 1 Sub Total 42.9
Scope 2 2.1 Electricity (generation only)** 62.3
Scope 2 Sub Total 62.3
Scope 3 3.1 Water (and wastewater) 0.0
3.2 Computing 108.8
3.3 Transmission & Distribution of electricity 5.3
3.3 Well to tank 190.9
3.4 Upstream Transportation and Distribution N/A
3.5 Waste 0.8
3.6 Flights 1123.7
3.6 Hotel stays 27.2
3.6 Taxi 8.9
3.6 Hire cars 0.6
3.6 Rail 0.3
3.7 Commuting 123.6
3.7 Home-working 26.2
3.8 Non-controlled site electricity 0.0
3.8 Non-controlled site gas 0.0
3.8 Upstream Lead Assets N/A
3.9 Downstream transportation and distribution N/A
3.10 Processing of Solid Products N/A
3.11 Use of Solid Products N/A
3.12 End-of-life Treatment of Solid Products N/A
3.13 Downstream Leased Assets N/A
3.14 Franchises N/A
3.15 Investment N/A
Scope 3 sub-total 1616.3
TOTAL
1721.5
* Natural gas consumption only.
** Electricity generation only – Does not include transmission and distribution or WTT.
43
Overview Strategic Report Governance AppendixFinancial Statements
Task Force on Climate-related Financial Disclosures (TCFD)
Governance
CAB Payments has developed a strong governance
framework to address climate-related risks and
opportunities, aligning with the TCFD recommendations.
The Board acknowledges the financial implications of
climate change and has added consideration of ESG
factors as an agenda item at least twice per financial year.
An ESG Board Sub-committee, chaired by independent
Non-executive Director (NED) Susanne Chishti, was
formed in 2023 to advise the Board specifically on ESG
matters. The Board oversees the long-term impact
of climate-related risks and opportunities on the
organisation’s strategy and risk appetite.
The CRO, Chris Green, plays a central role in providing
updates to the Risk Committee and the Board on events
and stakeholder impacts as well as ensuring the inclusion
of climate impacts in the Group’s business strategy (where
applicable). Regular reporting mechanisms are in place to
escalate relevant ESG and climate-related events to the
Board and its committees, increasing transparency and
accountability.
The CRO is the Executive Committee ESG Champion
and has been delegated overall responsibility for
managing climate-related financial risks, with day-to-day
responsibilities delegated to the Head of ESG, Charlie
Bronks, and Senior Compliance Manager, Steven Smith.
Relevant updates are provided to the Executive Risk
Committee. This comprehensive approach reflects our
commitment to addressing climate-related issues across
all facets of our operations and strategic planning.
A formal ESG Steering Committee, chaired by ChrisGreen,
meets at least four times per financial year andhas
representation across the organisation to ensureESG
is considered, integrated, and actioned throughout the
Group.
The Group has met all TCFD requirements related to the
governance, risk management, and metrics and targets
pillars. Additionally, the Group has fulfilled parts ‘a’ and
‘b’ of the strategy disclosure requirements. The Group
has not provided the recommended disclosures with part
‘c’ of the strategy pillar, which is the completion of a 2°C
scenario analysis. This is attributed to the fact that the
identified risks do not have a material impact on the Group.
CAB Payments will undertake a 2°C scenario analysis
when any impact exceeds the materiality threshold, in
accordance with best practice.
Strategy
The Group has conducted assessments of climate-
related risks, identifying actual and potential risks such
as liquidity and capital risk, and physical risks such as
floods, tropical storms and hurricanes. The Group’s risk
assessment strategy considers a twelve-month period
when considering short-term risk assessment, however
the Internal Capital Adequacy Assessment Process
(ICAAP) under stressed conditions considers five, 25 and
100 years. The Group acknowledges the importance of
monitoring and managing these risks to ensure financial
resilience and operational continuity in conjunction with
increasing climate-related events.
The Group has assessed the impact of climate change on
capital within the pillar 2B assessment for prudential risk.
This evaluation considers climate stress in conjunction with
broader market stress, ensuring a holistic understanding
of potential impacts. The conclusion is that climate change
represents a negligible impact and that these risks are
not material. The potential impacts of climate change on
the prudential risk profile (including capital adequacy and
liquidity) are viewed as being absorbed within the Risk
Appetite Statement.
We consider physical risks will have the most likely impact
on the Group and its clients but have determined that
the impact will remain low due to the nature, size, and
complexity of the business.
We have considered transition risks and determined that
there is no material impact on the business. However, we
recognise the dynamic nature of climate-related risks and
will continue to assess this status.
The Group is aware of its potential positive impact on
those affected by physical climate-related events. By
leveraging established relationships with IDOs, NGOs
and charities, the Group aims to support the allocation
of resources where they are most needed. The potential
financial benefits the Group may accrue as a result of
increasing severity and frequency of physical climatic
events has not been assessed. However, it is likely that
both FX services and international remittances will see
increased volumes with no significant incremental cost.
During 2023, there were increased workflow requirements
and focus on ESG reporting for CAB Payments due in part
to the public listing on the London Stock Exchange. As the
impacts of climate related risks have been assessed during
this period, they have not been identified as sufficiently
material to require investment in a separate 2°C scenario
analysis at this stage of the Group’s ESG journey.
ESG Report continued
CAB Payments Holdings plc | Annual Report and Accounts 202344
Metrics and Targets
Liquidity
Liquidity stresses are, by their nature, sudden and extreme
and therefore physical climate change risks are deemed
more relevant than transition risks.
The Group has modelled the impact of a severe physical
climate change event on the top 20 nations who are
most susceptible to a climate change event (this list of
nations is taken from the Notre Dame Country Climate
Change Vulnerability Index). CAB only holds deposits
from counterparties resident in twelve of these nations.
Deposits from entities resident in these countries are
deemed to be withdrawn immediately, irrespective of the
term structure of deposit. The impact on CAB Payments’
Liquidity Cover Ratio (LCR) as at 31 March 2023 (relating
to when the last ILAAP was undertaken in FY23) is then
modelled.
The impact per geography is shown below:
Country
Total deposit
£m
LCR impact of
withdrawal
Afghanistan 27.3 -1.3%
Dem. Rep. of the Congo 7.4 0.8%
Guinea-Bissau 0.01 0.0%
Haiti 18.1 -0.8%
Liberia 13.9 -1.0%
Madagascar 15.1 -0.2%
Mali 0.1 0.0%
Malawi 31.2 3.0%
Sudan 0.02 0.0%
Somalia 0.001 0.0%
Uganda 20.9 -0.4%
Zimbabwe 8.0 0.8%
Total 141.8 0.85%
The LCR increases by 0.85% if CAB Payments were to lose
deposits from clients in countries most at risk to climate
change due to the high LCR outflow factor associated with
thesedeposits.
All climate change risks will continue to be monitored
and scenario assessments completed through the annual
ICAAP and Internal Liquidity Adequacy Assessment
Process (ILAAP) analysis.
Risk Management
The Group has implemented a comprehensive ESG
risk management approach, aligning with the Group
materiality matrix, outlined in the Group’s Enterprise
Risk Management Framework (ERMF). Climate Risk
is considered as part of Business Risk in the Board
approvedERMF.
The responsibility for identifying top and emerging risks is
shared among all stakeholders, with clear accountability
designated to the respective risk owners. This inclusive
process is integrated into all business development
and execution projects, ensuring a holistic and dynamic
approach to risk management.
The Group places a particular emphasis on climate change
risks as a critical component of its risk management
strategy. The climate change risk assessment is subject
to review and updated at least once per calendar year.
The findings of this assessment are presented to the
Executive Risk Committee for review and challenge. This
commitment to transparency and accountability in the risk
management process underscores the Group’s dedication
to effectively addressing climate-related risks.
The CRO is responsible for overseeing the management of
the Financial Risks from Climate Change and is assisted
by the Head of ESG and the Senior Compliance Manager
in exercising this responsibility.
During 2023, there were no material physical climate
events that impacted to the organisation’s liquidity
orcapital.
In our strategic approach to managing risk, we align
our strategy to address the diverse nature and timeline
of different impacts. We evaluated the aforementioned
risks across short, medium, and long-term timeframes,
ultimately determining that these were immaterial to
the balance sheet. We incorporated geographic impacts
as part of our Risk Control Self Assessments (RCSA),
employing horizon scanning on a twelve-month cycle to
identify trigger events, alongside an ICAAP scenario that
considers severe yet plausible risks through long-term
analysis and stress testing.
45
Overview Strategic Report Governance AppendixFinancial Statements
Capital
As the Group does not write long-term client loans, the
business is resilient to transitional climate change risks.
All trade finance loans have an original maturity of less
than one year with the vast majority having an original
maturity being less than six months. Consequently, any
deterioration in credit quality of a counterparty due to
transitional climate change risks will be evident prior to
CAB Payments initiating a loan.
Within the ICAAP approved by the Board in January 2024,
the Group included climate-related elements in a wider
Market and Climate stress. To understand the impact to
CAB Payments of just such a climate related stress, the
following scenario was modelled:
• Trade finance counterparties resident in geographies
materially at risk of being detrimentally impacted by
climate change default;
• At the low point of the stress (in terms of Common
Equity Tier1 (CET1) ratio) an outage of the banking
system due to a severe climate change event in
impacted geographies leads to late settlement of all
‘in flight’ spot FX payments. This results in a capital
deduction of an equivalent amount. Subsequently, the
impacted banking systems are re-established, and
payments are settled (i.e. there is no permanent loss);
and
• Revenue increase of 10% in FX and payment revenue
up to December 2026 to reflect increases in IDO and
remittance activity as a result of heightened climate
change related disaster relief efforts: on a pre-
management actions basis, the low point CET1 ratio
is 21.3% in August 2024 notably driven by the climate
change capital deduct at the low point element, before
rising in outer years when the impacts of higher revenue
are recognised in the capital base. For context, the low
point CET1 ratio in the full market wide stress is 17.2% in
August 2024.
In short, the climate change impact of the stress is
relatively muted due to the timing of the stress and
because a loss is not generated. The 10% Loss Given
Default (LGD) is immaterial due to the construct of the
balance sheet at the date of the stress. The higher
revenues drive the capital ratio higher when recognised
in the capital base in the outer years. Whilst the capital
deduction due to late settling FX spot deals is reversed
in the subsequent month due to an assumed re-
establishment of the relevant banking infrastructure.
The ICAAP analysis concludes that prior to any pre-
management actions, the Group comfortably meets
risk appetite under the modelled climate scenarios. We
continue to monitor our capital position in relation to the
Financial Risks from Climate Change and any significant
changes are reported to the relevant governance
committee for appropriate challenge and review.
GHG emissions
The Group uses scope 1, scope 2 and scope 3 (travel
and commute) GHG emissions to assess climate
impact. Energy consumption metrics and a breakdown
of energy sources are disclosed on page 43, aligning
with our dedication to sustainable practices and
SECRrequirements.
The energy and carbon emissions disclosed in this
statement are for the duration of the reporting year –
1January to 31 December 2023, from facilities over which
the Group has financial control and is in line with GHG
Protocol Corporate standard.
The Group has not identified any material risks within
scope 1, scope 2 or scope 3 of our carbon footprint.
The Group has set a GHG reduction target of 5% reduction
of total GHG emissions per £million of revenue, this aligns
with the overarching target to reach net zero by 2050.
ESG Report continued
CAB Payments Holdings plc | Annual Report and Accounts 202346
47
Overview Strategic Report Governance AppendixFinancial Statements
Stakeholder Engagement and s172 Statement
The Companies Act 2006 and the UK
Corporate Governance Code 2018
(the Code) require the Annual Report
to provide information that enables
our stakeholders to assess how
the Directors of the Company have
performed their duties under s172 of
the Companies Act 2006.
The Companies Act 2006 provides
that the Directors must act in a way
that they consider in good faith would
be most likely to promote the success
of the Company for the benefit of
shareholders as a whole. In doing
so, the Directors must have regard,
amongst other things, to the following
factors:
The Likely Consequence
of any Decision in the
Long Term
It is critical for the Board to
understand and balance the needs,
interests and expectations of our key
stakeholders so that it can work to
ensure that CAB Payments achieves
its purpose. Our decision to IPO
reflects our commitment to the long-
term success of the CAB Payments
Group, realising our vision to connect
emerging markets to the world
using finance and technology and
supporting the movement of money
where it is needed.
Now in the third phase of the Group’s
long-term strategy launched in
2016, the Board uses its combined
experience in global markets to
provide key support for launching
activities in European and US
markets. The Board recognises that
competing stakeholder views can
appear contradictory, but by giving
consideration not only to areas
where there is agreement, but also
developing consensus where there is
difference, the Group can realise its
ambitions and grow long-term value
for all stakeholders.
More information on our
strategy / Pages18to25.
The Interests of the
Company’s Employees and
Other Stakeholders
As a Board, we understand the
importance of a motivated workforce
to the long-term success of our
Company and the Group. When
making decisions, we as a Board have
had regard to the interests of CAB
Payments’ employees, as well as the
interests of wider stakeholder groups.
Our colleagues are key to our success,
and they are always considered as
part of the Board’s discussions and
decision making.
The Board engaged with the
workforce in a number of ways
throughout 2023, including speaking
at ‘town hall’ meetings and at events
to celebrate Group events such as the
achievement of B Corp status and
global events such as Chinese New
Year and International Women’s Day.
Following discussions, the Board has
agreed to designate a Non-executive
Director to lead engagement with
the workforce; Susanne Chishti has
volunteered to fulfil this role and
will be undertaking a programme
of engagement in 2024. Feedback
will be provided to the Board after
each formal engagement meeting to
discuss any topics raised at relevant
Board and Committee meetings.
We recognise the importance of our
employees’ hard work towards all our
goals. Following our successful IPO,
the Board approved a range of new
share plans to retain and motivate
current employees and attract new
talent. We also regularly engage with
our employees on all CAB Payments-
related matters.
For more information on
employee engagement /
Page 84.
The Need to Foster the
Company’s Relationships
with Suppliers, Clients and
Others
The Board appreciates and values
the suppliers that support the
Group in a wide range of activities
including recruitment, compliance,
marketing, technology and facilities
management. Executive management
engages regularly with existing
suppliers to ensure open dialogue
and to maintain relationships,
while conducting due diligence and
receiving feedback from suppliers.
The Board is briefed on new and
updated supplier-related policies,
including the delegation of authorities
and developments in the Group’s
approach to procurement generally.
The Board recognises that the
greater our understanding of our
clients’ needs, the better we can
support them to achieve their aims
and succeed in our purpose and
strategy. By engaging with clients
and potential clients, the Group can
form an understanding of why clients
do business with us and how we can
drive meaningful improvements.
The Board receives regular updates
from executives on new client pipeline
and onboarding, along with reports
on operational strategies to enhance
client experience across the Group’s
offerings.
For more information on ESG /
Pages 28 to 46.
The Impact of Operations
on the Community and the
Environment
The Board recognises the importance
of using business as a positive force
for good, and to build ethical and
sustainable business practices and
operations. The decision to apply
for B Corp certification reflects the
commitment of the Board to the
highest standards of verified social
and environmental performance,
public transparency, and legal
accountability.
Balancing the needs of our stakeholders
CAB Payments Holdings plc | Annual Report and Accounts 202348
Although as a Board, we continually
monitor the ESG strategy and oversee
progress against sustainability-related
goals and commitments, the formation
during 2023 of a sub-committee of the
Board to directly oversee ESG issues
acknowledged the place of these
matters at the heart of our values.
For more information on ESG /
pages 28 to 46.
The Desirability of the
Company Maintaining
a Reputation for High
Standards of Business
Conduct
The Board acknowledges its
responsibility for setting and
monitoring the culture, values and
reputation of the Group. Our colleagues
are central to us achieving this
ambition and we’re building a culture
where our colleagues can be their best.
In January 2023, we appointed
the Chair of the Audit Committee,
Karen Jordan, as our Whistleblowing
Champion, taking on responsibility
for ensuring and overseeing
the integrity, independence and
effectiveness of the Group’s policies
and procedures on whistleblowing.
This appointment provides another
avenue for employees to report
concerns as to the conduct of the
business, alongside the Compliance
team and an external, confidential,
whistleblowing telephone line.
Also in 2023, the Group launched
a Vendor Code of Conduct, which
includes an ESG framework which all
our suppliers will be required to align
with. This will enable the Group to
measure and monitor our supply chain
and ensure that we align work with
partners who share our core values.
For more information on internal
controls and risk management /
Pages 96 to 97.
The Need to Act Fairly for
AllOur Members
The Company has established a clear
programme of interacting with all
our investors and research analysts.
Since the IPO in July 2023, the
Executive Directors and the Investor
Relations team have held more
than 100 meetings with institutional
shareholders and investors,
predominantly across the UK, the US
and Europe. The Company currently
seeks to be available to investors
and analysts on a consistent basis,
proactively following significant
announcements and reactively at all
other times.
These meetings are designed to
provide potential and existing
investors the opportunity to discuss
business performance and strategy
and to develop an understanding
of investor views, while helping our
new investors and market analysts to
gain a greater understanding of our
business performance and strategy.
Following the well-received half-year
financial results announcement in
September 2023, the team met, either
virtually or in-person, more than 40
institutions. Over the weeks following
the unscheduled announcement on
24 October 2023, the team spoke
with more than 20 institutions. The
Chair also made herself fully available
at that time and spoke directly with
four significant shareholders.
Not all of our investors are
institutions, and the Board is
aware that communications
should be available for all of the
Company’s shareholders. Company
information including updates on
business performance and strategic
developments are made available
on the Company’s website at https://
cabpayments.com/investors.
The Board is mindful of the
requirement to share information
fairly, consistently and concurrently
with all shareholders, and is
committed to ensuring the
independence of the Board under the
terms of the Relationship Agreement
with the Company’s significant
shareholder (more details of which
can be found on page 84).
At all times, the Board is committed to
ensuring that any decision it makes is
in the interests of all our shareholders.
Decisions Made During
the Year
All decisions made by the Board
are subject to the submission of
quality, appropriate information by
way of Board papers, provided to
the Board in a timely manner. Our
Board meetings are structured in
such a way to allow sufficient time to
dedicate to all topics. When making
decisions, each Director ensures that
they act in a way they consider, in
good faith, would most likely promote
the Company’s success for the benefit
of its shareholders, and has due
regard (among other matters) to the
factors set out above.
Listing on the London Stock
Exchange
In June 2023, the Board gave their
approval for the Company to float
on the Main Market of the London
Stock Exchange. In preparation, the
Board undertook a full due diligence
programme, guided throughout by
section 172, in order to be assured
that the public listing approach was
most likely to promote the success
of the Company for the benefit of its
members as a whole. With support
from a range of professional advisers,
the Board oversaw a number of
reviews to support the information
and declarations required for the
listing process.
Consideration was given to the likely
consequences of the decision in the
long-term, with the IPO broadening
ownership, while supporting the
Company’s strategy of delivering
long-term sustainable growth to
cement its position as a payments
and forex partner of choice for
high quality clients transacting in
emerging markets, along with the
potential benefit to the Group’s
existing credit rating.
The Board also had regard to the
impact on employees, and to the
communities around the world
that benefit from the products and
services provided by the Group.
49
Overview Strategic Report Governance AppendixFinancial Statements
2
Financial Review
A highly profitable, cash
generative, liquid and resilient
business model, built to deliver
sustainable growth
Richard Hallett
Chief Financial Officer (CFO)
Biography / Page 72
We have continued to invest in the sustainability of our
business model, ensuring that our risk, governance and
control environment are world class and meet the high
prudential and conduct standards set by our regulators,
the Prudential Regulation Authority (PRA) and the
Financial Conduct Authority (FCA).
Notwithstanding the disappointing trading update in
October 2023 in which we reset short-term market
guidance, we have ended the year with a strong income
growth of 25% that translates into an Adjusted EBITDA
of £64.6 million. This resilience underpins the broader
and consistent financial health of the organisation.
We are a highly cash generative business, which is
reflected in strong CET1 levels, capital and liquidity
surpluses and the absence of Corporate Debt. Building
our capital reserves is important to us not only for
ongoing financial sustainability but to deliver our global
ambitions. We have the robustness and sustainability
of a developed market bank, whilst making emerging
market returns.
Macroeconomically, in 2023 there was a continuation
of high inflationary pressures and consequential central
bank interventions through increasing interest rates. We
have been able to capitalise on those uplifts through
enhanced net interest income proving out the resilience
of our business model through the cycle.
It is important to remember that the CAB Payments
model is uniquely positioned to take advantage of FX
volatility and through our aid delivering client segments
provides a natural counter cyclicality to broader
macroeconomic stresses.
Gross Income
Gross Income for the twelve months ended 31 December
2023 stood at £137.1 million, which reflects 25% growth
on the previous year (2022: £109.4 million). At a headline
level, the year-on-year growth rates of both FX and
cross currency payments have been depressed by the
market conditions that have underpinned our business in
specific currency corridors, with NGN being particularly
noteworthy with a reduction in income to £18.0 million in
2023 (2022: £27.5 million). The reductions in NGN were
partially offset by growth in net interest income, reported
through Other Income.
Overall
2023 has been a momentous year for CAB Payments,
achieving record income, completing the premium listing
on the London Stock Exchange and laying the foundations
for future growth.
Over the last seven years, we have invested in developing
our world-class correspondent banking network, our
diverse client base, including our relationships with
government agencies, supranational organisations
and blue-chip companies, which we serve through
relationships with our liquidity providers. This has enabled
us to deliver a high-value and high-quality foreign
exchange and payments proposition, allowing us to
consistently access the hardest to reach markets where
our clients need itmost.
With these solid foundations in place, we are now able to
evolve from a UK-centric model to a global offering with
our pending applications in Europe and US. Accessing a
new global client base will allow us to capitalise on the
market shift from global and regional cross border FX and
Payment Banks to specialist and highly-focused providers
such as ourselves.
CAB Payments Holdings plc | Annual Report and Accounts 202350
2
Wholesale FX and Payment FX Income
Income from Wholesale FX and Payments FX, excluding NGN, grew by 28% year-on-year to £70.4 million (2022: £55.2
million). Although this reflects strong growth it is lower than expected, principally impacted by a variety of central bank
directives issued in the year across a number of our keycurrencies.
Despite these disruptions, our volumes remained broadly flat versus 2022, with income growth arising from higher
margins in almost all regions. Our average take rate increased to 26bps in 2023 from 24bps in 2022, reflecting our
competitive access to liquidity over competitors. Since 2020 our Emerging Markets take rate has increased steadily over
time as improvements in our liquidity provider network, market position and product mix have driven sustainablegrowth.
Income (£m) Volume (£bn) Take rate (%)
2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023
Developed markets 3.9 5.5 12.0 13.0 11.6 12.8 20.8 21.0 0.03 0.04 0.06 0.06
Emerging markets 15.8 34.0 70.8 75.4 7.7 10.3 14.3 13.6 0.21 0.33 0.50 0.55
Total 19.6 39.5 82.8 88.4 19.2 23.1 35.0 34.7 0.10 0.17 0.24 0.26
As a fully regulated UK bank it is in our DNA to manage to the highest level of conduct and compliance in all the markets
in which we operate. We only deal with counterparties that are licensed or regulated in our target markets. We continue
to build relationships with local central banks ensuring clarity on our credentials and the services we provide to those
economies.
In the near term we continue to focus on geographical diversification, establishing new market footprints in the United
States, Europe and further developing our presence in Latin America (LATAM). In future we will look to expand further
establishing a presence in the Asia Pacific (APAC) region. This expansion will reduce concentration risk and in turn income
volatility and will enable us to further reduce the risk to the business of central bank interventions.
Another key facet to both our growth and concentration mitigation is to increase the number of clients that we actively
work with. In2023, we onboarded 83 new clients, of which 42 clients generated income in year, while 41 clients are
expected to trade early in 2024.
We provide a valuable service to our clients by having infrastructure in place, which delivers their flows and saves them
time, effort and cost of managing overseas accounts. Further, we believe the flows that we provide into our key corridors
supports economic growth and stability.
Continuing Operations
£m unless stated otherwise
Twelve Months Ended
31December

FY23 FY22 %
Gross Income
1
, of which: 137.1 109.4 25%
Wholesale FX and Payment FX
1
exc. NGN 70.4 55.2 28%
Wholesale FX and Payment FX
1
NGN 18.0 27. 5 (35)%
Other Payments Income 14.3 14.3 0%
Banking Services and Other Income 34.3 12.3 179%
Adjusted EBITDA margin 47% 50% (3) ppts
Operating Free Cash Flow
1
56.7 49.8 14%
Free Cash Flow Conversion
1
88% 91% (3) ppts
1 See alternative performance measures for definition / Page 241.
1 See alternative performance measures for definition / Page 241.
2 Income from Wholesale FX and Payment FX exc. NGN.
25%
Gross Income Growth
47%
Adjusted EBITDA margin1
29%
FX Income Growth
2
88%
Free Cash Flow
Conversion
51
Overview Strategic Report Governance AppendixFinancial Statements 51
Banking and Other Payments Income
Our total payments income primarily consists of Payments
FX, Banking Payments and income generated from
Mobile Payments. Banking Payments reflects income
from providing access to USD, GBP and EUR payment
and clearing services. In 2023, excluding Payment FX, we
generated £14.3 million from these income streams, which
is in line with 2022.
Banking Services and Other Income
Other income, which mainly represents net interest income,
and Trade Finance for the reporting year was £34.3 million,
up from £12.3 million for the prior period. Net interest
income is earned from investment of clients’ deposits
and own cash into high-quality liquid assets and in 2023
generated £31.7 million compared with £10.1 million from
the prior period with the increase reflecting the impact
of Federal Reserve and Bank of England interest rate
rises. This income line is expected to continue to reflect
movements in these rates.
Operating Expenses
Year ended
31 December
Year-on-
year
%2023 2022
Staff expenses 45.6 35.8 27%
Other operating expenses 26.5 18.3 45%
Depreciation and amortisation 5.8 5.7 2%
Non-recurring operating
expenses 21.1 5.3 296%
The business continues to invest to deliver ongoing income
growth. The investment is predominantly in headcount,
with a focus on increasing the Sales force, Risk and
Controls, Operations and IT capabilities. Staff costs have
increased 27% to £45.6 million, reflecting the impact
of higher headcount, with a higher average number of
permanent employees in 2023 of 310 Full-Time Equivalent
(FTE) versus 222 FTE in 2022, higher number of short-
term staff, increasing by 10 FTE from 20 FTE in 2022,
and following the annual pay review, which includes
performance and inflationary salary increases.
Other operating expenses rose by £8.2 million to £26.5
million, driven by increased spend on recruitment fees,
software licences and support costs, an uplift in audit fees
(as a result of becoming a listed organisation), and higher
professional fees supporting expansion plans in Europe
and the US.
Profitability
Adjusted EBITDA
1
increased by 17% to £64.6 million
(2022: £55.0 million) as a result of incremental income
generated outstripping the increase in costs base;
however, with the rate of cost growth being higher than
the rate of income growth – due mainly to the unforeseen
central bank interventions impacting income - the Adjusted
EBITDA margin declined to 47% (2022: 50%).
Profit Before Tax was down by 14% at £37.6 million (2022:
£43.9 million) due to the higher non-recurring items in
2023. Non-recurring items primarily reflect the professional
fees incurred by the listing process in H1, as well as
committed non-performance staff bonuses.
Operating free cash flow
1
grew from £49.8 million in the
year ended 31 December 2022 to £56.7 million over the
same period in 2023. This demonstrates the strong cash
flow delivered by the business as it continues to scale,
while also making investments in tangible and intangible
assets of £7.4 million (2022: £4.9 million) and absorbing an
increase in payments made on property leases to £0.5m
(2022: £0.3m).
Taxation
The tax charge arising during the period of £13.7 million
(2022: £10.5 million) indicates an effective tax rate of 36%
(2022: 24%) which reflects adjustments for disallowable
costs associated with the listing. The tax rate takes
account of the corporation tax rate and banking surcharge.
Investments
Capital expenditure for the year ended 31 December
2023 was £7.4 million (2022: £4.9 million), of which £7.0
million (2022: £4.5 million) related to capitalised software.
Ultimately this was lower than expectation for the year,
which was due to the Chief Technology Officer undertaking
a review of the Technology function and ensuring resource
alignment and appropriate prioritisation of the change
portfolio before significantly increasing the rate of spend
during the tail end of the year.
Financial Review continued
25.5%
CET
1
152%
LCR
72%
HQLA as % Assets
£nil
Corporate Debt In Issue
1 See alternative performance measures for definition / Page 241.
CAB Payments Holdings plc | Annual Report and Accounts 202352
Balance Sheet
2023 has been a year in which we have continued to build
solid foundations and financial health across our balance
sheet. As at 31 December 2023, our High-Quality Liquid
Assets (HQLA) stood at £1.3 billion (2022: £1.2 billion)
providing deep liquidity access to the business to support
our ongoing growth, far exceeding our minimum prudential
requirements with LCR now standing at 152% (2022:
158%).
The Group remains debt free with no debt securities in
issue, we are proud that our debt free and highly-liquid
balance sheet enables us to move in an agile manner
to seize on growth opportunities. We have continued to
reinvest our profits into the long-term growth prospects
of the Group whilst simultaneously growing our capital
base with CET1 now standing at £107.5 million (2022:
84.5 million).
During the year we made provisions for credit losses of
£0.4 million (2022: £0.3 million) with impairment provisions
at 31 December 2023 of £0.9 million (2022: £0.5 million).
The Group experienced its first ever credit loss this year
which has been fully provisioned for and has had no
material impact on returns or balance sheet metrics.
Other Matters
During the year, the Group undertook three activities of
note which were covered in detail as part of the half year
interim results announcement detailed in H1 2023:
1. The Company restructured its shares in issue to only
have one class of ordinary share ‘class A shares’;
2. The Company undertook, as part of the pre-IPO
shareholding restructure, a payment in dividends to
shareholders; and
3. The Group also disposed of Crown Agents Asset
Investment Management (CAIM) and JCF Nominees
Limited (JCF) with effect from 31 March 2023.
1 Includes movements in the Expected Credit Losses (ECL) provision reported as reversal/impairment (loss) on financial assets at amortised cost on the interim
condensed consolidated statement of profit or loss and other comprehensive income.
Income Statement (£m) for Continuing Operations
Year ended
31 December
Year-on-year
%2023 2022
FX income 68.5 63.4 8%
Payment FX 19.9 19.5 2%
Banking and other payments 14.3 14.3 0%
Total payments income 34.2 33.7 2%
Net interest income from cash management 31.7 10.1 215%
Other banking income 2.6 2.3 14%
Total banking services income 34.3 12.3 179%
Gross income 137.1 109.4 25%
Staff costs -45.6 -35.8 27%
Other operating expenses -26.5 -18.3 45%
Depreciation and amortisation -5.8 -5.7 2%
Total recurring operating expenses -77.9 -59.9 30%
Impairment provision
1
-0.4 -0.3 18%
Non-recurring operating expenses -21.1 -5.3 296%
Profit before tax 37.6 43.9 -14%
Tax -13.7 -10.5 31%
Profit after tax 23.9 33.4 -29%
53
Overview Strategic Report Governance AppendixFinancial Statements
Balance Sheet (£m)
Year ended
31 December
Year-on-year
%
2023 2022
Cash and balances at central banks 528.4 6 07.4 (13)%
Money market funds 518.8 209.5 148%
Investment in debt securities 353.0 414.1 (15)%
Loans and advances 281.0 188.1 49%
PP&E 1.2 1.6 (25)%
Right of use assets 0.7 1.1 (39)%
Intangible assets 24.3 21.9 11%
Other assets 25.2 41.7 (40)%
Total assets 1,732.5 1,485.4 17%
Customer accounts 1,542.9 1,305.6 18%
Derivative financial liabilities 9.7 4.6 112%
Lease liabilities 0.9 1.3 (31)%
Other liabilities 47. 5 58.1 (18)%
Total liabilities 1,601.0 1,369.5 17%
Total equity 131.5 116.0 13%
Financial Review continued
CAB Payments Holdings plc | Annual Report and Accounts 202354
Risk Management
Risk environment
Our approach to risk
The following diagram outlines the key components of the Group’s risk framework.
Risk, Culture and Governance
Business
strategy and objectives
Enterprise risk taxonomy
(Type of risk)
Risk appetite
(How much risk to take by risk type)
Risk policies and procedures
(Sets standards on how risk types are managed and
how to demonstrate compliance)
Risk assessment
(Quantify the level of risk)
Risk control and mitigation
(How to control and mitigate inherent and potential risk)
Risk management, monitoring and performance
(How to manage, monitor material risk exposures and escalation)
Training
(Communicate and educate staff)
Risk, Culture and Governance
Risk, Culture and Governance
55
Overview Strategic Report Governance AppendixFinancial Statements
The taxonomy allows the Group to construct and calibrate
its Risk Appetite Statement (RAS) and tolerance limits
(TLs) that quantify, by risk type, how much risk it is willing
to accept under business as usual and stress conditions,
in order to achieve the Group’s business strategy and
objectives. These are constructed with due regard to
the organisation’s risk appetites, to align both strategy
and risk.
The Group’s risk team has created a broad suite of policies
and procedures to link the operating standards and
practices with the business strategy and risk appetite.
These tools include assurance activities, risk mitigation,
controls, and robust reporting and governance, based
on the risk framework of identification, assessment,
management, and reporting of risk.
The outcomes of the team’s regular risk assessments and
monitoring form a feedback loop, against which to gauge
our risk appetite thresholds, and whether they are still
applicable or need adjustment. At least once percalendar
year, the team reviews the business strategy, risk
framework and its associated component parts, refining
them where needed and ensuring a timely assessment
ofcurrent and emerging risks.
The foundation of the Group’s risk management is the Group Enterprise Risk Management Framework (ERMF).
In concert with the relevant architecture (e.g.risk taxonomy, risk appetite, etc.) it ensures that risk is suitably
identified, assessed, monitored, managed, andmitigated within the Group.
Risk Culture
The Group, together with local legal entity Boards and the executive management, is responsible for establishing
and embedding a culture of risk awareness and a strong internal control environment.
Our risk culture is further reinforced by the responsibility of the business to own and manage risk in accordance
with the ‘three lines of defence’ principle, and the Group ERMF.
We achieve this with leaders who set the tone from the
top, strongly supported by governance structures, clear
definitions of responsibilities, performance management
and regular communications that reinforce appropriate
behaviours and corporate values.
Equally, all employees have a role to play in driving a
positive risk culture through their overall vigilance and
motivation, and an innate desire to identify, manage and
communicate risk-related issues, including escalation and
resolution as appropriate.
This year, we have continued to embed the principles,
tools and techniques of the Group ERMF. In addition to
structured training, we have designed and delivered
learning campaigns for all staff on the importance of
managing risk and our collective responsibility.
All our people need to:
• understand the risks relating to their role and activities,
including any relevant policies, processes and procedure
documents;
• take on board how successfully managed risks can help
them achieve their objectives;
• be accountable for particular risks and how they can
manage them; and
• report systematically and in a timely manner on
emerging risks, near-misses, incidents, control failures
and improved business practices.
Risk Management continued
CAB Payments Holdings plc | Annual Report and Accounts 202356
Governance of Risk
The Company’s risk governance structure is outlined below:
Operational Risk
Committee
Asset & Liability
Risk Committee
Credit Risk
Committee
Financial Crime
Risk Committee
Lifecycle Committee
Treasury
Committee
Financial Crime
Systems Committee
Each risk sub-committee has representatives from the second line of defence providing oversight and challenge,
asrequired:
Risk sub-committees Risk type covered
Asset & Liabilities Committee Capital adequacy, liquidity, funding and market risk
Credit Risk Committee Credit risk
Operational Risk Committee Operational (excluding people risk)
Financial Crime Risk Committee Financial crime risk
Lifecycle Committee Reputational and client risk
The Board
The Board is responsible for setting the strategy, corporate objectives, and risk appetite. The Board reviews
the Group’s ERMF annually to ensure that it remains fit for purpose and complies with relevant laws and
regulations including the UK Corporate Governance Code.
Board Committee
Risk Committee
Responsible for assisting the Board in approving and overseeing the Group ERMF. Provides the Board with
recommendations and advice on key matters relating to risk and compliance. It receives risk reporting and
escalations from the Executive Risk Committee.
Management Committees
Executive Committee
The Executive Committee is chaired by the Group CEO and is responsible for developing, proposing and
implementing Board approved strategy.
Executive Risk Committee
The Executive Risk Committee is chaired by the Group CRO with members being the Executive Committee
and the Money Laundering Reporting Officer (MLRO). It provides Executive level enterprise-wide risk
management oversight and escalates key risks issues and recommendations to the Risk Committee in line
with the approved ERMF. It also receives escalation from its five risk sub-committees
57
Overview Strategic Report Governance AppendixFinancial Statements
Three lines of defence
The Group operates a tripartite risk governance framework, generally known as the three lines of defence model, which
distinguishes between risk management and oversight. The approach provides clear and concise separation of duties,
roles and responsibilities.
FIRST LINE
OFDEFENCE
Risk and control
management
The business and senior
managers, both across
the Group and at local
entity level, are responsible
and accountable for the
identification, assessment and
management of individual risks,
as well as associated controls
within their respective areas
ofresponsibility.
SECOND LINE
OF DEFENCE
Risk and control
oversight
Risk and Compliance provides
independent oversight and
challenge with respect to
the first line’s management
of their risks and controls.
They provide assurance that
the Group’s and local entity
level’s regulated activities are
undertaken in accordance with
regulatoryrequirements.
THIRD LINE
OF DEFENCE
Internal Audit
Internal audit is an independent
provider of assurance over
the effectiveness of the
Group’s, and local entity level’s,
processes and governance,
with regards to risk and
internalcontrols.
Risk Appetite
Aligned to the enterprise risk taxonomy, the Group’s risk appetite articulates for each principal risk a qualitative
risk appetite statement and quantified maximum levels of risk that the Group is prepared to accept in achieving
itsstrategic objectives and business plan.
In doing so, the interests of the Group’s clients, shareholders, capital and other regulatory requirements are all considered.
This assessment requires input from subject matter experts and management to define the appetite statement and
threshold for each principal risk. These are supported, where appropriate, by a suite of quantitative metrics to help
monitor performance against its set appetite.
At a headline level, the Group’s Risk Appetite Statements are as follows:
Business Risk
The Group will actively seek business opportunities that generate longer-term shareholder value. These opportunities must be in line with
our strategic, commercial and regulatory objectives and be delivered in line with risk appetite and organisational controlprocesses.
Financial Crime Risk
There is no appetite to operate in an environment where systems and controls do not enable the identification, assessment, monitoring,
management, and mitigation of financial crime risk. There is no appetite for employees to fail to have an appropriate understanding of
financial crime risks and their responsibilities to mitigate them. There is no tolerance to breach relevant financial crime regulations and
laws systematically or repeatedly.
Operational Risk
The Group acknowledges and accepts that for it to conduct its business, operational risk will be inherent in its business activities. The
Group strives to maintain a robust control environment cognisant of costs and other factors and as a result the Group takes a balanced
approach to Operational Risk.
Credit Risk
Transactions are selectively undertaken with approved counterparties based on the type and geographic nature of the business.
This assessment is supported by effective underwriting processes, systems and controls to ensure appropriate lending decisions.
Where considered appropriate credit exposures are secured by readily realisable collateral (cash cover) or payment-against-payment
arrangements to mitigate the counterparty risk.
Risk Management continued
CAB Payments Holdings plc | Annual Report and Accounts 202358
Horizon Scanning
Emerging risks
The strategic risk register assesses the material risks to the
organisation, over a forward looking twelve-month time
horizon, based on the enterprise risk taxonomy. Nascent
and established risks are identified and classified to their
respective principal risk sections and monitored through
the enterprise risk management process.
Climate risk
At CAB Payments our ESG focus integrates climate
change considerations, driving sustainable and
responsible practices highlighted in this report.
When reflecting on the financial risks from climate change,
the Group considers both physical and transition risks.
We believe the most likely impact on the Group and its
clients will come from physical risks such as floods, tropical
storms and hurricanes. But we also project that their
impact will be low due to the nature, size and complexity
of the business. For the same reasons, we also believe
transition risks to a greener economy will not present an
adverse impact.
The Group has incorporated the most likely impacts and
scenarios as part of the annual ICAAP and ILAAP analysis
review. Both these documents are submitted to the Board
for review and approval.
The Group has a positive impact on those affected by
physical climate-related events, by rapidly moving money
where it is urgently most needed through our established
relationships with IDOs, NGOs and charities.
There were no specific climate-related events that required
a report to the Board and its Committees in 2023.
We acknowledge the significance of ESG factors in
shaping the landscape of our operations and the
financial industry. We understand that the responsible
management of ESG risks is paramount to our long-term
sustainability and value creation for our stakeholders.
For a comprehensive analysis of our approach to ESG
risk management, as well as detailed information on
our performance and initiatives, please see our dedicated
ESG report, including the TCFD section, on pages 28
to 46. These sections provide a detailed overview of our
strategies, commitments and progress in integrating ESG
considerations into our risk management framework,
alongside our contributions to a more sustainable and
responsible financial ecosystem.
At CAB Payments we remain committed to embedding
ESG principles into our core business practices, enhancing
transparency, and building trust among our investors,
clients and the communities we serve.
We believe that effective ESG risk management not
only safeguards our institution against emerging threats
but also positions us for sustainable growth in a rapidly
changing world.
Our achievement of B Corp Certification in 2023, and
our Gold EcoVadis Global Sustainability Rating for two
consecutive years, is a further endorsement of how
sustainability sits at the heart of our strategy across
the Group.
Market Risk
As part of day-to-day operations, the Group is exposed to market risk principally in the form of FX risk, through its FX trading/cross
currency payment activities, and interest rate risk in the banking book (IRRBB). The Group will ensure that, under severe changes in
interest rates or currency FX rates, any capital or earnings at risk remains within pre-approved limits and for which capital isheld.
Capital Adequacy Risk
The Group acknowledges and accepts that capital adequacy risk will be undertaken as part of business activities and ensures that it
maintains sufficient capital both in quantity and quality to meet regulatory requirements and hold a management buffer as agreed with
the Board.
Liquidity and Funding Risk
The Group seeks to ensure that adequate liquidity, both in terms of quantity and quality, is held to meet liabilities as they fall due, whether
in normal or stress conditions while also meeting regulatory and internal requirements.
Conduct Risk
The Group seeks to develop and maintain long-term relationships with our clients, based on openness, trust and fairness in everything we
do. The Group has no appetite for reputational risk arising from the way in which we behave.
Regulatory and Compliance Risk
The Group acknowledges and accepts that it operates in a highly regulated industry and environment which are fundamental to our
business and sector and our appetite reflects the need to comply with these regulations. The Group continues to develop staff competency
through appropriate training to ensure its staff are aware of and comply with the regulatory and compliance requirements relevant to their
role and responsibilities. Any market expansion and new product introduction considers the regulatory compliance risks.
59
Overview Strategic Report Governance AppendixFinancial Statements
Principal Risks and Uncertainties
Overview of Principal Risks
Effective risk management is critical to realising our strategy. We have an established risk management framework
tomanage and mitigate the various risks that we face.
As at 31 December 2023 our principal risks consisted of:
Current context Mitigants and other considerations
1. Business risk 1,2,3,4
Risk Description:
The risks to the Group
arisingfrom:
• The business model
or strategy proving
inappropriate due
to macroeconomics,
geopolitical, industry,
regulatory or other
factors,
• Adverse events and
media coverage that
could negatively
impact the Group’s
name and reputation
thereby impacting its
ability to achieve its
strategic objectives.
• The Group’s business model and operations rely on the
continued relationships with a diversified network of
counterparties and partners including liquidity providers,
Nostros and clearing agents across a spectrum of
currency markets.
• The Group is highly reliant on established relationships
with a small number of key banks for clearing USD, GBP
and EUR.
• The Group provides access to emerging markets, with a
level of concentration to sub-Saharan Africa. Significant
changes to our partner network or key markets (e.g.
general access, regulatory, economic, or geopolitical
conditions) would have a corresponding impact on the
Group’s business, operations, financial performance and
reputation.
• Potential events may include:
– Adjustments in the nature of our partner networks
impacting access to local liquidity or clearing services
– Changes to local economies including market
structure (e.g. regulatory/central bank monetary
actions);
– Economic or political events (e.g. changes in
government)
– Translation risk associated with significant
strengthening in GBP relative to USD.
• The Board and Management periodically
review and update the strategic plan, budgets,
targets, emerging opportunities and threats.
• The Board and management track and
manage, through governance, a range of
metrics and early warning indicators to
highlight emerging risks to performance: these
continue to be developed and enhanced.
• The Group has a dedicated Network and
Partnerships Function, who develop and
manage our key local relationships; actions
continue to be taken to ensure these are
adequately diversified including key currencies
such as USD and GBP. This function also
tracks and reports regulatory changes and
geo-political issues in these markets.
• The Group has a strategic risk register which
tracks the top risks and the corresponding
actions planned and underway to mitigate
these. This is reported periodically to the Risk
Committee and Executive Risk Committee.
• The Group has a medium-term strategy in
place to continue diversifying revenues across
geographies, clients andproducts.
2. Financial crime risk 1,2,4
Risk Descriptions:
The risk associated
with criminal activity
in the form of money
laundering, terrorist
financing, bribery and
corruption, sanctions,
tax evasion and fraud.
• One of the Group’s core offerings is correspondent
banking and payments services. This product is in high
demand. It facilitates inclusion and allows corporates,
individuals and our clients to conduct millions of
transactions across the world on a daily basis. However,
this type of product can be more vulnerable to money
launderers, fraudsters, tax-evaders and sanctions-
breachers.
• The Group provides its services to clients based in global
jurisdictions, including across Africa, the Americas and
Caribbean, the Middle East, the USA, Canada and
Europe.
• Transaction risk focuses on the nature and types of
transactions processed and the inherent exposure it
generates.
• Our increase in voluntary reports to competent
authorities, driven mainly by the imposition of sanctions
against Russia and Belarus during 2022 and 2023, and
the resulting complexities of managing the sanctions
risk, mean that NBFIs and MSBs are considered
higher risk. They are more likely to offer services to
underbanked communities, and to leverage new
payment technologies which present new types of
financial crime risks.
• There is generally a lower level of regulatory oversight
and scrutiny of many NBFIs and MSBs. Trends of recent
sanctions relating to deficiencies in controls of MSBs
have been indicative of problems in mitigating financial
crime risk in the sector.
• To mitigate risks effectively, the Group
has implemented strict onboarding and
correspondent banking due diligence
processes and procedures, as well as strong
governance and client approval committees.
• A robust country risk framework mitigates
the Group’s exposure to high- risk countries.
This framework includes complete
prohibitions of some countries and detailed
restrictions on others.
• Screening and monitoring controls enforce
the framework, and the Group’s employees
have a strong awareness and understanding
of the legal and regulatory environment in
which they operate, including the relevant
financial crime prevention provisions.
• On-going programme of investment in anti-
financial crime technology and optimisation
of system rule-sets. A new transaction
monitoring system is being implemented
in 2024 along with an upgrade to the
transactions screening system.
• Regular training is delivered to ensure
standards are continuously maintained.
• A dedicated Risk and Compliance Function
provides oversight and undertakes thematic
assurance activity to identify potential gaps
and issues.
Linked to strategic pillars - 1. Network, 2. Clients, 3. Platform and 4. Markets
CAB Payments Holdings plc | Annual Report and Accounts 202360
Current context Mitigants and other considerations
3. Operational risk 1,2,3,4
Risk Description:
The risk of loss or
other non-financial
impact, resulting from
inadequate or failed
internal processes,
people and systems, or
from external events.
• The Group is exposed to operational risk in executing
its core business activities and seeks to manage this
exposure in a cost-effective manner.
• The Group is alert to the fact that operational risk has a
broad remit, covering processes, people, systems and
external events. It therefore has a risk appetite set at
Level 2 risk types. The top level 2 risks at this level are:
– Data management risk: The Group uses data
(including personally identifiable data) in its activities
to drive business outcomes. There is a risk of poor
data quality and the requirements of UK General Data
Protection Regulation and the Data Protection Act not
being adhered to.
– Execution, transaction processing and delivery
risk: The Group relies on a combination of manual
and automated processing to fulfil its obligations to
its clients. Specific clients have bespoke processes
that are performed by a select few. The Company as
a listed entity needs to comply with the Listing Rules
of the UK Listing Authority (the Listing Rules) for the
first time.
– Technology, information security and cyber risk:
The Group relies extensively on the use of technology,
including the inter-relationship between multiple
third-party services, which is central to the processing
and operating environment that services its clients.
It is therefore imperative that the Group protects its
clients, counterparty and employee data from theft,
damage or destruction from cyber-attacks. The Group
is acutely aware of the growing sophistication of
cyber-attack threats across the industry.
– Outsourcing, vendor management and third-
party risk: The Group is reliant on material vendors
to support its technology infrastructure, architecture
and certain applications. It is fully aware of the
risks this reliance creates in delivering its products
and services. The Group works closely with these
suppliers to ensure the services they provide remain
resilient.
– People risk: Resource capacity and capability impact
all risk-types, these are monitored frequently to
ensure staffing levels reflect the size and complexity
of the Group.
– Operational resilience: The Group has identified its
important business services and impact tolerance
limits that form part of the Group’s risk materiality
assessment. This is in line with the PRA supervisory
requirements (SS1/21).
– Clients, products and business practices: The
Group considers transformation and change risk
within this Level 2 risk type. The Group offers three
key products (see page 22) and there has been little
change to them, or the underlying business practices.
However, as the Group grows, the risks associated
with transformation and change are becoming a
priority.
• The Group has an established Group
Operational Risk Management Policy
that details various tools that support the
identification, assessment, management and
reporting of operational risk, linked to the
Group ERMF.
• The RCSAs are performed at a business
unit level. All risks and controls are stored
centrally within the Group’s approved
GRC system. The system has links to risks,
controls, issues, assurance actions, Board
metrics and other similar information, thus
providing a holistic operational risk profile.
• Data management risk: The Group continues
to monitor and mitigate data risk through
governance structures. Data risk is assessed
through the RCSA process at least once per
calendar year.
• Execution, transaction processing
and delivery risk: Processes are being
documented, and automation considered, to
ensure consistency and reduction of manual/
bespoke processing. To comply with the
Listing Rules, the Finance team has been
strengthened with external subject matter
experts, as required.
• Technology, information security and
cyber risk: Protecting the Group’s clients,
counterparties, suppliers and employees
remains a top priority. The Group is working
on obtaining ISO 27001 and Cyber
Essentials accreditation. The Group has
recently completed a disaster recovery
exercise and cyber simulation to continue to
strengthen its operational resiliency efforts.
• Outsourcing, vendor management and
third-party risk: The Group has enhanced
its procurement and outsourcing framework
and associated policies to align with the
requirements of the outsourcing and
third-party risk management supervisory
statement (SS2/21).
• People risk: The Group deploys a number
of attraction and retention strategies
throughout the employee lifecycle, including
hybrid-working and competitive employee
benefits.
• Operational resilience: The Group continues
to embed a robust operational resilience
framework and enhance contingency plans
for the failure of key systems, processes and
services to ensure a timely recovery.
• Clients, products and business practices:
The Group has developed a New Product
and Significant Change Policy that brings
together the Group’s transformation and
change agenda. Key transformation
projects are discussed at the Operational
Risk Committee and the Executive Risk
Committee as required.
Linked to strategic pillars - 1. Network, 2. Clients, 3. Platform and 4. Markets
61
Overview Strategic Report Governance AppendixFinancial Statements
Current context Mitigants and other considerations
4. Credit risk 1,2,4
Risk Description:
The risk of financial loss
arising from a borrower’s
or counterparty’s failure
or inability to meet their
financial obligations
in accordance with
contractualterms.
• Credit risk is inherently generated through the Group’s
banking and financing activities; i.e. for example, through
trade finance products, working capital overdrafts,
Nostro balances etc.
• Counterparty credit risk arises due to FX/Payment
related trading and derivatives activities where
counterparties may be unable or unwilling to meet their
financial obligations, including collateral obligations, as
they falldue.
• Treasury related activities also generate an element of
credit risk through its day-to-day placement of funds i.e.
money market funds, HQLA portfolio etc.
• Credit Risk remains a key focus for the
Group given the current macroeconomic
environment.
• Risk appetite thresholds are constructed
with regard to regulatory requirements
and internal assessments included within
theICAAP.
• An established credit policy is in place
with portfolio levels exposure limits and a
maximum individual counterparty exposure
limit framework. The Credit Risk Committee
provides individual counterparty approvals
and portfolio leveloversight.
• Robust individual credit assessment and
monitoring frameworks ensure that credit
risk is managed and mitigated in line
with credit management objectives and
riskframeworks.
• Counterparty FX and derivatives transaction
risk is mitigated via an ISDA master
agreements and credit support annexes,
where suitable.
5. Market risk 1,2,4
Risk Description:
The risk of losses
occurring from adverse
value movements of
the Group’s assets and
liabilities; principally
relating to FX and
interest rates.
• The Group’s market risk exposure occurs primarily
through FX volatility and IRRBB.
• The economic and financial market uncertainties remain
elevated, driven by elevated inflation and tightening
monetary policy. Disruptive adjustment to higher interest
rate levels, deteriorating trade or geopolitical tensions
could have implications for FX rates and the value of
the Group’s Nostro balances. Alternatively, a decline in
interest rates may compress net interest margin across
the business
• Adverse changes in FX rates can impact capital ratios
given elements of the risk-weighted assets exposures
are denominated in foreign currencies.
• Failure to account for foreign currency movements could
result in an adverse impact on the Group’s regulatory
capital and leverage ratios.
• An assessment of market risk drivers is
conducted as part of the ICAAP, and to
assess BAU and stressed market risk.
• Market Risk exposure limits are staggered, to
constrain typical market risk exposure. The
Group primarily trades in the FX spot market
and risk appetite limits are set and monitored
at both an aggregate and currency level.
• Defensive positions are typically taken to the
extent that markets exhibit increased market
risk events, such as during nationalelections.
• Interest rate risk in the banking book is driven
by client deposit-taking, investments in the
liquid asset portfolio and funding activities.
The Group executes hedging strategies to
ensure a predominantly matched profile and
thereby mitigate the majority of the IRRBB
risks that result from these activities.
Linked to strategic pillars - 1. Network, 2. Clients, 3. Platform and 4. Markets
Overview of Principal Risks continued
Principal Risks and Uncertainties continued
CAB Payments Holdings plc | Annual Report and Accounts 202362
Current context Mitigants and other considerations
6. Regulatory and compliance risk 1,2,3,4
Risk Description:
The risk arising from
non-compliance with
laws and regulations
governing financial
services institutions in
the markets in which
we operate.
• As the Group continues to grow in terms of increasing
size and complexity it brings with it a complex legislative
and regulatory landscape thus increasing the risks of
legal or regulatory sanctions, material financial loss
and/or reputational damage in the markets in which
we operate.
• Horizon-scanning is conducted to monitor
upcoming UK regulatory changes.
• Responding to any regulatory
requestpromptly.
• Ensuring that we have adequate permissions
to operate in certain markets.
• CAB Payments partners with local providers
that are typically regulated entities or
locallylicensed.
• The Group consults third-party legal counsel
for new territorial expansions to ensure
compliance with local regulations.
7. Capital adequacy risk 1,2,3,4
Risk Description:
The risk of the Group
having insufficient
quality or quantity
of capital, to meet
its regulatory capital
requirements and
internal thresholds to
cover risk exposures
and withstand a severe
stress as identified as
part of the ICAAP.
• The Group’s capital ratios can be affected by various
business activities and the failure to meet prudential
capital requirements, internal targets and/or to support
the Group’s strategic plans.
• The key risk drivers with capital implications are credit
risk, market risk and operational risk, each of which is
addressed within its relevant section.
• The Group has robustly defined capital
adequacy thresholds, constructed in
reference to regulatory requirements and
maintain capital ratios in excess of these.
• The Group produces an ICAAP at least once
each calendar year. Challenge and oversight
of the ICAAP occurs at the Asset & Liability
Risk Committee and Risk Committee before
approval by the Board.
• Day-to-day capital risk exposure is managed
by the Treasury function with oversight from
Asset & Liability Risk Committee and the
Group Treasury Committee, who monitor and
manage capital risk in line with the Group’s
capital management objectives, capital plan
and risk frameworks.
• If the Group were to encounter a significant
stress on capital resources, a Recovery Plan
is maintained which includes options to
ensure it can remain sufficiently capitalised
to remain viable. Recovery Plan metrics are
regularly monitored and reported against.
The Group’s Pillar 3 disclosures contain a
comprehensive assessment of its capital
requirements and resources and are
published separately on the Group’s website.
Linked to strategic pillars - 1. Network, 2. Clients, 3. Platform and 4. Markets
63
Overview Strategic Report Governance AppendixFinancial Statements
Current context Mitigants and other considerations
8. Liquidity and funding risk 1,2,4
Risk Description:
The risk the Group
cannot meet its
contractual or
contingent obligations
in a timely manner as
they fall due. Funding
risk is the risk that the
Group cannot maintain
access to a sufficient
stable funding base to
maintain its liquidity.
• The Group’s liquidity ratios (i.e. LCR and Net Stable
Funding Ratio (NSFR) can be affected by various
business activities, either idiosyncratic or market wide,
that could impact prudential liquidity requirements
and corresponding business activities, and investor or
depositor confidence.
• The key liquidity risk drivers are depositor outflows, and
intraday liquidity requirements.
• Funding and liquidity risks are managed
within a comprehensive risk framework in
reference to regulatory requirements and
internal thresholds to ensure there is no
significant risk that liabilities cannot be met
as they fall due.
• CAB produces an ILAAP at least once per
calendar year. Challenge and oversight of
the ILAAP occurs at the Asset & Liability Risk
Committee and the Risk Committee before
approval by the Board.
• The primary metrics used to monitor and
assess the adequacy of liquidity are the
Overall Liquidity Adequacy rule (OLAR), the
LCR and NSFR.
• Day-to-day liquidity risk exposure is
managed by the Treasury function with
oversight from the Asset & Liability Risk
Committee and the Group Treasury
Committee.
• Treasury conducts regular and
comprehensive liquidity stress testing,
including reverse stress testing, to ensure
that the liquidity position remains within the
Board’s appetite.
9. Conduct risk 2,4
Risk Description:
The risk that the
conduct of the Group
and its staff, towards
clients (or in the
markets in which it
operates), leads to
unfair or inappropriate
client outcomes and
results in reputational
damage and/or
financial loss.
• Clients may suffer detriment due to actions, processes or
products which originate from within theGroup.
• Conduct risk can arise through:
– the design of products that do not meet clientneeds;
– mishandling complaints where the Group has
behaved inappropriately towards its clients;
– inappropriate sales processes; and
– behaviour that does not meet market or
regulatorystandards.
• Conduct risk is incorporated into the product
approval process.
• Complaints are formally registered,
investigated and responses provided.
• The Group has a Gifts and Hospitality Policy
with an approval and logging process.
• All staff receive annual online training on
conduct, ethics and culture.
Linked to strategic pillars - 1. Network, 2. Clients, 3. Platform and 4. Markets
Principal Risks and Uncertainties continued
CAB Payments Holdings plc | Annual Report and Accounts 202364
Going Concern and Viability Statements
Time Horizon
The Directors have an obligation under Provision 31 of the
Code to confirm that they believe that the Group will be
able to continue in operation, and to meet its liabilities as
they fall due.
The Code requires the Directors to articulate in the Annual
Report and Accounts how the health of the Group has
been assessed, over what time-period this assessment
considers and why this time horizon is considered to be
appropriate.
The Directors have determined that the three years to 31
December 2026 is an appropriate period over which to
perform the assessment. This is the period over which the
Group prepares detailed corporate plans that articulate
financial performance and key regulatory metrics such as
CET1 ratio, LCR and NSFR. Financial forecasts over longer
durations would decrease accuracy and are therefore of
limited value in conducting assessments of this nature.
Consideration of Key Risks
As described in the Risk Report on page 56 the Directors
actively monitor the Group’s risk management and internal
control systems. The Directors have performed a robust
assessment of the principal risks that the Group is exposed
to as well as an assessment of emerging risks. These risks
and the policies and procedures for managing them are
described in more detail in the Risk Report on page 56.
Planning
The Group’s Corporate Plan was approved by the Board
in December 2023. In preparing the Corporate Plan,
due consideration was given to the Group’s strategy as
articulated on page 16.
The process for preparation of the Corporate Plan starts
with the strategic objectives of the Group and considers
the risk appetite limits in place to ensure that these
are adhered to over the course of the planning period.
Assumptions with regards to key macro economic
conditions are then assessed and underpin the forecast
financial performance.
Key prudential Regulatory metrics are forecast to ensure
that these do not fall below risk appetite over the planning
horizon. The metrics which are forecast as part of the
Corporate Plan are:
• CET1 ratio;
• Total Capital Ratio;
• Leverage Ratio;
• LCR;
• Surplus HQLA over LCR minimum;
• NSFR.
Stress Testing – Capital
As part of the ICAAP, severe, but plausible Idiosyncratic,
Market and Climate and Combined stresses are applied to
the Group Corporate Plan. The Combined Stress is simply
the aggregate of the Idiosyncratic and Market and Climate
Stresses. (See page 59 for further details on the stresses).
All stresses are calibrated to those risks which the Board
believe are most relevant for the Group, taking into
consideration all the principal risks identified on page 60
and any wider macro economic factors that the Group may
be exposed to. In accordance with the guidelines from the
PRA, the stresses are intended to be severe, yet plausible.
As part of these stresses, forecasts of pre and post
management action Revenue, Profit & Loss (P&L), CET1
ratio and Leverage Ratio are assessed in comparison
to internal risk appetites and regulatory minimum. An
assessment of any additional capital that has to be held is
then made based on the output of these stresses.
The stresses modelled the impact on financial performance
and key regulatory metrics over the period to 31 December
2026. The table below indicates the impact of the most
severe stress had on revenue and profit before tax post
management actions. These figures compare the revenue
and profit before tax modelled under the stress compared
to the equivalent period in the base case Corporate Plan.
The Group
Percentage Reduction FY 24 FY 25 FY 26
Revenue (32)% (28)% (26)%
PBT (87)% (71)% (60)%
65
Overview Strategic Report Governance AppendixFinancial Statements
Stress Testing – Liquidity
The Group is not regulated for liquidity on a consolidated
basis; however, the only trading entity in the Group is CAB
which is regulated for liquidity by the PRA. As such the
Group does not have any meaningful liquidity risks outside
of those held in CAB.
CAB must adhere to key regulatory liquidity metrics (the
LCR and the NSFR) as well as conduct an ILAAP on an
annual basis. As part of the ILAAP, CAB must demonstrate
how it meets the OLAR which states that a bank must be
able to meet its liabilities as they fall due.
Within the ILAAP, CAB demonstrates that it meets the
OLAR, in part, by modelling the impact of a wide variety
of liquidity stresses which focus on specific liquidity
risks which are relevant to its business model. The most
comprehensive of these, the OLAR stress, models a severe
deposit outflow as well as a variety of other factors which
have a detrimental liquidity impact. The OLAR stress
assesses whether CAB has sufficient liquidity to meet
these outflows over a 90 day period. To ensure continued
robustness from a liquidity perspective, the OLAR stress
is prepared monthly and forms part of CAB’s liquidity
risk appetite.
Reverse Stress Testing
Reverse Stress Testing (RST) also forms part of the
Group’s wider stress testing framework and is conducted
as part of the ILAAP and ICAAP. The purpose of the
RSTs is to define scenarios which threaten the viability of
CAB and the Group, assess whether these scenarios are
plausible and to, where practical, build contingency plans
to mitigate the likelihood of such scenarios occurring.
The RSTs considered a variety of scenarios to determine
scenarios which would threaten the viability of CAB and
the Group from a capital and liquidity perspective.
Assessment
The Group has a strong business franchise and a robust
financial position as at 31 December 2023. All key
regulatory metrics are forecast to remain above Risk
Appetite over the duration of the Corporate Plan.
The Stress Testing activities conducted as part of the
ICAAP, ILAAP and on an ongoing basis give the Directors
comfort with regards to the Group’s ability to withstand
stress events and meet liabilities as they fall due.
Furthermore, none of the RST scenarios identified as part
of the ILAAP or ICAAP are deemed by the Directors to be
plausible based on current forecasts.
Based upon this, the Directors have concluded that there
is a reasonable expectation that the Group will be able to
continue in operation and will be able to meet its liabilities
as they fall due over the period to 31 December 2026.
Furthermore, there is no information contained within the
outer years of the Corporate Plan which the Directors
consider would threaten the longer-term viability of
the Group.
Going Concern
The Directors have considered the financial position of the
Group, including the net current asset position, regulatory
capital requirements and estimated future cash flows
and have formed the view that the Group has adequate
resources to continue in operational existence for a period
of twelve months from when these financial statements
are authorised for issue and that the Group will be able to
meet its obligations as they fall due.
In order to satisfy themselves that the Group has sufficient
resources to operate, the Directors have reviewed both
the Group’s Corporate Plan as well as the outputs of
the stress testing and reverse stress testing exercises
undertaken as part of the ICAAP and the ILAAP. In
addition, the Directors have also taken into consideration
all of the key risks articulated under the principal risks
(page 60) and any wider macro economic factors the
Group may be exposed to.
Going Concern and Viability Statements continued
CAB Payments Holdings plc | Annual Report and Accounts 202366
This section of the Strategic Report constituted the Non-Financial Information Statement of the Company, produced to
comply with Sections 414(C)(A) and 414(C)(B) of the Companies Act 2006. The information listed in the table below is
incorporated by cross-reference.
Reporting requirement Policies and standards which govern our approach Additional information and risk management
Environmental matters Employee Travel Handbook
ESG Strategy
Vendor Code of Conduct
Sustainable Procurement Policy
ESG (pages 28 to 46)
TCFD (page 44 to 46)
Employees Anti-Bribery & Corruption Policy
Anti-Harassment & Bullying Policy
Employee Code of Conduct
Flexible Working Policy
Health & Safety Policy
Inclusive Workplace Policy
Political Activity at Work Policy
Whistleblowing Policy
s172 Statement (pages 48 and 49)
ESG (pages 28 to 46)
Audit Committee Report (pages 90 to 95)
Nomination Committee Report (pages 86 to 89)
Directors’ Report (pages 120 to 124)
Social matters Anti-Harassment & Bullying Policy
Inclusive Workplace Policy
Political Activity at Work Policy
Vendor Code of Conduct
Sustainable Procurement Policy
Whistleblowing Policy
s172 Statement (pages 48 and 49)
ESG (pages 28 to 46)
Audit Committee Report (pages 90 to 95)
Directors’ Report (pages 120 to 124)
Respect for human rights Anti-Harassment & Bullying Policy
Employee Code of Conduct
Inclusive Workplace Policy
Modern Slavery Statement
Political Activity at Work Policy
s172 Statement (pages 48 and 49)
ESG (pages 28 to 46)
Audit Committee Report (pages 90 to 95)
Anti-corruption and bribery Anti-Bribery & Corruption Policy
Conflicts of Interest Policy
Employee Code of Conduct
Gifts & Hospitality Policy
Personal Account Dealing Policy
Political Activity at Work Policy
Vendor Code of Conduct
Whistleblowing Policy
s172 Statement (pages 48 and 49)
ESG (pages 28 to 46)
Audit Committee Report (pages 90 to 95)
Directors’ Report (pages 120 to 124)
Description of the business model Business Model (pages 16 and 17)
Description of principal risks
and impact of business activity
Business Model (pages 16 and 17)
Principal Risks and Uncertainties (pages 60 to 64)
TCFD (page 44 to 46)
Non-financial KPIs Strategic Report (pages 10 to 67)
KPIs (pages 26 to 27)
TCFD TCFD (page 44 to 46)
The policies mentioned above form part of the Group’s policies, which act as the strategic link between our purpose and
values and how we manage our day-to-day business. The Board has determined that the policies remain appropriate,
are consistent with the Group’s values and support its long-term sustainable success.
Approval
Pages 10 to 67 form part of the Strategic Report, which has been reviewed and approved by the Board.
Bhairav Trivedi
Chief Executive Officer
25 March 2024
Non-financial and Sustainability Information
67
Overview Strategic Report Governance AppendixFinancial Statements
Governance
Report
70 Chair’s Introduction
72 Board of Directors
74 Board Statements
76 Corporate Governance Statement
86 Nomination Committee Report
90 Audit Committee Report
96 Risk Committee Report
98 Directors’ Remuneration Report
120 Directors’ Report
125 Directors’ Responsibilities Statement
Developed Economies…
Moving vital funds from
CAB Payments Holdings plc | Annual Report and Accounts 202368
… to
Emerging
Markets
69
Overview Strategic Report Governance AppendixFinancial Statements
Chair’s Introduction
Chair’s Introduction to Governance
Ann Cairns
Chair
I am delighted to introduce CPH’s
first Governance Report as a listed
company and also my first as Chair
ofthe Board. Over the past few
months, we have worked hard to
establish the highest standards of
corporate governance within the
organisation, and I believe we have
made significant progress. This Report
sets out the key milestones on our
journey to date, as well as some of
our futureaspirations.
The Board
During the first half of the year, in anticipation
of the Company’s IPO, we focused on building
the Board. Our two Executive Directors: Bhairav
Trivedi (CEO) and Richard Hallett (CFO) were
appointed to the Board in 2021 and 2019
respectively. Together with the other members
of CAB Payments’ Executive Committee,
they take forward the Company’s strategy
and are responsible for its operational and
financialperformance.
Three new Non-executive Directors (NEDs)
joined the Group in 2023: Caroline Brown, Noël
Harwerth and myself. Working together with
the existing Directors and with four independent
NEDs who have joined the Board in addition to
their roles as Directors of our subsidiary, CAB,
Ibelieve we form an effective team who can
lead the executive team, provide oversight as
the Company goes through the early stages of
life as a listed company and set the tone for the
Group’s purpose and culture. We continue to
work alongside our non-independent NED, Simon
Poole who represents our major shareholder and
has served on the Board since 2016, bringing
useful knowledge of the Group’s recent history
and corporate context. I am particularly pleased
that we were able to bring Noël Harwerth onto
the Board as Senior Independent Director. Noël
brings a unique and hugely valuable combination
of Board experience in the governmental, banking,
and corporate worlds which we are already
benefitingfrom.
In February 2024 we announced that Neeraj
Kapur will succeed Bhairav Trivedi as CEO,
subject to regulatory approval.
CAB Payments Holdings plc | Annual Report and Accounts 202370
I am delighted that Bhairav has agreed to
continue to represent, advise and support the
Group going forward. Neeraj is a seasoned
finance professional and proven leader who
brings a wealth of experience to this role; we are
confident that the Group will continue to flourish
and grow under his leadership, as he executes
our strategy to deliver long term value for all
ourstakeholders.
Compliance with the Code
Our approach to governance is based on the
concept that good corporate governance
enhances longer-term shareholder value and
sets the culture, ethics and values for the Group.
Consistent with our belief in the importance of
corporate governance, the Group as a whole
has been working towards compliance with the
Code since before the IPO in July 2023 and the
Company aspires to be in full compliance with it
before the end of 2024.
Diversity
We have started life as a listed company
meeting the current expectations of investors
and regulators in relation to the diversity of our
Board, both in terms of gender and ethnicity,
and further information about the composition
of the Board is shown on pages 88 and 89,
We fully recognise the value of diversity in the
make-up of our Board, executive leadership
and across our workforce generally. We are not
complacent and recognise that we still have
work to do particularly in bringing a broader
cross-section of nationalities onto the Board and
at all levels in the organisation as our workforce
and structures develop and grow.
Committees
Prior to our listing, a significant amount of
work was undertaken to ensure that the Group
had the appropriate governance systems in
place. Our Nomination and Remuneration
Committees are now up and running alongside
our existing Audit and Risk Committees and
their respective reports outline their initial
priorities and workstreams. I am pleased to see
plenty of dialogue among Board members and
the executives between formal meetings and
our new Committee Chairs are building good
working relationships with their counterparts
within the executive team which I believe will
bear fruit as the Committees settle into their
cycles of annual activity.
Stakeholders
The CAB Payments group of companies has
a unique purpose in the banking world: we
facilitate billions of dollars of aid payments,
getting money to the people who really need it
the most, particularly in emerging markets or
frontier markets. The Board takes the Group’s
purpose seriously and recognises the importance
of all its stakeholders in fulfilling its purpose.
The Group’s application for B Corp status, which
was awarded in August 2023, is evidence of
that commitment and we will seek to build on it
in the coming months and years. The strength of
our other stakeholder relationships – particularly
clients – is discussed at length in our Strategic
Report (see pages 48 and 49).
Relationship Agreement and
Independence
In this Report, we provide details on the
arrangements we have put in place to ensure
a clear and transparent framework for our
cooperation with our major shareholder.
These arrangements will enable us to benefit
from a close working relationship with our
major shareholder while retaining our ability
to operate independently for the benefit of all
ourstakeholders.
Board Effectiveness
My Board colleagues and I desire to be effective
in our work and therefore are keen to have
regular reviews of our own effectiveness as
part of our Board programme. We undertook an
internally-run Board review in December 2023
and plan to run an externally facilitated review
in the second half of 2024 by which time the
Board will have had more experience of working
together in its current configuration.
Annual General Meeting
The Company’s first Annual General Meeting
(AGM) will take place at 2.00pm on Thursday, 9
May 2024 at The News Building, 3 London Bridge
Street, London SE1 9SG. All Directors will attend
this event, which will provide an opportunity for
shareholders to hear more about our performance
and to ask questions of the Board. I look forward
to meeting any shareholders who can join us at
our AGM and extend my thanks to you all for your
continued support.
Finally, I would like to thank the Board and all of
the Group’s employees who worked so tirelessly
before, during and following our IPO for their
dedication and endeavours. I look forward to
working with them during the coming year
to develop and strengthen our approach to
governance as we continue to seek to
create value for all our stakeholders.
Ann Cairns
Chair
25 March 2024
71
Overview Strategic Report Governance AppendixFinancial StatementsOverview
Board of Directors
Key
A
Audit Committee
K
Risk Committee
R
Remuneration Committee
N
Nomination Committee
B
Director, Crown Agents Bank Limited
T
Director, CAB Tech Holdco Limited
Chair
Ann Cairns
Chair
N
R
B
Date of appointment:
23 February 2023, as a Director and
26May2023 as Chair
Experience:
Ann has held board positions with ICE,
AstraZeneca, Charity Bank and UK
Government’s BEIS. Until 2022, Ann was
executive Vice Chair of Mastercard, after being
President of International Markets. Ann led the
London Financial Services Group at Alvarez
& Marsal, after 20 years in payments and
FX at ABN-AMRO and Citi. Ann has a Pure
Mathematics degree, honorary Doctorate from
Sheffield University and MSc and honorary
Doctorate from Newcastle University. She is a
fellow of London Business School.
External appointments:
Ann is on the board of Lightrock, a global
private equity platform investing in sustainable
businesses. She is Chair of Financial Alliance
for Women and TMF Group.
Bhairav Trivedi
Chief Executive Officer
B
T
Date of appointment:
1 March 2021
Experience:
Bhairav has 35 years’ experience in financial
services, with strong focus on payments and
payment processing, cross-border remittance
and financial technology. He held senior roles
at leading financial institutions including
Finablr, Network International Payment
Solutions, Sigue Global Services, and Citi. He
founded PayQuik, worked at McKinsey & Co.,
Fair Isaac and Providian Bancorp. Bhairav has
an MBA from the Wharton School, University
of Pennsylvania, Masters in Engineering
Economic Systems from Stanford University
and an undergraduate degree in Engineering
from Birla Institute of Technology.
Noël Harwerth OBE
Senior Independent Director
A
K
N
R
B
Date of appointment:
23 February 2023
Experience:
Noël has wide experience in banking
and financial services, with prior roles at
Standard Life, London Metals Exchange,
Bank of England, GE Capital Bank Europe,
and Sumitomo Mitsui Bank. She also worked
with Dominion Diamond, Avocet and Sirius
Minerals, as well as Alent, Corus, Logica,
Impellam Group, RSA Insurance Group and
the British Horseracing Authority, the London
Underground (Transport for London), and Tote.
Noël has a JD Degree from the University of
Texas Law School.
External appointments:
Noël is Chairman, UK Export Finance Agency
and director of UK Department of Business &
Trade and OSB Group plc. She is liveryman of
the WCIB, Chair of the UK chapter of Woman
Corporate Directors and a member of the IWF.
Simon Poole
Non-executive Director
B
T
Date of appointment:
19 April 2016
Experience:
Simon has a range of international finance
and administration experience. He has been
Operating Partner for Helios Investment
Partners since 2011, serving on the boards of
Helios Towers Africa, Vivo Energy, Interswitch
and Fawry. Previously he was CFO of Intela
Global Ltd and Celtel International (in Burkina
Faso, Chad and DRC), after roles with Price
Waterhouse, Bank of America and BT. Simon
qualified as a Chartered Accountant with Price
Waterhouse and is a member of the Institute of
Chartered Accountants in England & Wales.
External appointments:
Simon serves on the board of The Malachite
Group.
Richard Hallett
Chief Financial Officer
B
T
Date of appointment:
3 September 2019
Experience:
Richard’s career spans more than 30 years in
top tier financial services organisations with an
extensive track record across the investment
banking, commercial and retail banking sectors
both regionally and globally. Richard was
formerly CFO of Barclays Africa and CFO of
Absa Capital. Previous roles also include senior
positions at RBS, Morgan Stanley and Credit
Suisse First Boston. Richard started his career
at Price Waterhouse as a qualified Accountant
and holds a BSc (Hons) in Chemistry from the
University of East Anglia.
CAB Payments Holdings plc | Annual Report and Accounts 202372
For further details on our
BoardofDirectors please visit
https://cabpayments.com/investors
Dr Caroline Brown
Independent Non-executive Director
A
K
R
B
Date of appointment:
26 April 2023
Experience:
Dr Brown’s experience includes 15 years in
corporate finance with BAML (New York), UBS
and HSBC; 15 years as an operating CFO
in technology and engineering businesses
and over 20 years chairing audit and risk
committees of listed entities including
Earthport plc prior to its acquisition by VISA
International. Caroline holds an MA and PhD
from the University of Cambridge, an MBA
from the University of London and is a Fellow
of the Chartered Institute of Management
Accountants.
External appointments:
Caroline is a director of IP Group plc, Ceres
Power Holdings plc and Luceco plc. She also
sits on the Global Partnership Council of
CliffordChance.
Mario Shiliashki
Independent Non-executive Director
N
R
B
T
Date of appointment:
26 April 2023
Experience:
Mario brings a wealth of experience in global
payments and fintech. He led MasterCard’s
global eCommerce and cross-border trade
initiatives, launching and commercialising their
first open API developer platform. He drove
PayPal’s expansion into Asia and Europe after
roles with Bain & Company and Goldman
Sachs. Mario speaks at payments and fintech
conferences and contributes to several
industry publications. He holds an MBA from
Harvard Business School and an International
Directors Programme Diploma from INSEAD.
External appointments:
Mario was until recently the CEO of PayU
Global – a leading global online payments
player in high-growth emerging markets.
Jennifer Johnson-Calari
Independent Non-executive Director
A
K
B
T
Date of appointment:
26 April 2023
Experience:
Jennifer brings over 37 years of financial
services experience and is a former Director
of the World Bank’s Reserves Advisory &
Management Program (RAMP). Following roles
with Federal Reserve Board and US OCC, she
was Portfolio Manager at the International
Bank for Reconstruction & Development, then
Director of Sovereign Investment Partnerships
at the World Bank. Jennifer co-authors and
contributes to publications on banking and
policy issues, and is an editor and contributing
author of Sovereign Wealth Management.
External appointments:
Jennifer is Non-executive Director of
MGIM, London and CAIM, London and an
independent Non-Executive Director of
Clubhouse International in New York.
Karen Jordan
Independent Non-executive Director
A
K
B
T
Date of appointment:
26 April 2023
Experience:
A specialist in banking and asset
management, Karen has worked with PwC,
Barclays and State Street. She advises on
global and cross-border regulatory and law
enforcement matters on a range of complex
governance, regulatory and reputational
challenges, taking the lead role in ensuring
that projects to provide redress to clients due
to mis-selling or wrongdoing were well-
managed and produced fair outcomes. Karen
has an auditing background and is a qualified
Chartered Certified Accountant.
External appointments:
Karen holds a small number of non-executive
roles with private companies. These roles
include financial services companies and the
whistleblower protection charity, Protect.
Susanne Chishti
Independent Non-executive Director
N
B
T
Date of appointment:
26 April 2023
Experience:
Susanne has over 25 years of expertise on
organisational governance in the SME market,
holding senior positions at Deutsche Bank,
Lloyds Banking Group, Morgan Stanley and
Accenture. Susanne co-edited ‘The FINTECH
Book’ series and was recognised in the
Evening Standard’s ‘Top 10 global fintech
influencers’ in 2022, the “Fintech Champion of
the Year” in 2019 (Women in Finance) and in
the European Digital Financial Services ‘Power
50’ in 2015. Susanne holds an MBA from
Vienna University of Economics and Business.
External appointments:
Susanne is a Non-executive Director at CMC
Markets PLC and CEO of FINTECH Circle,
Europe’s first Angel Network focused on
fintech innovation.
Gender
Independence
Male: 40%
Female: 60%
Non-independent Non-executive Directors: 14.3%
Independent Non-executive Directors: 85.7%
73
Overview Strategic Report Governance AppendixFinancial Statements
Requirement Compliance statement
Where to find
furtherinformation
Strategic Report The Strategic Report was approved by the Board of Directors on
25March2024.
Pages 10 to 67
Non-financial
and Sustainability
Information Statement
The Company has complied with the Non-Financial Reporting Directive
contained in Sections 414CA and 414CB of the Companies Act 2006.
Page 67
s172 of the Companies
Act 2006
The Board of Directors, through the Strategic Report, provides information
for shareholders to help them assess how the Directors have performed
their duty, under s172, to promote the success of the Company and, in
doing so, had regard to the matters set out in that section. This includes
considering the interests of other stakeholders which will have an impact
on the long-term success of the Company.
Pages 48 and 49
Compliance with the
Code
In accordance with the Listing Rules, the Company confirms that for the
period from Admission to the Main Market of the London Stock Exchange
on 11 July 2023 to 31 December 2023 and at the date of this Annual
Report, it was in compliance with all the relevant provisions as set
out in the Code with the exception of Provision 5 relating to workforce
engagement. Details on how the Company will comply with Provision 5
bythe end of 2024 are set out on page 84.
Pages 68 to 125
Going concern After making appropriate enquiries and taking into account the matters
set out in this Annual Report, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational
existence for twelve months from the date of approval of this Annual
Report and therefore continue to adopt the going concern basis when
preparing the financial statements.
Page 66
Viability statement The Directors confirm that they have a reasonable expectation that the
Group will continue in operation and meet its liabilities as they fall due over
the three-year period under review.
Page 65
Robust assessment
of the principal risks
facing the Group
The Directors confirm that they have carried out a robust assessment
ofthe principal and emerging risks facing the Group, including those that
would threaten its strategy, business model and future performance.
TheDirectors also assessed the Group’s risk appetite with regard to each
risk and considered how to manage and mitigate such risks.
Pages 60 to 64
Board Statements
CAB Payments Holdings plc | Annual Report and Accounts 202374
Requirement Compliance statement
Where to find
furtherinformation
Annual review of
the systems of risk
management and
internal control
The Directors confirm that they have carried out a robust assessment of
the risk management and internal controls systems of the Group, assisted
by the Risk and Audit Committees and based on the three lines of defence
model that is in place.
Pages 90 to 97
Fair, balanced and
understandable
statement
The Board agrees with the recommendation of the Audit Committee
that this Annual Report, taken as a whole, is fair, balanced and
understandable.
Page 92
Directors’ Remuneration
Report
The Directors confirm that their report on remuneration for the period
ended 31 December 2023 complies with the requirements of the Listing
Rules, Schedule 8 of the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008 (as amended) and the
provisions of the Code.
Pages 98 to 119
Competition and
Markets Authority
The Audit Committee considers that the Company complied with the
mandatory audit processes and Audit Committee responsibility provisions
of the Competition and Markets Authority Audit Order for the year ended
31 December 2023.
Pages 90 to 95
Modern Slavery Act
2015
The Directors confirm, for the financial year ended 31 December 2023,
that steps have been taken in relation to our responsibilities under Section
54 of the Modern Slavery Act 2015 and that the Board approved a
statement setting out the steps that have been taken to combat modern
slavery in the Group’s supply chain.
Page 122
TCFD The Directors confirm that the Group has met all TCFD requirements
related to the governance, risk management, and metrics and targets
pillars. Additionally, the Group has fulfilled parts ‘a’ and ‘b’ of the strategy
disclosure requirements. The Group has not provided the recommended
disclosures with part ‘c’ of the strategy pillar, which is the completion of a
2°C scenario analysis. This is attributed to the fact that the identified risks
do not have a material impact on the Group. The Group will undertake a
2°C scenario analysis when any impact exceeds the materiality threshold,
in accordance with best practice.
Pages 44 to 46
Key Roles (Chair, CEO, CFO and SID)
Key Board Metrics
Length of service (as at 31 December 2023)
Male: 50%
Female: 50%
0–3 Years: 80%
3–6 Years: 10%
6–9 Years: 10%
75
Overview Strategic Report Governance AppendixFinancial Statements
Corporate Governance Statement
How we are governed
Statement of Compliance
with the Code
As a premium listed Company on
the London Stock Exchange, the
Company is reporting in accordance
with the UK Corporate Governance
Code (the Code) published in July
2018. The Code sets out standards
of good practice in relation to
board leadership and effectiveness,
remuneration, accountability and
relations with shareholders.
The Code is published by the UK
Financial Reporting Council (FRC)
and a copy of the 2018 UK Corporate
Governance Code is available from
the FRC website at www.frc.org.uk.
The Board confirms that the
Company has complied with the
Code throughout the period under
review with the exception of Provision
5 relating to workforce engagement.
Measures are set out on page 84 that
are intended to deal with this matter
and bring the Company into full
compliance with the Code before the
end of 2024.
Further information about the
Company’s compliance with the
Code can be found in the following
sections of this Annual Report and
on the Company’s website at
https://cabpayments.com/investors/.
Section Pages
Board Leadership and Purpose
• Purpose, values, strategy and culture 84 and 85
• Stakeholder engagement 48 and 49
• Workforce engagement and whistleblowing 84
Division of Responsibilities
• The role of the Board and Committees 77 and 78
• The balance of the Board and division of responsibilities 78 and 79
• Board policies and processes 78 to 81
Composition, Succession and Evaluation
• Board appointments, succession and Board diversity 86 to 89
• Skills, experience and length of service 72 and 73
• Board evaluation 80
Audit, Risk and Internal Control
• The oversight of corporate reporting and the external audit 90 to 95
• The oversight of internal audit 90 to 95
• The management of risk and internal controls 96 and 97
• Going concern and Viability Statement 66 and 67
Remuneration
• Remuneration Policy 102 to 112
• Remuneration outcomes 112 to 118
CAB Payments Holdings plc | Annual Report and Accounts 202376
Our Governance framework
Board Committees
Nomination Committee
The Nomination
Committee assists the
Board in relation to
the composition and
make-up of the Board
and its Committees.
It is responsible for
evaluating the balance
of skills, knowledge
and experience and
the size, structure
and composition
of the Board and
its Committees. It
also monitors the
independent status
of the Independent
Non-executive Directors
and is responsible for
periodically reviewing
the Board’s structure
and identifying potential
candidates to be
appointed as Directors
or Committee members.
See / Page 86
Committee
members:
Ann Cairns (Chair)
Susanne Chishti
Noël Harwerth
Mario Shiliashki
Committee
members:
Noël Harwerth
(Chair)
Caroline Brown
Ann Cairns
Mario Shiliashki
Committee
members:
Jennifer Johnson-
Calari (Chair)
Caroline Brown
Noël Harwerth
Karen Jordan
Committee
members:
Karen Jordan (Chair)
Caroline Brown
Noël Harwerth
Jennifer Johnson-
Calari
Committee
members:
Ann Cairns (Chair)
Richard Hallett
Noël Harwerth
Karen Jordan
Bhairav Trivedi
Risk Committee
The Risk Committee
assists the Board with
regard to managing
the Group’s risk
framework (including
recommendations on
financial, operational
and reputational risk),
internal controls and
risk reporting. Its role
includes assisting the
Board with risk appetite,
tolerance and strategy,
and the monitoring
of internal controls
and risk systems and
annual review of the
effectiveness of the
internal control system.
See / Page 96
Remuneration
Committee
The Remuneration
Committee assists the
Board in relation to
Directors’ remuneration
including making
recommendations
to the Board on the
Company’s policy on
executive remuneration,
setting the overarching
principles, parameters
and governance
framework of
the Company’s
remuneration policy
and determining the
individual remuneration
and benefits package of
each of the Company’s
Executive Directors,
senior managers and
the Company Secretary.
See / Page 98
Audit Committee
The Audit Committee
assists the Board
in discharging its
responsibilities with
regard to financial
reporting and external
audits. Its role includes
reviewing and
monitoring the integrity
of the Group’s annual
and interim financial
statements, reviewing
and monitoring the
extent of the non-audit
work undertaken by
the external auditor,
advising on the
appointment of and
relationship with
the external auditor,
and reviewing the
effectiveness of the
external audit process.
See / Page 90
Disclosure Committee
The Disclosure
Committee assists the
Board in reaching the
accurate and timely
disclosure of price-
sensitive information
to meet the legal and
regulatory obligations
and requirements of a
company listed on the
London Stock Exchange.
See / Page 78
Board sub-committees
In order to ensure continuing oversight of certain key matters, for example the development of the Company’s ESG strategy, the
Board has formed a number of sub-committees and advisory panels consisting of Board members with support from standing
attendees from the management team. Discussions are then reported to the Board, with recommendations for next steps.
CAB Payments
Holdings plc
Board
77
Overview Strategic Report Governance AppendixFinancial Statements
Corporate Governance Statement continued
Board Leadership and Purpose
Bhairav Trivedi is the CEO and,
therefore, the roles of Chair and
CEO are held by different people.
Noël Harwerth, Senior Independent
Director, was appointed on 23
February 2023.
The key responsibilities of the
Board and its committees are set
out in writing and are available on
the Company’s website at https://
cabpayments.com/investors/ where
the following documents are published:
• Schedule of Matters reserved for
the Board
• Terms of Reference for each
Committee of the Board
• Responsibilities of Chair, CEO and
Senior Independent Director
Each of these documents were
considered at the time of the
Company’s IPO and reviewed and
approved subsequently by the Board
and committees. In addition to the six
scheduled meetings of the full Board
during 2023, the Chair and Non-
executive Directors held discussions
without the Executive Directors
present at the end of Board meetings
whenever possible. This ensures a
free and frank exchange of views on
the effectiveness of the Executive
Directors and senior management
and provides an opportunity to
discuss any other matters as
necessary.
In December 2023, the Senior
Independent Director held a separate
meeting with the Non-executive
Directors, without the Chair present, to
evaluate the performance of theChair.
Committees of the Board
Certain specific responsibilities are
delegated to the Committees of the
Board, notably the Audit, Nomination,
Risk and Remuneration Committees,
which operate within clearly defined
terms of reference and report
regularly to the Board. Further details
are set out in the reports of each
Committee that follow this statement.
The Board of Directors
The principal duties of the Board
are to provide the Company’s
strategic leadership, to determine
the fundamental management
policies of the Group and to oversee
the performance of the Company’s
business to promote long-term,
sustainable success. The Board is
the principal decision-making body
for all matters that are significant to
the Group, whether in terms of their
strategic, financial or reputational
implications. The Board has final
authority to decide on all issues
save for those which are specifically
reserved to the general meeting of
shareholders by law or by the Articles
of Association.
The key responsibilities of the
Boardinclude:
• determining the Company’s
strategy, budget and structure;
• approving the fundamental policies
of the Group;
• implementing and overseeing
appropriate financial reporting
procedures, risk management
policies and other internal and
financial controls;
• proposing the issuance of
new ordinary shares and any
restructuring of the Company;
• determining the remuneration
policies of the Company;
• ensuring the independence of
Directors and that potential conflicts
of interest are managed; and
• calling shareholder meetings
and ensuring appropriate
communication with shareholders.
Division of Responsibilities
There is a clear division of
responsibilities between leadership
of the Board and executive
management leadership of the
Company’s business. Ann Cairns
was appointed as Chair on 26 May
2023 and was independent on her
appointment to the role.
A Disclosure Committee of the Board is
also in place, to ensure that adequate
procedures, systems and controls are
maintained and operated to enable
the Company to fully comply with its
obligations regarding the timely and
accurate identification and disclosure
of all information to meet the legal and
regulatory obligations and requirements
arising from the Companies Act
2006, the Listing Rules, the Disclosure
Guidance and Transparency Rules
and the EU Market Abuse Regulation,
as it forms part of retained EU law.
The Board notes, however, that the
existence of this Disclosure Committee
does not absolve the Board from its
obligations in this area. This Committee
comprises the CEO, the CFO, the Chair
of the Board, the Senior Independent
Non-executive Director and the Chair of
the Audit Committee. By its nature, the
Disclosure Committee meets on an ad-
hoc basis, when circumstances require.
Membership of each Committee
of the Board is reviewed annually
and minutes of Committee meetings
are made available to all Directors
on a timely basis. The written
terms of reference for the Audit,
Risk, Disclosure, Nomination and
Remuneration Committees, all of
which were reviewed, updated
where necessary and approved during
the year, are available on
the Company’s website at
https://cabpayments.com/investors.
The Chairs of the Audit, Nomination,
Risk and Remuneration Committees
intend to be available at the AGM to
answer questions on the work of their
respective Committees.
Company Secretary
All Directors have access to the advice
of the Company Secretary, Lesley
Martin, whois responsible for advising
the Board on all governance matters.
The appointment and removal of the
Company Secretary is a reserved
matter for the wholeBoard.
CAB Payments Holdings plc | Annual Report and Accounts 202378
Summary of Roles
Chair
Facilitates effective Board decision-making and governance
by ensuring effective information flows and sufficient time for
agenda itemdiscussion.
Facilitates constructive Board relations and discussions.
Oversees Director induction andtraining.
Oversees Board and Committee performance
evaluationprocess.
Oversees succession planning process as Chair of
Nomination Committee.
Oversees engagement with key stakeholders,
includingshareholders.
Chief Executive Officer
Manages the Group on a day-to-day basis with support of
executive management.
Develops and implements Group strategy, plans and
commercial objectives.
Manages and mitigates Group principal and emerging risks.
Oversees development needs for Executive Directors and
senior management.
Oversees succession planning for keypersonnel.
Senior Independent Director
Leads the review of the performance of the Chair of theBoard.
Acts as a sounding board for shareholder queries where
inappropriate to raise with the Chair of the Board or
ExecutiveDirectors.
Provides a sounding board for the Chair of theBoard.
Chairs the Nomination Committee in instances where
succession plans for the Chair of the Board are considered.
Chief Financial Officer
Leads, directs and oversees all aspects of the finance and
accounting functions of theGroup.
Manages relationships with the external auditor and key
financial institutions and advisers.
Leads, directs and oversees the Group’s Finance, Treasury
and Tax functions.
Ensures effective internal controls are in place and
compliance with appropriate accounting regulations for
financial, regulatory and taxreporting.
Non-executive Directors
Monitors and oversees Group performance against objectives. Approves and oversees strategic direction.
Serves on Committees.
Company Secretary
Supports the Board to ensure efficient and effective functioning.
Supports the Directors in receiving information in a
timelymanner.
Available to Directors individually and collectively for advice
on governancematters.
79
Overview Strategic Report Governance AppendixFinancial Statements
Corporate Governance Statement continued
Independence
The Nomination Committee, on
behalf of the Board, has considered
the independence of its NEDs
and confirms that all of the NEDs
designated as being ‘independent’
within the meaning of the Code
are free from any business or other
relationship that could materially
interfere with the exercise of their
independent judgement. The
Board therefore consists of six
independent NEDs, two Executive
Directors, one NED appointed by
the Company’s largest shareholder
(non-independent) as well as the
Chair, who was considered to be
independent on appointment.
Board Development
New Directors participate in an
induction programme on the
operations and activities of the Group,
the role of the Board and the matters
reserved for its decision, the Group’s
corporate governance practices
and procedures and their duties,
responsibilities and obligations as
Directors of a listed public company.
This programme is supplemented by
meetings with, and presentations by,
senior executives and the Group’s
advisers.
Conflicts of Interests and
Directors’ Concerns
The Group has procedures in place,
which will be reviewed on an annual
basis, to deal with the situation where
a Director has a conflict of interest.
Board Attendance
1
Board
Ann Cairns (Chair) 6/6
Caroline Brown
2
5/6
Susanne Chishti 6/6
Richard Hallett 6/6
Noël Harwerth 6/6
Jennifer Johnson-Calari 6/6
Karen Jordan 6/6
Simon Poole 6/6
Mario Shiliashki 6/6
Bhairav Trivedi 6/6
Notes
1 The information in this table relates to the period
from the Company’s admission to the Main
Market of the London Stock Exchange on 11 July
2023 until 31December 2023.
2 Caroline Brown was unable to attend the Board
meeting held on 15 November 2023 but received
all papers relating to the business of the meeting
and had the opportunity to discuss any issues
arising with the Chair before the meeting.
Board Performance Review
The effectiveness of the Board
and its Committees is regularly
reviewed with the most recent
externally facilitated review of the
Board undertaken in December
2021 by Odgers Berndtson (who
have no connection to the Group
or any individual Director) with a
questionnaire-based Board review
facilitated by the Company Secretary
in early 2023.
Given the changes to Board
composition as part of the
preparations for the IPO in July 2023,
the Board agreed to defer a further
formal review to allow the new
Board to settle. A further internal
review was undertaken in December
2023, with an externally facilitated
Board review now scheduled to
be conducted in the second half of
2024; outcomes from this review will
be reported in the Company’s 2024
AnnualReport.
At the beginning of each Board
meeting, Directors are reminded of
their duties under sections 175, 177
and 182 of the Companies Act 2006
which relate to the disclosure of
any conflicts of interest prior to any
matter that may be discussed by the
Board. Directors also notify the Board
of any other new board and other
appointments that they have or are
about to take on so that they can be
recorded and reviewed by theother
Directors.
A procedure is in place for Directors
to raise concerns about the operation
of the Board or the management that
cannot be resolved through the Senior
Independent Director.
Board Activities
At each Board meeting the CEO
presents an update on performance,
strategy and business issues and
the CFO presents a detailed analysis
of the financial performance of the
Group. Senior Executives below Board
level attend relevant parts of Board
meetings to make presentations on
their areas of responsibility; this gives
the Board access to a broader group
of Executives and helps the Directors
make ongoing assessments of the
Group’s succession plans.
During the early part of 2023, the
Board of Directors of CAB Payments
Holdings plc consisted of Directors
appointed by the Helios Funds, the
Company’s major shareholder.
During the middle part of the
year, the Board focused on the
Company’s admission to listing on
the Main Market of the London Stock
Exchange (Admission to Listing)
which completed in July 2023. A key
workstream during the IPO was the
establishment of a robust framework
of governance, which the Board
has continued to develop during the
period following the IPO.
CAB Payments Holdings plc | Annual Report and Accounts 202380
The key activities and discussions of the Board during the year were:
Key Approvals Key discussions
Strategy
Admission of the Company’s shares to Listing
Operational
Business Plan and Budget
Prudential Regulation Authority Recovery Plan
Financial
Half-year results
Q3 trading update
2023 Reforecast
Dividend Policy
Established the Audit Committee
Risk
Risk Management Framework
Principal and emerging risks
Group Risk Appetite
Established the Risk Committee
Governance
Relationship Agreement with the Helios Funds
Schedule of Matters Reserved for the Board
Workforce
Group Whistleblowing Policy Workforce engagement mechanism
HR Reports
Sustainability
B Corp Application
Board Composition
New Board appointments (NEDs)
Membership of Board Committees
Established the Nomination Committee
Reviewed Succession Plan
Remuneration
Directors Remuneration Policy Established the Remuneration Committee
81
Overview Strategic Report Governance AppendixFinancial Statements
Strategy and Business Model
At the time of the IPO, the Board
stated that the next phase of strategy
for the Group was to expand its
sales and delivery capacity to take
advantage of its market-leading
product and service offering.
Consequently, its agreed strategy
consists of:
• increasing transaction share with
existing clients;
• expanding and increasing the
geographical presence of its
salesteam;
• strengthening the Group’s core
offering;
• expanding global coverage to
24hours; and
• developing its major market bank
client segment.
Further information about the
strategy / Pages 18 to 25.
In preparation for the IPO, the Board
assessed the Group’s business case
and thereby confirmed the basis upon
which CAB Payments generates
and preserves value over the long
term (the business model can be
found on pages 16 and 17 of the
Strategic Report). In particular, the
opportunities for the future success
of the business were considered
by the Board and described in
the IPO prospectus along with an
assessment of the sustainability of
the Group’s business model. The
Group’s governance framework was
also developed ahead of the IPO
as set out in this Report. The Board
considers that this supports the
delivery of itsstrategy.
Operational Performance
The Board is responsible for ensuring
that the necessary resources are
in place for the Group to meet its
objectives and measure performance
against them. Review and approval of
the annual budget forms part of this
assessment, in addition to the Board’s
ongoing assessment of the Executive
Directors’ implementation of the
approved strategy. The Board has
reviewed the Budget and Business
Plan for 2024 which provides the
basis for the allocation of resources
and capital expenditure for the year.
Audit, Risk and Internal
Control
The Board is ultimately responsible
for the Group’s financial reporting, risk
management framework, compliance
with regulatory requirements and the
quality of its internal controls systems.
In fulfilling these responsibilities, it
is supported by the Audit and Risk
Committees. The terms of reference
of both Committees were reviewed
and upgraded prior to the Company’s
Admission to Listing to ensure that
they clearly reflected the full range
of responsibilities that audit and
risk committees in listed companies
would be expected to undertake,
and were aligned and coordinated
with each other’s terms of reference
and the terms of reference of other
Board Committees with a relevant
involvement in matters relating
to risks and controls. These terms
of reference are available on the
Company’swebsite
https://cabpayments.com/investors/
In anticipation of the IPO, the
membership of both the Audit
Committee and Risk Committee was
extended with Noël Harwerth and
Caroline Brown each being appointed
to both Committees. Having the
same members on both Committees
ensures that the level of overlap in
the discussions and decision-making
of each Committee is minimised and
coordination is optimised.
The experience of the Committee
members is as follows:
• Karen Jordan has an auditing
background and executive
experience in banking and asset
management. She qualified as a
Chartered Certified Accountant
in1992.
• Jennifer Johnson-Calari brings
over 37 years of financial services
experience across governance,
central banking, portfolio and risk
management and bank supervision.
• Noël Harwerth has experience
on audit committees of several
multinational boards, including
governmental agencies and
listedcompanies.
• Caroline Brown has over 20 years’
experience of chairing audit and risk
committees of listed businesses. She
is a Fellow of the Chartered Institute
of Management Accounting.
More information on the
experience and skills of Board
members / Pages 72 and 73.
Financial and Business Reporting
Corporate Governance Statement continued
CAB Payments Holdings plc | Annual Report and Accounts 202382
Risk and Internal Controls
The Group’s risk assessment
process and the way in which
significant business risks and
controls are managed is the collective
responsibility of the Board. Our activity
here is driven primarily by the Group’s
assessment of its principal risks and
uncertainties, as set out on pages 60
to 64.
Building on work undertaken
during the IPO, the Group continues
to enhance its internal control
environment.
Management is responsible for
establishing and maintaining adequate
internal controls over financial
reporting and the Board, supported
by the Audit and Risk Committees,
is responsible for ensuring the
effectiveness of thesecontrols.
Ahead of the IPO, an analysis of the
Group’s system of internal controls
and the risk management framework
was carried out both through internal
reviews and also with the assistance
of external advisers, as part of the
review of financial position and
prospects procedures. Actions to deal
with potential areas of concern that
were identified through this process
have been subject to scoping, review
and approval by the Audit Committee,
with the two remaining actions to be
resolved in 2024.
In accordance with the requirements
of the Code, the Board has reviewed
the Group’s ERMF and internal control
systems. No significant failings or
weaknesses were identified as a result
of the review.
Going Concern
After making enquiries, the Directors
have a reasonable expectation that
the Company and the Group have
adequate resources to continue in
operational existence for the twelve
months from the date of approval
of this Annual Report. Accordingly,
and consistent with the guidance
contained in the document titled
‘Guidance on Risk Management,
Internal Control and Related Financial
and Business Reporting’ published by
the FRC, they continue to adopt the
going concern basis in preparing the
annual financial statements.
83
Overview Strategic Report Governance AppendixFinancial Statements
Whistleblowing
The Board places great importance
on having arrangements in place
which mean that all employees
have confidence in speaking up
if they identify concerns, safe in
the knowledge that they will be
listened to and will suffer no reprisals
for raising those concerns. The
Board has delegated oversight
of the Group’s whistleblowing
policies and procedures to the Risk
Committee. Karen Jordan is the
Board’s appointed Whistleblowing
Champion. Details of the current
policy and procedures are set out in
the Group Whistleblowing Policy. All
employees undergo regular training
on whistleblowing and a report is
provided to the Board annually in
relation to incidents reported via the
Group’s whistleblowing arrangements
together with an assessment of the
effectiveness of those arrangements.
Stakeholder Engagement
During 2024 the Board will
continue to develop its approach
to the evaluation of stakeholder
considerations within the Board’s
decision-making process. Details of
how the Board has engaged with
stakeholder groups can be found in
the s172 Statement on pages 48
and 49.
Shareholders
Since Admission to the Main Market
of the London Stock Exchange, a
formal programme of engagement
with shareholders has been
developed. In October 2023, the
Board appointed J.P. Morgan
Cazenove, Barclays Bank PLC
and Canaccord Genuity Limited
as corporate brokers and has
established an Investor Relations
team who will facilitate feedback
to the Board as necessary on
shareholder issues.
Culture, Values and Purpose
Corporate Governance Statement continued
Mechanisms for Monitoring
and Assessing Culture
The Board is responsible for
monitoring and assessing culture and
ensuring that policy, practices and
behaviours throughout the business
are aligned with the Group’s purpose,
values and strategy. The Board
monitors employee morale and the
Group culture through Glass Door
reviews and employee surveys which
are regularly discussed with the Board
by the Group Head of HR.
New joiners to the Group, including
new Directors, complete a suite of
courses as a part of their induction
which not only provide up-to-date
guidance on regulatory requirements
but also includes sessions on fostering
and maintaining the right culture for
the business. This continues to be
supported for continuing employees
and Directors with regular updates
and training reviews.
The Board monitors employee morale
and the Group’s culture through
employee surveys and GlassDoor
reviews which are regularly discussed
with the Board by the Group Head
of HR to assess sentiment and
to identify areas that may need
development or additional focus to
align with the values that the Group
seeks to uphold.
Workforce Policies and
Practice
The Board is responsible for ensuring
workforce policies and practices are
consistent with the Group’s values
and support its long-term sustainable
success. The Board is responsible for
approving (including any changes to)
the Group’s major policies, including
those relating to the conduct of
business, regulatory compliance and
conduct, whistleblowing, modern
slavery and human trafficking, code
of ethics, financial crime prevention
and conflicts of interest, which will
be reviewed on an annual basis
goingforwards.
Workforce Engagement
The CAB Payments Executive team
engages with employees through
a wide range of channels including
regular anonymous workforce surveys
and regular townhall meetings for all
employees, with smaller focus groups
on specific issues.
The Directors understand the
importance of providing opportunities
for the workforce to engage with them
directly to provide feedback on the
employee experience. In 2024, the
Board will be launching a programme
to enable direct engagement with
the workforce through face-to-face
meetings for employee groups with
a nominated Non-executive Director,
Susanne Chishti. Details of the
workforce engagement programme
and any actions arising from this
programme will be reported in the
2024 Annual Report.
CAB Payments Holdings plc | Annual Report and Accounts 202384
The Executive Directors are in regular
contact with the largest investors,
meeting with shareholders following
the release of the Company’s
2023 half year announcement in
September 2023 and the updates
published in October 2023 and
January 2024 to discuss concerns
and receive feedback. The Chair is
available to speak with shareholders
on governance matters, as is the
Senior Independent Director.
Relationship Agreement
The Company’s principal
shareholders, Helios Investors III,
LP and Helios Investors III (A), LP
(together, the Helios Funds), each
acting by its general partner Helios
Investors GENPAR III, LP, have
entered into a relationship agreement
with the Company (the Relationship
Agreement). The Relationship
Agreement will for such time as the
individual or combined shareholdings
of the Helios Funds are greater than
or equal to 10%, regulate the ongoing
relationship between the Company
and the Helios Funds in particular
arrangements to ensure that the
Company is capable of carrying
on its business independently of
Helios and that transactions and
arrangements with the Helios Funds
are conducted at arm’s length and
on normal commercial terms. The
Board has also agreed procedures for
monitoring related party transactions
under Chapter 11 of the Listing Rules.
The Relationship Agreement complies
with the independence provisions
set out in Listing Rule 6.1.4DR for
controlled companies. Any new
contract with the Helios Funds will
require Board approval. The Helios
Funds have also undertaken not to
exercise their voting rights to amend
the Articles of Association in a way
which would be inconsistent with
the provisions of the Relationship
Agreement and to abstain from
voting on any resolution to approve a
related party transaction (as defined
in paragraph 11.1.5 R of the Listing
Rules) in which the Helios Funds
areinterested.
The independent Non-executive
Directors will annually review the
good standing of the Relationship
Agreement to ensure that they are
satisfied that the Company has
complied with the independence
provisions included in the
Relationship Agreement during the
relevant financial year.
As far as the Company is aware,
such provisions have been complied
with during the financial year ended
31December 2023 by Helios Funds.
Remuneration
The Directors’ Remuneration
Report is set out on pages 98
to 119 and provides details of
our Remuneration Policy and
how it has been implemented,
together with the activities of the
RemunerationCommittee.
AGM
The Company’s first AGM since IPO
will be held at 2.00pm on Thursday,
9 May 2024 at The News Building,
3 London Bridge Street, London
SE1 9SG.
The Board views the AGM as a
valuable opportunity to communicate
with private shareholders in
particular, for whom it provides the
opportunity to ask questions of the
Chair and, through her, the Chairs
of the key Committees and other
Directors.
To ensure transparent representation
of shareholder views, resolutions
at the 2024 AGM will be subject to
poll voting. This gives shareholders
the ability to vote directly on the
resolutions either in person at the
meeting, or by submitting their
proxy instructions to the Company’s
Registrar, Equiniti, in advance
ofthemeeting.
85
Overview Strategic Report Governance AppendixFinancial Statements
Nomination Committee Report
A focus on succession planning
Ann Cairns
Chair, Nomination Committee
Understanding key person
risk and establishing
succession planning is one of
the Committee’s main goals.
Committee membership
and attendance
Current members Attendance
Ann Cairns (Chair) 2/2
Susanne Chishti 2/2
Noël Harwerth 2/2
Mario Shiliashki 2/2
Role and Responsibilities
The Nomination Committee was established at
the start of 2023, with its primary objective being to
ensure that Non-executive Directors were recruited
who would together make up a strong, experienced,
and diverse Board. I am therefore delighted that we
were able to start our journey as a listed company
with such a strong and well-balanced team.
We have a Board which is able to bring together a
valuable blend of knowledge, experience and insight
to our discussions. We also have a Board that meets
all the current stakeholder expectations in relation
to the diversity of its composition.
Since its inception, the Nomination Committee
has also undertaken an initial review of the current
succession plans for the executive management
team, and we plan to spend more time focusing on
this area, including diverse representation within it,
during 2024.
CAB Payments Holdings plc | Annual Report and Accounts 202386
Key Duties
The terms of reference of the Nomination Committee, which were reviewed and approved
during the year, are available on the Company’s website at https://cabpayments.com/
investors/
In accordance with its terms of reference, the Nomination Committee’s key duties include:
• regularly reviewing the Board structure,
size and composition (including the skills,
knowledge, independence, experience and
diversity) and making recommendations
to the Board about suitable candidates for
the role of Senior Independent Director, and
membership of Committees, in consultation
with the Chairs of the relevant Committees;
• considering plans for orderly succession
on the Board and in the Group’s senior
leadership with a view to ensuring the
continued ability of the organisation to
compete in the marketplace; and
• leading the search process and making
recommendations to the Board for the
appointment of new Directors.
Board Composition and Succession
The Chair, Ann Cairns, and six independent
Non-executive Directors (myself and two others
being new to the Group) were appointed to the
Company’s Board in the first half of the year,
inanticipation of the Company’s IPO. TheCEO,
Bhairav Trivedi, the CFO, Richard Hallett and
Simon Poole, a NED appointed by Helios Funds,
were appointed to the Board in prior periods.
In February 2024 we announced that Neeraj
Kapur will succeed Bhairav Trivedi as CEO,
subject to regulatory approval. A robust search
and assessment process was carried out in
conjunction with executive search firm Sapphire
Partners. Bhairav will continue to represent the
Group as a Senior Adviser totheBoard.
Russell Reynolds Associates, Sapphire Partners
and Next Ventures Global Staffing Solutions
were retained to assist with the recruitment
of new Non-executive Directors during the
year and are each independent, with no
other connection to the Company; Russell
Reynolds Associates and Sapphire Partners are
signatories to the enhanced Voluntary Code of
Conduct for Executive Search Firms on diversity
and best practice.
A description of the skills and experience of
all of the Directors is set out on pages 72 and
73 of the Annual Report, demonstrating the
comprehensive range of collective experience in
the fintech and payments sector that they bring
to Board discussions. The Board members also
bring practical knowledge and understanding
of central banks and the legal and regulatory
frameworks within which the Group operates.
The Committee will keep the leadership needs
of the organisation, both the Executive and Non-
executive Directors, under review to underpin
the growth of the business.
87
Overview Strategic Report AppendixFinancial StatementsOverview Governance
Nomination Committee Report continued
Induction and development
Each of the Directors appointed during the year has been
briefed on CAB Payments’ operations and provided with
opportunities for individual briefings with each of the
members of the Executive Committee. In addition, the
Group’s legal advisers provided briefings for the Directors
on their legal duties and responsibilities as Directors of a
Main Market listed company. TheCompany Secretary will
also supply regular updates to the Directors on relevant
legal and corporate governance developments.
Election and re-election of Directors
The Directors will stand for election in accordance with the
provision of the Articles of Association of the Company
at the AGM and will be subject to annual re-election in
future years in compliance with the Code. The Nomination
Committee is satisfied that the contributions made by
the Directors offering themselves for election at the AGM
continue to benefit the Board and shareholders will
therefore be invited to support their election.
External directorships and Directors’
timecommitments
Significant time commitments of potential Directors are
considered before an appointment is formalised.
The Board believes, in principle, in the benefit of Executive
Directors accepting Non-executive directorships of other
companies in order to widen their skills and knowledge
for the benefit of the Group. All such appointments require
the prior approval of the Board and the number of public
company appointments is limited to one. The Executive
Directors have not held any such appointments since
the IPO.
The external time commitments of our NEDs has also
been considered and the Committee is confident that they
each have sufficient time available to meet their Board
responsibilities.
Performance Review
A review of the performance of the Committee will form
part of the Board Performance Review to be conducted in
the second half of 2024 and will take place on an annual
basis goingforward.
Succession Planning for Senior Executives
A key part of the Committee’s role is to maintain an
ongoing assessment of the senior leadership depth and
improve the effectiveness of the internal talent pipeline.
A review of the internal succession pipeline was
undertaken in the second half of 2023, with the aim of
enhancing visibility and awareness of leadership talent,
strengths and gaps, and this exercise will be revisited in
2024.
Board Diversity Policy
The Committee, the Board of Directors, and the Group
as a whole continue to pay full regard to the benefits of
diversity, including gender and ethnic diversity, when
searching for candidates for the Board, the executive
management team and all other appointments. We
believe that better business decisions can be made by
having representation from different genders and cultural
backgrounds with differing skill sets, experience and
knowledge which reflect our client base and the wider
population.
Diversity of Board members is important to provide
the necessary range of background experience, values
and diversity of thinking and perspectives to optimise
the decision-making process. Gender and ethnicity are
important aspects of diversity which the Chair and the
Committee will consider when deciding upon the most
appropriate composition of the Board and its Committees.
This policy and its effectiveness will be reviewed
annually by the Nomination Committee with any
changes recommended to the Board for its approval.
If necessary, this policy will be reviewed on an ad-hoc
basis in consideration of any regulatory or governance
developments in relation to Board diversity. At 31
December 2023, the Committee reports the Group’s
performance against the diversity targets set out in FCA
Listing Rule 9.8.6(9) and Listing Rule 14.3.33 below:
CAB Payments Holdings plc | Annual Report and Accounts 202388
Gender Identity or Sex
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
1
Number in
executive
management
2
Percentage
of executive
management
2
Number
in general
workforce
Percentage
of general
workforce
Men 4 40.0% 2 7 70.0% 197 60.2%
Women 6 60.0% 2 3 30.0% 130 39.8%
Not specified/prefer not to say - - - - - - -
Ethnic Background
Number
of Board
members
Percentage of
the Board
Number
of senior
positions on
the Board
1
Number in
executive
management
2
Percentage
of executive
management
2
Number
in general
workforce
Percentage
of general
workforce
White British or other White
(including minority White groups) 8 80.0% 3 9 90.0% 158 49.7%
Mixed/multiple ethnic groups - - - - - 15 4.7%
Asian/Asian British 1 10.0% 1 - - 70 22.0%
Black/African/Caribbean/Black
British - - - 1 10.0% 51 16.1%
Other ethnic group, including Arab 1 10.0% - - - 9 2.8%
Not specified/prefer not to say - - - - - 15 4.7%
Note
1 Chair, CEO, CFO and Senior Independent Director.
2 The Executive Committee including the Company Secretary but excluding administrative and support staff.
The Committee notes that the Group has achieved each of the targets set out in the relevant Listing Rules relating to the
Board, but not for Executive management.
The Board believes an inclusive and diverse membership results in optimal decision-making and assists in the
development and execution of a strategy which promotes the success of the Group in line with its overall cultural
expectations and for the benefit of its stakeholders and will continue to work towards more diverse representation at all
levels within the Group when opportunities arise.
Ann Cairns
Chair, Nomination Committee
25 March 2024
89
Overview Strategic Report Governance AppendixFinancial Statements
Audit Committee Report
Strengthening compliance
and governance
Karen Jordan
Chair, Audit Committee
The strength of our Audit
Committee ensures the
Group operates within clear
parameters and has solid
foundations upon which
to build.
Committee membership
and attendance
Current members Attendance
Karen Jordan (Chair) 3/3
Caroline Brown 3/3
Noël Harwerth 3/3
Jennifer Johnson-Calari 3/3
Key Responsibilities
In summary, the Committee’s responsibilities
include the following:
• monitoring and assessing the integrity of the
financial statements, formal announcements and
regulatory information in relation to the Group’s
financial performance, as well as significant
accounting judgements;
• reviewing the effectiveness of, and ensuring that
management has appropriate internal controls
over, financial reporting;
• reviewing management’s arrangements for
compliance with the PRA’s regulatory financial
reporting;
• reviewing and monitoring the relationship
with the external auditor and overseeing its
appointment, tenure, rotation, remuneration,
independence and engagement for non-audit
services; and
• overseeing the work of the outsourced Internal
Audit provision, monitoring and assessing
the effectiveness, performance, resourcing,
independence and standing of the function.
The terms of reference for the Audit Committee
areavailable on the Company’s website
https://cabpayments.com/investors/
CAB Payments Holdings plc | Annual Report and Accounts 202390
The Audit Committee (and its predecessor,
the Audit and Risk Committee) has been
in place within the Group for a number of
years and, therefore, much of the work of the
Committee was, in reality, ongoing before the
IPO. Nevertheless, the Audit Committee took
on additional responsibilities both as part of
the preparations for listing and on an ongoing
basis once the Company became a listed entity,
including oversight of change and transformation
programmes to enhance the Group’s internal
controls over financial reporting ahead of the
application for listing.
Building on the work undertaken during
the IPO, the Group continues to enhance its
internal control environment. The Committee
reviewed the effectiveness of the internal control
environment during the period under review and
concluded that the framework was satisfactory.
The constitution and composition of the Audit
Committee itself was also reconfigured during
the IPO process to ensure that it is well-placed to
fulfil all the responsibilities expected of an audit
committee in a listed company.
The Audit Committee has paid particular
attention during the year to the levels of
non-audit services provided to the Group
by the external auditor, Mazars LLP. The
financial reporting and associated disclosures
provided by any company to the market when
approaching an IPO are extensive and the
Committee considered it to be efficient to use
the external auditor to provide these services
due to its existing understanding of the Group.
The relatively high level of non-audit services
undertaken by the external auditor during the
year are services that auditors would usually
undertake in support of an IPO. However, as
a Committee, we expect the level of non-audit
work undertaken by Mazars LLP to return to
much lower and proportionate levels in 2024.
Our priorities during the period since the IPO
have been:
• to oversee the work of the Group Finance
team’s arrangements for the additional
financial reporting requirements of a listed
company;
• to engage with and monitor the work of
Mazars as the Group’s external auditor in
relation to the Company’s half-year and full-
year reporting;
• to continue to oversee the ongoing work of the
internal audit function, including monitoring
the selection process for a new internal audit
service provider for 2024; and
• the Committee has also overseen the actions
underway within the Finance team and the
external auditor to develop the effectiveness
of the financial reporting and external audit
process.
After each Committee meeting, which takes
place approximately once every two months, I
update the Board on the Committee’s activities
and flag any issues that require the Board’s
attention. I also have regular meetings with the
CFO, the external audit lead partner and the lead
partner for our outsourced internal audit function.
On behalf of the Audit Committee, I would
like to thank everyone involved for their hard
work during and since the IPO, especially the
Finance team. I look forward to meeting with
shareholders at the AGM and answering any
questions they may have about the work of
theCommittee.
Karen Jordan
Chair, Audit Committee
25 March 2024
91
Overview Strategic Report AppendixFinancial StatementsOverview Governance
Audit Committee Report continued
Significant Issues and Other
Accounting Judgements
The critical accounting assumptions and key sources of
estimation uncertainty considered by the Audit Committee
in relation to the Annual Report and Accounts 2023
are outlined below and in more detail in Note 2 to the
Financial Statements. Furthermore, the Audit Committee
also considered the going concern statement set out on
page 66 and discussed these with the external auditor
during the year and, where appropriate, these have been
addressed as areas of audit focus as outlined in the
Independent Auditor’s Report on pages 128 to 136.
Management override of controls
The Audit Committee is aware of the risk that management
overrides the controls environment that is in place in
order to misrepresent performance of the business. The
effectiveness of internal controls is monitored by the Audit
Committee both directly and through the continuing internal
audit work undertaken by BDO during the period.
The Committee is aware that International Accounting
Standards require the external auditor to presume risk of
fraud in respect of management override of controls; this
will dovetail with oversight work undertaken on an ongoing
basis by management and the internal audit team.
Completeness and accuracy of Expected
Credit Losses (ECL)
Credit risk is an inherently judgemental area due to the use
of subjective assumptions and a high degree of estimation.
The Audit Committee understands that the impairment
provision relating to the Group’s loans and advances
portfolio, including undrawn commitments, requires
management to make judgements over the ability of the
Group’s debtors to make future repayments.
Work has been undertaken during the period under review
on the potential impact of adverse economic conditions, the
implementation of IFRS9 and to increase precision around
the precise risks with ECL and the Committee receives
regular reports and presentations from management on
how procedures are implemented and monitored.
Revenue recognition
The Committee is mindful of the increased risk that
heightened focus on revenue post-IPO could increase risks
around revenue recognition. Theoversight framework
supporting the accuracy of adjustments is monitored
internally and general IT controls, including access controls,
change management and segregation of duties within core
systems have been the focus of significant management
time in the preparations for IPO and in the period since.
Fair, Balanced and Understandable
The Audit Committee has undertaken a careful review to ensure that the Annual Report is fair, balanced and
understandable and provides the necessary information for shareholders to assess the Group’s consolidated
position, performance, business model and strategy.
The Committee and other Board members were consulted at various stages of the drafting of the Annual
Report, as well as having the opportunity to review the Annual Report as a whole. In forming its opinion and
recommendation to the Board in respect of the above matters, we assessed the following:
• A qualitative review of disclosures and a review of
internal consistency throughout the Annual Report
and Accounts;
• A review by the Committee of all material matters,
as reported elsewhere in this Annual Report and
Accounts;
• A review of the ESG disclosures;
• A risk comparison review, which assesses the
consistency of the presentation of risks, and
significant judgements throughout the main
areas of risk disclosure in this Annual Report
and Accounts; and
• Ensuring it correctly reflects:
– the Group’s position and performance as
described on pages 2 to 15 and 50 to 54;
– the Group’s business model, as described
on pages 16 and 17; and
– the Group’s strategy, as described on
pages 18 to 25.
On the basis of this work, the Committee
recommended, and in turn the Board confirmed, that
it could make the required statement that the Annual
Report is fair, balanced and understandable.
CAB Payments Holdings plc | Annual Report and Accounts 202392
Additional Areas of Financial Statement Risk
Impairment reviews
The Committee receives regular updates on the assessment
of goodwill, intangible assets, investments in subsidiaries
for impairment and appropriateness of going concern
insofar as the assessments reflect management’s best
estimate of the future cash flows of the business and the
rates used to discount the cashflows, both of which are
subject to uncertainty factors.
Non-recurring expenses
The Committee reviews management’s determination
of certain expenses to be non-recurring. Management’s
assessments of the nature, timing and frequency of
the events giving rise to certain expenses is based on
judgement when applying the Group’s accounting policy
and the Committee monitors those applications in order to
ensure the presentation of such items remains transparent
and understandable.
IT controls environment
The Committee monitors the Group’s IT controls
environment on an ongoing basis, in particular given the
critical nature of the financial and operating processes of
the Group.
Share-based payments
The Committee is aware that the process of calculating
share-based payments involves estimation and judgements
which may result in the risk of material misstatement and
maintains oversight of this process and the use of external
specialists.
Internal Audit
The Audit Committee is responsible for reviewing and
approving the role and mandate of the Group’s internal
audit function, and monitoring and reviewing the
effectiveness of its work. BDO was the provider of internal
audit services during 2023. The 2023 Internal Audit Plan
was approved in November 2022 and revised during the
year following the IPO. A high-level plan for 2024 was
approved in November 2023.
The Audit Committee reviewed BDO’s planned scope for
each of its reviews and its reports on the outcomes of each
review as well as monitoring progress in the implementation
of the internal audit findings.
Towards the end of the year, the Audit Committee put
the internal audit mandate out to tender and, as a result,
Grant Thornton has been appointed as CAB Payments’
outsourced internal audit provider with effect from January
2024. The Audit Committee will continue to provide
oversight of the transition from BDO to Grant Thornton
during early 2024.
Going Concern and Viability Statements
The Audit Committee reviewed the Group’s longer-term
viability statement, set out on pages 65 and 66. To do this,
it ensured that the financial model used was consistent with
the approved three-year Corporate Plan and that scenario
and sensitivity testing aligned clearly with the Principal
Risks and Uncertainties of the Group as described on pages
60 to 64.
Committee members challenged the underlying
assumptions used and reviewed the results of the detailed
work performed. As a result, the Audit Committee members
were satisfied that the analysis supporting the viability
statement had been prepared on an appropriate basis.
The Audit Committee also reviewed the going concern
statement, set out on page 66 and confirmed its
satisfaction with the testing methodology.
ESG and Climate Change Disclosures
The Committee, supported by the ESG Board Sub-
committee, provided oversight of the disclosure risks in
relation to ESG and climate reporting. The Committee
monitored developments from a number of prominent
consultations and considered them when reviewing the
climate disclosures in this Annual Report, requesting
further details on the pipeline of mandatory regulatory
and externally committed ESG and climate-related
disclosures over the short- and medium term, including the
delivery status. This allowed the Committee to consider
management’s development of a Group-specific framework
to fulfil external disclosure requirements andcommitments.
ESG reporting is fast evolving with few globally consistent
reporting standards and a high reliance on external data.
By aligning the Group’s ESG targets and reporting with the
UN Sustainable Development Goals, attaining B Corp status
and seeking the external audit of certain ESG disclosures,
the Committee is assured that ESG and climate disclosures
were materially accurate, consistent, fair and balanced
during the year.
93
Overview Strategic Report Governance AppendixFinancial Statements
Committee Effectiveness
The Audit Committee evaluates its performance on an
annual basis. This year, the assessment was facilitated
using a questionnaire completed by members of the
Committee and other regular attendees. The results of the
review were reported to the Board. Common membership
across the Risk and Audit Committees facilitates effective
communication on topics such as finance and risk while
ensuring that agendas are aligned, and duplication is
avoided. One area highlighted as requiring ongoing focus
is the updating of the Committee members on regulatory,
accounting, corporate governance and financial reporting
developments. The Committee received several briefings
during the year from external advisers on topics including
listed company reporting requirements and the audit reform
agenda. Members of the Committee also interacted with
key employees during the year to increase their knowledge
and understanding ofthebusiness.
External Audit
The Audit Committee oversees the Company’s relationship
with, and the performance of, the external auditor. This
includes responsibility for monitoring its independence,
objectivity and compliance with the relevant regulatory
requirements.
Appointment and tenure
Mazars LLP has been the Group’s external auditor for
three years. The Company’s approach is for no external
auditor to stay in post for longer than 20 years and for
tender exercises to be undertaken at least every ten years,
accordingly the next audit tender will take place no later
than 2031.
The Committee notes and confirms compliance with the
Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order
2014 (the CMA Order) in respect of statutory audit services
for FTSE350 companies. In line with the CMA Order, Mazars
LLP was selected in 2021 following a tender process on the
basis of the capability that the firm was able to offer and
its fees.
There are no contractual obligations in existence that
restrict the Company’s choice of external auditor.
Effectiveness
The Audit Committee has assessed the performance
of Mazars LLP on an ongoing basis, with particular
attention to the mindset and culture, skills, character and
knowledge, quality control and judgement in its handling
of key judgements, its responsiveness to the Committee
and its commentary, where appropriate, on the systems of
internal control. Itconcluded that while it has continued to
perform in line with the Committee’s expectations, some
areas have been highlighted where audit efficiency can be
enhanced. Mazars LLP’s reappointment will be proposed to
shareholders at the AGM.
The Audit Committee held private sessions with both the
internal and external auditor on a regular basis during the
year, without Executive Directors or senior management
in attendance. This facilitates the ability of the auditors to
raise any issues ofconcern.
Audit Committee Report continued
CAB Payments Holdings plc | Annual Report and Accounts 202394
Independence and objectivity
The Audit Committee ensures adequate safeguards are in
place to ensure the independence of the external auditor.
These include:
• non-audit work is subject to the policy detailed below
and the non-audit team does not prepare anything which
would be relied upon in the Group audit;
• work performed is subject to an independent professional
standards review and Engagement Quality Control
Review process;
• the Audit Committee considers the reappointment of
the external auditor, including the rotation of the audit
partner, annually; and
• the external auditor attests its independence and
objectivity to the Audit Committee on an annualbasis.
As part of the engagement process forthe 2023 external
audit, Mazars LLP has confirmed that its engagement team
and others in the firm as appropriate are independent and
comply with relevant professional ethical requirements. In
giving its approval for all non-audit services, including audit-
related services, provided by Mazars LLP totheCompany
during the year, theAuditCommittee satisfied itself that
the provision of such services was not a threat and that
appropriate safeguards were in place topreserve the
auditor’s independence andobjectivity.
Non-audit work
The Group has a formal policy on the use of the external
auditor for non-audit work, which is reviewed annually.
The policy stipulates that non-audit work should only
be awarded to the external auditor when there is clear
reason to prefer it over alternative suppliers, following a
rigorous procurement process. Allawards of non-audit
work to the external auditor are monitored to ensure
that their independence, andperceived independence,
arenotcompromised.
The Audit Committee must approve in advance any award
of non-audit work with an aggregate value in excess of
£50,000. The Chair of the Audit Committee must approve
any non-audit work with an aggregate value of£25,001
to £50,000.
Mazar LLP’s fees for non-audit work during the year were
£1.57 million (2022: £0.05 million).
During 2023, Mazars LLP provided the following non-
audit service to the Group. This was considered to be
a permissible non-audit service. Mazars LLP provided
personal taxations services to a Director before the date
the Director joined the Company and briefly after while
they were disengaged. Although the Committee considered
that appropriate safeguards were in place to manage this
potential threat to independence, the services have been
discontinued.
Service Fees (£000’s)
Reporting Accountants Non-Audit Service Engagement to CPH plc between December 2022 and July 2023 in
connection with the IPO. 825
ISRE (UK) 2410 review engagement on interim financial information in respect of fulfilling the Reporting Accountants
engagement for CPH plc for the three-month period to 31 March 2023 300
ISRE (UK) 2410 review engagement on interim financial information of CPH plc for the six-month period to 30 June
2023 370
Profit verification engagements for CPH plc and CAB Limited (subsidiary) for the six-month period to 30 June 2023 73
Total 1,568
In addition to the fees noted above Mazars charged an additional 1.5/2% to cover the administration costs of the service
provided.
95
Overview Strategic Report Governance AppendixFinancial Statements
Risk Committee Report
Reviewing internal controls
and risk management
Jennifer Johnson-Calari
Chair, Risk Committee
I am pleased to present the Risk
Committee’s report for the year
ended 31 December 2023. I have
chaired the Risk Committee since
2021, which now comprises
four independent Non-executive
Directors with extensive
experience in board governance,
international banking, risk
management, auditing and bank
supervision and regulation.
Committee membership
and attendance
Current members Attendance
Jennifer Johnson-Calari (Chair) 3/3
Caroline Brown 3/3
Noël Harwerth 3/3
Karen Jordan 3/3
Role and Responsibilities
The role of the Risk Committee is to advise the
Board (which retains overall responsibility for risk
management) on, among other things:
• the overall risk appetite, tolerance and strategy,
and the principal and emerging risks the Group
is willing to take in order to achieve its long-term
strategic objectives;
• seek assurance on the risks the Group has
identified as those to which the business may
beexposed;
• the likelihood and the impact of principal
risks materialising, and the management and
mitigation of principal risks to reduce the
likelihood of their incidence or their impact;
• overseeing the Group’s policies, procedures and
arrangements for capturing and responding to
whistleblower concerns and ensuring they are
operating effectively; and
• the risk aspects of proposed changes to strategy,
strategic transactions, and new products, ensuring
that a due diligence appraisal of the proposition is
undertaken, focusing in particular on implications
for the risk appetite, tolerance and strategy of the
Group, and taking independent external advice
where appropriate and available.
The terms of reference for the Risk Committee are
available on the Company’s website
https://cabpayments.com/investors/
The CRO has a dual reporting line to the CEO and also
to the Committee Chair, which helps foster regular and
transparent communication andindependence of the
CROfunction.
Our main subsidiary CAB is an established UK Bank,
which is regulated by both the FCA and the PRA. The
Group has therefore had a well-established Audit
and Risk Committee in place for many years and
this was split into two separate committees in 2021
to provide even greater scrutiny over the integrity of
financial reporting and financial/operational resilience,
respectively.
CAB Payments Holdings plc | Annual Report and Accounts 202396
Over the past few years, the Group’s risk
management and compliance frameworks
have been substantially strengthened and
continue to undergo improvement in the face of
evolving business requirements, regulatory and
marketchanges.
2023 was a challenging year for markets due
to sharply rising interest rates to combat global
inflationary pressures and geopolitical tensions,
which resulted also in a marked expansion of
sanctions regimes. The Group continued to
scale its operations with steady growth in the
level of payments and FX transactions. The Risk
Committee thus paid particular attention during
the year to the effectiveness and adequacy of
resources, both systems and people, to ensure
operational resilience and compliance with
Anti-Money Laundering and Sanctions regimes -
afocus that will continue in 2024.
Conduct also falls within the remit of the Risk
Committee. In this regard, the Board appointed
Committee member Karen Jordan as Board
champion for Group obligations for ‘Consumer
Duty’ to retail clients. In addition, the Risk
Committee oversaw the strengthening of
policies and practices relating to Anti-Bribery
and Corruption as well as strengthening
documentation around denial of banking
services in response to FCA concerns and
reporting requirements. The Risk Committee has
an ongoing oversight on the Group’s conduct
relating to any whistleblowing claims and the
Group’s Whistleblowing Champion, Karen Jordan,
is a member of the Risk Committee.
At each meeting, the CRO provides the Risk
Committee with a comprehensive overview of
all principal risks, highlighting emerging areas of
concern for discussion and, if necessary, follow-
up. The MLRO reports to the Risk Committee on
key financial crime matters including compliance
with sanctions regimes and governing laws
and regulations to combat financial crime. Both
the CRO and MLRO undertake deep dives
into topical issues, which in 2023 included
compliance with the Russia sanctions regime,
operational and technology resilience and
business concentration risk. InNovember 2023,
the Risk Committee approved the Group’s
Strategic Risk Register, which ranks risks based
on probability and potential impact as set out in
the Principal Risks and Uncertainties on pages
60 to 64 of this Annual Report and Accounts,
and which will help guide the Committee’s
2024agenda.
The Risk Committee relies heavily on the
professionalism, capabilities and technical
expertise of the second line Risk and Compliance
functions. This team has continued to grow, and
I remain confident in the expertise that it brings
to bear across the assessment of principal and
emerging risks. We have also sought assurance
that the appropriate funding is in place as part
of the 2024 budget to continue investing in risk
and control capabilities as the Group continues
to expand operations and improve its operational
and technology capacity.
Looking forward, the Group plans to continue
expanding by opening offices in the Netherlands
and the US, which will entail new challenges
in ensuring compliance with local laws and
regulations, managing a greater number of
clients and transactions, vetting new products
and coordinating with stakeholders in our key
markets. In addition to our regulatory obligations,
the Committee’s focus in the coming year will be
to continue to ensure that the IT and operational
platform can accommodate new business
growth, that our operations overseas comply
with local laws and regulations and that the Risk
and Control functions are adequately resourced.
As Chair, I remain dependent upon, and grateful
for, the professionalism and expertise of my
colleagues on the Committee and the Group’s
senior managers with whom we meet regularly
to discuss business development and risk
mitigation. I also would like to thank senior staff,
who have provided us with outstanding ‘teach-
ins’ on some of the technical complexities of
the areas for which we are responsible. I look
forward to meeting the shareholders at the AGM
and responding to any questions or concerns.
Jennifer Johnson-Calari
Chair, Risk Committee
25 March 2024
97
Overview Strategic Report Governance AppendixFinancial StatementsOverview
Committee membership
and attendance
Current members Attendance
Noël Harwerth (Chair) 2/2
Caroline Brown 2/2
Ann Cairns 2/2
Mario Shiliashki 2/2
Directors’ Remuneration Report
Aligning reward with
performance
Noël Harwerth
Chair, Remuneration Committee
As Chair of the Remuneration
Committee of CAB Payments,
Iam pleased to present our first
Directors’ Remuneration Report
(DRR) since our Admission to
Listing on6July2023. I would
like to take this opportunity
to welcome all our new
shareholders.
The new Remuneration Committee has given careful
consideration to a remuneration policy which offers
market competitive remuneration for the achievement
of stretching performance objectives measured both
annually and long-term. We will ensure that pay is closely
linked to the business strategy and generates a strong
alignment of interest with all our stakeholders.
This report is divided into three sections:
• This Annual Statement, which summarises the work of
the Committee, our approach to Directors’ remuneration
in the context of the Group’s performance and our wider
workforce policies;
• The Directors’ Remuneration Policy (the Policy) section,
which details the framework under which Directors’ pay
will be set and how it links to strategy. This section will
be put to shareholders under a binding shareholder vote
at our AGM; and
• The Annual Report on Remuneration, which sets out the
remuneration outcomes for 2023, including the period
prior to Admission, and how the Committee intends to
implement the new Policy in 2024.
CAB Payments Holdings plc | Annual Report and Accounts 202398 CAB Payments Holdings plc | Annual Report and Accounts 202398
Background and Role of the
Remuneration Committee
The Remuneration Committee was established
shortly before Admission. Prior to Admission,
the Company had a different remuneration
committee, which was composed of
Non-executive Directors of the pre-IPO
business. In developing the new Policy,
atransitional process was followed between the
former committee and the current Committee.
Mario Shiliashki provided continuity in this
regard, as he previously chaired the pre-IPO
committee, and other members of the new
Committee also attended meetings throughout
the process.
The Committee comprises Noël Harwerth
(Chair), Caroline Brown and Mario Shiliashki,
all of whom are independent Non-executive
Directors and Ann Cairns, the Chair of the
Board. The full terms of reference of the
Committee are available on the Company’s
corporate website at https://cabpayments.
com/investors/. In summary, the Committee’s
responsibilities areas follows:
• To develop the Group’s policy on executive
remuneration and monitor its ongoing
appropriateness and effectiveness;
• To determine the levels of remuneration for
the Executive Directors, senior management
and the Chair of the Board (ensuring that no
individual is involved in any decisions relating
to their own remuneration outcome);
• Oversee the remuneration policies and
practices of our wider workforce and
ensure that our policy for the senior team
isconsistently structured;
• Ensure that any applicable regulations,
whether connected to our status as a
regulated bank or as a listed company more
generally are followed proportionately; and
• Oversee the operation of the Company’s
shareschemes.
Market Context
2023 was a milestone year for CAB Payments.
Following our successful listing on the London
Stock Exchange, we were disappointed not
to meet market expectations in respect of our
financial performance following listing, which
resulted in our share price falling significantly
inthe months after listing.
Nonetheless, 2023 was a record year for the
Group, delivering our highest ever income result,
record adjusted EBITDA performance and a
market leading free cash flow margin. These are
very important financial KPIs for us. Our highest
ever results across all three of these metrics
demonstrate that, notwithstanding the lower
than expected results, we have a very robust
underlying business, with considerable scope
forfuture growth opportunities.
The Remuneration Committee has carefully
considered the challenges ahead and the
Group’s strategic priorities around controlled
income growth and diversification. Our strategy
is closely reflected in the scorecard that will be
used for measuring annual bonus performance
in 2024, detailed further below.
Remuneration Payable in Respect
ofFY23
As the Company listed part-way through
the financial year, a transitional process was
followed in relation to remuneration for the
period ended 31 December 2023. In summary,
this meant that certain changes to policy
(primarily positioning base salaries for the
Executive Directors and the adoption of the
Long-Term Incentive Plan (LTIP)) were made on
our Admission to Listing, whilst certain changes
(mainly the adoption of a revised Annual Bonus
framework) will be fully embedded from 1
January 2024 onwards.
The Single Figure of Remuneration payable for
the period ended 31 December 2023 shown in
this Report is based on the 2023 financial year
and therefore also covers the period before
Admission on 6 July 2023. The base salary,
benefits, pension and bonus are the amounts
payable over the full 2023 financial year.
Overview Strategic Report Governance AppendixFinancial Statements
99
Overview
The structure of the annual bonus for the 2023 financial year
was unaffected by Admission to Listing and was assessed
based half on financial metrics (gross income and adjusted
EBITDA margin) and half on a basket of non-financial
metrics (including risk, product and other metrics). As the
bonus metrics were set in the context of the Company being
unlisted at the start of the year, the targets were set as
binary rather than operating sliding scales (which will be the
case from 2024).
Despite growth in both gross income and adjusted EBITDA
margin, the performance against both these metrics fell
short of the targets set, and so no bonus was payable
to the Executive Directors under the financial elements.
Under the non-financial elements, we met the targets
in all areas. For example, we were extremely proud to
achieve the milestone B Corp certification, ran a very
successful recruitment campaign to position ourselves
for our current and future growth, successfully achieved
the launch of our new Liquidity as a Service product, and
operated within the banking risk parameters set by the
Risk Committee. The Remuneration Committee exercised
its discretion in relation to the annual bonus outcomes
for 2023 for the Executive Directors to reflect shareholder
experience following the Admission to Listing and applied
a 10% reduction to the formulaic bonus scorecard outcome
set out on page 114, reducing the 2023 bonus for both
Executive Directors from the formulaic outcome of 50% of
the maximum opportunity to a discretionary outcome of
45% of the maximum opportunity.
Accordingly, the Remuneration Committee is satisfied
that the remuneration payable to the Executive Directors
in relation to 2023 performance appropriately reflects the
underlying performance of the business against our core
strategic priorities over the period, balanced against the
shareholder experience since listing.
There were no long-term incentive awards outstanding as
at the date ofAdmission to Listing.
Overview of Directors’ Remuneration Policy
In anticipation of the Company’s Admission, a review
of the pre-Admission remuneration arrangements was
undertaken, with particular attention on how the listing
would impact remuneration policies for the Executive
Directors and senior executive team. Careful consideration
was given as to how to structure the post-Admission to
Listing Policy to ensure it would continue to be supportive
of the Group’s strategy while also being appropriately
aligned to PLC market practice, regulatory requirements
as a dual-regulated business within the financial services
sector, and corporate governance requirements. In
addition, the Code requirements of clarity, simplicity, risk,
predictability, proportionality and alignment to culture
were taken into account during the design to ensure the
policy would promote the long-term success of the Group.
The policy is designed to provide market competitive
remuneration for the achievement of stretching targets,
with incentives aligned to the long-term business strategy
and a significant proportion deliverable in shares which
must be held long-term.
The Remuneration Committee encourages an open
and transparent dialogue with our shareholders on
executive pay matters and as such towards the end of
FY23, Ireached out to the majority of our shareholders
to introduce myself as Remuneration Committee Chair
and provide an overview of our new Policy. In particular,
Iwished to provide reassurance to our shareholders
that, notwithstanding the fall in our share price in the
months following Admission to Listing, the Remuneration
Committee believes that the Policy is fit for purpose for the
strong underlying business that we have confidence in.
The Committee will give careful consideration to the
measures and targets used to assess variable pay
outcomes under the policy. We shall ensure that variable
pay outcomes reflect the shareholder experience, and that
the metrics and targets are closely aligned to our strategy,
which in turn will drive the restoration of underlying
shareholder value.
Full details on the Policy are set out pages 102 to 112 and
this will be put forward for shareholder approval at the
Company’s AGM on 9 May 2024.
Admission LTIP awards
On 11 July 2023, the Executive Directors were granted
the first performance share awards under the LTIP (the
Admission LTIP awards), equivalent to 150% of salary for the
CEO and 130% of salary for the CFO using the Admission
share price of 335.0 pence to determine the number of shares
granted. Vesting of the Admission LTIP awards is conditional
on the achievement of stretching adjusted Earnings Per
Share (EPS) targets (for 67% of the award) and our Total
Shareholder Return (TSR) compared to the companies in the
FTSE 250 Index excluding investment trusts at Admission (for
the other 33% of the award). EPS provides a focus on profit
growth whilst TSR will provide a focus on share price and
dividend growth and delivering shareholder value.
The target range for adjusted EPS requires the Company’s
adjusted EPS to be 37.2 pence for the financial year
ending 31 December 2025 for threshold vesting and 48.9
pence or more for maximum vesting. Straight-line vesting
occurs between these two targets. The TSR performance
condition will be measured from the share price at
Admission until 31December 2025. The target range
requires median to upper quartile performance against the
peer group for threshold and maximum vesting. Shares
from vested awards are required to be held for a further
twoyears.
Directors’ Remuneration Report continued
CAB Payments Holdings plc | Annual Report and Accounts 2023100
Operation of the Policy inFY24
The Policy set out in this DRR and the implementation of the Policy
for FY24 are consistent with the disclosure in the IPO Prospectus.
An overview of the remuneration arrangements for FY24 is set
outbelow:
• Salaries on Admission were set at £675,000 for the
CEO and £450,000 for the CFO and these will remain
unchanged for FY24.
• Pension provision for our Executive Directors is aligned to
the rate applicable to the UK workforce (currently up to
10% of salary).
• The maximum annual bonus opportunity is 150% of
salary for the CEO and 130% of salary for the CFO. One
third of any bonus earned, post-tax, will be used to buy
Company shares which must be held by the executive for
three years. The performance conditions for FY24 will be
based on a blend of financial metrics (60% of the total)
and clearly measurable non-financial metrics (40%). More
specifically, the financial metrics will be gross income
growth (30%), adjusted EBITDA margin (15%) and free
cash flow (15%). Our non-financial metrics will comprise
a range of diversification measures – representing 25% of
the total bonus - (principally product, currency and income
diversification), together with employee and ESG metrics.
• LTIP awards will be granted to Executive Directors in FY24.
However, the Remuneration Committee has decided to
slightly delay the grant of the FY24 award, so as to ensure
that the award levels made and the performance targets
set are truly reflective of our long-term financial forecasts
and strategy. It is currently the intention that the metrics
used will remain a blend of EPS and relative TSR. Full
details of the level of grants and performance conditions
applying will be provided when the grants are made.
• At the time of performance assessment, the Committee
will have discretion to adjust the formulaic annual bonus
outturn or vesting level under the LTIP if it believes that
such outcome is not a fair and accurate reflection of wider
performance factors and/or stakeholder experience.
• Malus and clawback provisions will also apply for a
minimum period of three years following any incentive
payment. Further details on the circumstances in which
they apply can be found within the Policy.
• A shareholding requirement of 200% of salary applies
in-service and this continues to apply for two-years
post-cessation of employment. Both the CEO and CFO
hold significantly in excess of this shareholding requirement
already creating a strong alignment of interest between
Executive Directors and shareholders.
On 23 February 2024 we announced that Bhairav Trivedi,
CEO, will be succeeded by Neeraj Kapur following publication
of the Full Year 2023 Results on 26 March 2024. Bhairav will
support a smooth transition of responsibilities to Neeraj and
has agreed to then take on a new role within the Group as
Senior Adviser to the Board. Bhairav will continue to receive
his salary and benefits and is eligible to participate in an
incentive plan for 2024 connected to his new role. Neeraj’s
remuneration arrangements are set out above relating to the
operation of the Policy in 2024.
Broader Workforce Arrangements
Across CABPayments
In determining the Executive Directors’ Policy, the pay and
benefits for the wider workforce were taken into account
to ensure alignment of culture and reward throughout the
business. The new Policy has been cascaded below Board
with the Executive Committee and other senior grades of
management also participating in the annual bonus and LTIP.
All employees participate in the annual bonus plan.
The Remuneration Committee was pleased to approve the
grant of an award of 1,000 free shares under the Share
Incentive Plan to eligible employees (defined as those in
continuous service since 6 July 2023) in March 2024. This
will give eligible employees the opportunity to become
shareholders in the Company and share in futuresuccess.
UK regulations require companies with more than 250 UK
employees to report their gender pay gap. This is the first
year for which the Group has been required to report the
gender pay gap and the Group will publish its report at the
snapshot date of 5 April 2023 in full on the gender pay gap
service website https://gender-pay-gap.service.gov.uk/ by
4 April 2024.
As part of our journey to create a truly inclusive culture,
in 2021 CAB became a signatory of the HM Treasury’s
Women in Finance Charter. By signing up to the Charter we
are making a commitment to promote gender diversity and
support the progression of women in our industry. Further
details of our gender diversity and progress towards our
Women in Finance targets are set out on page 36 of this
Report.
On behalf of the Committee thank you for reading this report
and we hope that you will be supportive of the pay-related
resolutions at the AGM on 9 May 2024. We would encourage
any shareholders wishing to discuss any remuneration-
related matters to reach out to me and I will be delighted to
engage with you.
Noël Harwerth
Chair, Remuneration Committee
25 March 2024
Overview Strategic Report Governance AppendixFinancial Statements
101
Executive Director Remuneration at a Glance
Performance snapshot
Share ownership
1
Shareholding guideline
Bhairav Trivedi
Richard Hallett
2
0% 100% 200% 300% 400% 500% 600% 700% 800%
200%
367%
738%
Note:
1 Snapshot shown as at 31 December 2023. The closing share price on 29 December 2023 was 82.8 pence.
2 Further to the above, Richard Hallett increased his shareholding to 376% through purchasing 50,000 shares on 16 January 2024.
Overview of the Policy
CEO
Bhairav Trivedi
CFO
Richard Hallett
Base Salary £675,000 £450,000
Pension and ancillary
benefits
Pension contributions are in line with the wider workforce (currently up to 10% of base salary)
which may be taken as a cash allowance in lieu of pension. Benefits comprise medical insurance,
income protection and life assurance cover.
Annual bonus plan • Maximum: 150% of base salary
• Target: 75% of base salary
• Maximum: 130% of base salary
• Target: 65% of base salary
Performance scorecard for 2024:
• Financial performance conditions (60%), comprising gross income (30%), adjusted EBITDA (15%)
and free cash flow (15%)
• Non-financial performance conditions (40%), comprising product, currency and income
diversification (25%), employee metrics (10%) and ESG (5%)
• Structure: one third of the post-tax bonus will be used to purchase shares which must be held for
three years, the remaining two-thirds will be paid in cash
Long Term Incentive Plan • Maximum grant level: 150% of base salary • Maximum grant level: 130% of base salary
• Structure: three-year performance period and two-year holding period
Minimum shareholding
requirement
• In-employment: 200% of base salary
• Post-employment: 200% of base salary to be held for two years.
Directors’ Remuneration Policy
This section sets out the Company’s first Policy which has been prepared in accordance with the Companies Act 2006,
Schedule 8 of the Large and Medium-sized Companies and Groups (Accountsand Reports) Regulations 2008 (as amended
by the 2018 and 2019 regulations) and the Listing Rules. This Policy will be subject to a binding shareholder vote at the
AGM on Thursday, 9 May 2024 and, subject to shareholder approval, is intended to apply for a period of up to three years
from that date. The Policy as set out inthis section is consistent with the information provided in the prospectus published
on27June 2023 in relation to Listing on the London Stock Exchange.
Directors’ Remuneration Report continued
CAB Payments Holdings plc | Annual Report and Accounts 2023102
Decision-making Process for Determination,
Review and Implementation of Policy
The Policy was developed by the Committee prior to the
Company’s Admission to the London Stock Exchange,
taking into account the following:
• strong alignment with financial and operational
performance as well as the Group’s strategy, purpose,
culture and KPIs;
• provision 40 of the Code as set out below;
• institutional shareholder and proxy adviser views,
corporate governance, market best practice and
compliance with prevailing applicable regulations of the
PRA and the FCA;
• promotion of long-term Executive Director share
ownership to align the interests of shareholders and
Executive Directors;
• the importance of attracting, retaining and motivating
high-calibre Executive Directors;
• the policies in place prior to IPO, with a focus on
ensuring a smooth transition from our pre-IPO and
post-IPO remuneration structures; and
• workforce remuneration arrangements, policies
andpractices.
Note, where relevant regulatory requirements are more
onerous than the provisions within the Policy these will be
adhered to.
When reviewing the Policy, the Committee will, in advance
of the relevant annual general meeting, consult major
shareholders in the event of any significant proposed
revisions to Policy. Shareholder feedback received will be
considered by the Committee when finalising any changes
to Policy. The Committee will also take into account
the views of management and advice received from its
independent remuneration consultants when reviewing
the design and implementation of the Policy. No individual
is involved in discussions about their own remuneration.
The implementation of the Policy is considered annually
bythe Committee for the year ahead in light of the
strategic priorities. Incentive metrics and target scales are
also reviewed based on a number of internal and external
reference points to check if they remain appropriate
orneed to be recalibrated.
The Policy has been tested against the six factors listed
inProvision 40 of the Code:
• Clarity – the Policy is clear and disclosed in full in
this DRR. TheRemuneration Committee will engage
regularly with the Company’s largest shareholders ahead
ofmaterial changes to the Policy, and as necessary with
regards its operation. Engagement with the workforce
willbeundertaken.
• Simplicity – the rationale for each element of the Policy is
clearly set out in the Policy. Remuneration structures are
simple and in line with standard market practice for UK
listed companies. Prospective disclosure of annual bonus
measures for the year ahead and the LTIP performance
metrics and targets has been made in the description of
the implementation of the Policy, Retrospective disclosure
of outcomes against targets will be provided in the relevant
DRR following the end of the performance period.
• Risk – the Policy has been shaped to discourage
inappropriate risk taking through the inclusion of a broad
scorecard of metrics (comprising both financial and non-
financial measures for variable pay), deferral of part of the
annual bonus, and the LTIP. The Remuneration Committee
also has discretion to adjust the formulaic outcome of
incentive awards and will monitor variable remuneration
outcomes, and adjust them as necessary to take account
of ex-post and ex-ante risk. In addition, clawback and
malus provisions apply, and in-employment and post-
employment shareholding requirements.
• Predictability – certain elements of the Policy are
subject to overall caps and dilution limits. The potential
pay-outs under different levels of performance have
been illustrated in the scenario charts in the Policy.
Thecircumstances in which the Remuneration Committee
may exercise its discretion are clearly set out in the Policy.
• Proportionality – there is a sensible balance between
fixed pay and variable pay that is appropriate to the
sector, growth profile of the business and the Group’s
size and complexity. The annual bonus and LTIP are
both subject to performance conditions that consider
both financial and non-financial performance linked
to strategy, the delivery of strong results, and superior
returns to shareholders. The Remuneration Committee
will ensure outcomes will not reward poor performance
through Remuneration Committee discretion, malus and
clawback provisions and risk alignment.
• Alignment to culture – the Remuneration Committee
reviews Group culture and wider workforce policies and
practices when determining the remuneration policy for
Executive Directors. In determining Executive Director
remuneration outcomes and the operation of the Policy
going forward, a key consideration of the Remuneration
Committee will be on fairness and the remuneration
outcomes across the workforce.
Overview Strategic Report Governance AppendixFinancial Statements
103
Remuneration Policy Table
Remuneration element
and purpose Operation Opportunity
Performance metrics,
weighting and assessment
Base Salary
Provide a base level of
remuneration to help us
acquire, retain and motivate
top talent.
Salaries are normally
reviewed annually, and
any changes are normally
effective from the beginning
of the financial year.
The review will take into
account several factors
including (but not limited to):
• The Director’s role
experience and skills;
• The Director’s
performance;
• The remuneration policies,
practices and philosophy of
the Group;
• Pay conditions in the
Group;
• Business performance;
• Market data for similar
roles and comparable
companies; and
• The economic environment.
Having been set based on
relevant factors, base salaries
will normally be increased
no higher than the rate
of increase for the wider
workforce.
Higher increases may be
permitted where appropriate,
for example where there
is a change to role or there
is additional responsibility
orcomplexity.
None.
Benefits
To provide a market
competitive level of benefits
based on the market in which
the Executive is employed.
The Executive Directors
receive benefits which include,
but are not limited to, medical
insurance, income protection
and life assurance cover,
although any such reasonable
benefits that the Committee
deems appropriate may also
be offered.
The Remuneration Committee
retains the discretion to be
able to adopt other benefits
including (but not limited
to) relocation expenses, tax
equalisation and support
in meeting specific costs
incurred by Directors.
Any reasonable business-
related expenses can be
reimbursed, including the tax
thereon if determined to be a
taxable benefit.
The Remuneration Committee
reviews benefit eligibility and
cost periodically.
The maximum will be set
at the cost of providing the
benefits described.
None.
Directors’ Remuneration Report continued
CAB Payments Holdings plc | Annual Report and Accounts 2023104
Remuneration element
and purpose Operation Opportunity
Performance metrics,
weighting and assessment
Pensions
To provide market-
competitive retirement
benefits.
Directors may elect to receive
either a contribution to the
Group pension scheme, or a
cash equivalent.
Pension contribution rate in
line with rate applicable for
the UK workforce (currently
up to 10% of base salary).
Where a cash equivalent
is taken, this will be at a
consistent rate (i.e. currently
10% of base salary).
None.
Annual Bonus Plan
To reward annual
performance against financial
and non-financial KPIs and
to encourage long-term
sustainable growth and
alignment with shareholders’
interests through partial
payment in shares.
The Remuneration
Committee will determine
the annual bonus payable
after the year end, based on
performance against targets.
No more than two thirds of
the annual bonus will be paid
out in cash after the end of the
financial year. The remaining
amount (net of tax) will be
used to purchase shares
in the Company which the
Executive is required to hold
for three years. The holding
period will normally continue
to apply post-cessation
of employment. Shares
purchased from bonus will be
beneficially owned, and are
not subject to forfeiture.
Malus and clawback
provisions will apply up for a
period of three years following
any annual bonus payment.
The maximum annual bonus
opportunity for the Executive
Directors is as follows:
• CEO – 150% of base salary
• CFO – 130% of base salary
Annual bonus pay-outs are
determined based on the
satisfaction of a range of key
financial and non-financial/
strategic objectives set by the
Remuneration Committee.
The majority of the
performance measures
will be based on financial
performance.
Performance measures and
their respective weightings
will be set each year in line
with Company strategy.
No more than 25% of the
relevant portion of the
annual bonus is payable
for delivering a threshold
level of performance, and no
more than 50% is payable
for delivering a target level
of performance (where the
nature of the performance
metric allows such an
approach).
In determining the outcome,
the Committee will engage
with the Risk Committee
to take into account
relevant risk factors. The
Remuneration Committee
has the discretion to adjust
the formulaic annual bonus
outcome if the Remuneration
Committee believes that such
outcome is not a fair and
accurate reflection of wider
performance factors and/
or stakeholder experience,
including having the
discretion to scale back the
outcome (including to zero)
if there has been a negative
event.
Overview Strategic Report Governance AppendixFinancial Statements
105
Remuneration element
and purpose Operation Opportunity
Performance metrics,
weighting and assessment
LTIP
To encourage long-term
sustainable growth and
to provide alignment with
shareholders’ interests.
Awards can be granted in the
form of conditional shares or
nil cost options.
Awards will vest at the end
of a performance period of at
least three years, subject to the
satisfaction of performance
conditions and provided
that the Executive remains
employed by the Group.
The net of tax number of
shares that vest will be
subject to an additional
two-year holding period,
during which the shares
cannot be sold. The holding
period will normally continue
to apply post-cessation
ofemployment.
Dividends or dividend
equivalents may accrue on
LTIP awards over the vesting
period and, to the extent that
the award vests, are paid
onvesting,
Malus and clawback
provisions will apply for
a period of three years
postvesting.
The policy maximum is 150%
of salary, with the normal
maximum award level for
the Executive Directors is
asfollows:
• CEO – 150% of base salary
• CFO – 130% of base salary
Performance will be assessed
against a range of financial,
stock market-based and/
or non-financial (including
ESG) performance measures
determined at the time of
each grant and set by the
Remuneration Committee
taking into account
businessstrategy.
Threshold performance
under each metric will result
in no more than 25% of that
portion of the award vesting.
In determining the outcome,
the Remuneration Committee
will engage with the Risk
Committee to take into
account relevant risk factors.
The Remuneration Committee
has the discretion to adjust
the formulaic outcome of the
LTIP if the Committee believes
that such outcome is not a
fair and accurate reflection
of wider performance factors
and/or stakeholder experience,
including having the discretion
to scale back the outcome
(including to zero) if there has
been a negative event.
All-employee share plans
To provide alignment with
Group employees and to
promote share ownership
The Executive Directors
may participate in any
all-employee share plan
operated by the Company.
Participation will be capped
by the HMRC limits applying
to the respective plan.
None.
Directors’ Remuneration Report continued
Remuneration Policy Table continued
CAB Payments Holdings plc | Annual Report and Accounts 2023106
Remuneration element
and purpose Operation Opportunity
Performance metrics,
weighting and assessment
Shareholding Requirement
To provide alignment with
shareholders’ interests.
During employment
Executives are required
to build up and retain a
shareholding equivalent to
200% of their base salary.
Until the shareholding
requirement is met, Executive
Directors will be required to
retain 50% of the net of tax
shares they receive under any
incentive plan.
Post-employment
Any Executive Director leaving
the Company will be expected
to retain the lower of the
shares held at cessation of
employment and shares to the
value of 200% of salary for a
period of two years.
200% of salary None.
Non-executive Directors
To provide an appropriate
fee level to attract and retain
Non-executive Directors and
to appropriately recognise
the responsibilities and time
commitment of the role.
Non-executive Directors
are paid a base fee and
additional fees for acting as
Senior Independent Director
and as the Chair or member
of Board Committees. Fees
will typically be reviewed
annually.
Additional fees may be
payable to reflect other
additional responsibilities
and/or additional/unforeseen
time commitments.
The Chair of the Board
receives an all-inclusive fee.
Neither the Chair of the
Board nor the Non-executive
Directors participate in any
incentive plans.
The fee for the Chair of
the Board is set by the
Remuneration Committee,
the Non-executive Directors’
fees are set by the Chair of
the Board and the Executive
Directors.
In general, fee level increases
will be no higher than the
salary increase awarded to
the rest of the workforce.
The Company will reimburse
any reasonable expenses
incurred (and related tax
ifapplicable).
None.
Overview Strategic Report Governance AppendixFinancial Statements
107
Notes to the Remuneration Policy Table
Choice of Performance Measures
Performance metrics for incentives, and their weightings
and target ranges are considered annually for the year
ahead. The Remuneration Committee will select the most
appropriate performance measures as targets for the
annual bonus and LTIP, taking into account factors such as
regulatory requirements, Group strategy and KPIs.
Targets for the annual bonus and LTIP awards will be
reviewed each year and consideration will be given
as to whether these remain appropriate or need to be
recalibrated. The specific performance targets seek
to be stretching to incentivise and reward improved
performance taking into account the wider economic
context and market conditions.
Discretion
The Committee will operate the annual bonus plan
and LTIP according to the rules of each respective plan.
Discretions include, but are not limited to, the following in
relation to incentive schemes:
• Who participates in the plan
• Determining the timing of grants of awards and/or
payments
• Determining the quantum of an award and/or payment
• Determining the vesting level
• Determining how and whether an award may be
changed or adjusted in certain circumstances (e.g.
change of control, rights issues, or special dividends)
• Whether an Executive Director is a good or bad leaver
for incentive plan purposes and vesting for leavers
In addition, the Committee may make minor amendments
to the Policy with regard to technical or administrative
matters where it would be, in the opinion of the
Committee, disproportionate to seek or await shareholder
approval.
Directors’ Remuneration Report continued
Malus and Clawback
The Committee may, at any time within three years of
LTIP awards vesting or the payment of the annual bonus,
determine that malus or clawback provisions may apply in
the following circumstances:
i. where the number of shares vesting to a participant
or cash payout awarded was based on an error, or
inaccurate or misleading information;
ii. fraud or gross misconduct by a participant;
iii. material financial misstatement;
iv. corporate failure of the Group;
v. significant reputational damage; or
vi. any other applicable circumstances prescribed or
recommended by the Group’s regulators.
To the extent that prevailing regulations require a stricter
application of malus and clawback, the Policy will be
based on the stricter requirements.
There are robust mechanisms in place to ensure that these
provisions are enforceable, including provisions within
Executive Directors’ service contracts and the relevant
incentive scheme rules.
Remuneration Scenarios for Executive
Directors
The chart on page 109 gives an indication of the level of
total annual remuneration that would be received by each
Executive Director in accordance with the new policy (as
it will apply for FY24) in respect of minimum pay (fixed
pay), on-target and maximum performance based on
assumptions set out below.
Minimum: Comprises fixed pay only using the salary rate
on Admission, the anticipated value of benefits in FY24
and a Company pension contribution in line with policy.
On-Target: Fixed pay plus an annual bonus pay-out at
50% of maximum (75% of salary for the CEO and 65% of
salary for the CFO) and LTIP vesting at 50% of face value
(75% of salary for the CEO and 65% of salary for the CFO).
Maximum: Comprises fixed pay and assumes full pay-out
under the annual bonus (150% of salary for the CEO and
130% for the CFO) and the LTIP grant vests in full (150% of
salary for the CEO and 130% for the CFO). The maximum
scenario includes an additional element to represent 50%
share price growth on the LTIP award from the date of
grant to vesting.
CAB Payments Holdings plc | Annual Report and Accounts 2023108
Fixed Pay
Annual Bonus
LTIP
LTIP with 50% Share price growth
100%
Minimum MinimumOn Target
CEO
On Target
CFO
Maximum Maximum
100%
42%
46%
27%
30%
30%
15%
27%
29%
29%
23%
26%
31%
31%
15%
£748k
£1,761k
£1,085k
£1,963k
£500k
£3,279k
£2,000k
£3,000k
£2,500k
£3,500k
£1,500k
£1,000k
£500k
£0k
Consideration of Employment Conditions Elsewhere in the Group
The Company provides a market competitive package to all employees with additional reward through incentive
payments linked to the achievement of stretching performance targets. This reward philosophy applies to all levels of
the business. In view of the greater potential remuneration, the Executive Directors have a greater proportion of their pay
at ‘risk’ and subject to deferral and holding periods. The Remuneration Committee takes into account general workforce
remuneration and related policies, and the alignment of incentives and rewards with culture when setting and operating
the Policy for Executive Directors’ remuneration. The Committee receives regular updates on any changes to wider
Group Policy.
The Remuneration Committee Chair will engage with employees to explain the alignment of executive pay with that
ofthe general workforce and in relation to any changes to the Policy applicable to Executive Directors.
Consideration of Shareholder Views
In designing the Policy, the published remuneration guidelines and specific views of the Company’s prospective institutional
shareholders and proxy voting agencies were taken into account. In considering the operation of the Policy each year, the
Committee will continue to take these factors into account alongside any applicable new guidance. The Committee will
consult with the Company’s largest shareholders, where considered appropriate, regarding changes to the operation of the
Policy and when the Policy is being reviewed and brought to shareholders forapproval.
Prior to the publication of this Policy, the majority of our shareholders received a letter from the Remuneration Committee
Chair providing an overview of the new Policy and its proposed implementation for 2024.
Overview Strategic Report Governance AppendixFinancial Statements
109
Recruitment Policy
When setting remuneration packages for new Executive Directors, pay will be set in line with the Policy outlined above.
The Remuneration Committee’s policy is to pay no more than is necessary to recruit the desired candidate for the role.
Remuneration element Policy
External appointment
to the Board
Salary For an external appointment, the Committee will take account of an individual’s remuneration
package in their prior role, the market positioning of the package and their skills and experience.
Base salary will be set at an appropriate level considering the factors mentioned above.
Pension and benefits Executive Directors will be eligible to participate in the Group’s benefit plans and the Group pension
scheme in accordance with the Policy set out above.
Relocation If an individual needs to relocate in order to take up the role, the Group may agree to meet certain
costs of relocation including (but not limited to), actual relocation costs, temporary accommodation
and travel expenses.
Buy-out awards For external appointments, the Remuneration Committee may (if it is considered appropriate)
provide a buy-out award equivalent to the value of any outstanding incentive awards that
will be forfeited on cessation of a Director’s previous employment. To the extent possible, the
buyout award will be made on a broadly like for like basis. The award will take into account the
performance conditions attached to the vesting of the forfeited incentives, the timing of vesting,
the likelihood of vesting and the nature of the awards (cash or equity, performance based or
non-performance based). Any such buyout award may be granted under the LTIP or the provision
available under FCA’s Listing Rule 9.4.2. to enable awards to be made outside the LTIP in
exceptional circumstances.
Annual Bonus Depending on the timing of appointment, the individual may receive a pro-rated annual bonus
based on their employment as a proportion of the financial year. The annual bonus opportunity
willbe set in line with the Policy. The Committee may deem it appropriate to set different
performance conditions and targets to the current Executive Directors for the first performance
year of appointment.
LTIP An Executive Director will be eligible to participate in the LTIP in line with Policy. The opportunity
levels will be consistent with the Policy table set out above.
The Committee may deem it appropriate to set different performance conditions and targets to
those applying to current Executive Directors for the first grant following appointment. An LTIP
award may be made shortly following an appointment.
Internal appointment
to the Board
If an existing employee is promoted to the Board, the above Policy will apply, from the point when
they are appointed to the Board and not retrospectively.
For an internal appointment, the Committee may initially position remuneration below market level
and increase overall pay levels over a period of time to achieve alignment with market levels for the
role, subject to Group and individual performance.
In addition, any variable remuneration element awarded in respect of their prior role may be
permitted to pay out according to its terms. In certain circumstances where an individual’s legacy
remuneration arrangements fall outside of the approved Policy, the Remuneration Committee may
elect to honour those legacy arrangements on a ringfenced basis.
Non-executive Directors Fees will be in line with the remuneration policy and the fees provided for the other Non-executive
Directors.
Directors’ Remuneration Report continued
CAB Payments Holdings plc | Annual Report and Accounts 2023110
Service Agreements and Letters of Appointment
Executive Directors
The Executive Directors have a service contract requiring twelve months’ notice of termination from either party as shown
below:
Executive Director Date of appointment Date of current contract
Notice from the
Company
Notice from the
individual
Unexpired period of
service contract
Bhairav Trivedi 1 March 2021 27 May 2023 12 months 12 months Rolling
Richard Hallett 3 September 2019 27 May 2023 12 months 12 months Rolling
Policy on termination of service (loss of office)
In the event of termination for cause (e.g. gross misconduct) neither notice nor payment in lieu of notice will be given, and
the Executive Director will cease to perform their services immediately.
Treatment of other elements of the Policy (including annual bonus and LTIP), will vary depending on whether a Director
is defined as a Good or Bad Leaver. The Remuneration Committee has the discretion to determine whether an executive
is a Good Leaver. Reasons for Good Leaver treatment include, but are not limited to, death, ill-health, injury or disability,
redundancy and retirement.
The treatment of the various elements of pay on termination are summarised below.
Remuneration element Treatment
Salary, benefits
and pension
• If notice is served by either party, the Executive Director can continue to receive base salary, benefits
and pension for the duration of their notice period. The Executive Director may be asked to perform their
normal duties during their notice period, or they may be put on garden leave. The Group may, at its sole
discretion, terminate the contract immediately, at any time after notice is served, by making a payment
in lieu of notice equivalent to salary, with any such payments being paid in monthly instalments over
the remaining notice period. The Executive Director will normally have a duty to seek alternative
employment and any outstanding payments will be subject to offset against earnings from any new
role.
Annual bonus • Good Leavers will still be eligible to receive an annual bonus payable at the usual time with performance
measured at the usual time. The annual bonus will normally be pro-rated for service during the
financialyear.
• Bad Leavers, and Executives who are under notice to leave, who are not classified as Good Leavers,
willnot be eligible to receive an annual bonus.
• Shares purchased under the annual bonus plan are beneficially owned by the Executive Director and
so they are not at risk of forfeiture, other than in relation to clawback and malus. Shares subject to a
holding period will usually be released at the normal time other than if the Remuneration Committee
determines otherwise.
LTIP • Awards are forfeited on cessation of employment save for Good Leavers where awards may continue
to vest subject to performance conditions and normally scaled back pro rata to reflect the proportion of
the vesting period served. Vested shares subject to a holding period will be released at the normal time.
Change of control • The extent to which unvested awards under the LTIP will vest will be determined in accordance with the
rules of the plan. This states that LTIP awards may vest early on a takeover, merger or other relevant
corporate event unless the Board determines the award will be subject to rollover. The Committee will
determine the level of vesting taking into account the extent to which the performance condition is
satisfied and, unless the Committee determines otherwise, the period of time elapsed from the date of
grant to the date of the relevant corporate event relative to the performance period.
• Holding periods applying to shares owned under the bonus plan and vested LTIP awards will normally
cease to apply.
Overview Strategic Report Governance AppendixFinancial Statements
111
Chair and Non-executive Directors
The Chair of the Board and Non-executive Directors have letters of appointment with the Company for an initial three-
year term, subject to annual reappointment at the AGM. The appointment letters provide that no compensation is payable
on termination, other than accrued fees and expenses.
The table below details the terms of the letters of appointment for the Chair and for each Non-executive Director.
Chair/Non-executive Directors Date of appointment
Date of current
letter of appointment
Notice from the
Company
Notice from the
individual
Ann Cairns (Chair) 23 February 2023 27 May 2023 12 months 6 months
Caroline Brown 26 April 2023 27 May 2023 3 months 3 months
Susanne Chishti 26 April 2023 27 May 2023 3 months 3 months
Noël Harwerth 23 February 2023 27 May 2023 3 months 3 months
Jennifer Johnson-Calari 26 April 2023 27 May 2023 3 months 3 months
Karen Jordan 26 April 2023 27 May 2023 3 months 3 months
Simon Poole 19 April 2016 16 June 2023 3 months 3 months
Mario Shiliashki 26 April 2023 27 May 2023 3 months 3 months
Annual Report on Remuneration
This section of the Annual Report describes the remuneration received for the 2023 financial year which includes a blend
of remuneration relating to the period prior to Admission to Listing when the Company was not listed and the operation of
the Policy for FY24.
Remuneration Committee Members and Meetings
The Remuneration Committee was established shortly prior to Admission to Listing. The Committee currently comprises
the three Non-executive Directors and the Chair of the Board as listed below. TheRemuneration Committee Chair has
over 15 years’ of experience chairing other UK plc remuneration committees. TheCommittee meets at least three times a
year. The Committee met twice between Admission and the year end, andthe meetings were attended by all members of
the Committee.
Committee Chair Noël Harwerth
Committee Member Ann Cairns
Committee Member Caroline Brown
Committee Member Mario Shiliashki
Key Activities During the Year
Over the period since it was constituted, the Committee has carried out the following activities:
• Approved the new Policy and certain elements of its operation effective from Admission, such as the base salary levels
for the Executive Group and the first LTIP awards to be made just after Admission.
• Considered the operation of the annual bonus and LTIP (for example the timing of awards under the LTIP,
themeasures, their weightings and targets applying) for FY24 and considered the approach to broader all-employee
shareparticipation.
• Noted the impact of regulatory requirements, and the views of shareholder and proxy agencies on the design of the
Policy and its’ implementation for 2024.
• Considered the outturn for the FY23 annual bonus.
• Approved the grant of the all-employee Free Shares award to be made in March 2024.
Directors’ Remuneration Report continued
CAB Payments Holdings plc | Annual Report and Accounts 2023112
External Advisers
The Remuneration Committee receives independent
advice from Korn Ferry, who were appointed in
December 2022 following a tender process. During
the year under review, the Committee received advice
prior to listing on the new Policy, its operation in 2023
and application for 2024 and the drafting of this
report. Korn Ferry is a signatory to the Remuneration
Consultants’ Code of Conduct and has confirmed to
the Committee that it adheres in all respects to the
terms of the Code of Conduct. The fees for the advice
provided from Admission to 31 December 2023 were
£86,835. Korn Ferry provided no other advice or
services to the Company during the year and has no
connection with any individual Director.
Single Total Figure of Remuneration for
2023 (audited)
Executive and Non-executive Directors for the full 2023 financial year to 31 December 2023 and 2022 financial year to
31 December 2022.
All figures shown in £
Salary and
fees Benefits Pension
Total fixed
pay Annual Bonus LTIP
Total variable
pay
Total
Remuneration
Bhairav Trivedi 583,750 2,082 58,375 644,207 303,750 – 303,750 947, 9 57
Richard Hallett 372,346 5,621 26,064 404,032 202,500 – 202,500 606,532
Ann Cairns 270,833 – – 270,833 – – – 270,833
Caroline Brown 77,500 – – 77,500 – – – 77,500
Susanne Chishti 70,000 – – 70,000 – – – 70,000
Noël Harwerth 100,625 – – 100,625 – – – 100,625
Jennifer Johnson-
Calari 87,500 – – 87,500 – – – 87,500
Karen Jordan 85,000 – – 85,000 – – – 85,000
Simon Poole
1
67,500 – – 67,500 – – – 67,500
Mario Shiliashki 77,500 – – 77,500 – – – 77,500
Single Total Figure of Remuneration for 2022 (audited)
All figures shown in £
Salary and
fees Benefits Pension
Total fixed
pay Annual Bonus LTIP
Total variable
pay
Total
Remuneration
Bhairav Trivedi
2
500,000 1,577 – 501,577 1,801,992 – 1,801,992 2,303,569
Richard Hallett 277,500 4,257 19,425 301,182 200,000 – 200,000 501,182
Susanne Chishti 62,917 – – 62,917 – – – 62,917
Jennifer Johnson-
Calari 76,978 – – 76,978 – – – 76,978
Karen Jordan 73,333 – – 73,333 – – – 73,333
Simon Poole
1
70,000 – – 70,000 – – – 70,000
Mario Shiliashki 69,583 – – 69,583 – – – 69,583
Note
1 Simon Poole is a nominated director appointed to the Board of the Group by the Company’s Principal Shareholder, this fee is paid to Helios Investors Genpar III directly.
2 Bhairav Trivedi’s 2022 bonus was paid across March 2023 and May 2023. The payment to Bhairav Trivedi in May 2023 was subject to direction given by the PRA
under section 138A of the Financial Services and Markets Act 2000 disapplying Rule 15.9(3) of the Remuneration Part of the PRA Rulebook in respect of the
performance year starting on 1 January 2022 and ending on 31 December 2022.
Remuneration Committee
Roles and Responsibilities
The Role of the Remuneration Committee is to determine
and establish a remuneration policy for the Executive
Group (which comprises the Executive Directors and
members of the Executive Committee), and to oversee
the remuneration packages for those individuals. When
determining remuneration arrangements, the Committee
must review workforce remuneration and related policies
and the alignment of incentives and rewards with
culture, and take these into account when determining
remuneration of the Executive Group. Further details
on the roles and responsibilities of the Committee are
disclosed in the Terms of Reference which can be found
on the Company’s corporate website.
Overview Strategic Report Governance AppendixFinancial Statements
113
Annual Bonus Plan Outcomes for 2023
The structure of the annual bonus for the year ending 31 December 2023 was unaffected by the Company’s Admission
to Listing on the London Stock Exchange and was operated in line with the Group’s Policy prior to Admission to Listing,
taking account of the applicable remuneration regulations. The 2023 bonus plan followed a balanced scorecard approach
as shown below. Thebonus opportunity for each of the Executive Directors was 100% of their base salary at year-end.
Thebonus ispayable incash, in line with the Policy prior to Admission.
The bonus targets for 2023 were set several months prior to Admission to Listing using a mixture of financial and
strategic measures which were binary. This is a legacy arrangement which will not operate in2024.
Measures Weighting Target Actual
Achievement
% of maximum
opportunity
Gross Income
1
30% £140.1m £137.1m 0%
Adjusted EBITDA margin 20% 50% 47% 0%
Strategic measures 50% A mixture of stretching targets covering employees,
ESG, Operations, Product and Risk applied for
2023. Key achievements included onboarding new
employees to reflect our growing organisation and
structure, achieving B Corp certification, and moving
our overdraft facility (Liquidity as a Service) into full
operation, whilst maintaining risk governance and
smooth operations
100%
(equivalent to 50%
of total bonus)
Note
1 Structure of 2023 annual bonus plan pre-IPO referred to Revenue rather than Gross Income, but Gross Income shown as measurable outcome in 2023 financial
statements.
The Remuneration Committee exercised its discretion in relation to the annual bonus outcomes for 2023 for the Executive
Directors to reflect shareholder experience following the Admission to Listing on the London Stock Exchange and applied
a 10% reduction to the formulaic bonus scorecard outcome, reducing the 2023 bonus for both Executive Directors to a
discretionary outcome of 45% of the maximum opportunity, as shown below:
Executive
Overall Annual Bonus outcome
1
% of maximum % of salary
Value of full year bonus
(£’000)
Bhairav Trivedi 45% 45% 303,750
Richard Hallett 45% 45% 202,500
Note
1 Bonus payable in cash in 2024.
LTIP Vesting During the Year (Audited)
There are no awards under the LTIP due to vest based on performance to 31 December 2023.
LTIP Granted During the Year (Audited)
The targets for the award granted shortly after Admission to Listing on 11 July 2023 are listed below:
Performance measure Weighting
Targets
Threshold
(25% vesting)
Maximum
(100% vesting)
FY25 Earnings per share 67% 37.2 pence 48.9 pence
TSR relative to FTSE 250 excluding investment trusts 33% Median Upper quartile
Directors’ Remuneration Report continued
CAB Payments Holdings plc | Annual Report and Accounts 2023114
The details for the LTIP awards granted to each Executive Director are shown below:
Executive
Basis of the
award (% of
salary)
Threshold
vesting (% of
maximum)
Number
of shares
granted
1
Face value of
the award at
offer price
Face value of
the award at
grant date
1
Grant date
End of performance
period
Bhairav Trivedi 150% 25% 302,238 £1,012,497 £936,938
11 July 2023 31 December 2025
Richard Hallett 130% 25% 174,626 £584,997 £541,341
1 LTIP grants were granted in the form of conditional share awards. As disclosed in the Prospectus, the number of shares awarded was calculated using the Offer
Share Price of 335 pence. The face value of the awards at the grant date reflects the decrease in the Company’s share price over the period between Admission
and the Grant Date. The share price at grant was 310 pence.
Payments to Former Directors and for Loss of Office (Audited)
There were no payments to former Directors or payments for loss of office during the year.
Directors’ Interests (Audited)
The interests of the Directors and their connected persons in the shares in the Company as at 31 December 2023
issetout below.
Director
Ordinary shares held at
31 December 2023
Bhairav Trivedi 6,019,689
Richard Hallett 1,995,652
Ann Cairns –
Caroline Brown –
Susanne Chishti –
Noël Harwerth –
Jennifer Johnson-Calari –
Karen Jordan –
Simon Poole –
Mario Shiliashki –
Executive Directors’ Shareholding Requirements (Audited)
Under the new Policy Executive Directors are required to build and maintain a shareholding equivalent to 200% of
their base salary during employment. The shareholdings of the CEO and CFO on Admission exceed this requirement
significantly. Post-cessation of employment, Executive Directors must retain shares to the lesser of their shareholding at
cessation and 200% of salary for a period of two years.
The table below summarises each Director’s current shareholding, including those of connected persons, and the shares
subject to a deferral or holding period and performance conditions.
Director
Beneficially
owned
shares on
31 December
2023
Vested shares
subject to
deferral/
holding period
Unvested
shares subject
to performance
conditions
Shareholding
requirement
(% of salary)
Current
shareholding
(% of salary)
Requirement
met?
Bhairav Trivedi 6,019,689 – 302,238 200% 738% Yes
Richard Hallett
1
1,995,652 – 174,626 200% 367% Yes
Ann Cairns – – – N/A N/A N/A
Caroline Brown – – – N/A N/A N/A
Susanne Chishti – – – N/A N/A N/A
Noël Harwerth – – – N/A N/A N/A
Jennifer Johnson-Calari – – – N/A N/A N/A
Karen Jordan – – – N/A N/A N/A
Simon Poole – – – N/A N/A N/A
Mario Shiliashki – – – N/A N/A N/A
Note
1 Further to the above, Richard Hallett increased his shareholding through a purchase of 50,000 shares on 16 January 2024.
Overview Strategic Report Governance AppendixFinancial Statements
115
Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023
CAB Payments Holdings plc
FTSE All Share
120
100
80
60
40
20
0
Total Shareholder Return
Performance Graph and Table
CPH shares began conditional trading on the London Stock Exchange’s Main Market on 6 July 2023. The chart below
shows the TSR performance of £100 invested in the Company from 6 July 2023 (using the offer price of 335 pence per
share) to 31 December 2023 against the FTSE All-Share Index. The FTSE All-Share Index is considered an appropriate
comparison as CPH is a constituent of the Index.
Directors’ Remuneration Report continued
The table below shows the single figure of total remuneration for the CEO since 2022 and the variable remuneration
delivered as a percentage of maximum opportunity.
Bhairav Trivedi (CEO)
Single figure of total
remuneration
Bonus earned as % of
maximum opportunity
Vesting of LTIP as % of maximum number
of shares that could have vested
2022 £1,803,569 100%
1
n/a
2
2023 £947, 957 45% n/a
2
Note
1 Bhairav Trivedi’s 2022 bonus was subject to direction given by PRA under section 138A of the Financial Services and Markets Act 2000 disapplying Rule 15.9(3)
of the Remuneration Part of the PRA Rulebook in respect of the performance year starting on 1 January 2022 and ending on 31 December 2022.
2 No long-term incentive plan awards were scheduled to vest in 2022 or 2023.
CAB Payments Holdings plc | Annual Report and Accounts 2023116
Change in Directors and Employee Remuneration
The table below sets out the percentage change in base salary, value of taxable benefits and bonus for the Directors
in 2023 compared with the average percentage change for employees. For these purposes, employees employed at
30September in each year have been used as a comparator group as this is the population eligible for pay review.
Thepercentage change for Executive and Non-executive Directors is calculated based on the remuneration disclosed
in the single figure table. The percentage is not included for Non-executive Directors who joined the Board in the year
as the disclosure would not be meaningful. There have been no material changes to the structure of employee benefits
between 2022 and 2023, however, the cost of medical insurance increased and this is reflected below. The increase
toUK salaries reflects the change in employee population with more technology hires and more specialists hired to reflect
the requirements of a listed company. The increases to Executive Director salaries in 2023 compared to 2022 were
based on a market assessment of salary levels. The reduction in bonus for the CEO is due to the discretion exercised
by the Remuneration Committee in 2023 as described above. The increases to the Non-executive Director fees in 2023
compared to 2022 were based on a market assessment of fee levels.
Base salary/NED fees Taxable benefits Annual bonus
2020/2021 2021/2022 2022/2023 2020/2021 2021/2022 2022/2023 2020/2021 2021/2022 2022/2023
UK employees 16% 2% 4% 15% 3% 13% 95% 28% (30)%
CEO N/A 25% 17% N/A 789% 32% N/A 123% (83)%
CFO 9% 5% 34% 5% 21% 32% 19% 14% 1%
Susanne Chishti 14% 39% 11% N/A N/A N/A N/A N/A N/A
Jennifer Johnson-Calari 32% 36% 14% N/A N/A N/A N/A N/A N/A
Karen Jordan N/A 27% 16% N/A N/A N/A N/A N/A N/A
Mario Shiliashki 42% 22% 11% N/A N/A N/A N/A N/A N/A
CEO Pay Ratio
UK regulations require companies with more than 250 UK employees to publish a ratio to show CEO pay vs that of UK
employees. In line with these regulations, we have provided the ratio calculated using option A as determined by the
regulations, through calculating a single total figure of remuneration for each employee and analysing the quartiles,
asthis is the most statistically accurate option under the regulations.
Financial year Method Lower quartile Median Upper quartile
2023 A 14:1 11:1 7:1
The pay for the CEO and the employees at the percentiles are set out below:
CEO Lower quartile Median Upper quartile
Basic salary 583,750 48,205 65,825 103,750
Total pay 947, 957 65,508 88,862 138,331
The employee pay figures were calculated by reference to the year to 31 December 2023, consistent with the period used
for the single total figure of remuneration calculated for the directors. No components of pay have been omitted in this
calculation. Salaries, variable compensation, taxable benefits and pensions were annualised for employees who have not
been with the Group for the full financial year or grossed up on a full-time equivalent basis for part-time employees. The
Committee is comfortable that the pay ratio shown above is consistent with our pay, reward and progression policies for
the Group’s UK employees as a whole.
Overview Strategic Report Governance AppendixFinancial Statements
117
Relative Importance of the Spend on Pay
The table below shows the Group’s expenditure on employee pay compared to distributions to shareholders for the year
ended 31 December 2023:
FY23
£m
FY22
£m
Distribution to shareholders 12.8 -
Total employee pay 45.6 35.8
Implementation of Policy in FY24
Executive Director Remuneration
Base Salary
There will be no change to the base salary levels set on Admission. Therefore, the base salary levels will be as follows:
• Chief Executive Officer £675,000
• Chief Financial Officer £450,000
Pension and benefits
Executive Directors will receive a pension contribution or cash equivalent of 10% of salary in line with the rate applying
tothe majority of the UK workforce. Benefits include medical insurance, income protection and life assurance cover.
Annual bonus
The maximum annual bonus opportunity will be in line with Policy, 150% of salary for the CEO and 130% of salary for the CFO.
The performance conditions for FY24 will be as follows:
Financial targets (60% of the total bonus)
Gross income: 30%
Adjusted EBITDA margin: 15%
Free Cash Flow: 15%
Non-financial and strategic targets (40% of the total bonus)
Diversification of currencies, clients and geographies: 25%
Employee metrics linked to engagement score and gender balance of new hires: 10%
ESG measures: 5%
These metrics were considered in detail by the Remuneration Committee, and are specifically designed to address our
core strategic priorities, the delivery of strong, sustainable financial growth and to position the Group for the longer term
restoration of shareholder value.
One-third of the after tax bonus will be used to purchase shares which must be held for three years, the remaining
two-thirds will be paid in cash.
LTIP
The Remuneration Committee intends to make LTIP awards during 2024 as soon as practicable. The Committee decided
to postpone the 2024 grant so as to ensure that the performance conditions applying are as relevant to the Group’s long-
term growth plans as possible.
The Committee will determine the level of award to be made to the Executive Directors, within the limits set out inthe
Policy, taking into account the share price at the time the grant is made.
Full details of the number of shares awarded and the performance conditions applying will be published when the
awards are made.
Vested awards will be subject to a two-year post-vesting holding period.
Directors’ Remuneration Report continued
CAB Payments Holdings plc | Annual Report and Accounts 2023118
Change of CEO
On 23 February 2024 we announced that Bhairav Trivedi, Chief Executive Officer (CEO), will be succeeded by Neeraj
Kapur, following publication of the FY23 Financial Results on 26 March 2024 and subject to regulatory approval. Neeraj
joined on 23 February 2024. Bhairav will support a smooth transition of responsibilities to Neeraj and has agreed to
then take on a new role within the Group as Senior Adviser to the Board. Bhairav will continue to receive his salary and
benefits and is eligible to participate in an incentive plan for 2024 connected to his new role.
Neeraj’s remuneration arrangements have been set in accordance with the Policy set out above. His salary is £675,000.
He receives a pension contribution, or cash equivalent, of 10% of base salary in line with the rate applying to the majority
of the UK workforce. His benefits include medical insurance, income protection and life assurance cover. His maximum
bonus opportunity is 150% of salary and he will be eligible for FY2024 bonus subject to the performance conditions set
out above, and pro-rated to reflect the proportion of FY2024 for which he is an employee. He is also eligible to receive an
award under the LTIP to be granted in 2024 as set out above. Neeraj did not receive abuy-out award.
Non-executive Director Remuneration
Prior to Admission, Non-executive Director fees were reviewed. A summary of the fees set on Admission (which are
unchanged for 2024) is shown below.
Non-executive Director Fee
Chair of the Board £325,000
Non-executive Director base fee £65,000
Senior Independent Director fee £15,000
Risk Committee Chair fee £22,500
Audit or Remuneration Committee Chair fee £20,000
Risk Committee member fee £7,500
Audit or Remuneration Committee member fee £5,000
Tech forum member fee £5,000
All-Employee Share Incentives
In January 2024, the Company approved an award of 1,000 ‘free shares’ under the Company’s Share Incentive Plan to all
employees inservice with the Group since the time of Admission to Listing on the London Stock Exchange.
Overview Strategic Report Governance AppendixFinancial Statements
119
Directors’ Report
In accordance with Section 415 of the Companies Act 2006, the Directors present their report for the year ended 31
December 2023.
The requisite components of this report are largely set out elsewhere in this Annual Report and are incorporated into
this Report by reference. Additional information may be found on the Company’s website at https://cabpayments.com/
investors/. The table below sets out where disclosures can be found or provides the relevant information.
Business Performance
Results Results for the year ended 31 December 2023 are set out in the Strategic Report on pages 2 to 15
and the Consolidated Statement of Profit or Loss on page 137.
Dividends Details of dividends paid during the period can be found in Note 28 to the financial statements.
TheCompany does not currently intend to pay any dividends as the Group invests in future growth.
The Company intends to revisit its dividend policy in future years and may revise its dividend policy
from time to time. Nofinal dividend will be proposed for the year ended 31 December 2023.
Strategic Report The Strategic Report can be found on pages 10 to 67.
Corporate Governance
Statement
The Company’s Statement on Corporate Governance can be found on page 76.
Directors’ Remuneration
Report
The Directors’ Remuneration Report can be found on pages 98 to 119.
Activities in Research
and Development
Details can be found in the Strategic Report on pages 10 to 67
Future developments Details about the Group’s future developments can be found in the Strategic Report on pages
10 to 67.
Post Balance Sheet
events
Events after the Reporting Period are set out in Note 46 to the financial statements.
Directors
Directors Directors that have served during the year and up to the date of signing and summaries of the
current Directors’ key skills and experience are set out in the Corporate Governance Statement on
pages 72 and 73.
Board Diversity
Statement
The Board Diversity Statement as required by the Listing Rules is set out on page 88.
Directors’ interests Details of the Directors’ beneficial interests are set out in the Directors’ Remuneration Report
onpage115.
Directors’ indemnities The Company has given indemnities to each of the Directors in respect of any liability arising against
them in connection with the Group’s activities in the conduct oftheir duties. These indemnities are
subject to the conditions set out in the Companies Act 2006 andremain in place at the date of this
Annual Report.
These provisions are qualifying third party indemnity provisions as defined in Section 234 of the
Companies Act 2006 and do not provide cover in the event that a Director is proven to have acted
dishonestly or fraudulently.
Directors’ and Officers’
liability insurance
Directors’ and Officers’ Liability Insurance cover is in place at the date of this Report. Cover is
reviewed annually and does not provide cover in the event that a Director is proven to have acted
dishonestly orfraudulently.
Appointment and
replacement of Directors
A Director may be elected by the shareholders or appointed by the Board. At each annual general
meeting all Directors must retire and will be eligible for election or re-election by the shareholders.
Forso long as the Company has a Controlling Shareholder an election or re-election of an
independent Director must be approved by the shareholders of the Company as a whole and any
member entitled to vote who is not a Controlling Shareholder.
Under the terms of the Relationship Agreement, for so long as the Principal Shareholder holds at least
10% of the ordinary shares the Principal Shareholder has the right to nominate one Non-executive
Director to the Board and for so long as they hold at least 25% of ordinary shares have the right
tonominate two Non-executive Directors to the Board.
Powers of the Directors Subject to the Articles of Association, the Companies Act 2006 and any directions given by special
resolution, thebusiness of the Company will be managed by the Board which may exercise all the
powers oftheCompany.
CAB Payments Holdings plc | Annual Report and Accounts 2023120
Employees
Employees The average number of employees within the Group is shown in note 8 to the financial statements. In
our commitment to diversity and inclusion, the Group values the unique contributions of our diverse
workforce, fostering a culture of openness, mutual respect, and collaboration. The Group prioritises
equal opportunities, ensuring fairness and inclusivity in all aspects of employment with policies
prohibiting discrimination based on various factors, including race, gender, disability, and age.
Equal opportunities The Group provides equal opportunities in recruitment, training, and career development, emphasising
abilities and aptitudes regardless of disabilities, and offers retraining opportunities for employees who
become disabled during their tenure.
Health and safety The Group prioritises the safety and wellbeing of its employees, visitors, and the public, integrating
health and safety measures into its business objectives.
Harassment The Group has a zero-tolerance policy towards workplace harassment, including sexual, mental, or
physical harassment, with clear reporting procedures to the HR Department.
Human rights The Group promotes human rights and dignity through its global supply chain and product
contributions, as detailed in the ESG section of this Annual Report and Accounts on pages 28 to 46.
Communication The Group ensures transparent communication through regular updates on financial and economic
factors, encouraging employee engagement through surveys, meetings, and presentations.
Whistleblowing Policy The Group’s policy provides guidelines for individuals to raise concerns confidentially, with protections
in place to safeguard their positions.
Constitution
Articles of Association Any amendments to the Articles of Association may be made by a special resolution of shareholders.
The Articles are available on the Company’s website at https://cabpayments.com/investors/.
Branches outside
of the UK
Details of the Company’s subsidiary undertakings and branch offices are set out on page 198.
Change of control The following represents the likely effect on significant agreements with the Company were it to be
subject to a change of control:
The Group is party to a small number of agreements that may be terminated upon a change
ofcontrol of the Company, including a takeover bid. Whether this may apply depends on the identity
orcharacteristics of the new controller. The Company does not have any agreements with any
Non-executive Director, Executive Director or employee that would provide compensation for loss
ofoffice or employment resulting from a change of control except that provisions of the Company’s
share incentive plans may cause outstanding unvested options and awards granted to employees
under such plans to vest on a takeover as follows:
Share incentive plan Change of control
Effect on vesting
provisions in the rules Performance condition
Long Term Incentive Plan Yes Full vesting n/a
Overview Strategic Report Governance AppendixFinancial Statements
121
Stakeholders and policies
s172 Statement The Company’s s172 Statement can be found in the Strategic Report on pages 48 and 49.
Workforce engagement Details of how the Group engages with its workforce can be found in the Strategic Report onpages
48 and 49 and the Corporate Governance Statement on page 84.
Supporting disability Details of the Group’s policy for giving full and fair consideration to applications for employment of
disabled persons, continuing employment of and appropriate training for employees who become
disabled, training, career development, promotion of disabled employees can be found on page 121.
Stakeholder engagement
on key decisions
Details of the key decisions and discussions of the Board during the year and the main stakeholder
inputs into those decision are set out in the Strategic Report on 48 and 49 and Corporate Governance
Statement on page 84 and 85.
Modern Slavery
Statement
The Group has approved and published on its website its Modern Slavery Statement in accordance
with the Modern Slavery Act 2015 https://cabpayments.com/modern-slavery-statement/
Diversity Policy The Board has approved a policy on diversity and inclusion. An overview of the Group’s approach to
equity, diversity and inclusion can be found on page 121.
Greenhouse gas
emissions
Details of the Group’s greenhouse gas emissions can be found in the ESG Report on 28 to 46 ofthe
Strategic Report.
Political contributions The Group did not make any donations to political organisations during the year.
Financial instruments
and risk
Details of the Group’s policies on financial risk management and the Group’s exposure to price risk,
credit risk, liquidity risk and cash flow risk are outlined in notes 37 to 40 to the financial statements.
Going concern After making appropriate enquiries and taking into account the matters set out in the Principal Risks
and Uncertainties section on pages 60 to 64 of this Annual Report, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational existence for twelve
months following the approval of this Annual Return. For this reason, they continue to adopt the going
concern basis when preparing these financial statements.
Shareholders and share capital
Share capital The Company has a single class of share which is divided into ordinary shares of 0.0333 pence each.
Each Ordinary Share carries one vote and all of the ordinary shares rank pari passu. There are no
special control rights attached to any of the ordinary shares. At the date of this Report, 254.1 million
ordinary shares of 0.0333 pence each had been issued which are fully paid up and are listed on the
London Stock Exchange. The rights and obligations attaching to the Company’s ordinary shares are
set out in the Company’s Articles of Association, which can be obtained from the Company’s website
at https://cabpayments.com/investors/ or can be obtained from Companies House or by writing to the
Company Secretary.
The Company has established an employee benefit trust (EBT) in connection with the operation of the
Company’s share incentive plan. The trustees of the EBT have waived their right to receive dividends
on any ordinary shares held by it, save in respect of ordinary shares it holds for any beneficiary
asnominee.
At a general meeting of the Company, every member has one vote on a show of hands and, on a poll,
one vote for each share held. A proxy or corporate representative on a show of hands has one vote
forand one vote against a resolution if appointed by one or more members to vote for the resolution
andby one or more members to vote against the resolution.
Directors’ Report continued
CAB Payments Holdings plc | Annual Report and Accounts 2023122
Shareholders and share capital continued
Under the Companies Act 2006, members are entitled to appoint a proxy or proxies to exercise all
orany of their rights to attend, speak and vote at a general meeting.
No member is entitled to vote at any general meeting in respect of shares held if any call or other sum
outstanding in respect of that share remains unpaid. In addition, subject to the Articles of Association,
no member shall be entitled to vote if they have failed to provide the Company with information
concerning interests in those shares required to be provided under the Companies Act 2006.
The Articles of Association provide for a deadline for submission of proxy forms of not less than
48hours before the meeting (or such shorter time if agreed by the Board). In calculating the period no
account should be taken of any day that is not a working day.
Variation of rights
Rights attached to any class of share may be varied with the written consent of the holders of at least
three-quarters in nominal value of the issued shares of that class, or by a special resolution passed
ataseparate meeting of the holders of those shares.
Restrictions on transfer of shares
There are no specific restrictions on the transfer of securities in the Company which are governed by
its Articles and relevant legislation other than certain restrictions which may from time-to-time be
imposed by law, for example insider trading law or as required under the Company’s Remuneration
Policy for Executive Directors. In accordance with the Market Abuse Regulation as retained in UK law,
certain employees are required to seek the approval of the Company prior to dealing in its securities.
The Company is not aware of agreements between the holders of shares that may result in
restrictions on the transfer of shares or that might result in restrictions on voting rights.
Further details of the Company’s share capital are set out in Note 27 to the Financial Statements.
Powers for issue
of new shares
Details of changes in the share capital of the Company during the year ended 31 December 2023 can
be found in Note 27 to the Financial Statements.
At the AGM the Directors will seek renewal of their authorities to allot shares and to disapply pre-
emption rights in line with the latest institutional shareholder guidelines.
Authority to purchase
own shares
At a general meeting held prior to Admission, the Company was given authority by a resolution
passed by shareholders to make market purchases of up to 10% of its issued share capital. This
authority will expire at the conclusion of the Company’s 2024 AGM. A resolution to renew the
authority will be proposed at the 2024 AGM. The Company did not make use of the authority during
the year.
Major interests
in shares
In accordance with Listing Rule 9.8.6(2), the Company has been notified of the following significant
interests in its ordinary shares pursuant to Disclosure Guidance and Transparency Rule 5:
Notifiable interests Voting rights % of capital
Nature of holding
(direct/indirect)
Helios Investment Partners LLP 114,640,189 45.11 Indirect
BlackRock, LLC 19,627,745 7.71 Indirect
FMR, LLC 14,056,500 5.53 Indirect
Eurocomm Holding Limited 13,264,981 5.23 Direct
As at 25 March 2024, the Company had been advised of the following additional changes:
Notifiable interests Voting rights % of capital
Nature of holding
(direct/indirect)
FMR, LLC 12,681,936 4.99 Indirect
Working Capital Advisors (UK) Ltd 12,721,597 5.00 Indirect
AGM The Company’s AGM will be held at 2.00pm on Thursday, 9 May 2024 atTheNews Building, 3
London Bridge Street, London SE1 9SG. Details of the arrangements for the AGM can be found on the
Company’s website.
Overview Strategic Report Governance AppendixFinancial Statements
123
Auditors and audit
Auditor reappointment A resolution to re-appoint Mazars LLP as auditor will be proposed at the AGM.
Audit confirmations Each of the Directors at the date of the approval of this report confirms that:
• So far as they are aware, there is no relevant audit information of which the Group’s auditor
isunaware;
• They have taken all the reasonable steps that they ought to have taken as a Director to make
themselves aware of any relevant audit information and to establish that the Group’s auditor
isaware of the information; and
• The confirmation is given and should be interpreted in accordance with the provisions
ofsection418 of the Companies Act 2006.
Listing Rule Disclosures
Listing Rule 9.8.4
Disclosure requirements under Listing Rule 9.8.4 are identified below along with cross-references
indicating where the relevant information is set out in the Annual Report:
Listing Rule Detail Page
9.8.4 (12) Arrangements to waiver dividends by shareholder 122
9.8.4 (14) Controlling Shareholder statements 84
The Directors’ Report has been approved by the Board of Directors of CAB Payments Holdings plc.
Signed on behalf of the Board
Lesley Martin
Company Secretary
25 March 2024
CAB Payments Holdings plc
Registered Office: 2 Quadrant House, The Quadrant, Sutton, Surrey, England, SM2 5AS
Company Number: 09659405
Directors’ Report continued
CAB Payments Holdings plc | Annual Report and Accounts 2023124
Directors’ Responsibilities Statement
The Directors are responsible for preparing the Annual
Report and the Group and Parent Company Financial
Statements in accordance with applicable United Kingdom
law andregulations.
The Directors are required to prepare financial statements
for each financial year which present a true and fair view
of the financial position of the Company and of the Group
and the financial performance and cash flows of the
Company and of the Group for that period. The Directors
have elected to prepare the Group and Parent Company
financial statements in accordance with the UK-adopted
International Financial Reporting Standards (IFRSs) in
conformity withthe Companies Act 2006.
In preparing those financial statements, the Directors are
required to:
• select suitable accounting policies in accordance with
IAS 8: ‘Accounting Policies, Changes in Accounting
Estimates and Errors’ and then apply them consistently;
• make judgements and accounting estimates that are
reasonable andprudent;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with
the specific requirements in IFRSs is insufficient to
enable users to understand the impact of particular
transactions, other events and conditions on the
Company and of the Group’s financial position and
financial performance;
• state whether UK-adopted international accounting
standards have been followed, subject to any material
departures disclosed and explained in the financial
statements; and
• prepare the accounts on a going concern basis unless,
having assessed the ability of the Company and the
Group to continue as a going concern, it is appropriate
to presume that the Company and/or the Group will not
continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s and Group’s transactions and which
disclose with reasonable accuracy at any time the financial
position of the Company and of the Group and enable
them to ensure that the financial statements comply with
the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and the Group
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Under applicable UK law and regulations, the Directors
are responsible for the preparation of a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Corporate Governance Statement that comply with
that law and regulations. In addition, the Directors are
responsible for the maintenance and integrity of the
corporate and financial information included on the
Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements
may differ from legislation in otherjurisdictions.
Neither the Company nor the Directors accept any liability
to any person in relation to the annual financial report
except to the extent that such liability could arise under
English law. Accordingly, any liability to a person who
has demonstrated reliance on any untrue or misleading
statement or omission shall be determined in accordance
with section 90A and schedule 10A of the Financial
Services and Markets Act 2000.
Directors’ Responsibility Statement under the
Code
In accordance with Provision 27 of the Code, the Directors
consider that the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable and provides
information necessary to enable shareholders to assess the
Company’s performance, business model andstrategy.
Responsibility Statement of the Directors in
Respect of the Annual Report and Accounts
Each of the Directors whose names are listed on pages 72
and 73 confirm that to the best of their knowledge:
(a) the consolidated financial statements, prepared in
accordance with UK-adopted international accounting
standards give a true and fair view of the assets,
liabilities, financial position and profit and loss of
the Company and the undertakings included in the
consolidation taken as a whole; and
(b) the Annual Report (including the Strategic Report
encompassed within the ‘Overview’, ‘Strategic Report’,
‘Performance’ and ‘Governance’ sections) includes a
fair review of the development and performance of
the business, and the position of the Company and the
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks
and uncertainties that they face.
For and on behalf of the Board
Richard Hallett
Chief Financial Officer
25 March 2024
Overview Strategic Report Governance AppendixFinancial Statements
125
128 Independent Auditor’s Report to the
members of CAB Payments Holdings plc
137 Consolidated Statement of Profit or Loss
138 Consolidated Statement of Other
Comprehensive Income
139 Consolidated Statement of Financial Position
141 Consolidated Statement of Changes inEquity
142 Consolidated Statement of Cash Flows
143 Company Statement of Financial Position
144 Company Statement of Changes in Equity
145 Company Statement of Cash Flows
146 Notes to the Financial Statements
Financial
Statements
cross-border payments…
Moving money through secure
CAB Payments Holdings plc | Annual Report and Accounts 2023126
livelihoods,
societies
and
economies
…for the transformation of
127
Overview Strategic Report Governance AppendixFinancial Statements
Opinion
We have audited the financial statements of CAB Payments Holdings plc (the ‘Parent Company’) and its subsidiaries (the
‘Group’) for the year ended 31 December 2023 which comprise the Consolidated Statement of Profit or Loss, the Consolidated
Statement of Other Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement
of Changes in Equity, the Consolidated Statement of Cash Flows, the Parent Company Statement of Financial Position, the
Parent Company Statement of Changes in Equity, the Parent Company Statement of Cash Flows, and notes to the financial
statements, including material accounting policy information.
The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international
accounting standards and, as regards the Parent Company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion, the financial statements:
• give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2023 and of
the Group’s profit for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards and, as regards the
Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the financial
statements” section of our report. We are independent of the Group and the Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s
(‘FRC’) Ethical Standard as applied to listed entities and public interest entities and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
Our audit procedures to evaluate the directors’ assessment of the Group’s and the Parent Company’s ability to continue to
adopt the going concern basis of accounting included but were not limited to:
• Undertaking an initial assessment at the planning stage of the audit to identify events or conditions that may cast
significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern;
• Obtaining an understanding of the relevant controls relating to the directors’ going concern assessment;
• Reviewing the directors’ going concern assessment to determine that it appropriately considers an assessment of key
business risks including assessing the sufficiency of the Group’s capital and liquidity taking into consideration the most
recent Internal Capital Adequacy Assessment Process (‘ICAAP’) and Internal Liquidity Adequacy Assessment Process
(‘ILAAP’) documents;
• Making enquiries of the directors to understand the period of assessment considered by them, the assumptions
they considered and the implication of those when assessing the Group’s and the Parent Company’s future financial
performance;
• Challenging the appropriateness of the directors’ key assumptions used in their forecasts, by reviewing supporting and
contradictory evidence in relation to these key assumptions and assessing the directors’ consideration of stress testing
and reverse stress testing on the Group’s capital and liquidity and their consideration of severe but plausible scenarios.
This included assessing the viability of mitigating actions within the directors’ control and assessment of the directors’
considerations of the implications of the macroeconomic environment and geopolitical risk;
• Engaging our prudential regulatory experts to assess the results of management’s stress testing and the impact on
liquidity and regulatory capital;
Independent Auditor’s Report to the members of CAB Payments Holdings plc
CAB Payments Holdings plc | Annual Report and Accounts 2023128
• Assessing the reasonableness of the forecasts prepared by the directors, including evaluating the historical accuracy of
the forecasts;
• Inspecting regulatory correspondence with the Prudential Regulation Authority (‘PRA’) and the Financial Conduct
Authority (‘FCA’) and inspecting Board of Directors’ meeting minutes to identify events or conditions that may impact
the Group’s and the Parent Company’s ability to continue as a going concern;
• Considering whether there were events subsequent to the balance sheet date which could have a bearing on the going
concern conclusion;
• Considering the consistency of the directors’ forecasts with other areas of the financial statements and our audit; and
• Evaluating the appropriateness of the directors’ disclosures in the financial statements on going concern.
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 Group’s and the Parent Company’s ability to continue as
a going concern for a period of 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.
In relation to CAB Payments Holdings plc’s reporting on how it has applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether
the director’s considered it appropriate to adopt the going concern basis of accounting.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
We summarise below the key audit matters in forming our opinion above, together with an overview of the principal audit
procedures performed to address each matter and our key observations arising from those procedures.
These matters, together with our findings, were communicated to those charged with governance through our Audit
Completion Report.
129
Overview Strategic Report Governance AppendixFinancial Statements
Key Audit Matter How our scope addressed this matter
Revenue recognition on manual
adjustments to net foreign
exchange gain
The Group recognised a total net
foreign exchange gain of £88,417,000
in the year ended 31 December 2023
(2022: £82,756,000).
Refer to material accounting policy
information (Note 1) and to Note 6 of
the financial statements.
The net foreign exchange gain
comprises unrealised income/losses
from foreign exchange transactions,
and net foreign exchange translation
gains/losses, which are subject to
manual adjustments.
Management performs mark-
to-market adjustments to open
trades daily. Automated elements
of the process contain errors due
to limitations in the calibration of
data feeds within the core operating
system. Management performs
reviews to ensure errors are identified
and manually corrected. The reliance
on manual processes increases the risk
of error.
Foreign exchange gains/losses on
translation of non-sterling balances
are calculated automatically using
exchange rate data feeds. Errors in
the data fees require management to
manually reperform the calculation.
Adjustments are also made to the
automated data to reflect the illiquid
nature of some frontier markets
currencies.
The accuracy and completeness of
these manual adjustments has been
designated as a key audit matter
given the enhanced risk of material
misstatement due to error.
Our audit procedures included, but were not limited to:
In relation to manual mark-to-market adjustments on open trades, we have:
• Obtained an understanding of the key processes relating to manual mark-to-
market adjustment on open trades and performed end-to-end walkthroughs of
relevant key business processes to identify key systems, applications and controls
in the process;
• Evaluated the design and implementation of key controls, including information
technology dependent manual controls, on the exchange rate adjustments to the
mark-to-market balances;
• Tested the operating effectiveness of key controls around management’s manual
interventions on mark-to-market adjustments on open trades;
• Tested the accuracy of foreign exchange rates applied in the core banking system;
• On a sample basis, performed a recalculation of the foreign exchange gains or
losses, based on supporting documentation;
• With assistance of our in-house data analytics specialists, tested the accuracy of
net foreign exchange gain through re-computation; and
• Tested the accuracy of the manual adjustments and validating the journal entries
posted in the general ledger.
In relation to manual adjustments to daily translation of non-Sterling balances, we
have:
• Obtained an understanding of the key processes relating to manual adjustments to
daily revaluation of non-Sterling balances and performed end-to-end walkthroughs
of relevant key business processes to identify key systems, applications and
controls in the process;
• Evaluated the design and implementation of key controls over the daily exchange
rate adjustments on the non-Sterling balances;
• Tested the operating effectiveness of key controls around management’s manual
interventions;
• Tested the accuracy of foreign exchange rates applied in the core banking system;
• On a sample basis, agreed frontier market currency trades to supporting documents
such as SWIFT statements or deal tickets;
• Tested the accuracy of the manual adjustments and validating the journal entries
posted in the general ledger;
• Performed a recalculation of the foreign exchange translation for a sample of
non-Sterling balances on the Statement of Financial Position at year end, based on
supporting documentation; and
• With the assistance of our in-house data analytics specialists, tested the accuracy
of net foreign exchange gain through re-computation.
We tested the information technology general controls including user access, change
management, and segregation of duties within the core banking system.
We assessed the adequacy and appropriateness of the disclosures in the financial
statements in relation to net foreign exchange gain and assessed for compliance with
the requirement of IFRS.
Our observations
We found the manual adjustments to net foreign exchange are not materially
misstated for the year ended 31 December 2023 and materially in accordance
with IFRS.
Independent Auditor’s Report to the members of CAB Payments Holdings plc
continued
CAB Payments Holdings plc | Annual Report and Accounts 2023130
Key Audit Matter How our scope addressed this matter
Completeness and accuracy of
expected credit losses (‘ECL’) on
loans and advances including
undrawn commitments
At 31 December 2023, the Group
reported a total ECL balance sheet
provision for loans and advances
including undrawn commitments of
£784,000 (2022: £376,000).
Refer to material accounting policy
information (Note 1) and to Notes
2, 13, 26 and 37 of the financial
statements.
Credit risk is an inherently judgmental
area due to the use of subjective
assumptions and a high degree of
estimation. The Group has credit
exposure with banks and customer
counterparties located in a diverse
range of countries around the world.
The impairment provision relating
to the Group’s loans and advances
portfolio requires the directors to
make judgements over the ability of
the Group’s debtors to make future
repayments.
Management identifies stage 3
loans through criteria relating to
days past due or being unlikely to
pay. Judgement is applied in the
assessment of unlikely to pay criteria.
The identification of stage 3 loans
and advances and the provision
assessment of these related exposures
with higher credit risk, within Liquidity
as a Service (‘LaaS’), lines of credit and
guaranty products, has been identified
as an enhanced risk.
The ECL model used by the Group
requires model inputs from a range
of sources collated manually. Sources
include operating system data,
credit risk management committee
minutes, internal rating scorecards
and facility agreements. These inputs
particularly impact the completeness
and accuracy of Probability of Default
(‘PD’) and Exposure at Default (‘EAD’).
The manual nature of the process
increases the likelihood of error
or omission, giving rise to an
enhanced risk.
Our audit procedures included but were not limited to:
In relation to the completeness of stage 3 loans, we have performed the following
procedures, including with the assistance of our credit modelling specialists, to
address the specific risks identified:
• Obtained an understanding of the key processes relating to ECL and performed
end-to-end walkthroughs of relevant key business processes to identify key
systems, applications and controls in the ECL process;
• Evaluated the design and implementation of key controls over staging allocation
criteria including internal rating calculations, annual reviews, days past due
monitoring and watchlist monitoring;
• Reviewed minutes of the credit risk management committee meetings which
include watchlist monitoring;
• Critically assessed the methodology for determining the default criteria in
accordance with IFRS 9 requirements;
• Reviewed a sample of stage 1 and 2 exposures against default criteria to assess
judgements made around unlikely to pay criteria;
• Tested the effectiveness of bank reconciliation controls to identify missed payments;
and
• Performed reconciliation of staging allocation to source documentation including
the watchlist.
In relation to data inputs, we have performed the following procedures, including
with the assistance of our credit modelling specialists, to address the specific risks
identified:
• Evaluated the design and implementation of key controls over the ECL data
including management’s processes to ensure the accuracy and completeness of
data feeding into the PD and EAD models;
• Tested the reconciliation of exposures used in the ECL model at year-end against
the exposures in the trial balance to ensure completeness of exposures in the ECL
model; and
• Tested the completeness and accuracy of data inputs for the ECL model, on a
sample basis, by agreeing to operating system data, credit risk management
committee minutes, internal rating scorecards and facility agreements.
We performed a stand-back assessment of the ECL provision to assess its
reasonableness and appropriateness, considering the quality of the portfolio, credit
risk profile and staging profile.
We assessed the adequacy and appropriateness of the disclosures in the financial
statements in relation to ECL, and assessed for compliance with the requirement
of IFRS 9. This included assessing appropriateness of accounting policy related to
ECL and evaluating whether the disclosures appropriately reflect and address the
uncertainty which exists when determining ECL including sensitivity analysis and key
judgements.
Our observations
We found the judgements and assumptions used by management in the ECL
assessment, and related disclosures, are materiality in accordance with the
requirement of IFRS 9. The ECL impairment provision on loans and advances,
including undrawn commitments, is not materially misstated as at 31 December
2023.
131
Overview Strategic Report Governance AppendixFinancial Statements
Our application of materiality and an overview of the scope of our audit
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect
of misstatements, both individually and on the financial statements as a whole. Based on our professional judgement, we
determined materiality for the financial statements as a whole as follows:
Group materiality
Overall materiality £2,936,000
How we determined it 5% of Profit before tax excluding non-recurring operating expenses
Rationale for benchmark applied Profit before tax (‘PBT’) is the benchmark typically used for profit-oriented groups.
We have adjusted the PBT with the non-recurring operating expenses incurred in
the current year. We believe that adjusted PBT provides us with most appropriate
measure for the users of the financial statements, given that the Group is a profit-
making entity, it is the standard for listed entities and it is consistent with the wider
industry.
Performance materiality Performance materiality is set to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements in the financial
statements exceeds materiality for the financial statements as a whole.
We set performance materiality at £1,762,000, which represents 60% of overall
materiality.
We considered several factors in determining performance materiality, including the
level and nature of uncorrected and corrected misstatements in the prior year and the
robustness of the control environment, and concluded that an amount in the middle of
our normal range was appropriate.
Reporting threshold We agreed with the directors that we would report to them misstatements identified
during our audit above £88,000 as well as misstatements below that amount that, in
our view, warranted reporting for qualitative reasons.
Parent Company materiality
Overall materiality £1,486,000
How we determined it 1% of net assets
Rationale for benchmark applied We believe that net assets provides us with the most appropriate measure for the
users of the Parent Company’s financial statements, given that the Parent Company is
primarily a holding company.
Performance materiality Performance materiality is set to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements in the financial
statements exceeds materiality for the financial statements as a whole.
We set performance materiality at £892,000, which represents 60% of overall
materiality.
We considered several factors in determining performance materiality, including the
level and nature of uncorrected and corrected misstatements in the prior year and the
robustness of the control environment, and concluded that an amount in the middle of
our normal range was appropriate.
Reporting threshold We agreed with the directors that we would report to them misstatements identified
during our audit above £45,000 as well as misstatements below that amount that, in
our view, warranted reporting for qualitative reasons.
Independent Auditor’s Report to the members of CAB Payments Holdings plc
continued
CAB Payments Holdings plc | Annual Report and Accounts 2023132
As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due
to fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked at
where the directors made subjective judgements, such as assumptions on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial
statements as a whole. We used the outputs of our risk assessment, our understanding of the Group and the Parent
Company, their environment, controls, and critical business processes, to consider qualitative factors to ensure that we
obtained sufficient coverage across all financial statement line items.
Our group audit scope included an audit of the Group’s and the Parent Company’s financial statements. Based on our risk
assessment, the main trading component, Crown Agents Bank Limited, together with the Parent Company, were subject
to full scope audit performed by the group audit team. This provided the following coverage: 98.2% of the absolute Group’s
revenue, net of interest expense, 99.9% of the Group’s absolute PBT, 99.9% of the Group’s absolute PBT excluding non-
recurring operating expenses, 99.4% of the Group’s total assets and 89.7% of the Group’s net assets.
At the Parent Company level, the group audit team also tested the consolidation process and carried out analytical
procedures to confirm our conclusion that there were no significant risks of material misstatement of the aggregated
financial information.
Other information
The other information comprises the information included in the annual report and accounts other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information. 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 audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with
the Companies Act 2006.
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 those reports have been prepared in accordance
with applicable legal requirements;
• the information about internal control and risk management systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance and Transparency
Rules sourcebook made by the Financial Conduct Authority (the ‘FCA Rules’), is consistent with the financial statements
and has been prepared in accordance with applicable legal requirements; and
• information about the Parent Company’s corporate governance code and practices and about its administrative,
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
133
Overview Strategic Report Governance AppendixFinancial Statements
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the
course of the audit, we have not identified material misstatements in the:
• Strategic Report or the Directors’ Report; or
• information about internal control and risk management systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
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 by the Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited 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; or
• a corporate governance statement has not been prepared by the Parent Company.
Corporate governance statement
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the Parent Company’s compliance with the provisions of the UK
Corporate Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
• Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified, set out on page 122;
• Directors’ explanation as to its assessment of the entity’s prospects, the period this assessment covers and why they
period is appropriate, set out on pages 65 and 66;
• Directors’ statement on fair, balanced and understandable, set out on page 92;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks, set out on page 65;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems, set out on page 83; and;
• The section describing the work of the audit committee, set out on pages 90 to 95.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement set out on page 125, 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 Group’s and the Parent 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 Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Independent Auditor’s Report to the members of CAB Payments Holdings plc
continued
CAB Payments Holdings plc | Annual Report and Accounts 2023134
Auditor’s responsibilities for the audit of the financial statements
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.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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.
Based on our understanding of the Group and the Parent Company and the industry that they operate in, we considered
that non-compliance with the following laws and regulations might have a material effect on the financial statements:
regulatory and supervisory requirements of the PRA and of the FCA and financial crime regulations.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks
of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
• Gaining an understanding of the legal and regulatory framework applicable to the Group and the Parent Company,
the industry in which they operate, and considering the risk of acts by the Group and the Parent Company which were
contrary to the applicable laws and regulations, including fraud;
• Inquiring of the directors, management and, where appropriate, those charged with governance, as to whether the Group
and the Parent Company are in compliance with laws and regulations, and discussing their policies and procedures
regarding compliance with laws and regulations;
• Inspecting correspondence with PRA and FCA and holding bilateral discussions with the PRA;
• Inspecting minutes of meetings of directors held during the year and up until the date of approval of the financial
statements;
• Attending Board Audit Committee and Board Risk Committee meetings held during the year and up until the date of
approval of the financial statements and inspecting minutes of those meetings; and
• Discussing amongst the engagement team the laws and regulations listed above, and remaining alert to any indications
of non-compliance.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements,
such as UK tax legislation and the Companies Act 2006.
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of
the financial statements, including the risk of management override of controls, and determined that the principal risks
related to posting manual journal entries to manipulate financial performance, management bias through judgements and
assumptions in significant accounting estimates, and significant one-off transactions.
Our procedures in relation to fraud included but were not limited to:
• Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged
fraud;
• Gaining an understanding of the internal controls established to mitigate risks related to fraud;
• Discussing amongst the engagement team the risks of fraud;
• Addressing the risks of fraud through management override of controls by performing journal entry testing and testing
of significant one-off transactions; and
• Being skeptical to the potential of management bias through judgements and assumptions in significant accounting
estimates.
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Overview Strategic Report Governance AppendixFinancial Statements
The primary responsibility for the prevention and detection of irregularities, including fraud, rests with both those charged
with governance and management. As with any audit, there remained a risk of non-detection of irregularities, as these may
involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
The risks of material misstatement that had the greatest effect on our audit are discussed in the “Key audit matters” section
of this report.
A further description of our responsibilities is available on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the Board of Directors on 28 June 2021 to audit the financial statements for the year ending 31
December 2021 and subsequent financial periods, which was prior to the Parent Company becoming a public interest entity
(‘PIE’). The Parent Company became a PIE during the year ended 31 December 2023, and following the recommendation of
the Board Audit Committee, were appointed by the Board of Directors on 5 December 2023 to audit the financial statements
for the year ending 31 December 2023 and subsequent financial periods. The period of total uninterrupted engagement
since the Parent Company became a PIE is one year, covering the year ending 31 December 2023.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company
and we remain independent of the Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with our additional report to the Board Audit Committee.
Use of the audit report
This report is made solely to the Company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the Company’s members as a body for our audit
work, for this report, or for the opinions we have formed.
As required by the FCA Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements will form part of
the ESEF-prepared annual financial report filed on the National Storage Mechanism of the FCA in accordance with the ESEF
Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report provides no assurance over whether the annual financial
report has been prepared using the single electronic format specified in the ESEF RTS.
Maximiliano Bark (Senior Statutory Auditor) for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
30 Old Bailey, London, EC4M 7AU
27 March 2024
Independent Auditor’s Report to the members of CAB Payments Holdings plc
continued
CAB Payments Holdings plc | Annual Report and Accounts 2023136
Consolidated Statement of Profit or Loss
for the year ended 31 December 2023

|  | 2023 | 2022
| Note | £’000 | £’000
Continuing operations |  |  |
Interest income | 4 | 52, 353 | 17 ,171
Interest expense | 4 | (30, 85 4) | (10 , 3 9 8)
Net interest income |  | 21 , 4 9 9 | 6 ,77 3
Gains on money market funds |  | 11, 03 6 | 3,584
Net gain on financial assets and financial liabilities |  |  |
mandatorily held at fair value through profit or loss |  | 1 ,2 32 | 1,0 09
Fees and commission income | 5 | 1 4 , 5 71 | 1 5 ,7 97
Net foreign exchange gain | 6 | 88,41 7 | 82 ,756
Revenue, net of interest expense |  | 136 ,755 | 10 9 , 91 9
Other operating income / (loss) | 7 | 31 3 | (4 8 4)
Total income, net of interest expense |  | 1 3 7, 0 6 8 | 10 9 , 43 5
– Recurring | 8 | (77 ,946) | (5 9, 870)
– Non-recurring | 8 | (21 , 101) | (5 , 332)
Operating expenses |  | (99, 04 7) | (65, 202)
Impairment loss on financial assets at amortised cost | 37 | (4 0 4) | (3 42)
Profit before taxation |  | 3 7, 6 1 7 | 4 3 , 8 91
Tax expense | 9 | (1 3 , 7 2 7) | (10 , 4 5 6)
Profit after tax for the year from continuing operations |  | 23,8 90 | 33, 435
Discontinued operations |  |  |
Loss after tax for the year from discontinued operations | 10 | (1 5 3) | (67)
Profit for the year |  | 23 ,737 | 33 ,3 68
Profit for the year attributable to: |  |  |
– Owners of the parent | 28 | 22 , 71 3 | 31 , 0 01
– Non-controlling interests | 31 | 1, 024 | 2, 367
|  | 23 ,737 | 33 ,3 68
|  | 2023 | 2022
|  | pence | pence
Basic and diluted earnings per share | 44 |  |
Continuing operations |  | 10 | 14
Discontinued operations |  | – | –
Total basic and diluted earnings per share |  | 10 | 14

137
Overview Strategic Report Governance AppendixFinancial Statements
Consolidated Statement of Other Comprehensive Income
for the year ended 31 December 2023

|  | 2023 | 2022
| Note | £’000 | £’000
Profit for the year |  | 23 ,737 | 33 ,3 68
Other comprehensive income for the year: |  |  |
Items that may be reclassified subsequently to profit or loss: |  |  |
Foreign exchange (losses)/gains on translation |  |  |
of foreign operations | 30 | (1 21) | 119
Items that will not be reclassified subsequently to profit or loss: |  |  |
Movement in investment revaluation reserve for equity instruments at fair value through other comprehensive income | 29 | 27 | 88
Income tax relating to these items | 23 | (1 2) | (17)
Other comprehensive (loss)/income net of tax |  | (10 6) | 19 0
Total comprehensive income |  | 23 , 6 31 | 33 ,55 8
Total comprehensive income attributable to: |  |  |
– Owners of the parent |  | 22 , 617 | 31 ,1 7 7
– Non-controlling interests | 31 | 1 ,01 4 | 2 , 3 81
|  | 2 3 ,6 31 | 33,55 8

The notes on pages 146 to 237 form part of these consolidated financial statements.
CAB Payments Holdings plc | Annual Report and Accounts 2023138
Consolidated Statement of Financial Position
as at 31 December 2023

|  |  | As at
|  | As at | 31 December 2022
|  | 31 December 2023 | (restated 1 )
| Note | £’000 | £’000
Assets |  |  |
Cash and balances at central banks | 11 | 528 , 396 | 607 ,358
Money market funds | 12 | 518,7 64 | 209 ,486
Loans and advances on demand to banks | 13 | 135 ,178 | 9 0, 209
Investments in debt securities | 15 | 353 ,028 | 414 , 0 6 1
Other loans and advances to banks | 13 | 1 3 7, 5 70 | 85, 465
Other loans and advances to non-banks | 13 | 8 , 216 | 1 2 , 4 47
Unsettled transactions | 18 | 8 , 417 | 1 6 , 071
Derivative financial assets | 14 | 3, 829 | 6,5 67
Investments in equity securities | 16 | 495 | 488
Other assets | 18 | 11 , 20 0 | 16 , 4 0 9
Accrued income | 17 | 1 , 21 5 | 856
Property, plant and equipment | 19 | 1 ,1 91 | 1, 579
Right of use assets | 20 | 689 | 1,1 34
Intangible assets | 21 | 24 ,294 | 21 , 919
|  | 1 ,7 32 , 4 82 | 1,48 4, 049
Assets classified as held for sale | 10 | – | 1, 3 87
Total assets |  | 1 ,7 32 , 4 82 | 1,485,436
Liabilities |  |  |
Customer accounts | 24 | 1 ,5 42, 889 | 1,305,551
Derivative financial liabilities | 14 | 9,679 | 4,5 43
Unsettled transactions | 25 | 20,081 | 25 ,782
Other liabilities | 25 | 8 , 121 | 11 , 517
Accruals | 25 | 18, 367 | 19 ,3 64
Lease liabilities | 20 | 884 | 1 , 2 81
Deferred tax liability | 23 | 695 | 316
Provisions | 26 | 236 | 79
|  | 1 ,600, 952 | 1,3 68,4 3 3
Liabilities classified as held for sale | 10 | – | 1 ,045
Total liabilities |  | 1,6 00, 952 | 1, 3 6 9 , 478

1
1
2
2
139
Overview Strategic Report Governance AppendixFinancial Statements

|  |  | As at
|  | As at | 31 December 2022
|  | 31 December 2023 | (restated 1 )
| Note | £’000 | £’000
Equity |  |  |
Called up share capital | 27 | 85 | 6 8 , 010
Retained earnings | 28 | 1 31 , 47 8 | 4 0 ,17 9
Investment revaluation reserve | 29 | 111 | 96
Foreign currency translation reserve | 30 | (14 4) | (31)
Equity attributable to owners of the parent |  | 1 31 , 53 0 | 10 8 , 25 4
Non-controlling interests | 31 | – | 7,704
Shareholders’ funds |  | 1 31 , 53 0 | 11 5 , 9 5 8
Total liabilities and equity |  | 1 ,7 32 , 4 82 | 1,485,436

Company registration number - 09659405
1 Prior year restatement note is disclosed on Note 13.
2 Prior year restatement note is disclosed on Note 18.
The notes on pages 146 to 237 form part of these consolidated financial statements.
The Board of Directors approved the consolidated financial statements on 25 March 2024.
B Trivedi R Hallett
Group Chief Executive Officer Group Chief Financial Officer
Consolidated Statement of Financial Position continued
as at 31 December 2023
CAB Payments Holdings plc | Annual Report and Accounts 2023140
Consolidated Statement of Changes in Equity
for the year ended 31 December 2023

|  |  | Attributable to owners of the parent |  |  |  |
|  |  |  | Foreign |  | Non- |
|  |  | Investment | currency |  | Controlling | Total
| Share | Retained | revaluation | translation |  | Interest | shareholders’
| capital | earnings | reserve | reserve | Total | (NCI) | funds
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Balance at 1 January 2023 | 6 8 , 010 | 40,179 | 96 | (31) | 108 ,2 54 | 7,7 0 4 | 115 , 95 8
Profit for the year (Note 31) | – | 22 , 71 3 | – | – | 22 , 71 3 | 1 , 024 | 23 ,7 37
Other comprehensive income: |  |  |  |  |  |  |
Foreign exchange losses on translation |  |  |  |  |  |  |
of foreign operations (Note 30) | – | – | – | (111) | (111) | (1 0) | (1 21)
Movement in investment revaluation |  |  |  |  |  |  |
reserve for equity instruments at fair value through other comprehensive income (Note 29) | – | – | 27 | – | 27 | – | 27
Income tax relating to these items (Note 23) | – | – | (1 2) | – | (1 2) | – | (12)
Other comprehensive loss net of tax | – | – | 15 | (111) | (96) | (1 0) | (10 6)
Total comprehensive income/(loss) | – | 22 , 71 3 | 15 | (111) | 2 2 , 617 | 1 ,01 4 | 23 , 6 31
Transactions with owners |  |  |  |  |  |  |
in their capacity as owners: |  |  |  |  |  |  |
Share based payment expense (Note 32) | – | 1 , 31 3 | – | – | 1 , 31 3 | 46 | 1 , 359
Issuance of new shares (Note 27) | 11 | (11) | – | – | – | – | –
Capital injection in subsidiary (Note 28) | – | 3,66 1 | – | – | 3,661 | 296 | 3, 957
Change in ownership interest in subsidiary (Note 27e) | – | (54 3) | – | – | (543) | – | (5 43)
Share capital reduction (Note 27) | (67 ,936) | 6 7, 9 3 6 | – | – | – | – | –
Dividends declared (Note 28) | – | (11 , 3 0 0) | – | – | (11 , 3 0 0) | (1 , 5 4 0) | (1 2 , 8 4 0)
FX translations adjustment | – | – | – | 8 | 8 | – | 8
Acquisition of NCI (Note 28, Note 30) | – | 7, 5 3 0 | – | (1 0) | 7, 5 2 0 | ( 7, 5 2 0) | –
Total | (6 7, 9 2 5) | 68,586 | – | (2) | 659 | (8,718) | (8 ,059)
Balance at 31 December 2023 | 85 | 1 31 , 47 8 | 111 | (1 4 4) | 1 31 , 5 3 0 | – | 1 31 , 5 3 0
Balance at 1 January 2022 | 6 8 , 01 0 | 8 , 4 42 | 30 | (141) | 76 , 3 41 | 5, 222 | 81, 5 6 3
Profit for the year (Note 28) | – | 31 , 0 01 | – | – | 31 , 0 01 | 2,367 | 33 ,3 68
Other comprehensive income: |  |  |  |  |  |  |
Foreign exchange gains on translation |  |  |  |  |  |  |
of foreign operations (Note 30) | – | – | – | 110 | 110 | 9 | 119
Movement in investment revaluation reserve |  |  |  |  |  |  |
for equity instruments at fair value through other comprehensive income (Note 29) | – | – | 82 | – | 82 | 6 | 88
Income tax relating to these items (Note 23) |  |  | (16) |  | (16) | (1) | (17)
Other comprehensive income net of tax | – | – | 66 | 110 | 176 | 14 | 19 0
Total comprehensive income | – | 31 , 0 01 | 66 | 110 | 31, 17 7 | 2 , 3 81 | 33 ,55 8
Transactions with owners |  |  |  |  |  |  |
in their capacity as owners: |  |  |  |  |  |  |
Share based payment expense (Note 32) | – | 388 | – | – | 388 | – | 388
Change in NCI percentage (Note 31) | – | 348 | – | – | 348 | 101 | 449
Total | – | 736 | – | – | 736 | 101 | 837
Balance at 31 December 2022 | 6 8 , 010 | 4 0 , 179 | 96 | (31) | 108,254 | 7,704 | 115,958

The notes on pages 146 to 237 form part of these consolidated financial statements.
141
Overview Strategic Report Governance AppendixFinancial Statements
Consolidated Statement of Cash Flows
for the year ended 31 December 2023

|  |  | Restated
|  | 2023 | 2022
| Note | £’000 | £’000
Cash inflow/(outflow) from operating activities 1 | 34 | 321 , 47 6 | (2 3 3 , 41 3)
Tax paid |  | (14 , 0 8 4) | (9,583)
Payments for interest on lease liabilities | 20 | (65) | (1 9)
Net cash generated from/(used in) operating activities |  | 3 0 7, 32 7 | (24 3 , 015)
Cash flow used in investing activities |  |  |
Purchase of property, plant and equipment | 19 | (4 22) | (346)
Purchase of intangible assets | 21 | (6 , 9 82) | (4 , 53 8)
Purchase of investments in subsidiary undertakings |  | (54 3) |
Proceeds from sale of investment in CAIM | 10 | 2 ,1 33 | –
Net cash used in investing activities |  | (5 , 814) | (4 , 8 84)
Cash flow used in financing activities |  |  |
Repayment of principal portion of the lease liability | 20 | (4 6 2) | (252)
Proceeds from shares issued to non-controlling interests | 28 | 973 | –
Dividends paid | 28 | (1 2 , 8 4 0) | –
Net cash used in financing activities |  | (1 2,3 2 9) | (252)
Net increase/(decrease) in cash and cash equivalents 1 |  | 289, 184 | (24 8 ,151)
Cash and cash equivalents at the beginning of the year |  | 9 07, 0 5 3 | 1 ,120 ,10 9
Effect of exchange rate changes on cash and cash equivalents |  | (1 3 , 8 9 9) | 35, 09 5
Cash and cash equivalents at the end of the year |  | 1,1 8 2,3 38 | 907,053
Analysed as follows: |  |  |
Cash and balances at central banks | 11 | 528 ,3 96 | 607 ,358
Money market funds | 12 | 518,7 64 | 209 ,486
Loans and advances on demand to banks | 13 | 135 ,178 | 9 0, 209

1
1
1 Prior year restatement note is disclosed on Note 34.
The notes on pages 146 to 237 form part of these consolidated financial statements.
CAB Payments Holdings plc | Annual Report and Accounts 2023142
Company Statement of Financial Position
as at 31 December 2023
Note
2023
£’000
2022
£’000
Assets
Loans and advances receivable from subsidiary undertaking 13 658 –
Receivables from subsidiary undertaking 35 4,239 –
Other assets 18 188 –
Investments in subsidiary undertakings 22 164,380 63,384
169,465 63,384
Assets classified as held for sale 10 – 2,181
Total Assets 169,465 65,565
Liabilities
Payables to subsidiary undertaking 35 19,406 1,198
Other liabilities 25 422 –
Accruals 25 1,022 321
Total Liabilities 20,850 1,519
Equity
Called up share capital 27 85 68,010
Merger relief reserve 27 100,442 –
Retained earnings 28 48,088 (3,964)
Shareholders’ funds 148,615 64,046
Total equity and liabilities 169,465 65,565
Company registration number - 09659405
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting its own
profit or loss and other comprehensive income statement. The loss for the year of £4,584k (2022: £1,891k) has been
accounted for in the financial statements of the Company.
The notes on pages 146 to 237 form part of these Company financial statements.
The Board of Directors approved the Company financial statements on 25 March 2024.
B Trivedi R Hallett
Group Chief Executive Officer Group Chief Financial Officer
143
Overview Strategic Report Governance AppendixFinancial Statements
Company Statement of Changes in Equity
for the year ended 31 December 2023
Called up
share capital
£’000
Merger relief
reserve
£’000
Retained
earnings
£’000
Total
shareholders’
funds
£’000
Balance at 1 January 2023 68,010 – (3,964) 64,046
Loss for the year (Note 28) – – (4,584) (4,584)
Total comprehensive income 68,010 – (8,548) 59,462
Transactions with owners in their capacity as owners:
Issuance of new shares (Note 27) 11 100,442 – 100,453
Share capital reduction (Note 27) (67,936) – 67,936 –
Dividends declared (Note 28) – – (11,300) (11,300)
Total 67, 925 100,442 56,636 89,153
Balance at 31 December 2023 85 100,442 48,088 148,615
Balance at 1 January 2022 68,010 – (2,073) 65,937
Loss for the year (Note 28) – – (1,891) (1,891)
Total comprehensive income – – (1,891) (1,891)
Transactions with owners in their capacity as owners: – – – –
Total – – – –
Balance at 31 December 2022 68,010 – (3,964) 64,046
The notes on pages 146 to 237 form part of these financial statements.
CAB Payments Holdings plc | Annual Report and Accounts 2023144
Company Statement of Cash Flows
for the year ended 31 December 2023
Note
2023
£’000
2022
£’000
Cash inflow from operating activities 34 10,368 –
Net cash inflow from operating activities 10,368 –
Cash flow from investing activities
Sale of investments 2,133 –
Purchase of investments in subsidiary undertakings (543) –
Net cash generated from investing activities 1,590 –
Cash flow used in financing activities
Dividends paid (11,300) –
Net cash used in financing activities (11,300) –
Net increase in cash and cash equivalents 658 –
Cash and cash equivalents at the beginning of the year – –
Cash and cash equivalents at the end of the year 658 –
Analysed as follows:
Loans and advances receivable from subsidiary undertaking 658 –
The notes on pages 146 to 237 form part of these financial statements.
145
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements
for the year ended 31 December 2023
1. Statement of Accounting Policies
The following accounting policies relate to the financial statements of CAB Payments Holdings plc (the Company) and its
subsidiaries (collectively referred to as the Group).
a) General information
On 6 March 2023 the Company changed its name from CABIM Limited to CAB Payments Holdings Limited. On 4 July
2023 the Company was reregistered as a public limited company, CAB Payments Holdings plc, to comply with listing
requirements. The Company is incorporated and domiciled in England. The address of its registered office as at 31
December 2023 is Quadrant House, The Quadrant, Sutton SM2 5AS, England. The ordinary shares of the Company were
admitted to conditional trading on the London Stock Exchange on 6 July 2023 and unconditional trading on 11 July 2023.
The Company’s shares trade under the ticker code of CABP.L.
The Group provides regulated banking services that connect emerging and frontier markets to the rest of the world,
using foreign exchange (FX) and payments technology.
b) Basis of preparation
The consolidated and Company financial statements have been prepared under the historical cost convention, except
as disclosed in the accounting policies set out within these financial statements, and in accordance with the UK adopted
International Accounting Standards (UK-adopted International Financial Reporting Standards (‘IFRSs’)) in conformity
with the applicable legal requirements of the Companies Act 2006.
The principal accounting policies applied in the preparation of these financial statements are set out in this Note. These
accounting policies have been consistently applied to all the years presented unless otherwise stated. The balance sheet
has been presented in order of liquidity.
Comparatives have been restated due to prior period errors set out in Note 13, Note 18 and Note 34. This restatement was
not as a result of a change of accounting policies and there is no impact to profit or loss and equity.
The preparation of consolidated and Company financial statements in conformity with IFRS as adopted by the UK requires
the use of certain critical accounting estimates which have been disclosed in Note 2.
The consolidated and Company financial statements are presented in British Pound Sterling (GBP). All values are rounded
to the nearest thousand (£’000), except when otherwise indicated.
The Group and the Company have adopted the following new or amended IFRSs and interpretations that are effective from
1 January 2023, none of which had any material impact on Company’s or the Group’s consolidated financial statements
and the Company’s financial statements.
Accounting standard Amendment/interpretation
Amendments to IAS 8 Accounting Policies Changes in accounting estimates and errors/ definition
of accounting estimates – effective for annual reporting.
Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from
a Single Transaction (Issued May 2021).
Amendments to IAS 12 Implementation of Pillar 2 tax – effective for annual reporting
periods commencing 1 January 2023 but not applicable
because the Group’s annual revenues are below €750 million.
IFRS 17 – Insurance Contracts and amendments to IFRS 17 Effective for annual reporting periods commencing
1 January 2023.
Amendments to IAS 1 Presentation of Financial Statements
and IFRS Practice Statement 2 Making Materiality
Judgements – Disclosures of Accounting Policies
Effective for annual reporting periods commencing
1 January 2023.
CAB Payments Holdings plc | Annual Report and Accounts 2023146
1. Statement of Accounting Policies continued
c) Basis of consolidation
The consolidated financial statements include the financial statements of the Company and all of the entities controlled by
the Company i.e., its subsidiaries made up to 31 December each year. Control is achieved when the Company:
• has the power over the investee;
• is exposed, or has rights, to variable return from its involvement with the investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control listed above.
A subsidiary is an entity controlled directly or indirectly by the Company. The Company controls a subsidiary when it is
exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns
through its power over the investee.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in
the consolidated profit or loss account from the date the Company gains control until the date when the Company ceases
to control the subsidiary.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used
into line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members
of the Group are eliminated on consolidation, with the exception of foreign currency gains and losses on intragroup monetary
items denominated in a foreign currency of at least one of the parties.
NCI in subsidiaries is identified separately from the Group’s equity therein. Interests of non-controlling shareholders
represent ownership interests entitling them to a proportionate share of net assets upon liquidation initially being measured
at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.
Subsequent to acquisition, the carrying amount of the non-controlling interest is the amount of those interests at initial
recognition plus the NCI’s share of subsequent changes in equity. Total comprehensive income is attributed to non-
controlling interests even if it results in the non-controlling interests having a deficit balance. Following the capital re-
organisation in July 2023, there is no NCI at 31 December 2023 (Note 31).
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions.
The carrying amount of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted
and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the
Company.
147
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
1. Statement of Accounting Policies continued
d) Going concern
The Directors have assessed the ability of the Company and of the Group to continue as a going concern based on the
net current asset position, regulatory capital requirements and estimated future cash flows. The Directors have formed the
view that the Company and the Group have adequate resources to continue in existence for a period of twelve months from
when these financial statements are authorised for issuance. Accordingly, the financial statements of the Company and the
Group have been prepared on a going concern basis.
Critical to reaching this view were:
• The output of internal stress assessments which were conducted on a Company and Group level and modelled the
impact of severe yet plausible stresses which underpinned the ICAAP assessment.
• The output of the Reverse Stress Testing assessment which modelled the scenarios that would have to occur in order for
the Group to fall below its Total Capital Requirement (being the aggregate of Pillar 1 and Pillar 2A capital requirements).
In reaching their conclusions, the Directors also considered the outputs of the 2023 ILAAP, the 2023 ICAAP and the 2023
Recovery Plan.
i. Internal stress assessments
In total, three stresses were considered:
• Market & Climate Change Stress which modelled the impacts of a severe global recession which leads to increased
credit defaults and widespread credit rating downgrades, a low interest rate environment detrimentally impacting Net
Interest Income and £ sharply depreciating against USD which led to material increases in USD denominated Credit Risk
Weighted Assets (RWA);
• Idiosyncratic Stress which modelled the impact of a material reduction in revenue driven by idiosyncratic events; and
• A Combined Stress which modelled the impact of the Market & Climate Stress occurring concurrently with the
Idiosyncratic Stress.
In all the stresses noted above both the Company and the Group maintained sizeable surpluses to Total Capital Requirement.
ii. Reverse stress tests
The Reverse Stress tests are used to assess vulnerabilities of the Group and determine what extreme adverse events
would cause the business to fail. Where any of these events are deemed to be plausible, the Group will adopt measures to
mitigate the impact of such events where plausible.
The Group did not identify reasonably possible scenarios which could result in failure to continue in operational existence
for a period of twelve months from when these financial statements are authorised for issuance.
iii. Conclusion
The Directors are of the view that:
• There are no material uncertainties relating to events or conditions that cast significant doubt on the Company and the
Group’s ability to continue as a going concern; and
• The significant judgements and estimates made by management in determining whether or not the adoption of the
going concern is appropriate are disclosed in note 2.1. The forecasts and assumptions used for impairment assessments
were the same used for going concern assessment.
Accordingly, the financial statements have been prepared on a going concern basis.
CAB Payments Holdings plc | Annual Report and Accounts 2023148
1. Statement of Accounting Policies continued
e) Interest income and interest expense
Interest income and interest expense for all interest-bearing financial instruments, including interest accruals on related FX
contracts, are recognised within Net interest income in the statements of profit or loss and other comprehensive income.
The interest expense on financial liabilities and interest income on assets that are held for collection of contractual cash
flows, where those cash flows represent solely payments of principal and interest, is recognised using the effective interest
method.
The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and
of allocating the interest income or expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments or receipts (including all fees and points paid or received that form an integral
part of the effective interest rate, transaction costs and other premiums or discounts) through the life of the financial
instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability.
f) Fees and commission income
Fees and commissions receivable which are not an integral part of the effective interest rate are recognised as income
as the Group fulfils its performance obligations. Fee and commission income include following key revenue streams:
• Account management and payment services: the Group’s performance obligation in relation to account management
services is to provide management or maintenance services to its current account holders. The revenue for these services
is recognised over the period of time on a monthly basis as fees are received and Crown Agents Bank Ltd (CAB) provides
the service.
Payment services fees relate to payment services offered by the Group to its clients by executing payment transactions.
Revenue from providing services is recognised at a point in time when the services are rendered i.e. when the payments
are executed.
• Pension payment fees: pension payment fees are charged to pension companies for making payment to pension
beneficiaries on their behalf. The Group acts as a principal in rendering these services to its clients. Revenue from
providing services is recognised at a point in time when the services are rendered i.e., when the payments are executed.
• Trade finance income
– Financial guarantee income: financial guarantee income includes fixed fees earned by the Group for issuing financial
guarantee contracts. The performance obligation of the Group is to provide financial assurance to the recipient of the
guarantee in case of payment default. Revenue from providing financial guarantee services is recognised over the
period of time across the contract term. The fees for providing financial guarantee services are charged and collected
upfront.
– Income from letters of credit: the Group also receives certain fees in respect of its finance business against the issue
of letters of credit where the performance obligations are typically fulfilled towards the end of the client contract.
Where it is unlikely that the letter of credit will be exercised, letter of credit fees are recognised in fee and commission
income over the life of the facility, rather than as an adjustment to the effective interest rate for loans expected to
be drawn. The fees for acceptance of letter of credits include fee are charged and collected upfront. Other charges
relating to the services offered including advising fees, confirming bank’s fees and bank charges, all of which are
collected on the completion of the term of the letter of credit.
• Electronic platform fees: these fees include the services provided by the Group using its electronic platform to facilitate
bulk payments to its clients. Revenue from providing platform fees services are recognised at a point in time when the
services are rendered i.e., when the payments are executed.
• Risk assessment fees: risk assessment services include income from enhanced due diligence services provided by
the Group under fixed price contracts. Revenue from providing services is recognised over the period of time in the
accounting period on the basis of the actual service provided. As the fixed contracts are time-based contracts, revenue
is determined based on the time elapsed relative to the total time as per the contract period. The invoicing for the risk
assessment services is done on the completion of services or on a quarterly basis in accordance with the contractual
terms. No significant element of financing is deemed present as the services provided allow a credit term of 30 days.
• Introductory commission: this is commission earned by the Group for introducing a new client to a third party to facilitate
cash payment transactions. Revenue is recognised at a point in time when the services are rendered by the third party.
149
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
1. Statement of Accounting Policies continued
g) Net foreign exchange gain
Net FX gain comprises the following:
• Profit on settlement of FX contracts and remeasurement of non-sterling balances: these profits arise on FX
settlements involving the transfer of client funds to specified recipients. Under the Group’s FX and payment services,
clients agree to terms and conditions for all transactions at the time of signing a contract with the Group. On trade date
the Group measures these transactions at fair value, further changes in fair value are recognised in profit or loss until the
settlement of the contract. The remeasurement of non-sterling balances is performed daily via the translation of foreign
currency balances at daily spot rates, with changes taken to profit and loss.
• Fair value gains or losses on derivatives: this income comprises the profits and losses on remeasurement of forward
FX derivatives carried at fair value through profit and loss (FVTPL).
• FX gain on payment transaction revenue: a FX gain or loss on payment transactions is the difference between the
spot exchange rate between the functional currency and the foreign currency at the date of the payment transaction.
h) Foreign currency
(i) Functional and presentational currency
The Company and the Group’s functional and presentational currency is British Pounds Sterling (GBP).
(ii) 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 to the functional currency 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.
FX 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 the consolidated statement of profit or
loss except for FX gains and losses in relation to instruments measured at fair value through other comprehensive income
(FVTOCI) which are recognised in other comprehensive income (OCI).
(iii) Effects of FX movements on consolidated statement of cash flows
The consolidated statement of cash flows includes cash flows in currencies other than GBP. Such cash flows should be
reported at the GBP equivalent of the cash flow at the time of the transaction. In order to calculate such cash flows during
the period, the approach taken has been to remove from movement in the GBP equivalent at the beginning and end of the
year, the effect of the movement in the GBP balance caused solely by changes in the underlying exchange rate.
The Group’s systems do not presently allow extraction of the amount of FX gains and losses recognised in P&L on the
retranslation of cash and cash equivalents, for which an adjustment needs to be made to operating profit for the purposes
of arriving at cash flows from operating activities and presented at the foot of the cash flow statement as a reconciliation
of the opening and closing cash and cash equivalent balance. Historically the effects of FX rate movements on the GBP
equivalent balance recognised in P&L for the purposes of this adjustment has been determined by calculating the movement
of the GBP equivalent of the opening currency balance using the exchange rates at the beginning and the end of the year.
Management have reconsidered the approach previously applied and have produced a report which now factors in daily
movements at the daily closing rate to estimating the FX gains and losses on cash and cash equivalents recognised in P&L.
Applying this more sophisticated approach has revealed that the adjustment made in 2022 was materially different to the
more sophisticated approach used to estimate the 2023 adjustment. Therefore, the comparative reconciliation of profit to
cash flows from operating activities has been restated so that it is consistent with the approach used in the current period.
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1. Statement of Accounting Policies continued
(iv) Group companies
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations
are translated to the Group’s presentational currency at exchange rates prevailing on the balance sheet date. Income and
expense items are translated at daily exchange rates at the date of transactions.
FX differences arising on the translation of a foreign operation are recognised in other comprehensive income and
accumulated in the Foreign Currency Translation Reserve (FCTR).
i) Taxation
The tax expense for the period comprises current and deferred tax recognised in the reporting period. Current and deferred
tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or
directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly
in equity respectively. If current tax or deferred tax arises from the initial accounting for a business combination, the tax
effect is included in the accounting for the business combination.
Current or deferred tax assets or liabilities are not discounted.
Current tax
Current tax is the tax expected to be payable on the taxable profit for the year and on any adjustment to tax payable
in respect of previous years. Taxable profit differs from net profit as reported in profit or loss because it excludes items
of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable
or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the end of the reporting period.
A provision is recognised for those matters for which the tax determination is uncertain but it is considered probable that
there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount
expected to become payable.
If a company within the Group incur losses within the period, that company may surrender trading losses and other amounts
eligible for relief from corporation tax to another group company (the claimant company) for the claimant company to set
off against its own profits for corporation tax purposes as permitted by HMRC.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is
accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference
arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction
that affects neither the taxable profit nor the accounting profit. In addition, a deferred tax liability is not recognised if the
temporary difference arises from the initial recognition of goodwill.
j) Intangible assets (excluding Goodwill)
Intangible assets (except for Goodwill) are stated at cost less accumulated amortisation and accumulated impairment
losses. Amortisation is calculated, using the straight-line method, to allocate the amount to be amortised, of the assets
to their residual values over their estimated useful lives, as follows:
Core accounting software – 12.5 years;
1
Other software – 5 years (or over the life of the licence if less); and
Brand/name – 50 years (acquired).
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Notes to the Financial Statements continued
for the year ended 31 December 2023
1. Statement of Accounting Policies continued
j) Intangible assets (excluding Goodwill) continued
Costs associated with maintaining computer software are recognised as an expense as incurred. Development costs that
are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are
recognised as intangible assets when the following criteria are met:
• it is technically feasible to complete the software so that it will be available for use;
• management intends to complete the software and use or sell it;
• there is an ability to use or sell the software;
• it can be demonstrated how the software will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use or sell the software are
available; and
• the expenditure attributable to the software during its development can be reliably measured.
Other development expenditure that does not meet these criteria are recognised as an expense as incurred. Development
costs previously recognised as an expense are not recognised as an asset in a subsequent period. Long term software-as-
a-service type contracts that do not meet the definition of an asset (rental of software) are expensed to profit and loss over
the period of the contract in line with the benefits received.
1 The amortisation period for core accounting software changed from 10 years in 2022 to 12.5 years in the current period. This change was prompted by a revision
in our assessment of the expected useful life of this intangible asset, and accurately reflect the economic reality of this system as it will continue in use until at least
31 December 2026. As a result of this change, we have adjusted the amortisation expense prospectively in line with requirements of IAS 8. The impact on the
depreciation balance in each year is as follows:

| 2023 | 2024 | 2025 | 2026
| £’000 | £’000 | £’000 | £’000
Previous useful life | 838 | 419 | - | -
New useful life | 314 | 314 | 314 | 314
Impact of change in estimate | 524 | 105 | (314) | (314)

k) Property, plant and equipment and depreciation
Property, plant and equipment are stated in the statement of financial position at historic cost less accumulated depreciation.
Cost includes the original purchase price of the asset and the costs attributable to bring the asset to its working condition
for its intended use. Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives.
Depreciation commences when an asset becomes available for use. Depreciation is calculated to write down assets to their
residual value in equal instalments over their estimated useful lives, which are:

Leasehold improvements | Life of lease
Computer equipment | 5 years
Mobile phones | 3 years
Fixtures and fittings | 5 years
Artwork | 20 years

l) Impairment of non-financial assets and disposal assets held for sale
At each statement of financial position date, non-financial assets not carried at fair value are assessed to determine
whether there is an indication that the asset may be impaired such as, a decline in operational performance, geopolitical
uncertainty, economic uncertainty i.e. rising interest rates and inflation, changes in the outlook of future profitability among
other potential indicators. If there is such an indication the recoverable amount of the asset is compared to the carrying
amount of the asset.
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1. Statement of Accounting Policies continued
l) Impairment of non-financial assets and disposal assets held for sale continued
Individual assets are grouped for impairment assessment purposes at the lowest level at which there are identifiable cash
inflows that are largely independent of the cash flows of other groups of assets. This should be at a level not higher than
an operating segment. The recoverable amount of the asset is the higher of the fair value less costs to sell and value in use.
Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the
asset’s continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market
risk-free rate and the risks inherent in the asset. In determining fair value less costs to sell, recent market transactions are
taken into account. If no such transactions can be identified, an appropriate valuation model is used. If the recoverable
amount of the asset is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable
amount. An impairment loss is recognised in the statement of profit or loss unless the asset has been revalued then the
amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. An impairment
loss recognised for goodwill is not reversed in a subsequent period.
If an impairment loss is subsequently reversed, the carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that
would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods.
A reversal of an impairment loss is recognised in the statement of profit or loss and other comprehensive income.
Goodwill is allocated on acquisition to the cash generating unit expected to benefit from the synergies of the combination.
Goodwill is included in the carrying value of cash generating units for impairment testing.
Disposal groups held for sale are measured at the lower of their carrying amount and fair value less costs to sell. At initial
classification of the disposal group as held for sale, the carrying amounts of all the individual assets and liabilities in the
disposal group are measured in accordance with the Group’s accounting policies. If fair value less costs to sell for the
disposal group is below the aggregate carrying amount of all of the assets and liabilities included in the disposal group, the
disposal group is written down. The impairment loss is recognised in profit or loss for the period.
m) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with commercial or central banks and exposures
to money market funds (transacted via open ended investment companies). Cash equivalents are short-term highly liquid
investments that are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes
in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather for investment or other
purposes.
n) Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the
Group’s interest in the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the
fair value of any non-controlling interest in the acquiree.
Goodwill is tested for impairment at the end of each accounting period.
On disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit
or loss on disposal. Goodwill is accounted for at cost less accumulated impairment losses.
o) Financial instruments
Financial assets and financial liabilities are recognised in the Company and Group statements of financial position when
the Company or Group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.
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Notes to the Financial Statements continued
for the year ended 31 December 2023
1. Statement of Accounting Policies continued
o) Financial instruments continued
(i) Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised using trade date accounting.
The trade date is the date of the commitment to buy or sell the financial asset.
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending
on the classification of the financial assets.
Classification of financial assets
Financial assets that meet the following conditions are measured subsequently at amortised cost:
• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual
cash flows; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets that meet the following conditions are measured subsequently at FVTOCI:
• the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows
and selling the financial assets; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Despite the foregoing, the Group and the Company may irrevocably elect to present subsequent changes in fair value of
an equity investment in other comprehensive income if equity instruments are held as a strategic investment and not held
with the intention to realise a profit.
By default, all other financial assets are measured subsequently at fair value through profit or loss.
The Group’s financial assets measured at amortised cost comprise primarily of:
• Cash and balances at central banks;
• Loans and advances on demand to banks;
• Other loans and advances to banks;
• Other loans and advances to non-banks;
• Investment in debt securities;
• Unsettled transaction and
• Other assets such as balances with mobile network operators, staff loans, transactions debited by third party Nostro
providers.
The Group’s financial assets measured at FVTPL comprise primarily of money market funds and derivative
financial instruments.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses
recognised in profit or loss. Fair value is determined in the manner described in Note 43.
The Group’s financial assets designated at FVTOCI comprise primarily of its investments in equity securities, which are not
held for trading (Note 16).
The equity instruments are held as a strategic investment and not held with the intention to realise a profit.
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1. Statement of Accounting Policies continued
o) Financial instruments continued
(i) Financial assets continued
Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently,
they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive
income and accumulated in the Investment revaluation reserve. The cumulative gain or loss is not reclassified to profit or
loss on disposal of the equity investments, instead, it is transferred to retained earnings.
Dividends on these investments in equity instruments are recognised in profit or loss in accordance with IFRS 9 unless the
dividends clearly represent a recovery of part of the cost of the investment. Dividends are included in the ‘Other operating
income/(loss) ’ line item (Note 7) in the statement of profit or loss and other comprehensive income.
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised
cost (Note 1 (e)) above. Interest income is recognised in the statement of profit or loss and other comprehensive income in
the ‘Net interest income’ line item (Note 4).
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition of a financial asset the difference between the asset’s carrying amount and the sum of the consideration
received and receivable is recognised in profit or loss.
(ii) Financial liabilities
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the contractual
substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Classification of financial liabilities
All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value
through profit and loss.
Financial liabilities at fair value through profit and loss
The Group’s financial liabilities at fair value through profit and loss comprise primarily of derivative liabilities (see below for
policy on derivative financial instruments).
Financial liabilities at fair value through profit and loss are measured at fair value, with any gains or losses arising on changes
in fair value recognised in profit or loss.
Financial liabilities at amortised cost
The Group’s financial liabilities at amortised cost comprise primarily of client accounts, unsettled transactions and other
liabilities such as trade creditors, funds received in advance, transactions credited by third party Nostro providers and other
creditors.
Financial liabilities at amortised cost are measured subsequently at amortised cost using the effective interest method (see
Note 1(e) above).
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Group’s obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable is recognised in profit or loss.
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Notes to the Financial Statements continued
for the year ended 31 December 2023
1. Statement of Accounting Policies continued
o) Financial instruments continued
(iii) Derivative financial instruments
The Group’s derivatives policy only permits dealing in forward FX contracts to hedge or provide services to clients.
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at the reporting date.
A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value
is recognised as a financial liability.
Hedge accounting is not applied.
(iv) Offsetting
Financial assets and liabilities are offset and the net amounts presented in the financial statements only 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.
(v) Equity
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities.
Repurchase of the Company’s own equity instruments is recognised and deducted directly from equity. No gain or loss
is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.
(vi) Financial guarantee contracts and letter of credit confirmations/bill acceptances – provisions
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a
debt instrument.
Letters of credit confirmations/bill acceptances
Letters of credit confirmation/acceptance is a letter from an issuing bank guaranteeing that a buyer’s payment to a seller
will be received on time and for the correct amount. The Group confirms/accepts the letters of credit issued by an issuing
bank and charges fixed fees which are received either in advance or at a later date.
Fees relating to financial guarantee contracts and letter of credit confirmations / bill acceptances issued by the Group
fees can be received upfront and these fees are amortised on a straight-line basis to income over the year. When fees
for financial guarantee contracts and letter of credit confirmations/ bill acceptances issued by the Group are received at
termination date, they are recognised initially at zero, as the term has not yet started. The receivable increases over the
life of the contract as service is performed with the corresponding recognition of income in the statement of profit or loss.
All financial guarantee contracts issued by the Group are subsequently measured at the higher of:
• the amount of the loss allowance determined in accordance with IFRS 9; and
• the amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance
with the Group’s revenue recognition policies.
Financial guarantee contracts and letter of credit confirmations / bill acceptances are presented as provisions on the
statement of financial position and the remeasurement is included within the reversal of impairment/(impairment loss) on
financial assets at amortised cost.
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1. Statement of Accounting Policies continued
o) Financial instruments continued
(vii) Impairment of financial assets
The Group recognises loss allowances for Expected Credit Loss (ECL) in accordance with IFRS 9 on the following financial
instruments that are not measured at FVTPL and are not equity instruments measured at FVTOCI:
• Cash and balances at central banks;
• Loans and advances on demand to banks (comprising Nostro balances);
• Other loans and advance to banks (comprising fixed-term deposits);
• Other loans and advances to non-banks (comprising receivables from Non-Bank Financial Institutions (‘NBFIs’) and
other non-banks;
• Investment in debt securities;
• Other assets (financial assets included are balances with mobile network operators, transactions debited by third party
nostro providers, staff loans, late receipts);
• Accrued income;
• Off – balance sheet financial assets (comprising Financial guarantees, Liquidity as a Service and letters of credit
confirmations / bill acceptances); and
• Unsettled transactions.
Equity investments are not subject to impairment, consistent with IFRS 9.
ECLs are required to be measured through a loss allowance at an amount equal to:
• twelve-month ECL (referred to as Stage 1); or
• full lifetime ECL (referred to as Stage 2 and Stage 3).
For Stages 1 and 2, interest revenue is calculated on the gross carrying amount. Under Stage 3, interest revenue is calculated
based on the net carrying amount (gross amount less ECL).
The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective
financial instrument. For these financial assets, the Group recognises lifetime ECL when there has been a significant
increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased
significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount
equal to twelve-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of
a financial instrument. In contrast, twelve-month ECL represents the portion of lifetime ECL that is expected to result from
default events on a financial instrument that are possible within twelve months after the reporting date.
Significant increase in credit risk
The Group monitors all financial assets, financial guarantee contracts and letter of credit confirmations/bill acceptances
that are subject to the impairment requirements to assess whether there has been a significant increase in credit risk since
initial recognition. If there has been a significant increase in credit risk the Group will measure the loss allowance based on
lifetime rather than twelve-month ECL.
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the
Group compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default
occurring on the financial instrument at the date of initial recognition. In making this assessment, the Group considers both
quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-
looking information that is available without undue cost or effort. Forward-looking information considered includes the
future prospects of the industries in which the Group’s debtors operate, obtained from economic expert reports, financial
analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various
external sources of actual and forecast economic information that relate to the Group’s core operations.
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Notes to the Financial Statements continued
for the year ended 31 December 2023
1. Statement of Accounting Policies continued
o) Financial instruments continued
(vii) Impairment of financial assets continued
In particular, the following information is taken into account when assessing whether credit risk has increased significantly
since initial recognition:
• an actual or expected significant deterioration in the financial instrument’s external (if available) or internal credit rating;
• significant deterioration in external market indicators of credit risk for a particular financial instrument, e.g., a significant
increase in the credit spread, the credit default swap prices for the debtor, or the length of time or the extent to which the
fair value of a financial asset has been less than its amortised cost;
• existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant
decrease in the debtor’s ability to meet its debt obligations;
• an actual or expected significant deterioration in the operating results of the debtor;
• economic uncertainty i.e., inflation and rising interest rates;
• geopolitical uncertainty;
• significant increases in credit risk on other financial instruments of the same debtor; and
• an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor
that results in a significant decrease in the debtor’s ability to meet its debt obligations.
Irrespective of the outcome of the above assessment, the Group presumes that the credit risk on a financial asset has
increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group
has reasonable and supportable information that demonstrates otherwise. Despite the foregoing, the Group assumes that
the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument
is determined to have low credit risk at the reporting date. A financial instrument is determined to have low credit risk if:
• the financial instrument has a low risk of default;
• the debtor has a strong capacity to meet its contractual cash flow obligations in the near term; and
• adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability
of the borrower to fulfil its contractual cash flow obligations.
The Group considers a financial asset to have low credit risk when the asset with a credit rating of ‘investment grade’
in accordance with the globally understood definition, and a high credit risk when the asset has a credit rating of ‘sub-
investment grade’. Throughout the lifetime of the account, the Group monitors the behaviour of the asset based on its
financial position and assesses whether the asset has any amounts past due. The Group assigns a ‘performing’ status
when the counterparty has a strong financial position and there is no past due amounts, and a ‘non-performing’ status
when there is a degradation in the financial position and subsequent arrears.
For financial guarantee contracts and letter of credit confirmations/bill acceptances, the date that the Group becomes
a party to the irrevocable commitment is considered to be the date of initial recognition for the purposes of assessing the
financial instrument for impairment. In assessing whether there has been a significant increase in the credit risk since initial
recognition of a financial guarantee contract, the Group considers the changes in the risk that the specified debtor will
default on the contract.
The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase
in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in
credit risk before the amount becomes past due.
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1. Statement of Accounting Policies continued
o) Financial instruments continued
(vii) Impairment of financial assets continued
Definition of default
The Group considers the following as constituting an event of default for internal credit risk management purposes
as historical experience indicates that financial assets that meet the earlier of either of the following criteria are generally
not recoverable:
• when there is a breach of financial covenants by the debtor; or
• information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors,
including the Group, in full.
Irrespective of the above analysis, the Group considers that default has occurred when a financial asset is more than
90 days past due unless the Group has reasonable and supportable information to demonstrate that a more lagging
default criterion is more appropriate.
Write-off policy
The Group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty
and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered
into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the Group’s
recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit
or loss.
Measurement and recognition of ECLs
ECLs are a probability-weighted estimate of the present value of credit losses. These are measured as the present value of
the difference between the cash flows due to the Group under the contract and the cash flows that the Group expects to
receive arising from the weighting of multiple future economic scenarios, discounted at the asset’s Effective Interest Rate
(EIR).
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude
of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given
default is based on historical data adjusted by forward-looking information as described in Note 37. As for the exposure
at default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date; for financial
guarantee contracts and letter of credit confirmations/bill acceptances, the exposure includes the amount of guaranteed
debt that has been drawn down as at the reporting date, together with any additional guaranteed amounts expected to be
drawn down by the borrower in the future by default date determined based on historical trend, the Group’s understanding
of the specific future financing needs of the debtors, and other relevant forward-looking information.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due
to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the
original effective interest rate.
For a financial guarantee contract and letter of credit confirmations/bill acceptances, as the Group is required to make
payments only in the event of a default by the debtor in accordance with the terms of the instrument that is guaranteed, the
expected loss allowance is the expected payments to reimburse the holder for a credit loss that it incurs less any amounts
that the Group expects to receive from the holder, the debtor or any other party.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous
reporting period but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the
Group measures the loss allowance at an amount equal to twelve-month ECL at the current reporting date.
The Group measures ECL on an individual basis, or on a collective basis for portfolios of loans that share similar economic
risk characteristics. The measurement of the loss allowance is based on the present value of the asset’s expected cash
flows using the asset’s original EIR, regardless of whether it is measured on an individual basis or a collective basis.
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Notes to the Financial Statements continued
for the year ended 31 December 2023
1. Statement of Accounting Policies continued
o) Financial instruments continued
(vii) Impairment of financial assets continued
Presentation of ECL
Loss allowances for ECL are presented in the statement of financial position as follows:
• for financial assets measured at amortised cost: as a deduction from the gross carrying amount of the assets;
• financial guarantee contracts: as a provision.
The Group recognises an increase or decrease in impairment in profit or loss for all financial instruments with a corresponding
adjustment to their carrying amount through a loss allowance account.
p) Employee benefits
The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements,
medical insurance and defined contribution pension plans. The Group also provides to Executive Directors and certain other
key employees or senior management:
• a Long-Term Incentive Plan;
• the rights to invest in restricted shares of Group companies; and
• the rights to restricted share units of Group companies.
Short-term benefits
Short-term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the
period in which the service is received.
Pension contributions
All pension contributions are accounted for as defined contributions and paid over on a monthly basis. No liability for
pension entitlement accrues to the Group.
Long term incentive plan and restricted shares/restricted share units plan
The Group provides share-based payment arrangements to certain employees.
Equity-settled arrangements are measured at fair value of the equity instruments at the grant date. The fair value is
expensed on a straight-line basis over the vesting period. The fair value of the employee services received in exchange
for the grant of the awards is recognised in employee benefit expenses together with a corresponding increase in equity
(retained earnings), over the period in which the service and the performance conditions are fulfilled (the vesting period).
Long term incentive plan (“LTIP”) awards are subject to performance conditions. LTIP awards granted in 2023 are subject
to both market performance conditions (TSR) and non-market performance conditions (EPS). Service conditions are not
taken into account when determining the grant date and for fair value of awards, but the likelihood of the conditions being
met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. Any other
conditions attached to an award, but without an associated service requirement, are non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award. Share awards vest when service conditions are met.
Where equity-settled arrangements are modified before the vesting date, and are of benefit to the employee, the incremental
fair value is recognised over the period from the date of modification to date of vesting. If modified after vesting, it is
recognised immediately. Where a modification is not beneficial to the employee there is no change to the charge for the
share-based payment. Settlement and cancellations are treated as an acceleration of vesting and the unvested amount is
recognised immediately in the statements of profit or loss and other comprehensive income.
The Group has no cash-settled arrangements.
Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 32.
CAB Payments Holdings plc | Annual Report and Accounts 2023160
1. Statement of Accounting Policies continued
q) Investments in subsidiaries
Investments in subsidiaries are non-monetary assets measured at cost less impairment. Refer to Note 2 for the judgements
and estimates involved in impairment assessment.
r) Discontinued operations and disposal group held for sale
Discontinued operations and disposal group held for sale is a component of the Group’s business, the operations and
cashflows of which can be clearly distinguished from the rest of the Group and which:
• represents a separate major line of business or geographical area of operation;
• is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operation; or
• is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs upon disposal, abandonment or when the operations meet the criteria to
be classified as held for sale. This condition is regarded as satisfied only when the sale is highly probable and the asset or
disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which
should be expected to qualify for recognition as a completed sale within one year of the date of classification. Property,
plant and equipment and intangible assets, once classified as held for sale, are not depreciated or amortised.
Disposal groups classified as held for sale are measured at the lower of the carrying value and the fair value less costs
to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered
through a sale transaction rather than continued use. When an operation is classified as a discontinued operation, the
comparative statement of profit or loss and other comprehensive income is re-presented as if the operation had been
discontinued from the start of the comparative year.
When the Group ceases to have control of an undertaking (disposal group), it is at this point that the Group ceases to
consolidate the operations and any gain or loss on disposal is recognised in the Group consolidated statement of profit
or loss. In addition, any movements previously recognised in other comprehensive income in respect of that entity are
accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts
previously recognised in other comprehensive income are reclassified to profit or loss.
s) Provisions and contingent liabilities
Provisions are recognised in respect of present obligations arising from past events where it is probable that outflows
of resources will be required to settle the obligations and they can be reliably estimated. Contingent liabilities are possible
obligations whose existence depends on the outcome of uncertain future events or those present obligations where
the outflows of resources are uncertain or cannot be measured reliably. Contingent liabilities are not recognised in the
consolidated and company financial statements but are disclosed unless they are remote.
t) Share capital
On issue of ordinary shares, any consideration received net of any directly attributable transaction costs is included in
equity.
u) Earnings per share
i. Basic earnings per share
Basic earnings per share is calculated on the Group’s profit or loss after taxation attributable to the owners of the parent
and based on weighted average of ordinary shares at the end of the year.
ii. Diluted earnings per share
Diluted earnings per share is calculated on the Group’s profit or loss after taxation attributable to owners of the parent
and based on weighted average of ordinary shares at the end of the year and the weighted average number of ordinary
shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. Performance-
based employee share options are treated as contingently issuable shares because their issue is contingent upon satisfying
specified conditions in addition to the passage of time.
161
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
1. Statement of Accounting Policies continued
v) Dividends
Dividends are recognised in the financial statements when they are declared and approved by the Board of Directors. This
is because the approval of a dividend creates a legal obligation for the Company to pay the dividend to its shareholders.
w) Leases (Group as lessee)
The Group assesses whether a contract is, or contains, a lease, at inception of the contract. The Group recognises a right-
of-use asset and a corresponding lease liabilities with respect to all lease arrangements in which it is the lessee, except
for short-term leases (defined as leases with a lease term of twelve months or less) and leases of low value assets (such
as small items of fixtures and equipment and value of less than £10,000). For these leases, the Group recognises the lease
payments as an Operating Expense on a straight-line basis over the term of the lease unless another systematic basis
is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its
incremental borrowing rate.
The incremental borrowing rate depends on the term, currency and start date of the lease and is determined based on a
series of inputs including: the risk-free rate based on government bond rates; a country-specific risk adjustment; a credit
risk adjustment based on bond yields; and an entity-specific adjustment when the risk profile of the entity that enters into
the lease is different to that of the Group.
Lease payments included in the measurement of the Group’s lease liabilities are fixed lease payments less any lease
incentives receivable.
The lease liabilities are presented as a separate line in the consolidated statement of financial position.
The lease liabilities are subsequently measured by increasing the carrying amount to reflect interest on the lease liabilities
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liabilities, lease payments made at
or before the commencement day, less any lease incentives received and any initial direct costs and estimations of any
dilapidation obligations. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset.
The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment
loss as described in the ‘impairment of non-financial assets’ policy.
CAB Payments Holdings plc | Annual Report and Accounts 2023162
1. Statement of Accounting Policies continued
x) New and revised IFRS accounting standards in issue but not yet effective
At the date of authorisation of these consolidated financial statements, the Group has not applied the following new and
revised IFRS Accounting Standards that have been issued and endorsed for use in the UK but are not yet effective.
Accounting standard Details of amendment
Amendments to IAS 1 Classification of Liabilities as Current or Non-current: clarify that the classification
of liabilities as current or non-current is based solely on a company’s right to defer
settlement for at least twelve months at the reporting date. The right needs to exist
at the reporting date and must have substance.
Amendments to IFRS 16, Leases Lease Liability in a Sale-and-Leaseback requires a seller-lessee to account for
variable lease payments that arise in a sale-and-leaseback transaction as follows:
• On initial recognition, include variable lease payments when measuring a lease
liability arising from a sale-and-leaseback transaction; and
• After initial recognition, apply the general requirements for subsequent
accounting of the lease liability such that no gain or loss relating to the retained
right of use is recognised.
IAS 7, Statement of Cash Flows
and IFRS 7, Financial Instruments:
Disclosures (Amendment)
Supplier Finance Arrangements requires an entity to disclose qualitative and
quantitative information about its supplier finance programmes, such as terms
and conditions – including, for example, extended payment terms and security
or guarantees provided.
Amendments to IAS 21 The Effects of
Changes in FX Rates:
Lack of Exchangeability (Issued August 2023).
The Group does not expect that the adoption of the Standards listed above will have a material impact on the consolidated
and Company Financial Statements of the Group and the Company in future periods. The effective date of these amendments
is 1 January 2024.
y) New sustainability standards issued by the International Sustainability Standards Board (ISSB)
effective 1 January 2024
The ISSB issued its first two sustainability reporting standards on 26 June 2023. This included:
• General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1), the core framework for
the disclosure of material information about sustainability-related risks and opportunities across an entity’s value chain
• Climate-related Disclosures (IFRS S2), the first thematic standard issued that sets out requirements for entities to disclose
information about climate-related risks and opportunities
IFRS S1 and IFRS S2 are applicable for accounting periods beginning on or after 1 January 2024, but they have not yet been
adopted for use in the UK. The Directors are in the process of assessing the implications of these standards.
163
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
2. Critical Accounting Judgements and Key Sources of Estimation Uncertainty
In applying the Group’s accounting policies, which are described in Note 1, the Directors are required to make judgements
(other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates
and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
The critical judgements, apart from those involving estimation, made by management in applying the Group’s accounting
policies in these consolidated financial statements and the key sources of estimation uncertainty that may have a significant
risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year), which
together are considered critical to the Group’s results and financial position, are as follows:
2.1 Key judgements and estimates in impairment and going concern assessment
The assessment of goodwill (Note 21), intangible assets (Note 21), investments in subsidiary undertakings (Note 22) for
impairment and appropriateness of going concern reflects management’s best estimate of the future cash flows of the
Cash Generating Units (CGUs) and the rates used to discount these cash flows, both of which are subject to uncertain
factors as follows:
Judgements Estimates
The accuracy of forecast cash
flows is subject to a high degree
of uncertainty in volatile market
conditions.
Where such circumstances are
determined to exist, management
re-tests goodwill, intangible assets
and investments in subsidiaries
for impairment more frequently
than once a year when indicators
of impairment exist. Judgement
was involved in calculating the
cash flow forecasts and it involved
consideration of past business
performance, current market
conditions and our macroeconomic
outlook to estimate future earnings.
Key assumptions underlying
cash flow projections reflect
management’s outlook on interest
rates and inflation, as well as
business strategy, including the scale
of investment in technology and
automation.
Cashflows forecasts
The future cash flows of the CGUs are sensitive to the cash flows projected for
the three year period which detailed forecasts are available and to assumptions
regarding the long-term pattern of sustainable cash flows thereafter. Forecasts are
compared with actual performance and verifiable economic data, but they reflect
management’s view of future business prospects at the time of the assessment.
Discount rates (Weighted Average Cost of Capital (WACC))
The rates used to discount future expected cash flows can have a significant effect
on their valuation, and are based on the costs of equity assigned to individual CGUs.
The cost of equity percentage is generally derived from a capital asset pricing
model and market implied cost of equity, which incorporates inputs reflecting a
number of financial and economic variables, including the risk-free interest rate in
the country concerned and a premium for the risk of the business being evaluated.
These variables are subject to fluctuations in external market rates and economic
conditions beyond management’s control.
Terminal growth rates
The terminal growth rate is used to extrapolate the cash flows in perpetuity because
of the long-term perspective within the Group of business units making up the CGUs.
Refer to sensitivity analysis in Note 21.
CAB Payments Holdings plc | Annual Report and Accounts 2023164
2. Critical Accounting Judgements and Key Sources of Estimation Uncertainty continued
2.2 Key judgements and estimates impairment of financial assets
The calculation of the Group’s ECL under IFRS 9 requires the Group to make a number of judgements, assumptions and
estimates. The most significant are set out below:
Judgements Estimates
• Defining what is considered to be a significant increase in credit risk
• Selecting and calibrating the Probability of Default (PD), Loss Given
Default (LGD) and Exposure At Default (EAD) models, which support the
calculations, including making reasonable and supportable judgements
about how models react to current and future economic conditions
• Selecting model inputs and economic forecasts, including determining
whether sufficient and appropriately weighted economic forecasts are
incorporated to calculate unbiased expected loss
• Making management adjustments to account for late-breaking events,
model and data limitations and deficiencies, and expert credit judgements
(none were noted).
Note 37 – Credit Risk sets out the
assumptions used in determining ECL,
and provides an indication of the sensitivity
of the result to the application of different
weightings being applied to different
economic assumptions.
The quantitative disclosures, range of outcomes and sensitivities applied are disclosed in Note 37.
2.3 Key judgements on classification of non-recurring costs
Some of the expenses accounted for by the Group have been separately identified as non-recurring in the Consolidated
Statement of Profit or Loss and Other comprehensive income on the basis that such presentation enhances the transparency
and understanding of the Group’s financial performance. Judgement has been applied in determining whether an item of
expense is non-recurring in accordance with the Group’s accounting policy. Based on an assessment of the nature, timing,
and frequency of the events giving rise to certain expenses the following items have been presented as non-recurring:
– Professional costs incurred in connection with review and implementation of strategic options; and
– Staff bonuses related to listing and to take on commitments.
3. Segment Reporting
Operating segments are determined by the Group’s internal reporting to the Chief Operating Decision Maker (CODM).
The CODM has been determined to be the Group’s Executive Committee. The information regularly reported to the Executive
Committee for the purposes of resource allocation and the assessment of performance, is based wholly on the overall
activities of the Group. Based on the Group’s business model, the Group has determined that it has only one reportable
segment of continuing operations.
The CODM assess the profitability of the segment based on a measure of EBITDA and Adjusted EBITDA is defined as
follows:
- EBITDA - Calculated as Profit before Tax and IFRS16 lease liability interest, depreciation and amortisation. Although
it is typical to calculate EBITDA before interest, our net interest income is generated from operational client deposits and
subsequent re-investment to generate returns for the shareholder and therefore remains included within EBITDA.
- Adjusted EBITDA - EBITDA before non-recurring operating expenses.
All revenue from external clients is generated through its operations located in the UK and on that basis is wholly attributable
to the UK and all non-current assets, other than financial instruments and deferred tax assets, are located in the UK.
165
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
3. Segment Reporting continued
a) Income
The Group derives its income from continuing and discontinued operations as follows:

| Continuing | Discontinued |
Year ended 31 December 2023 | operations | operations | Total
Income by business line | £’000 | £’000 | £’000
FX | 68,518 | 4 | 68,522
Payments | 34,229 | 855 | 35,084
Banking services and other income | 34,321 | – | 34,321
Total income – net of interest expense | 137,0 68 | 859 | 137,927
| Continuing | Discontinued |
Year ended 31 December 2022 | operations | operations | Total
Income by business line | £’000 | £’000 | £’000
FX | 63,425 | 26 | 63,451
Payments | 33,661 | 3,362 | 37,023
Banking services and other income | 12,349 | – | 12,349
Total income – net of interest expense | 109,435 | 3,388 | 112,823

FX: The Group’s FX revenue is derived from the difference between the exchange rate the Group makes available to its
clients and the rate that it receives from one or more liquidity providers from whom it sources the relevant currency. Revenue
categorised as FX is from clients with a need to exchange a bulk amount from one currency for another without onward
payment to another party.
Payments: The Group’s payments revenue include cross currency payments, same currency payments (corresponding
activity income, and account management fees), pension payments and platform revenue. Cross currency payments
comprise margin derived from bid-ask spreads on foreign currency conversion and fees paid by clients to transfer money
from one country to another to third parties.
Same currency relates to payment services provided for payments transacted without an exchange of foreign currency
largely relating to major market currency clearing and includes fees for account management activities and payments
execution. Pension payments fees relate to amounts earned on processing of pension scheme foreign currency payments.
Platform revenue relates to recurring fixed fees rather than fees earned on transaction volumes.
Banking services and other income: The Group also generates income from trade finance, liquidity services (including
trade finance and letters of credit), and risk management consulting fees, interest earned from other placements with
banks, interest earned from advances to non-banks outside Liquidity as a Service, interest from staff loans and net gains
from financial 3. assets measured at fair value. The Group takes client funds earmarked for other needs as client deposits
and makes short-term investment in the money market to generate gain on money market funds.
CAB Payments Holdings plc | Annual Report and Accounts 2023166
3. Segment Reporting continued
b) Profitability
The Group measures profitability for the reporting segment on an Adjusted EBITDA basis. Adjusted EBITDA is used as a key
profit measure because it shows the results of normal, core operations exclusive of income or charges that are not considered
to represent the underlying operational performance. Adjusted EBITDA is useful as a measure of comparative operating
performance between both previous periods, and other companies as it removes the effect of taxation, depreciation and
amortisation, and non-recurring operating expenses, as well as items relating to capital structure.

Reconciliation of profit before tax to EBITDA | Continuing | Discontinued |
and Adjusted EBITDA | operations | operations | Total
Year ended 31 December 2023 | £’000 | £’000 | £’000
Profit/(loss) before taxation | 37,617 | (287) | 37, 330
Adjusted for: |  |  |
Interest expenses on lease liabilities (Note 4) | 65 | – | 65
Amortisation | 4,607 | 13 | 4,620
Depreciation | 1,243 | – | 1,243
EBIDTA | 43,532 | (274) | 43,258
Non-recurring operating expenses | 21,101 | – | 21,101
Adjusted EBITDA | 64,633 | (274) | 64,359

1

Reconciliation of profit before tax to EBITDA | Continuing | Discontinued |
and Adjusted EBITDA | operations | operations | Total
Year ended 31 December 2022 | £’000 | £’000 | £’000
Profit/(loss) before taxation | 43,891 | (77) | 43,814
Adjusted for: |  |  |
Interest expense on lease liability | 19 | – | 19
Amortisation | 4,600 | 51 | 4,651
Depreciation | 1,141 | 1 | 1,142
EBIDTA | 49,651 | (25) | 49,626
Non-recurring operating expenses | 5,332 | – | 5,332
Adjusted EBITDA | 54,983 | (25) | 54,958

1
1 Balance includes depreciation on property plant and equipment and depreciation on right of use of asset.
167
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
4. Net Interest Income

| Consolidated |
| 2023 | 2022
Interest income: | £’000 | £’000
Interest on cash and balances at central banks | 28,147 | 8,217
Interest on loans and advances | 7,676 | 3,421
Interest on letters of credit | 599 | 302
Interest on investment in debt securities | 15,802 | 5,168
Other interest income and similar income | 129 | 63
Interest income | 52,353 | 17,171
Interest expense: |  |
Interest on financial liabilities at amortised cost | (30,685) | (10,328)
Interest expense on lease liabilities | (65) | (19)
Other interest expense | (104) | (51)
Interest expense | (30,854) | (10,398)
Total net interest income | 21,499 | 6,773

1
1
1 Other interest income and similar income and other interest expense are interest received, interest accrued or interest paid on the collateral balances paid to or
received from our FX Swap Counterparties .
5. Fees and Commissions Income

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Fees and commissions income: |  |
Account management and payments | 11,750 | 12,151
Pension payment fees | 1,467 | 1,395
Trade finance | 725 | 645
Electronic platform fees | 610 | 785
Introductory commission | 19 | 821
Total fees and commission income | 14,571 | 15,797

At 31 December 2023, the Group held on its consolidated statement of financial position £531k (2022: £610k) of accrued
income in respect of services provided to clients and £75k (2022: £171k) of deferred income (entirely recognised within one
year) in respect of amounts received from clients for services to be provided after the year end.
6. Net Foreign Exchange Gain

| Consolidated |
| 2023 1 | 2022 1
| £’000 | £’000
Profit on settlement of FX contracts |  |
and remeasurement of non-sterling balances | 76,402 | 55,021
Fair value (losses)/gains on derivatives | (7, 88 4) | 8,059
FX gain on payment transaction revenue | 19,899 | 19,676
Total | 88,417 | 82,756

2
1 Includes only continuing operations. Net FX transactions relating to discontinued operations is included in Note 10.
2 Foreign exchange derivative financial instruments are mandatorily held at fair value through profit or loss. These fair value movements offset the Profit and Losses
arising from the remeasurement of non-sterling balances.
CAB Payments Holdings plc | Annual Report and Accounts 2023168
7. Other Operating Income/(Loss)

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Other operating income/(loss) | 313 | (484)

The other operating loss balance for 2022 includes the effect of revisions to the estimate of the R&D claim accruals for the
years 2020 and 2021. The claims relate to tax credits receivable from HMRC under the UK Research and Development
Expenditure Credit Scheme (RDEC) and are recognised in the consolidated statement of profit or loss and other
comprehensive income.
The 2023 balance consists of the Group’s estimate of the R&D claim in relation to 2023 and a revision of the estimate in
relation to 2022.
8. Operating Expenses

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Staff costs and Directors’ emoluments |  |
Salaries and bonuses | 37,646 | 30,050
Share based payments | 1,359 | 837
Social security costs | 4,401 | 3,484
Pension costs | 2,180 | 1,445
Fees payable to the auditor |  |
Audit |  |
– the Company | 724 | 104
– Group companies | 1,090 | 723
Audit related services | 477 | –
Depreciation and amortisation |  |
Amortisation of intangible assets (Note 21) | 4,607 | 4,600
Depreciation of property, plant, and equipment (Note 19) | 798 | 819
Depreciation of right-of-use assets (Note 20) | 445 | 322
Other expenses |  |
Low-value lease expenses | 47 | 25
Clearing costs | 2,314 | 2,597
Other costs of sales | – | 139
Other bank charges | 2,861 | 2,514
Software support/licenses | 5,903 | 4,771
Process automation costs (see Note 36B(ii)(a)) | 2,000 | 2,000
Professional fees | 2,573 | 1,112
Irrecoverable VAT | 1,090 | 1,158
Other operating expenses | 7,4 31 | 3,170
Total recurring operating expenses | 77, 946 | 59,870
Non-recurring operating expenses | 21,101 | 5,332
Total operating expenses | 99,047 | 65,202

1
2
1 Audit fees includes £379k (2022: £221K) of prior year audit fees. Additional services provided by the auditor are noted in (a) below.
2 Non-recurring operating expenses consist of material non-recurring items that are considered exceptional in nature by virtue of their size and/or incidence and as a
result of arising outside of the normal trading of the Group. In determining whether a cost is non-recurring, the Group considers the nature and frequency of similar
events or transactions that have occurred in the past, as well as the likelihood of similar events or transactions in the future.
169
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
8. Operating Expenses continued
a) Non-recurring operating expenses can be analysed as follows.

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Professional costs incurred in connection with review of strategic options: | 16,559 | 1,868
Fees related to services provided by the auditor | 1,250 | –
Other | 15,309 | 1,868
Bonus related to: | 4,542 | 3,464
Listing | 2,288 | –
Take-on commitments | 2,254 | 3,464
Total non-recurring operating expenses | 21,101 | 5,332

1
1 Fees for audit services amounts to £125k (2022: nil) and fees for non-audit services amounts to £1,125k (2022: nil).
b) Number of employees
The monthly average number of full-time equivalent staff employed within the Group, including Executive Directors, was
310 (2022: 234) and the number of employees at year end was 381 (2022; 254).

| 2023 | 2022
Average number of persons employed during the year by legal entity |  |
Crown Agents Bank Limited | 303 | 214
Segovia Technology Company | 6 | 8
CAB Europe BV | 1 | –
Crown Agents Investment Managements | – | 12
| 310 | 234

9. Tax Expense
a) Analysis of tax expense for the year
i. Tax expense

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Continuing and discontinued operations |  |
Current tax |  |
Corporation tax based on the taxable profit for the year | 13,079 | 10,569
Adjustment in respect of prior years | 316 | (20)
| 13,395 | 10,549
Deferred tax |  |
Prior year | – | 59
Impact of tax rate changes | – | 10
Origination and reversal of temporary differences | 332 | (172)
| 332 | (103)
Total tax expense in statement of profit or loss | 13,727 | 10,446
Analysed as follows: |  |
Continuing operations | 13,727 | 10,456
Discontinued operations | (66) | (10)
Total tax expense for the year | 13,661 | 10,446
Effective tax | 36% | 24%

1
1 The effective tax rate materially exceeds the applicable tax rate since a large portion of the non-recurring expenses, (e.g., relating to the Admission) are not deductible
for tax purposes.
CAB Payments Holdings plc | Annual Report and Accounts 2023170
9. Tax Expense continued
ii. Amounts recognised directly in other comprehensive income

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Aggregate deferred tax arising in the year and not recognised in net profit or loss and recognised in other comprehensive income: |  |
Current year | 6 | 17
Adjustment in respect of prior years | 6 | –
Deferred tax charge (Note 23) | 12 | 17

b) Factors affecting tax expense for the year
The tax assessed for the year is higher (2022: higher) than the standard rate of Corporation Tax in the UK.

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Profit before taxation | 37,617 | 43,891
Standard rate corporation tax of 25%/19% on profit before taxation (2022: 19%) | 8,840 | 8,339
19% | 1,787 | 8,339
25% | 7, 053 | –
Effect of: |  |
Expenses not deductible for tax | 4,514 | 268
Temporary differences regarding capital items | (19) | 67
Losses not available for group relief | 20 | 79
Impact of overseas tax rates | 67 | (40)
Tax rate changes | – | 9
Permanent difference due to banking surcharge levy | 642 | 1,695
Prior year adjustments / other | (337) | 39
Total tax expense for continuing operations for the year | 13,727 | 10,456

The Company’s tax loss of £391k (2022: £60k) was surrendered to other Group companies (Corporation Tax Group Relief)
as permitted by HMRC. No tax has been paid by the Company in the current year (2022: nil).
As laid out in the Finance Act 2021, from 1 April 2023 the main corporation tax rate increased to 25% (19% previously). In
addition, there is a permanent difference due to banking surcharge levy of 3% (8% previously) in relation to taxable profits
of banks in excess of £100 million (£25 million previously) from 1 April 2023. The effects of this increase are reflected in
the consolidated financial statements. The figures above incorporate the increased tax rate in respect of timing differences
expected to reverse after that date.
171
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
10. Discontinued Operations, Assets Classified as Held for Sale, Liabilities Classified
as Held for Sale
a) Assets and liabilities classified as held for sale

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Cash at bank and in hand | – | –
Other assets | – | 989
Property, plant and equipment | – | 3
Intangible assets | – | 395
Assets classified as held for sale | – | 1,387
Derivative financial liabilities | – | (22)
Other liabilities | – | (1,023)
Liabilities classified as held for sale | – | (1,045)

The sale of Crown Agents Investments Managements Limited (CAIM) and JCF Nominees Limited (JCF) was completed
on 31 March 2023. As at 31 March 2023, the cash balance with the Group amounts to £1,608k and the Group lost control
of assets totalling £1,275k and liabilities totalling £634k. The consideration of £2,133k received on sale included cash and
cash equivalents of £2,133k.
b) Results from discontinued operations
In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations the results of CAIM and
JCF are presented as discontinued operations in the current year and in the 2022 year end. The results from discontinued
operations, which are included in the consolidated statement of profit or loss and other comprehensive income, are set
out below:

| Consolidated |
| 2023 1 | 2022
| £’000 | £’000
Interest income | 25 | –
Fees and commission income | 830 | 3,362
Net foreign exchange gain | 4 | 26
Total income, net of interest expense | 859 | 3,388
Operating expenses | (1,146) | (3,465)
Loss before tax | (287) | (77)
Tax on loss | 66 | 10
Loss for the financial year | (221) | (67)
Profit on sale of discontinued operation | 68 | –
Other comprehensive income | – | –
Total comprehensive income | (153) | (67)

The loss from discontinued operations of £153k (2022: £67k) is attributable entirely to the owners of the Company.
There was no other comprehensive income attributable to discontinued operations.
CAB Payments Holdings plc | Annual Report and Accounts 2023172
10. Discontinued Operations, Assets Classified as Held for Sale, Liabilities Classified
asHeldfor Sale continued
c) Cash flows from discontinued operations

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Cash flow from operating activities | (536) | 148
Cash and cash equivalents at the end of the year | – | –

1
1 The 2023 results presented in table A and table B above represent three months to 31 March 2023 when CAIM and JCF were sold.
d) Assets classified as held for sale
In the Company financial statements, the investment in CAIM met the recognition criteria under IFRS 5 Non-current assets
held for sale and discontinued operations on 20 June 2022. On initial recognition, assets classified as held for sale assets
are carried at lower of their carrying value or fair value less cost to sell. The table below summarises the carrying value and
impairment loss recognised on investment in CAIM.

| Company |
| 2023 | 2022
| £’000 | £’000
Assets classified as held for sale at the beginning of the year | 2,181 | –
Investment in CAIM prior to classification as held for sale | – | 3,446
Impairment loss recognised | – | (1,265)
Disposal | (2,181) | –
Assets classified as held for sale at end of year | – | 2,181

1
The Company recognised a profit on sale of CAIM of £68k (2022: impairment £1,265k).
11. Cash and Balances at Central Banks

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Cash and balances at central banks | 528,396 | 607,358
Less: Impairment loss allowance | – | –
| 528,396 | 607,358
Component of cash and balances included in cashflow under: |  |
Cash and balances at central banks | 528,396 | 607,358

Cash and balances at central banks include no encumbered assets (2022: £nil).
There are no restricted amounts within cash and balances at central banks. The cash and bank balance at central banks
is measured at amortised cost as they meet the Solely Payment of Principal and Interest (SPPI) criterion and are held to
collect the contractual cashflows.
The carrying amount of these assets is approximately equal to their fair value.
Refer to Note 37 on Credit risk for further details on impairment loss allowance.
173
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
12. Money Market Funds

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Open Ended Investment Companies |  |
Goldman Sachs USD Treasury Liquid Reserves Fund | 380,805 | 209,486
Black Rock ICS USD Liquidity Fund | 98,566 | –
JP Morgan USD Liquidity LVNAV Fund | 39,393 | –
| 518,764 | 209,486
Component of Money Market Funds included in consolidated statement of cashflows under: |  |
Cash and cash equivalent balances | 518,764 | 209,486

Money market funds are mandatorily held at fair value through profit or loss as they do not satisfy the SPPI criterion set out
in IFRS9. The funds are all rated AAA (in 2022 and 2023) based on a basket of credit ratings agencies, all approved by the
Financial Conduct Authority.
The Company had no Money Market funds throughout 2023 (2022: nil). Refer to Note 43 on fair value measurements for
further details.
13. Loans and Advances
Loans and advances are measured at amortised cost as they meet the SPPI criterion and are held to collect the contractual
cash flows.

| Consolidated |
|  | Restated
| 2023 | 2022
| £’000 | £’000
Loans and advances (gross) |  |
Loans and advances on demand to banks | 135,203 | 90,255
Other loans and advances to banks 1 | 137,597 | 85,516
Other loans and advances to non-banks | 8,712 | 12,647
Total | 281,512 | 188,418
Less: Impairment loss allowance |  |
Loans and advances on demand to banks | (25) | (46)
Other loans and advances to banks | (27) | (51)
Other loans and advances to non-banks | (496) | (200)
Total | (548) | (297)
Net Loans and advances on demand to banks | 135,178 | 90,209
Net Other loans and advances to banks | 137, 570 | 85,465
Net Other loans and advances to non-banks | 8,216 | 12,447
Net loans and advances | 280,964 | 188,121
Component of loans and advances included in the consolidated statement of cash flows under: |  |
Cash and cash equivalents | 135,178 | 90,209
Total | 135,178 | 90,209

1
CAB Payments Holdings plc | Annual Report and Accounts 2023174
13. Loans and Advances continued
The Group’s other loans and advances to banks include £8,264k of encumbered assets (2022: £1,827k) in relation to
derivative contracts with other financial institutions and the balances are not overdue. Other loans and advances to non-
banks includes a loan to a related party (2023: nil; 2022: £2,251k) (see Note 35).
Refer to Note 37 on Credit risk for further details on impairment loss allowance.
1
Prior period restatement note
A prior period adjustment has been made to record a reclassification of a counterparty which was incorrectly recognised
in Other loans and advances to banks instead of Other loans and advances to non-banks. There was no impact to profit or
loss, equity or earnings per share. The 31 December 2022 consolidated statement of financial position has been restated
as follows:

|  | Other loans
| Other loans and | and advances
| advances to banks | to non-banks
Consolidated financial statements as at 31 December 2022: | £’000 | £’000
Year ended 31 December 2022 (as previously reported) | 93,164 | 4 ,74 8
Prior period adjustment | (7,699 ) | 7,699
Year ended 31 December 2022 (as restated) | 85,465 | 12,447

The Other loans and advances to banks and Other loans and advances to non-banks balances on Note 34, Note 37,
Note 38, Note 40 and Note 42 have been impacted by the same prior period adjustment amount and have been restated
accordingly.
The Company’s loans and advances with subsidiary undertaking is receivable from CAB and amounts to £658k (2022: nil).
14. Derivative Financial Instruments
At 31 December, the derivative assets and liabilities are set out below, these are held to manage foreign currency exposure
and are not designated in hedge accounting relationships for risk management purposes:

Consolidated | Notional principal | Assets | Liabilities
FX Forwards: | £’000 | £’000 | £’000
2023 | 711,098 | 3,829 | 9,679
2022 | 714,810 | 6,567 | 4,543

The forward FX contracts have been transacted to economically hedge assets and liabilities in foreign currencies. The
net unrealised (loss)/ gain at the statement of financial position date is (£5,850k) (2022: unrealised gain £2,024k). These
derivative financial instruments and the underlying transactions they hedge will mature during 2024 split as follows (2022:
mature during 2023).
The Group has entered into arrangements that do not meet the criteria for offsetting but still allow for the related amounts
to be set off in certain circumstances, such as bankruptcy or the termination of a contract. There were no such instances
during the year.
The following table presents the recognised financial instruments that are offset, or subject to enforceable master netting
arrangements and other similar agreements but were not offset in the statement of financial position, as at 2023 and 2022.
The column ‘net amount’ shows the impact on the Group’s balance sheet if all set-off rights were exercised.
175
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
14. Derivative Financial Instruments continued

Consolidated |  | Gross amounts | Net amounts | Amounts subjected |
2023 |  | set off in the | presented in the | on master netting |
£’000 | Gross amounts | balance sheet | balance sheet | arrangements | Net amount
Financial assets |  |  |  |  |
Derivative assets | 3,829 | – | 3,829 | 736 | 3,093
Financial liabilities |  |  |  |  |
Derivative liabilities | 9,679 | – | 9,679 | 8,387 | 1,292

1

Consolidated |  | Gross amounts | Net amounts | Amounts subjected |
2022 |  | set off in the | presented in the | on master netting |
£’000 | Gross amounts | balance sheet | balance sheet | arrangements | Net amount
Financial assets |  |  |  |  |
Derivative assets | 6,567 | – | 6,567 | 3,523 | 3,044
Financial liabilities |  |  |  |  |
Derivative liabilities | 4,543 | – | 4,543 | 4,219 | 324

1
1 Agreements with derivative counterparties are based on an ISDA Master Agreement and other similar master netting arrangement with other counterparties. Under
the terms of these arrangements, only where certain credit events occur (such as termination of the contract or default of the other party), will the net position owing/
receivable to a single counterparty in the same currency be taken as owing and all the relevant arrangements terminated. As the Group does not presently have a
legally enforceable right of set-off, these amounts have not been offset in the balance sheet, but have been presented separately in the table above.
The fair value of a derivative contract represents the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date (an exit price).
The Company had no derivative financial instruments throughout 2023 (2022: nil).
15. Investment in Debt Securities
The Group’s investment in debt securities consist of fixed rate bonds issued (or guaranteed) by central and private banks.
These are measured at amortised cost as they meet the SPPI criterion and are held to collect the contractual cashflows.

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Investment in debt securities at amortised costs |  |
Balance at the beginning of the period | 414,061 | 73,248
Purchases | 484,208 | 518,079
Redemptions | (521,161) | (188,662)
Exchange gains/ losses | (19,776) | 13,498
Movement in discount/premium and accrued Interest receivable | (4,290) | (2,089)
| 353,042 | 414 ,074
Less: Impairment loss allowance | (14) | (13)
Balance at the end of the period | 353,028 | 414,061

The Company had no investment in debt securities in 2023 ( 2022: nil).
Refer to Note 37 on Credit risk for further details on impairment loss allowance.
CAB Payments Holdings plc | Annual Report and Accounts 2023176
16. Investment in Equity Securities
Investment securities designated at FVTOCI are as follows:

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Shares in The Society for Worldwide Interbank Financial Telecommunication |  |
(SWIFT) | 495 | 488
| 495 | 488

| Consolidated |
| 2023 | 2022
| £’000 | £’000
At 1 January | 488 | 382
Exchange (loss)/gain | (20) | 18
Fair value gain | 27 | 88
At 31 December | 495 | 488

With the exception of the above the Group’s policy is not to invest in equities. However, in order to undertake its business,
the Group utilises the SWIFT payment system, the conditions of which oblige participants to invest in the shares of SWIFT,
in proportion to participants’ financial contributions to SWIFT. Due to the nature of the investment, this equity security has
been designated at FVTOCI.
No dividend income was recognised from these shares (2022: nil). There was no sale of these equity shares (2022: nil).
Apart from investments in subsidiary undertakings (see Note 22) the Company held no other investments throughout the
current or prior year.
Refer to Note 43 on fair value measurements for further details.
17. Accrued Income

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Financial assets: |  |
Accrued income (others) | 547 | 429
Less: Impairment loss allowance | (3) | (5)
| 544 | 424
Non-financial assets: |  |
Research and development tax rebate | 671 | 432
| 671 | 432
Total | 1,215 | 856

Accrued income relates to amounts owed for services which have not yet been invoiced. This balance arises from several
components including management fee, pension accruals, and other revenues. The balance is also related to a research
and development tax rebate which is a tax claim that the Group is due to receive from HMRC for the qualifying research
and development activities undertaken from the Group.
Lifetime ECL has been recognised for accrued income. Further details of expected credit losses on contract asset (accrued
income) are disclosed in Note 37.
177
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
18. Unsettled Transactions and Other Assets
i. Other assets

| Consolidated |
|  | Restated
| 2023 | 2022
| £’000 | £’000
Financial assets: |  |
Balances with mobile network operators | 3,164 | 3,635
Staff loans | 335 | 544
Transactions debited by third party Nostro provider | 1,996 | 8,322
Other assets | 262 | 794
Less: impairment loss | (36) | (62)
Total | 5,721 | 13,233
Non-financial assets: |  |
VAT refund | 1,994 | 914
Prepayments | 3,429 | 2,262
Deferred tax | 56 | –
Total | 5,479 | 3,176
Total other assets | 11,200 | 16,409

1
2
Financial assets are measured at amortised cost as they meet the SPPI criterion and are held to collect the contractual
cash flows.
1 Balances with mobile network operators (MNOs) are due to the Group in respect of mobile money transfers. The Group charges fees for services it provides to
aid transfer of funds by its clients to beneficiaries via mobile money using MNOs. These balances are funds with the MNO which have yet to be transferred to
beneficiaries.
2 These balances represent amounts that are debited in advance by third party Nostro providers at year end. The prior year balance has been restated to financial
assets because it was previously incorrectly classified under non-financial assets.
The Company’s other assets in 2023 amount to £188k (2022: nil).
ii. Unsettled transactions:

| Consolidated |
|  | Restated
| 2023 | 2022
| £’000 | £’000
Unsettled transactions | 8,417 | 16,071

3
3 Unsettled foreign currency transactions that are delayed due to time differences, public holidays in other countries (where the counterparties are located) or similar
operational reasons. The arising balances are short-term in nature (typically less than four days) and were settled early the following period.
The Company does not have unsettled transactions at year-end (2022: nil).
CAB Payments Holdings plc | Annual Report and Accounts 2023178
18. Unsettled Transactions and Other Assets continued
Prior period restatement note
A prior period adjustment has been made to record a reclassification of late receipts which was incorrectly recognised in
Other Assets instead of Unsettled Transactions. The 31 December 2022 consolidated statement of financial position has
been restated as follows:

| Other assets | Unsettled transactions
Consolidated financial statements as at 31 December 2022: | £’000 | £’000
Year ended 31 December 2022 (as previously reported) | 19,520 | 12,960
Prior period adjustment | (3,111) | 3,111
Year ended 31 December 2022 (as restated) | 16,409 | 16,071

The Other Assets and Unsettled Transactions balances in Note 34, Note 37, Note 38, Note 40 and Note 42 have been
impacted by the same prior period adjustment amount and have been restated accordingly. There is no impact on the
bucketing of the balances in the respective notes.
19. Property, Plant and Equipment
2023

|  | Consolidated |  |
| Leasehold improvements | Computer equipment | Fixtures & fittings 2 | Total
| £’000 | £’000 | £’000 | £’000
Cost |  |  |  |
At 1 January 2023 | 122 | 2,516 | 2,209 | 4,847
Additions | – | 348 | 74 | 422
Disposals | – | (75) | (8) | (83)
At 31 December 2023 | 122 | 2,789 | 2,275 | 5,186
Accumulated depreciation |  |  |  |
and impairment |  |  |  |
At 1 January 2022 | 89 | 1,605 | 1,574 | 3,268
Charge to profit or loss | 22 | 371 | 405 | 798
Disposals | – | (69) | (2) | (71)
At 31 December 2023 | 111 | 1,907 | 1,977 | 3,995
Net book value |  |  |  |
As 1 January 2023 | 33 | 911 | 635 | 1,579
At 31 December 2023 | 11 | 882 | 298 | 1,191

1
1 Includes mobile phones.
2 Includes artwork.
179
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
19. Property, Plant and Equipment continued
2022

|  | Consolidated |  |
| Leasehold improvements | Computer equipment | Fixtures & fittings | Total
| £’000 | £’000 | £’000 | £’000
Cost |  |  |  |
At 1 January 2022 | 122 | 2,288 | 2,183 | 4,593
Exchange differences | – | (2) | – | (2)
Additions | – | 325 | 30 | 355
Disposals | – | (95) | (4) | (99)
At 31 December 2022 | 122 | 2,516 | 2,209 | 4,847
Accumulated depreciation |  |  |  |
At 1 January 2022 | 67 | 1,293 | 1,173 | 2,533
Exchange differences | – | – | – | –
Charge to profit or loss | 22 | 393 | 404 | 819
Disposals | – | (81) | (3) | (84)
At 31 December 2022 | 89 | 1,605 | 1,574 | 3,268
Net book value |  |  |  |
As 1 January 2022 | 55 | 995 | 1,010 | 2,060
At 31 December 2022 | 33 | 911 | 635 | 1,579

1
2
1 Includes mobile phones.
2 Includes artwork.
The Directors consider property and plant for indicators of impairment at least annually, or when there is an indicator
of impairment. There are no physically visible impairment indicators at year-end. Management have considered decline
in market capitalisation as an impairment indicator, therefore performed an impairment assessment of the value of the
business which included property plant and equipment (‘PPE’). Refer to Note 21 for the comparison between recoverable
amount (value in use of CAB) and the carrying amount of the net assets.
No impairment charge was taken in the period (2022: nil).
The Company had no property, plant and equipment (2022: nil).
20. Leases (Group as a Lessee)
The Group has recognised a right of use asset and lease liabilities for its property leases which are for an average lease term
of five-year and ten-month period. The leases have been accounted for as a portfolio (as they have similar characteristics).
The discounts used are the incremental borrowing rates in the range of 2.14% – 8.99% in 2023 and 2022.
The Group makes fixed payments on a quarterly basis, in advance, to the lessors for the use of the properties and there are
no variable payments. The property leases have lease incentives, with the lease incentive receivable being deducted from
the future lease payments.
The services provided by the Lessors, such as cleaning, security, maintenance, and utilities as part of the contract, are
components which are not included in the right of use asset calculation and have been expensed in Other operating
expenses line item in Note 8. These expenses amount to £397k (2022: £259k).
There was no dilapidation cost (restoration cost) added to the right of use.
The Group’s leases of low value fixtures and equipment are expensed in ‘Other operating expenses’ line item in Note 8 on a
straight-line basis (see accounting policy in Note 1 for leases). These amounted to £47k (2022: £25k).
CAB Payments Holdings plc | Annual Report and Accounts 2023180
20. Leases (Group as a Lessee) continued
There were no short-term leases during the year (2022:nil).
The lease terms covers only the non-cancellable lease term. There are no purchase, extension, or termination options and
residual guarantees in the leases.
There are also no restrictions or covenants imposed by the leases.
The lease interest payments charged as an expense for the year totalled £65k (2022: £19k).
The Company had no lease payments under non-cancellable operating leases during 2023 (2022: nil).
There were no leases entered into but which had not commenced as at the year-end in the Group or the Company.
a) Right of use assets
All the Group’s right-of-use assets are non-current assets. A reconciliation of the Group’s right-of-use assets as at
31 December 2022 and 31 December 2023 are shown below:

| Consolidated
| Leasehold property
| £’000
Cost |
At 1 January 2023 | 1,760
Additions | –
At 31 December 2023 | 1,760
Accumulated depreciation |
At 1 January 2023 | 626
Charge to profit or loss | 445
At 31 December 2023 | 1,071
Net book value |
At 31 December 2023 | 689
Cost |
At 1 January 2022 | 1,065
Additions | 695
At 31 December 2022 | 1,760
Accumulated depreciation |
At 1 January 2022 | 304
Charge to profit or loss | 322
At 31 December 2022 | 626
Net book value |
At 31 December 2022 | 1,134

2
1
1
1 Charge to P&L includes depreciation on leases attributable to discontinued operations.
2 There is only one class of right of use assets which is the property lease.
181
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
20. Leases (Group as a Lessee) continued
b) Lease liabilities
A reconciliation of the Group’s remaining operating lease payments as at 31 December 2023 and 31 December 2022 are
shown below:

| Consolidated
| Leasehold property
| £’000
Lease liabilities as at 1 January 2023 | 1,281
Additions during the year | –
Payments during the year | (462)
Add: interest on lease liabilities | 65
At 31 December 2023 | 884
Lease liabilities as at 1 January 2022 | 819
Additions during the year | 695
Payments during the year | (252)
Add: interest on lease liabilities | 19
At 31 December 2022 | 1,281

There were no variable lease payments expenses in the reporting period (2022: nil).
The Group’s lease liabilities as at 31 December 2022 and 31 December 2023 is split into current and non-current portions
as follows:

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Non-current | 512 | 611
Current | 372 | 670
Lease liabilities | 884 | 1,281

The maturity analysis of lease liabilities is disclosed in Note 37.
c) Impact on the profit and loss
The following are the amounts recognised in profit or loss:

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Depreciation expense of right-of-use assets (Note 8) | 445 | 322
Interest expense on lease liabilities (Note 4) | 65 | 19
Expense relating to leases of low-value assets (Note 8) | 47 | 25
Total amount recognised in profit or loss | 557 | 366

The Group had total cash outflows for all leases of £462k (2022: £277k).
CAB Payments Holdings plc | Annual Report and Accounts 2023182
21. Intangible Assets

|  |  | Consolidated |  |
|  | Core accounting |  |  |
| Goodwill | software | Other software | Brand/name | Total
| £’000 | £’000 | £’000 | £’000 | £’000
Cost |  |  |  |  |
At 1 January 2023 | 5,919 | 5,817 | 24,809 | 1,427 | 37, 972
Additions | – | 82 | 6,844 | 56 | 6,982
Exchange rate loss | – | (27) | – | – | (27)
At 31 December 2023 | 5,919 | 5,872 | 31,653 | 1,483 | 44,927
Accumulated amortisation |  |  |  |  |
and impairment |  |  |  |  |
At 1 January 2023 | – | 4,146 | 11,785 | 122 | 16,053
Charged for the year | – | 309 | 4,253 | 45 | 4,607
Exchange rate loss | – | (27) | – | – | (27)
At 31 December 2023 | – | 4,428 | 16,038 | 167 | 20,633
Net book value |  |  |  |  |
At 1 January 2023 | 5,919 | 1,671 | 13,024 | 1,305 | 21,919
At 31 December 2023 | 5,919 | 1,444 | 15,615 | 1,316 | 24,294

In addition to the above the Group incurred a loss of £284k (2022: nil) in relation to intangible assets disclosed within the
assets held for sale as at 31 December 2022.

|  |  | Consolidated |  |
|  | Core accounting |  |  |
| Goodwill | software | Other software | Brand/name | Total
| £’000 | £’000 | £’000 | £’000 | £’000
Cost |  |  |  |  |
At 1 January 2022 | 5,919 | 5,684 | 20,987 | 1,536 | 34,126
Additions | – | 133 | 4,389 | 16 | 4,538
Classified as held for sale | – | – | (480) | (125) | (605)
Disposal | – | – | (87) | – | (87)
At 31 December 2022 | 5,919 | 5,817 | 24,809 | 1,427 | 37,972
Accumulated amortisation |  |  |  |  |
At 1 January 2022 | – | 3,429 | 8,200 | 91 | 11,720
Charged for the year | – | 717 | 3,794 | 37 | 4,548
Classified as held for sale | – | – | (152) | (6) | (158)
Disposals | – | – | (57) | – | (57)
At 31 December 2022 | – | 4,146 | 11,785 | 122 | 16,053
Net book value |  |  |  |  |
At 1 January 2022 | 5,919 | 2,255 | 12,787 | 1,445 | 22,406
At 31 December 2022 | 5,919 | 1,671 | 13,024 | 1,305 | 21,919

Software that does not result in an intangible asset (right to receive access to the supplier’s application software
in the future is a service contract) of the Group are expensed. Software expensed in the period amounts to £2,926k (2022:
£1,239k). These costs are expensed to profit and loss over the period of the contract in line with the benefits received. There
are no judgements made in this respect.
183
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
21. Intangible Assets continued
Internally generated assets include payment-related software that is created and utilised in the Group’s operation.
All intangible assets (except Goodwill) have finite lives - see Note 1 for accounting policies on the amortisation method
and useful lives.
Other software held by the Group includes payments, compliance, and banking software.
The Company had no intangible assets throughout 2023 and 2022.
a) Goodwill
The goodwill relates to the acquisitions:
(i) by the Company, on 31 March 2016, of the entire share capital of both CAB, a regulated wholesale bank, and
(ii) by the Group, on 1 July 2019, of the entire share capital of Segovia Technology Company (Segovia), a US based fintech
Company.
CGU: goodwill relating to the acquisitions of both CAB and Segovia is allocated to CAB. This is because CAB is the cash
generating unit benefiting from the Segovia’s business platforms which have the underlying value of goodwill. The CGUs
are determined at company level because there are no individual assets that can be attributed to revenue generation.
The goodwill is tested for impairment at the CGU level. Impairment reviews were performed on the carrying values of all
goodwill and intangible assets as follows:
(i) Goodwill: reviewed against a value in use calculation of CAB, the cash generating unit.
(ii) Other Intangible Assets: reviewed against valuations of the Group companies concerned. For CAB comparisons were
made against value in use calculations.
The carrying amount of goodwill has been allocated to the operating segment for all periods. The Group tests goodwill and
intangible assets annually for impairment, or more frequently if there are indications that goodwill and intangible assets
might be impaired. This impairment assessment also applies to PPE (Note 19) and investments in subsidiary undertakings
(Note 22).
CAB value in use
The recoverable amount of this cash-generating unit is determined based on a value in use calculation which uses cash
flow projections based on financial budgets approved by the Board of Directors covering a three-year period ending 31
December 2026, with the terminal growth rate applied from the start of 2027. The key assumptions used by the Group in
setting the financial forecasts for the initial three-year period were as follows:

| 2023 | 2022
Discount rate | 20.3% | 17%
Terminal value growth rate | 2% | 0%

i. Discount rate
The Group uses a pre-tax discount rate based on a weighted average cost of capital.
ii. Terminal growth rate
Terminal growth rate has increased from 0% to 2% being an industry realistic benchmark based on the UK long term
inflation rate.
iii. Sensitivity analysis of key assumptions in calculating value in use
The Group has conducted an analysis of the sensitivity of the impairment test to changes in the key assumptions used to
determine the recoverable amount for each of the group of CGUs to which goodwill and intangible assets are allocated.
The Group believes that any reasonably possible change in the key assumptions on which the recoverable amount of
CAB is based would not cause the aggregate carrying amount of goodwill and intangible assets to exceed the aggregate
recoverable amount of the related CGUs.
CAB Payments Holdings plc | Annual Report and Accounts 2023184
21. Intangible Assets continued
iv. Other impairment indicators
The reduction in market capitalisation due to announcement of inability to meet targeted profits by end of 2023 was
assessed as a potential impairment indicator. However, the market capitalisation of the group at year end is above the
carrying amount of the CGUs and the net assets of the Group, therefore no impairment is required (2022: nil).
22. Investments in Subsidiary Undertakings
Investments in subsidiary undertakings were as follows:
Reconciliation

| Company |
| 2023 | 2022
| £’000 | £’000
At 1 January | 63,384 | 66,830
Additions | 100,996 | –
Impairments | – | (1,265)
Classified as held for sale | – | (2,181)
At 31 December | 164,380 | 63,384

2
1

| Company |
| 2023 | 2022
| £’000 | £’000
Analysed as: |  |
CAB Tech Holdco Limited (CTH) | 164,380 | 63,384
CAIM | – | –
| 164,380 | 63,384

1
1 The investment in CAIM was classified as held for sale in the prior year and it was sold during the year. Refer to Note 10 for details on disposal of CAIM.
2. The Company acquired an additional interest in CTH on 10 July 2023 amounting to £100,996k (2022:nil).
Impairment reviews were performed on the carrying values of the investment in CTH for 2022 and 2023 as follows:
The key asset in CTH is its investment in CAB. The value in use of CAB calculation and assessment of key assumptions and
related sensitivity analysis in Note 21 is applicable for assessment for impairment of investment in subsidiary undertakings.
The value in use exceeds the carrying amount of the investment in subsidiary undertakings, therefore no impairment is
recognised (2022:nil).
For further details on subsidiaries refer to Note 33.
Refer to Note 28 for information on dividend payments.
185
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
23. Deferred Tax
a) Deferred tax liability
The deferred tax liability recognised in the consolidated financial statements is as follows:

|  |  | Consolidated |  |
| Property, plant | Investment | Intangible | ECL |
| and equipment | in equity | assets | Provision | Total
Deferred tax liability (2023) |  |  |  |  |
At 1 January 2023 | 3 | 24 | 263 | 44 | 334
Charge / (Credit) to profit and loss 2023 | 112 | – | 281 | (44) | 349
Charge to other comprehensive income 2023 | – | 12 | – | – | 12
At 31 December 2023 | 115 | 36 | 544 | – | 695
Analysed as follows: |  |  |  |  |
Continued operations | 115 | 36 | 544 | – | 695
Discontinued operations | – | – | – | – | –
| 115 | 36 | 544 | – | 695
Deferred tax liability (2022) |  |  |  |  |
At 1 January 2022 | 233 | 7 | 180 | – | 420
Charge / (Credit) to profit and loss 2022 | (230) | – | 83 | 44 | (103)
Charge to other comprehensive income 2022 | – | 17 | – | – | 17
At 31 December 2022 | 3 | 24 | 263 | 44 | 334
Analysed as follows: |  |  |  |  |
Continued operations | 3 | 24 | 245 | 44 | 316
Discontinued operations | – | – | 18 | – | 18
| 3 | 24 | 263 | 44 | 334

1
The deferred tax liability can be further analysed as follows:

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Liability reversing at 23.5% |  | 19
Liability reversing at 25% | 695 | 5
Liability reversing at 25.5% | – | (9)
Liability reversing at 27.25% | – | 123
Liability reversing at 28% | – | 196
At 31 December 2023 at 25% (2022: 23.5%/25%/25.5%/27.25%/28%) | 695 | 334

CAB Payments Holdings plc | Annual Report and Accounts 2023186
23. Deferred Tax continued
b) Deferred tax recognised in the year

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Accelerated tax depreciation on property, plant and equipment | 112 | (230)
Intangible assets | 300 | 83
Expected credit loss provision | (80) | 44
Total tax expense/(credit) to profit or loss | 332 | (103)
Charged to other comprehensive income: |  |
Deferred tax expense on investment on equity securities | 12 | 17
Total deferred tax expense in other comprehensive income | 12 | 17
Total deferred tax charge/(credit) for the year | 344 | (86)

1
1 Includes a deferred tax asset credit of £18k (2022 - £nil).
c) Unrecognised deferred tax assets and deferred tax liability
At the reporting date, the Group had nil (2022: nil) unused tax losses available for offset against future profits.
Company
The Company had not recognised deferred tax assets or liabilities at 31 December 2022 and 31 December 2023.
24. Customer Accounts

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Repayable on demand | 785,316 | 656,419
Other customers’ accounts with agreed maturity dates or periods of notice by residual maturity repayable: |  |
3 months or less | 670,901 | 479,641
1 year or less but over 3 months | 81,020 | 169,491
2 years or less but over 1 year | 5,652 | –
| 1,542,889 | 1,305,551

The Company had no customer accounts throughout 2023 (2022: nil).
Customer accounts are accounts that customers hold with the Group. The Group is transaction led and does not borrow to
finance lending. A substantial proportion of customer accounts are current accounts that, although repayable on demand,
have historically formed a stable deposit base.
187
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
25. Unsettled Transactions, Accruals and Other Liabilities
A. Other liabilities

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Financial liabilities |  |
Trade creditors | 2,041 | 554
Funds received in advance | 3,327 | 4,988
Transactions credited by third party nostro providers | 159 | 3,500
Other creditors | 696 | 9
| 6,223 | 9,051
Non-financial liabilities |  |
HM Revenue & Customs | 1,816 | 2,413
Deferred income | 82 | 53
| 1,898 | 2,466
Total other liabilities | 8,121 | 11,517

1
2
1 These balances represent amounts that are credited incorrectly by third party Nostro providers at year-end. The prior year balance has been restated to financial
liabilities because it was previously incorrectly classified under non-financial liabilities.
2 Deferred income relates to payments that are received from customers before the services are provided to customers.
B. Unsettled transactions

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Unsettled transactions | 20,081 | 25,782

3
3 Unsettled transactions result from foreign exchange transactions that are delayed due to time differences, public holidays in other countries (where the counterparties
are located) or similar operational reasons. The arising balances are short-term in nature (typically less than four days) and were settled shortly after the balance
sheet date.
C. Accruals

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Accruals | 18,367 | 19,364

4
The Company’s accruals and other liabilities are as follows:

| Company |
| 2023 | 2022
| £’000 | £’000
Accruals | 1,022 | 321
Other liabilities | 422 | –
| 1,444 | 321

4
4 Accruals comprise various balances which have not yet been invoiced for goods received or services provided e.g audit fees, bank charges, professional fees and
payroll accruals.
The Company does not have unsettled transactions (2022: nil).
CAB Payments Holdings plc | Annual Report and Accounts 2023188
26. Provisions

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Expected credit loss: |  |
Financial guarantee liability | 2 | 1
Liability for letter of credit confirmations / bill acceptances | 6 | 6
Liquidity as a service (LaaS) – undrawn commitments | 228 | 72
ECL for off balance sheet balances (Note 37) | 236 | 79

i. Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt
instrument. The Group provides financial guarantees to multiple counterparties. Please refer to Note 37 for the maximum
exposure of financial guarantee contracts. The Group received premiums of £73k (2022: £85k).
ii. Letter of credit confirmations / bill acceptances
Letter of credit confirmation / acceptance is a letter from an issuing bank guaranteeing that a buyer’s payment to a seller
will be received on time and for the correct amount. The Group confirmed the letters of credit issued by an issuing bank and
charged fixed fees which are received either in advance or at a later date. The Group provides these acceptances to multiple
counterparties. Please refer to Note 31 for the maximum exposure of letter of credit confirmations / bill acceptances. The
Group received premiums of £754k (2022: £572k).
The uncertainties relating to the amount or timing of any outflow are those inherent within the products concerned, notably
that the relevant counterparty will not carry out its obligations. Cash collateral of £44,588k (2022: £40,283k) was held by
the Group in respect of the assets underlying financial guarantees and letter of credits noted above. These are not restricted
cash and are available for use by the Group.
iii. Liquidity as a Service – undrawn commitments
LaaS is a credit facility offered by the Group to its clients which allows clients to draw down on the facility on satisfaction of
the terms of this facility. The Group charges facility fees for consideration of providing this facility. The Group provides this
facility to multiple counterparties. Please refer to Note 37 for the maximum exposure of Liquidity as a Service. The Group
received facility fees of £47k (2022: £52k).
189
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
27. Called up Share Capital

| 2023 | 2022
Number of ordinary shares | ‘000 | ‘000
Authorised, allotted, issued, and fully paid (ordinary shares – Class A) |  |
As at beginning of year | 68,000 | 68,000
Redesignation of class A Shares to new ordinary shares (Note 27c) | (68,000) | –
As at period end (ordinary shares – Class A) | – | 68,000
Authorised, allotted, issued, and fully paid (ordinary shares – Class B) |  |
As at beginning of the year | 10 | 10
Share split of Class B shares resulting in reduction of nominal value |  |
per share from £0.5913044 to £0.001 (Note 27b) | 5,913 | –
Redesignation of class B shares to new ordinary shares (Note 27c) | (5,913) | –
As of end of the year (ordinary shares - Class B) | – | 10
Authorised, allotted, issued, and fully paid (number of ordinary shares) |  |
Redesignation of Class A and Class B shares to new ordinary shares (Note 27c) | 73,913 | –
Share split (Note 27d) | 147,826 | –
Issuance of ordinary shares to former external shareholders of CTH (Note 27e) | 32,404 | –
As of end of the year (£0.000333 nominal value per ordinary shares) | 254,143 | 68,010
| 2023 | 2022
Ordinary share balance | ‘000 | ‘000
As at beginning of year | 68,010 | 68,010
Share capital reduction of Class A shares and Class B shares before redesignation |  |
(Note 27a) | (67,936) | –
Issuance of ordinary shares to former external shareholders of CTH |  |
(32,404 at £0.000333 per share) (Note 27e) | 11 | –
Total share capital – at year-end | 85 | 68,010

A. Group reorganisation and listing
The ordinary shares of the Company were admitted to the premium listing segment of the Official List of the FCA and to
trading on the Main Market of the London Stock Exchange on 11 July 2023 (Admission). Immediately prior to Admission,
the Group undertook certain steps as part of a reorganisation of its corporate structure, which resulted in all shareholders
of CTH (other than the Company) exchanging shares in CTH for Ordinary Shares in the Company (the Reorganisation).
On 4 July 2023, the Company was re-registered as a public company limited by shares.
In relation to the existing share plans within the Group structure prior to the share capital reorganisation and the Share
Exchange described below, and prior to Admission, any unvested conditional awards and options vested in full. Participants
who held conditional awards received the CTH shares subject to their awards and participants who held options were
given the opportunity to exercise their options and acquire CTH shares in order to participate in the Share Exchange.
The following steps relating to the Reorganisation took place during the year 2023 (2022: none):
27a) On 19 June 2023, in connection with the Pre-Admission Reorganisation, the Company reduced the nominal value of
the A shares in the Company from £1 to £0.001 and the B shares in the Company from £1 to £0.5913044. The effect of
the share capital reduction has been to reduce the share capital of the Company from £68,010k to £74k and to increase
retained earnings accordingly by £67,936k.
27b) The Company split the B ordinary shares into 5,913,044 ordinary shares with a nominal value of £0.001 each.
CAB Payments Holdings plc | Annual Report and Accounts 2023190
27. Called up Share Capital continued
A. Group reorganisation and listing continued
27c) The Company re-designated its existing A ordinary shares and B ordinary shares into a single class of ordinary shares
with a nominal value of £0.001 each.
27d) The Company subdivided each ordinary share with a nominal value of £0.001 each into three ordinary shares with
a nominal value of 0.0333 pence each.
Following steps (27a) to (27d) the Company’s share capital comprised 221,739,135 ordinary shares.
27e) In accordance with the terms of the Implementation Agreement, the Company acquired the shares held by the other
shareholders in CTH from each of CAB Tech Holdco Limited’s other shareholders in exchange for 32,404,083 newly issued
ordinary shares (the Share Exchange).
Accordingly, 254,143,218 ordinary shares are in issue at year end (2022: 68,010,000).
There are no restrictions on the distribution of dividends and the repayment of capital.
B. Merger relief reserve
The Company recognised a merger relief reserve of £100,442k (2022: nil) relating to the transaction described in Note 27e.
On consolidation the merger relief reserve was eliminated by the difference between the adjustment to the non-controlling
interest and the fair value of the shares issued.
28. Retained Earnings

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Balance at beginning of year | 40,179 | 8,442
Profit for the year | 22,713 | 31,001
Share capital reduction (Note 27a) | 67, 936 | –
Dividends declared | (11,300) | –
Share-based payment expense (Note 32) | 1,313 | 388
Acquisition of NCI (Note 31) | 7,530 | 348
Capital injection | 3,661 | –
Issuance of new shares | (11) | –
Change in ownership interest in subsidiary (Note 27e) | (543) | –
Balance at end of year | 131,478 | 40,179

1
2
The Company’s retained earnings are as follows:

| Company |
| 2023 | 2022
| £’000 | £’000
Balance at beginning of year | (3,964) | (2,073)
Loss for the year | (4,584) | (1,891)
Share capital reduction (Note 27a) | 67, 936 | –
Dividends declared | (11,300) | –
Balance at end of year | 48,088 | (3,964)

1
1 During the year, Company declared dividends to its shareholders amounting to £11,300k in total, being £5,587k on 26 April 2023 and £5,713k on 1 June 2023
(year ended 31 December 2022: nil). The dividend per share was £0.08 in each case. CTH, a subsidiary of the Company, declared a dividend of £17,100k on 19 April
2023 (year ended 31 December 2022: nil) of which £1,540k was payable externally to CTH’s minority shareholders.
2 The capital injection in subsidiary relates to new shares issued by CTH as follows:
– The Group received cash from the issuance of A2 ordinary shares which increased equity attributable to the owners of the Group by £331k (2022:nil).
– The Group received cash from the issuance of C and D shares on 30 May 2023, which increased the equity attributable to the owners of the Group (£3,330k) and
the non-controlling interest (£296k).
– Of the new shares issued only £973k (2022 - £nil) was received in cash.
191
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
28. Retained Earnings continued
Equity classification of C and D shares held by NCI during the year
A judgement has been made, based on the Articles of Association of CTH, adopted on 2 May 2023, that C and D shares
issued on 30 May 2023 by CTH qualify as equity instruments in the consolidated financial statements. Contingent events
that could give rise to a put or a call over the shares issued by CTH are within our control and we therefore have an
unconditional right to avoid delivery of shares in the CAB Payments or cash to CTH shareholders.
29. Investment Revaluation Reserve

| Consolidated
| £’000
Balance at 1 January 2023 | 96
Fair value gain on investments in equity instruments designated as at FVTOCI | 27
Income tax relating to above | (12)
Balance at 31 December 2023 | 111
Balance at 1 January 2022 | 30
Fair value gain on investments in equity instruments designated as at FVTOCI | 82
Income tax relating to above | (16)
Balance at 31 December 2022 | 96

The investment revaluation reserve represents the cumulative gains and losses arising on the revaluation of investments in
equity instruments designated as at FVTOCI, net of cumulative gain / loss transferred to retained earnings upon disposal.
30. Foreign Currency Translation Reserve

| Consolidated
| £’000
Balance at 1 January 2023 | (31)
Exchange losses arising on translating the foreign operations | (121)
Attributable to owners | (111)
Acquisition of NCI (Note 31) | (10)
FX translation adjustment | 8
Balance at 31 December 2023 | (144)
Balance at 1 January 2022 | (141)
Exchange losses arising on translating the foreign operations | 110
Balance at 31 December 2022 | (31)

Exchange differences relating to the translation of the results and net assets of the Group’s foreign operation from its
functional currencies to the Group’s presentational currency (i.e. GBP) are recognised directly in OCI and accumulated in
the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation
reserve (in respect of translating the net assets of foreign operations) are reclassified to profit or loss on the disposal of the
foreign operation.
CAB Payments Holdings plc | Annual Report and Accounts 2023192
31. Non-Controlling Interest
Summarised financial information in respect of the Group’s subsidiary (CTH, which owns the entire share capital of CAB
and CAB Tech Holdco USA LLC, a US based holding Company, which itself owns Segovia) that had material non-controlling
interests up to 11 July 2023, is set out below.

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Profit attributable to owners of the Company | 22,713 | 31,001
Profit attributable to the non-controlling interests | 1,024 | 2,367
Profit for the year | 23,737 | 33,368
Other comprehensive income / (loss) attributable to owners of the Company | (96) | 177
Other comprehensive income attributable to the non-controlling interests | (10) | 13
Other comprehensive income / (loss) for the year | (106) | 190
Total comprehensive income attributable to owners of the Company | 22,617 | 31,177
Total comprehensive income attributable to the non-controlling interests | 1,014 | 2,381
Total comprehensive income for the year | 23,631 | 33,558
Dividends paid to non-controlling interests | 1,540 | –
Net cash outflow from operating activities | (4,460) | (18,223)
Net cash outflow from investing activities | (24) | (395)
Net cash outflow from financing activities | (666) | (28)

The external shareholders of CTH exchanged their shareholding in CTH for shares in CPH on 11 July 2023. The NCI % used
in these financial statements was 7.13% up to 11 July 2023 and was nil as at 31 December 2023 (2022: 6.99%) following
the capital restructuring of the Group detailed in Note 27. The balances attributable to the NCI in the table above are for
the period up to 11 July 2023.
The total equity attributable to NCI upon group capital restructuring amounting to £7,520k (2022: £7,704k) was transferred
to retained earnings and there was no NCI at year end. Refer to the consolidated statement of changes in equity for the
NCI reconciliation.
193
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
32. Share Based Payments
The Group operates a number of employee equity-settled schemes as part of its strategy. The fair value of the employee
services received in exchange for the grant of the awards is recognised in employee benefit expenses together with a
corresponding increase in equity (share-based payment reserve), over the period in which the service and the performance
conditions are fulfilled (the vesting period). Movements in the consolidated statement of profit or loss and other comprehensive
income during the year for all three schemes were as follows:

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Share based payments expenses recognised in statement of profit or loss and other comprehensive income |  |
Share based scheme 1 | 665 | 449
Share based scheme 2 | 387 | 388
Share based scheme 3 | 307 | –
Expense arising from equity settled share based payment transactions | 1,359 | 837

a) Share Based Scheme 1 – Group
Description and vesting
In 2017 an equity settled share based payment scheme was put in place to incentivise senior management. Legal ownership
of the shares lies with the Employee Benefit Trust (‘EBT’). Employees receive the equitable interest in the shares for which
they pay nominal value.
In July 2023, the Admission, triggered an exit event. As a result, all vesting conditions were accelerated as follows:

| Consolidated
Share based payments scheme 1 | Number of awards
Outstanding at 1 January 2022 | 10,000
Granted during the year | –
Released during the year | –
Cancelled during the year | –
Forfeited during the year | –
Outstanding at 31 December 2022 | 10,000
Vested and exercisable at 31 December 2022 | 8,590
Outstanding at 1 January 2023 | 10,000
Granted during the year | –
Released during the year | (10,000)
Cancelled during the year | –
Forfeited during the year | –
Outstanding at 31 December 2023 | –
Vested and exercisable at 31 December 2023 | –

The scheme is now closed. Given the accelerated vesting and release of the awards in the current year, the provision of
vesting details provided in previous years is now irrelevant and not disclosed.
CAB Payments Holdings plc | Annual Report and Accounts 2023194
32. Share Based Payments continued
a) Share based scheme 1 – Group continued
Valuation and inputs to the model
The fair value at grant date is independently determined using the Monte Carlo method which considers, the term of the
award, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the
risk-free interest rate for the term of the award and the correlations and volatilities of peer group companies. The expected
price volatility is based on the historic volatility (based on the remaining life of the awards), adjusted for any expected
changes to future volatility due to publicly available information. The valuation is a Level 2 valuation.
In 2021, new allocations were made to further senior managers. The estimated fair value of the awards granted was
£605 per share on grant date. There were no allocations in 2022 or 2023 for this scheme and therefore no valuations were
required.
The following table lists the inputs to the models used to determine the fair value at grant date for the share awards
granted in this scheme:

Share based payments scheme 1 | Key inputs
Dividend yield (%) | n/a
Expected volatility (%) | 30–40
Risk-free interest rate (%) | 1.2
Expected life of share awards (%) | 2.7
Share price at grant date (£) | 142
Model used | Monte Carlo

b) Share based scheme 2 – Group
Description and vesting requirements
Following the purchase of Segovia in 2019, incentives in the shares of CTH were allocated to key individuals employed
within Segovia. The incentives were provided as Restricted Share Awards or Restricted Share Unit Awards (both in relation
to the Class B £1 ordinary shares) at the individual’s discretion. Subsequently, additional Restricted Share Units were
awarded to key individuals of Segovia Technology Company. This scheme is an equity settled share-based payment
scheme. When issued, the fair value of the Restricted Shares and Restricted Share Units was £1.19. The fair value at grant
date was based on a market valuation of CTH following a report provided by external consultants. The fair value included
a discount of 20% on the valuation of CTH due to a lack of marketability.
195
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
32. Share Based Payments continued
b) Share based scheme 2 – Group continued
In July 2023, the Admission, as detailed in Note 1 (a), triggered an exit event. As a result, all vesting conditions were
accelerated, and employees exercised their right to receive ordinary shares in CTH, as follows:

|  | Consolidated number of awards
Share based payments scheme 2 | RS-Number | RSU-Number
Outstanding at 1 January 2022 | 858,560 | 1,384,442
Granted during the year | – | –
Released during the year | – | –
Cancelled during the year | – | –
Forfeited during the year | – | –
Outstanding at 31 December 2022 | 858,560 | 1,384,442
Vested and exercisable at 31 December 2022 | 826,999 | –
Outstanding at 1 January 2023 | 858,560 | 1,384,442
Granted during the year | – | –
Released during the year | (858,560) | (1,384,442)
Cancelled during the year | – | –
Forfeited during the year | – | –
Outstanding at 31 December 2023 | – | –
Vested and exercisable at 31 December 2023 | – | –

The Group’s tax liability was £404k (2022: £490k) for corporate taxes payable on employee share based payment
obligations; the personal tax obligation was borne by the employees. By the year end the liability had been settled.
The scheme is now closed. Given the accelerated vesting and release of the awards in the current year, the provision of
vesting details provided in previous years is now irrelevant and not disclosed.
Valuation and inputs to the models
There were no allocations in 2022 or 2023 for this scheme and therefore no valuations were required.
c) Share based scheme 3 – Group
Description and vesting requirements
Long Term Incentive Plan (LTIP) awards were granted to incentivise senior management on 11 July 2023. The vesting
conditions are subject to performance measures relating to relative total shareholder return and earnings per share. Each
measure is assessed independently over the vesting period. LTIP awards have an individual conduct gateway requirement
that results in the award lapsing if not met. The scheme includes a clawback condition for a minimum period of three years.
The LTIP award movements for the year to 31 December 2023 is as follows:

|  | Two-year awards |  | Three-year awards
| Holding period | Non-holding period | Holding period | Non-holding period
Share based payments scheme 3 |  | Number of awards |  |
Outstanding at 1 January 2023 | – | – | – | –
Granted during the year | 629,851 | 792,492 | 1,106,713 | 792,480
Released during the year | – | – | – | –
Cancelled during the year | – | (34,029) | – | (34,029)
Forfeited during the year | – | – | – | –
Outstanding at 31 December 2023 | 629,851 | 758,463 | 1,106,713 | 758,451
Vested and exercisable at 31 December 2023 | – | – | – | –

CAB Payments Holdings plc | Annual Report and Accounts 2023196
32. Share Based Payments continued
c) Share based scheme 3 – Group continued
Inputs to the models
The calculation of the LTIP expense takes into account the following key inputs:

| Key inputs |
| Two year awards | Three year awards
Grant date | 11 July 2023 | 11 July 2023
Share price at grant date | £3.10 | £3.10
Actual leavers | 34,029 | 34,029
Vesting period | Until 11 July 2025 | Until 11 July 2026
Earnings per share range | Less than 25.p | Less than 33.4p
Total shareholder return discount | 45% | 39%
Holding period discount | 8% | 9%
Leavers lapse provision (holding/non-holding period) | 0%/22% | 0%/31%
Clawback condition – effect on valuation | 0% | 0%
Model used | Monte Carlo | Monte Carlo

The resulting value is expensed to the consolidated statement of profit and loss and other comprehensive income over the
vesting period in line with the vesting of the interests concerned.
197
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
33. Related Undertakings
i. Principal subsidiaries
The Company’s principal direct and indirect subsidiaries as at 31 December 2023 are set out below. The Company is the
majority shareholder of CTH. Shares in other subsidiaries are held as indicated. Unless otherwise stated, the share capital
consists solely of ordinary shares and the proportion of ownership held equals the voting rights held by the parent. For all
subsidiaries, the country of incorporation or registration is also the principal place of business.

| Principal activity/ | Country of incorporation and
Direct/indirect subsidiaries | business | principal place of business
CAB Tech HoldCo Limited | Holding Company | UK
Crown Agents Bank Limited (‘‘CAB’’) | Bank | UK
CAB Europe BV | Payments | Netherlands
Stichting CAB Payments Europe | Trust company | Netherlands
CAB Tech HoldCo USA LLC | Holding Company | US
Segovia Technology Company | Fintech | US
Segovia International Holdings LLC | Holding Company | US
Segovia Technology Pakistan (PVT) Limited | Dormant | Pakistan
Segovia Technology International Ltd | Holding Company | Cayman Islands
Segovia Technology Congo SARL | Fintech | The Republic of Congo
Segovia Technology Côte d’Ivoire SARL | Fintech | Ivory Coast
Segovia Technology Kenya Limited | Fintech | Kenya
Segovia Technology Liberia Corporation | Fintech | Liberia
Segovia Technology 454 Limited | Dormant | Malawi
Segovia Technology Nigeria Limited | Fintech | Nigeria
Segovia Technology Rwanda Corporation Limited | Fintech | Rwanda
Segovia Technology Tanzania Company Limited | Fintech | Tanzania
Segovia Technology Company Uganda Limited | Fintech | Uganda
Segovia Technology Bangladesh Ltd (dissolved January 2022) | Dissolved | Bangladesh
Segovia Technology Cameroon Co Ltd (dissolved March 2022) | Dissolved | Cameroon
Segovia Niger SARL (dissolved March 2022) | Dissolved | Niger
Segovia Technology Senegal Corp SUARL (dissolved January 2023) | Dissolved | Senegal

All Segovia entities are held indirectly through CTH in 2023 and 2022, which owns the entire share capital of CAB Tech
Holdco USA LLC, a US based holding Company which owns Segovia. CTH also owns 100% shareholding in CAB in 2022
and 2023. All UK subsidiaries are incorporated in the UK with registered offices at Quadrant House, The Quadrant, Sutton,
Surrey SM2 5AS. Refer to note 9 for assets classified as held for sale relating to CAIM and JCF.
All subsidiaries are 100% group owned except for Segovia Technology Pakistan (PVT) Ltd which is 66% (2022 – 66%)
owned by senior management.
CAB Payments Holdings plc | Annual Report and Accounts 2023198
34. Notes to the Statement of Cash Flows
i. Reconciliation of profit before taxation to net cash outflow from operating activities

| Consolidated |  | Company |
|  | Restated |  |
| 2023 | 2022 | 2023 | 2022
| £’000 | £’000 | £’000 | £’000
Profit/(loss) before taxation |  |  |  |
Continuing operations | 37,617 | 43,891 | (4,964) | (1,913)
Discontinued operations | (220) | (75) | – | –
Adjusted for non-cash items: |  |  |  |
Effect of currency exchange rate change | (14,988) | 53,317 | – | –
Effect of other mark to market revaluations | (83) | (15) | – | –
Amortisation | 4,607 | 4,600 | – | –
Depreciation |  |  |  |
– Right of use of assets | 445 | 322 | – | –
– Property, plant and equipment | 798 | 819 | – | –
Share based payment charge | 1,359 | 837 | – | –
Loss on write-off of: |  |  |  |
– Property, plant and equipment | 12 | 35 | – | –
– Intangible assets | 284 | – | – | –
Profit on disposal of discontinued operations | (67) | – | – | –
Interest accrued on lease liabilities | 65 | 19 | – | –
Other non-cash expenses | 1,045 | 1,606 | – | –
Dividend received from subsidiary | – | – | (15,560) | –
Impairment provision on investment in subsidiary undertakings | – | – | – | 1,265
| 30, 874 | 105,356 | (20,524) | (648)
Changes in working capital: |  |  |  |
Net decrease in collections/transmissions | – | – | – | –
Net (increase)/decrease in loans and advances to banks |  |  |  |
other than on demand | (54,376) | 4,927 | – | –
Net increase/(decrease) in client accounts | 294,336 | (14,044) | – | –
Net decrease/(increase) in investment in debt securities | 41,410 | (324,285) | – | –
Net decrease/(increase) in other loans and advances to non-banks | 4,226 | (12,431) | – | –
Net decrease/(increase) in unsettled transactions | 1,952 | (5,620) | – | –
Net decrease/(increase) in other assets | 4,756 | (7,768) | 11,181 | –
Net (decrease)/increase in other liabilities | (237) | 9,264 | 19,009 | 468
Net decrease in accrued income | 470 | 325 | – | –
Net (decrease)/increase in accruals, provisions, and deferred income | (1,933) | 10,863 | 702 | 180
Net cash generated/(outflow) from operating activities | 321,476 | (233,413) | 10,368 | –

1
1
1
1
1
1
1
1/2
1 See restatements in note E below.
2 Cash flows from operating activities include interest received of £53,606k (2022: £21,718k) and interest paid of £21,869k (2022: £5,472k).
199
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
34. Notes to the Statement of Cash Flows continued
ii. Non-cash transactions – Consolidated
Non-cash transactions from investing activities for the Group during the year include acquisition of right of use assets
amounting to £nil (2022: £695k).
Non cash transactions from investing activities for the Company during the year include the acquisition of CTH shares held
by external shareholders as at 5 July 2023. (2022: nil).
iii. Changes in liabilities arising from financing activities
The Group’s changes in lease liabilities are in Note 20. There are no other changes in liabilities from financing activities.
There are no changes in liabilities arising from financing activities for the Company.
iv. Restatement of prior year balances
Certain 2022 cash flow balances have been restated as follows:

|  |  |  | Consolidated - 2022 |  |
| Previously |  |  |  |  |
| reported |  |  |  |  | Restated
Notes to the statement of cash flows | £’000 | Prior year adjustments £’000 |  |  |  | £’000
|  | Adjustment 1 | Adjustment 2 | Adjustment 3 | Adjustment 4 |
Non-cash items |  |  |  |  |  |
Effect of currency exchange rate changes | 50,437 | – | – | 2,880 |  | 53,317
Other non-cash expenses | – | – | – | – | 1,606 | 1,606
Changes in working capital |  |  |  |  |  |
Net (increase)/decrease in loans and advances to banks other than on demand | (10,426) | 7,6 99 | – | 7,474 |  | 4,927
Net decrease in client accounts | (11,340) | – | – | (2,704) |  | (14,044)
Net increase in investment in debt |  |  |  |  |  |
securities | (332,055) | – | – | 7,770 |  | (324,285)
Net increase in other loans and advances |  |  |  |  |  |
to non-banks | (4,748) | (7, 699 ) | – | 16 |  | (12,431)
Net (increase)/decrease in unsettled |  |  |  |  |  |
transactions | (2,509) | – | (3,111) | – |  | (5,620)
Net increase in other assets | (10,879) | – | 3,111 | – |  | (7,768)
Net (decrease)/increase in other liabilities | 10,870 | – | – | – | 1,606 | 9,264
Net cash outflow from operating activities | (248,849) | – | – | 15,436 |  | (233,413)
Consolidated statement of cash flows |  |  |  |  |  |
for the year ended 31 December 2022 |  |  |  |  |  |
Net cash outflow from operating activities | (248,849) | – | – | 15,436 |  | (233,413)
Net cash used in operating activities | (248,849) | – | – | 15,436 |  | (233,413)
Net decrease in cash and cash equivalents | (263,587) | – | – | 15,436 |  | (248,151)
Effect of exchange rate changes on cash |  |  |  |  |  |
and cash equivalents | 50,531 | – | – | (15,436) |  | 35,095

Adjustment 1: see Note 13.
Adjustment 2: see Note 18.
Adjustment 3: The Group has implemented an improved approach to capturing unrealised FX gains and losses which under
IAS 7 are not deemed to be cash flows. As a result, the prior year balances relating to the consolidated statement of cash
flows for the year ended 31 December 2022 and related notes have been restated accordingly.
Adjustment 4: relates to the net receipt of bonuses which were transferred internally. As a result there was no cash
movement.
CAB Payments Holdings plc | Annual Report and Accounts 2023200
35. Related Party Transactions
The immediate parent undertaking of the company which had control in 2022 and up to 6 July 2023 was Merlin Midco
Limited. As at the year end Merlin Midco Limited’s ownership was 45.1% (2022: 98.8%), which is held by a nominee
company Diagonal Nominees Limited. No company is required to consolidate these financial statements this year (2022:
no company consolidated the entity).
The related party transactions (which were all at arm’s length and were transacted at market prices) are as follows:
a) As at 31 December 2023 the Group had related party balances with companies outside the Group (2022: two) as follows:
(i) £129k (2022: £64k), payable to Helios Investors Genpar III LP. The amount relates to the outstanding balance of a
director’s fees payable by CAB. No interest accrues on the outstanding amount. Helios Investors Genpar III LP continues
to have indirect significant influence over the Company as at 31 December 2023 following changes to the capital
structure on 6 July 2023; and
(ii) Other loans and advances to non-banks include (2023: nil ; 2022: £2,251k) receivable from Merlin Topco Limited. The
balance related to a contractual loan on which interest accrues at a commercial rate. The balance was settled during
the year. Merlin Topco Limited is the parent company of Merlin Midco Limited which has direct significant influence over
CPH as at 31 December 2023 following changes to the capital structure on 6 July 2023.
b) As at the year end, nil (2022: 771,605 £1 Class A ordinary shares,) ordinary shares of the Company were owned by a
Company connected to a Director of the Company.
c) The Group provided banking services to connected parties with income earned as follows:

| Net foreign |  |
| exchange gain | Net interest income | Total
2023 | £’000 | £’000 | £’000
Helios Investors Genpar III LP | 1 | – | 1
| 1 | – | 1

| Net foreign |  |
| exchange gain | Net interest income | Total
2022 | £’000 | £’000 | £’000
GiveDirectly Inc | 1,315 | 16 | 1,331
Helios Investors Genpar III LP | 2 | – | 2
| 1,317 | 16 | 1,333

1
1 An entity of which Michael Faye, a Director of CAB, CTH (both until 11 July 2023) and Segovia Technology Company (until 27 November 2023), was a Director. This
company is not a related party in 2023 due to Michael Faye no longer being deemed to have a controlling interest.
d) As at 31 December 2023, CPH owns 100% shareholding in CTH following the capital reorganisation as disclosed in
Note 27. Directors owned the following shares in CTH as at 31 December 2022:

|  |  |  | CTH – Number Of £1 ordinary shares |  |
|  |  | Restricted | Restricted |  |
|  | A2 share | shares | share units |  |
2022 | A2 shares | options | (B shares) | (B shares) | C shares | D Shares
Director 1 | 662,325 | – | 157,808 | – | – | –
Related parties | 202,681 |  |  |  |  |
Director 2 | 43,989 | 22,929 | 4,871 | 544,910 | – | –

201
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
35. Related Party Transactions continued
e) Directors and key management loans
The Group had a number of loans to Directors and key management as summarised as shown below. Across the Group
there were loans outstanding at the year end as follows:

| 2023 |  | 2022 |
| No | £’000 | No. | £’000
Directors |  |  |  |
As at 1 January | 3 | 159 | 3 | 159
As at period end | 1 | 335 | 3 | 159
Key Management |  |  |  |
As at 1 January | 8 | 252 | 8 | 252
As at year end | – | – | 8 | 252

The loans outstanding as at 31 December 2022 (and repaid in 2023) accrued interest at the HMRC stipulated interest rate
but only on balances in excess of £10,000. The Directors loan advanced in 2023 was to the CEO of the Group, Bhairav
Trivedi, and accrues interest at the HMRC stipulated rate on the entirety of the loan. All loans are repayable on the occurrence
of the earliest of a number of events. There was no impairment on loans in respect of the amounts owed by related parties
(2022: nil). The ECL for staff loans was assessed as immaterial as at 31 December 2023 (2022: nil).
f) Remuneration of key management personnel (including directors)
The remuneration of the key management personnel of the Group is set out below in aggregate for each of the categories
specified in IAS 24 Related Party Disclosures.

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Short-term employee benefits (including bonuses and NICs Ers) | 12,427 | 5,975
Post-employment benefits | 241 | 187
Share-based payments | 639 | 837
Total remuneration | 13,307 | 6,999

Included in the aggregate emoluments above, the Group has made contributions of £84k (2022: £58k) on behalf of two

| directors (2022: three) to a defined contribution pension scheme. No retirement benefits accrued for any director (2022:
none) under a defined benefit pension scheme. |
The aggregate emoluments (including share based payment charge) and accrued pension contributions of the highest paid |

director in the Group were £3,163k (2022: £2,113k) and £58k (2022: £nil) per annum respectively.
The aggregate emoluments (Including pension contributions and exit compensation) of the Group’s key management
personnel (excluding directors) were £8,583k (2022: £6,999k). See breakdown in Note 35 on ‘Related party transactions
policy’.
g) Company related party balances
In addition to the above related party transactions and balances of the Group, the Company had outstanding balances
with following intercompany entities within the group as at 31 December 2023:
i. £19,406k (2022: £1,198k), payable to CAB. The amount relates to the payments made by CAB on behalf of, or recharged
to the Company.
ii. £4,239k (2022: £nil), receivable from its subsidiary, CTH. The amount relates to a dividend payment and other intragroup
receivables.
iii. The Company holds a bank account with CAB and the balance at year end is £658k (2022: nil).
CAB Payments Holdings plc | Annual Report and Accounts 2023202
36. Contingent Liabilities, Commitments and Guarantees
a) Contingent liabilities
The Group and the Company do not have any other contingent liabilities at the balance sheet date other than those
disclosed in Note 26.
b) Commitments
i. Capital commitments
The Group and Company do not have any capital commitments at the balance sheet date (2022: nil) nor any which have
been approved but not contracted (2022: nil). It should be noted that as disclosed in Note 46, a property lease was signed
on 25 January 2024.
ii. Other commitments
a) In 2020, the Group entered into a five-year contract to assist with the ongoing automation of manual processes.
The following payments are due under the contract:

| 2023 | 2022
Payment Due | £’000 | £’000
Not later than one year | 2,260 | 2,210
Later than one year and not later than five years | 1,883 | 4,143
| 4,143 | 6,353

The total of the amounts due under the contract are expensed to consolidated statement of profit or loss over the life of the
contract in line with the benefits received.
b) The Group has committed to the following lease payments for the use of office space at Quadrant House and Tower 42
lease contracts (Note 20 ) in existence at year-end:

| 2023 | 2022
Payment Due | £’000 | £’000
Not later than one year | 407 | 670
Later than one year and not later than five years | 477 | 611
| 884 | 1,281

Right of use of asset balance and a lease liability balance have been recognised on the statement of financial position and
interest expense and depreciation will be recognised on the statement of profit or loss and other comprehensive income
over the life of the lease contract.
Further commitments are discussed in Note 26.
203
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk
Credit risk is the risk that a customer or counterparty will default on its contractual obligations resulting in financial loss to
the Group. Credit risk is a principal risk, arising from financial assets which are loans and advances on demand to banks,
other loans and advances to banks, other loans and advances to non-banks, investments in debt securities, unsettled
transactions, accrued income and other asset exposures. In addition, it considers off-balance sheet exposures from financial
guarantees, acceptances, confirmations, and LaaS. The Group considers the following elements of credit risk exposure,
including counterparty-specific risk, geographical risk, and sector risk for risk management purposes. Information about the
credit risk management policy of the Group is contained in the strategic report.
a) Credit risk management
The Group monitors credit risk per class of financial instrument. The Group recognises expected credit losses on financial
assets that are measured at amortised cost which includes cash and balances at central banks, loans and advances on
demand to banks, other loans and advances to banks, other loans and advances to non-banks, unsettled transactions,
accrued income, Investment in debt securities, other assets, as well as off-balance sheet account (undrawn commitments)
such as financial guarantees, letter of acceptances, letter of confirmations and LaaS.
b) Exposure to credit risk by instrument
The table below outlines the classes identified, as well as the financial statement line item and the note. The related notes
contain an analysis of the items included in the financial statement line for each class of financial instrument including how
the exposure to credit risk arise. There are no changes to the exposures to risks on these financial instruments and how
those exposures to risk arise compared to prior year.
Instrument Description Note
Cash and
balances at
central banks
These are balances with the Bank of England, which has AA-credit rating. Balances are available
on demand and are located in the UK.
11
Loans and
Advances on
Demand to Banks
These are nostro bank accounts that the Group holds with other commercial banks in support of
client payment flows.
13
Other Loans and
Advances to
banks
Credit Support Annexes (CSA) Loans represent collateral required from clients through a credit
support annexe for initial and variation margin as part of derivative transactions. They are under
a collateralised mark to market (CTM) regime. A CTM model requires the out of the money party
to post collateral with an amount equal to the cumulative mark to market value, either with the
counterparty or with an exchange. Both initial and variation margin are refundable upon settlement
of the derivative and is therefore accounted for as collateral.
Discounted Letters of Credit are advanced letter of credit payments that the Group pay to
counterparties before the completion of the sales and shipping process. The amount that the Group
pays out is discounted by a discounted fee (interest rate) and as such, is lower that the principal
expected to be received. They are essentially factoring transactions.
Trade Finance loans are short-term working capital loans to banks operating in trade finance
markets. They assist buyers and sellers to finance their trade commitments on a transactional
basis. The Group receives interest payments in return.
13
Other Loans and
Advances to non-
banks
Liquidity as a Service is a type of overdraft facility where the Group agrees to provide clients with
a facility for a set period with specific terms as set out in the Liquidity as a Service agreement. The
clients use the liquidity to undertake foreign exchange business with the Group.
A flat facility fee is charged for the provision of services. The Group will lend money to clients
solely for the purpose of assisting the client with its specific liquidity requirements that arise from
settlement timelines in its standard payment flows. The rate charged for the amount lent is the
greater of i. a fixed rate (e.g. 9%) or ii. US Federal rate plus a spread (e.g. US Fed rate plus 1%).
13
Unsettled
Transactions
Unsettled transactions are unsettled balances resulting from foreign exchange transactions that
are delayed due to time differences, public holidays in other countries (where the counterparties are
located) or similar operational reasons. The balances are short-term (typically less than four days).
18
CAB Payments Holdings plc | Annual Report and Accounts 2023204
37. Credit Risk continued
b) Exposure to credit risk by instrument continued
Instrument Description Note
Investment in
Debt Securities
Fixed rate bonds (US Treasury bills) are US Treasury bills issued by the US government which offer a
fixed rate of interest for a set period of time.
Fixed rate bonds (other) are other fixed rate bonds issued by companies or G20 governments which
offer a fixed rate of interest for a set period of time.
Floating rate notes are investments in debt securities that pay a coupon determined by a reference
rate which resets periodically. As such, the interest received is not fixed.
Certificates of deposit (CDs) are Investment in debt securities that pay fixed interest for a fixed period
of time. Unlike bonds, CDs are usually not tradable in a secondary market.
15
Other assets Balances with mobile network operators are the payments from Mobile Network Operators (MNOs)
that are due to the Group in respect of mobile money accounts. In certain countries in Africa, mobile
money accounts are widely used, this service allows users to deposit money into an account stored on
their mobile phones and to then send balances using a PIN-secured SMS text message to other users.
One of the services that the Group provide is the transfer of funds by clients to beneficiaries via mobile.
Typically, a client will deposit funds in the Group’s controlled bank account. These funds are then
transferred to an account held with a MNO. Clients submit a request for a payment to be made on the
Payment Gateway. On receipt of the request, funds are remitted from the account held with the MNOs
to the beneficiary with the Group’s fee deducted simultaneously. MNOs therefore provide the Group
with the equivalent of a bank account.
In relation to the Company – Other Asset exposures also include amounts due from Group companies.
18
Accrued income Accrued income is money owed to the Group for services rendered or provided that have not yet
been invoiced. The balance arises from several components such as management fees, pension fee
accruals, and other revenues.
17
Off-Balance
Sheet Accounts
These are trade finance guarantees, letter of acceptances and confirmation that are contingent
liabilities and so require documented levels of performance to be achieved for settlement. Typically, the
Group’s counterparty is another bank and ordinarily the contract has a maximum tenor of six months.
The undrawn portion of Liquidity as a Service facilities. The Liquidity as a Service facilities are
repayable on demand as drawing to the agreed limit can be made at the counterparty’s instruction
then the undrawn portion does attract an ECL amount.
26
The maximum credit exposures (gross balance before ECL adjustment) distributed across each instrument are summarised
in the table below.

| Consolidated |  |
|  |  | Restated
| 2023 |  | 2022
| £’000 |  | £’000
Cash and balances at central banks | 528,396 |  | 607,358
Loans and advances on demand to banks | 135,203 |  | 91,470
Other loans and advances to banks | 1 | 37,597 | 84,493
Other loans and advances to non-banks |  | 8,712 | 12,455
Unsettled transactions |  | 8,417 | 16,988
Investment in debt securities |  | 353,042 | 414,074
Other asset (measured at amortised cost) |  | 11,257 | 4,056
Accrued income |  | 1,218 | 429
Total on-balance sheet exposure |  | 1,183,842 | 1,231,323

1
1
2
2
1 Prior year balances have been restated. Refer to Note 13.
2 Prior year balances have been restated. Refer to Note 18.
Refer to Note 37(G) for the financial assets carrying amounts tying to consolidated statement of financial assets.
205
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
b) Exposure to credit risk by instrument continued
i. Off-balance sheet exposures

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Financial guarantee contracts | 1,911 | 4,000
Trade Finance – letter of credit confirmation / acceptance | 4,228 | 15,000
Confirmations | 9,173 | 23,000
Liquidity as a service | 14,884 | 4,721
Total Off-Balance Sheet Exposure | 30,196 | 46,721

1
1 The total off-balance sheet exposure consists of the following: financial guarantee contracts, which are contracts that requires the issuer to make specified payments
to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument, letter of
credit confirmation / acceptance, which is a letter from an issuing bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct
amount and liquidity as a service, which is a credit facility offered by the Group to its customers which allows customers to draw down on the facility on satisfaction
of the terms of this facility.
The carrying amounts of financial assets best represents their maximum exposure to credit risk. The amounts include both
balance sheet and undrawn exposures.
c) Significant increase in credit risk
The Group uses a defined criteria to determine whether credit risk has increased significantly for each instrument. The
criteria used are both quantitative changes in PD as well as qualitative. The table below summarises the range above
which an increase in lifetime PD is determined to be significant, as well as some indicative qualitative indicators assessed.
The Group uses an internal rating system that goes from Rating 0 to 7 with Rating 8 representing default except for NBFIs
and International Development Organisations ( counterparties which do not fit the Moody’s risk rating Model (RiskCalc).
Below is a table that represents the through-the-cycle (TTC) PD range per rating and the exposure-weighted distribution
for 2023. Furthermore, ratings 0 to 3 represent investment grade ratings whilst 4 to 7 represent sub-investment grade
ratings. This range in unchanged from previous years.

Rating Type | Rating | TTC PD Range
Investment Grade | Rating 0 | 0%, 0.01%
| Rating 1 | 0.01%, 0.02%
| Rating 2 | 0.03%, 0.05%
| Rating 3 | 0.06%, 0.08%
Sub-Investment Grade | Rating 4 | 0.081%, 0.10%
| Rating 5 | 0.11%, 0.5%
| Rating 6 | 0.51%, 1.5%
| Rating 7 | 1.51%, 25%
| Rating 8 (Default) | 100%

Irrespective of the outcome of the above rating assessment, the Group presumes that the credit risk on a financial asset
has increased significantly since initial recognition when contractual payments are more than 30 days past due unless the
Group has reasonable and supportable information that demonstrates otherwise.
The Group has monitoring procedures in place to make sure that the criteria used to identify significant increases in credit
risk are effective, meaning that significant increase in credit risk is identified before the exposure is defaulted. The Group
performs periodic back-testing of its ratings to consider whether the drivers of credit risk that led to default were accurately
reflected in the rating in a timely manner.
CAB Payments Holdings plc | Annual Report and Accounts 2023206
37. Credit Risk continued
d) Incorporation of forward-looking information
The Group incorporates readily available forward-looking information in its computation of ECL and utilises external
data to formulate a ‘base case’ scenario, projecting future economic variables and exploring a representative spectrum
of alternative forecast scenarios. The Group assigns probabilities to the identified forecast scenarios, with the base case
representing the singularly most probable outcome utilised for strategic planning and budgeting purposes.
Key drivers of credit risk and credit losses for each financial instrument class are meticulously identified and documented,
and statistical analyses of historical data establish relationships between macro-economic variables and credit risk as well
as credit losses. Throughout the reporting period, there have been no alterations to the estimation techniques or significant
assumptions.
The Group’s balance sheet is made from a simple product suite where the significant macro-economic variable is GDP
growth rates. These are disclosed in section 37 with related sensitivities.
The greatest volume of the exposure on the Balance Sheet is Bank of England balances and hold to maturity US Treasuries
and other High Quality Liquid Assets that are not really affected negatively by inflation, interest rates and unemployment
in those jurisdictions as they are with low risk institutions.
Whilst inflation, interest rates and unemployment could affect the economic cycle in some of the 130+ countries of risk, the
exposure is short-term and ordinarily de minimis at less than 10% of the Group’s balance sheet through Nostro balances
and FX settlement exposure. The cost of providing detailed forecast macro-economic variables such as unemployment,
inflation and interest rates would be onerous and potentially greater than the small exposure in such countries. Furthermore,
in some jurisdictions such data may not be available.
The table below outlines GDP growth indicators forecasted in economic scenarios as of December 31, 2023, for the years
2024 to 2028, specifically focusing on the UK and key regions where the Group operates, thereby exerting a substantial
impact on ECLs.
207
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
d) Incorporation of forward-looking information continued
This table comprises the 2023 GDP growth rates used in the calculation of the 2023 ECL balance.

| 2024 | 2025 | 2026 | 2027 | 2028
United Kingdom GDP growth |  |  |  |  |
Base scenario | 0.5% | 1.5% | 1.9% | 1.5% | 1.4%
Upside scenario | 4.6% | 3.7% | 3.0% | 1.8% | 1.3%
Mild upside scenario | 3.0% | 2.9% | 2.6% | 1.7% | 1.3%
Stagnation scenario | (2.0%) | 0.6% | 1.6% | 1.5% | 1.5%
Downside scenario | (3.1%) | 0.2% | 1.4% | 1.4% | 1.5%
Severe downside scenario | (5.1%) | (0.7%) | 1.1% | 1.3% | 1.6%
Americas GDP growth |  |  |  |  |
Base scenario | 1.1% | 1.6% | 2.4% | 2.2% | 1.8%
Upside scenario | 3.7% | 3.6% | 3.7% | 3.6% | 1.7%
Mild upside scenario | 2.6% | 2.9% | 3.3% | 2.5% | 1.8%
Stagnation scenario | (0.4%) | 0.9% | 1.9% | 2.1% | 1.9%
Downside scenario | (1.1%) | 0.5% | 1.6% | 2.0% | 1.9%
Severe downside scenario | (2.3%) | (0.3%) | 1.0% | 1.8% | 2.0%
Eurozone GDP growth |  |  |  |  |
Base scenario | 0.8% | 2.0% | 2.1% | 1.7% | 1.4%
Upside scenario | 4.0% | 4.5% | 3.4% | 1.9% | 1.2%
Mild upside scenario | 2.7% | 3.6% | 3.0% | 1.8% | 1.3%
Stagnation scenario | (1.2%) | 1.0% | 1.7% | 1.7% | 1.5%
Downside scenario | (2.1%) | 0.4% | 1.4% | 1.7% | 1.5%
Severe downside scenario | (3.7%) | (0.5%) | 1.0% | 1.6% | 1.6%
Asia-Pacific GDP growth |  |  |  |  |
Base scenario | 3.6% | 3.8% | 3.8% | 3.7% | 3.6%
Upside scenario | 7.0 % | 5.9% | 5.4% | 4.2% | 3.5%
Mild upside scenario | 5.6% | 5.1% | 4.9% | 4.0% | 3.5%
Stagnation scenario | 1.6% | 2.9% | 3.1% | 3.5% | 3.7%
Downside scenario | 0.7% | 2.4% | 2.8% | 3.4% | 3.7%
Severe downside scenario | (0.9%) | 1.6% | 2.1% | 3.2% | 3.8%
Sub-Saharan Africa GDP growth |  |  |  |  |
Base scenario | 3.1% | 3.4% | 3.4% | 3.4% | 3.2%
Upside scenario | 8.8% | 6.9% | 5.7% | 3.8% | 2.8%
Mild upside scenario | 6.6% | 5.7% | 4.9% | 3.7% | 3.0%
Stagnation scenario | (0.0%) | 1.9% | 2.3% | 3.1% | 3.4%
Downside scenario | (1.6%) | 1.1% | 1.7% | 3.0% | 3.6 %
Severe downside scenario | (4.1%) | (0.4%) | 0.6% | 2.9% | 3.8 %
Middle East North Africa GDP growth |  |  |  |  |
Base scenario | 2.6% | 3.0% | 2.8% | 2.6% | 2.5%
Upside scenario | 8.1% | 6.7% | 5.1% | 3.0% | 2.1%
Mild upside scenario | 5.9% | 5.4% | 4.3% | 2.8% | 2.3%
Stagnation scenario | (0.5%) | 1.5% | 1.8% | 2.4% | 2.7%
Downside scenario | (2.0%) | 0.6% | 1.2% | 2.3% | 2.9%
Severe downside scenario | (4.4%) | (0.9%) | 0.1% | 2.2% | 3.1%

This table comprise the 2022 GDP growth rates used in the calculation of 2022 ECL balance.
CAB Payments Holdings plc | Annual Report and Accounts 2023208
37. Credit Risk continued
d) Incorporation of forward-looking information continued
This table comprises the 2022 GDP growth rates used in the calculation of the 2022 ECL balance.

| 2023 | 2024 | 2025 | 2026 | 2027
United Kingdom GDP growth |  |  |  |  |
Base scenario | (0.9%) | 1.5% | 2.7% | 2.2% | 1.7%
Upside scenario | 3.0% | 3.8% | 3.9% | 2.6% | 1.5%
Mild upside scenario | 1.4% | 3.0% | 3.5% | 2.5% | 1.6%
Stagnation scenario | (3.5%) | 0.7% | 2.5% | 2.2% | 1.8%
Downside scenario | (4.6%) | 0.2% | 2.3% | 2.1% | 1.8%
Severe downside scenario | (6.5%) | (0.6%) | 2.0% | 2.1% | 1.9%
Americas GDP growth |  |  |  |  |
Base scenario | 0.0% | 1.3% | 2.3% | 2.4% | 2.2%
Upside scenario | 2.7% | 3.2% | 3.7% | 2.8% | 2.1%
Mild upside scenario | 1.6% | 2.5% | 3.2% | 2.7% | 2.1%
Stagnation scenario | (1.4%) | 0.5% | 1.8% | 2.2% | 2.2%
Downside scenario | (2.1%) | 0.1% | 1.5% | 2.1% | 2.3%
Severe downside scenario | (3.2%) | (0.7%) | 1.0% | 2.0% | 2.3%
Eurozone GDP growth |  |  |  |  |
Base scenario | (0.1%) | 2.1% | 2.3% | 1.9% | 1.6%
Upside scenario | 3.1% | 4.7% | 3.6% | 2.1% | 1.4%
Mild upside scenario | 1.8% | 3.8% | 3.2% | 2.0% | 1.5%
Stagnation scenario | (2.1%) | 1.1% | 1.9% | 1.9% | 1.6%
Downside scenario | (3.1%) | 0.6% | 1.6% | 1.9% | 1.7%
Severe downside scenario | (4.6%) | (0.4%) | 1.2% | 1.8% | 1.7%
Asia-Pacific GDP growth |  |  |  |  |
Base scenario | 3.3% | 4.2% | 4.9% | 4.6% | 4.2%
Upside scenario | 6.4% | 6.3% | 6.3% | 5.0% | 4.0%
Mild upside scenario | 5.1% | 5.5% | 5.8% | 4.8% | 4.1%
Stagnation scenario | 1.2% | 3.3% | 4.1% | 4.3% | 4.2%
Downside scenario | 0.3% | 2.9% | 3.7% | 4.2% | 4.3%
Severe downside scenario | (1.3%) | 2.0% | 3.0% | 4.0% | 4.3%
Sub-Saharan Africa GDP growth |  |  |  |  |
Base scenario | 2.8% | 3.2% | 3.3% | 3.4% | 3.3%
Upside scenario | 8.1% | 6.7% | 5.6% | 3.8% | 2.8%
Mild upside scenario | 6.0% | 5.4% | 4.8% | 3.6% | 3.0%
Stagnation scenario | (0.3%) | 1.8% | 2.2% | 3.2% | 3.6%
Downside scenario | (1.8%) | 0.9% | 1.6% | 3.1% | 3.7%
Severe downside scenario | (4.2%) | (0.5%) | 0.6% | 2.9% | 4.0%
Middle East North Africa GDP growth |  |  |  |  |
Base scenario | 2.1% | 2.9% | 2.8% | 2.5% | 2.4%
Upside scenario | 7.5% | 6.7% | 5.2% | 2.9% | 2.0%
Mild upside scenario | 5.4% | 5.3% | 4.4% | 2.8% | 2.2%
Stagnation scenario | (1.0%) | 1.2% | 1.7% | 2.4% | 2.7%
Downside scenario | (2.5%) | 0.3% | 1.1% | 2.3% | 2.8%
Severe downside scenario | (5.0%) | (1.3%) | (0.0%) | 2.1% | 3.0%

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Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
d) Incorporation of forward-looking information continued
Predicted relationships between the key indicators and default and loss rates on various portfolios of financial assets have
been developed based on analysing historical data over the past 18 years.
The Group has performed a sensitivity analysis on how ECL on the main portfolio would change if the key assumptions
used to calculate ECL change by macroeconomic scenario. The table below outlines the total ECL across the portfolio as at
31 December 2023, if the assumptions used to measure ECL remain as expected (amount as presented in the statement
of financial position) for each of the macroeconomic scenarios. The changes are applied in isolation for illustrative purposes
and are applied to each probability weighted scenario used to develop the estimate of expected credit losses. Each economic
scenario represents the average twelve-month PD and ECL, assuming a 100% weighting to that scenario. There will be
interdependencies between the various economic inputs and the exposure to sensitivity will vary across the economic
scenarios.

|  | 2023 |  |  | 2022 |
|  |  | ECL sensitivity |  |  | ECL sensitivity
| Average | ECL | from base case | Average | ECL | from base case
As at 2023 | 12m PD | £’000 | £’000 | 12m PD | £’000 | £’000
Base | 0.2% | 814 | - | 0.8% | 440 | -
Upside | 0.2% | 713 | - 101 | 0.7% | 409 | - 31
Mild upside | 0.2% | 750 | - 64 | 0.8% | 421 | - 19
Stagnation | 0.2% | 889 | + 75 | 0.9% | 465 | + 25
Downside | 0.2% | 921 | + 107 | 0.9% | 478 | + 38
Severe | 0.3% | 1,004 | + 190 | 1.0% | 501 | + 61

There are no changes to the estimation techniques for ECL at year-end and there are no significant changes to the GDP
growth rate when compared to prior year. It can be noted above that the sensitivity analysis does not result in significant
changes to the ECL balances.
The ECL is calculated using a weighted case from the macro-economic scenarios above. The probability of each scenario
occurring in both 2023 and 2022 is based on the following;

Economic Scenario | Probability Weighting
1. Base | 30%
2. Upside | 10%
3. Mild upside | 15%
4. Stagnation | 10%
5. Downside | 20%
6. Severe | 15%

CAB Payments Holdings plc | Annual Report and Accounts 2023210
37. Credit Risk continued
e) ECL
ECL is applicable to financial assets classified at amortised cost. The measurement of ECL reflects an unbiased and
probability-weighted amount that is determined by evaluating a range of possible outcomes, time value of money and
reasonable and supportable information that is available without undue cost or effort at the reporting date, about past
events, current conditions, and forecasts of future economic conditions.
The Group applies the general model for measuring ECL which uses a three-stage approach in recognising the expected
loss allowance to its financial assets measured at amortised cost. The Group considers the model and the assumptions
used in calculating these ECLs as key sources of estimation uncertainty. The key inputs used for measuring ECL are:
• probability of default (‘PD’);
• loss given default (‘LGD’); and
• exposure at default (‘EAD’).
The ECL Model allocates accounts to three Stages and calculates the impairment as:
• Twelve months Expected Loss for accounts in Stage 1; and
• Lifetime Expected Loss for accounts in Stage 2 and Stage 3.
The Group measures ECL considering the risk of default over the maximum contractual period (including extension options)
over which the entity is exposed to credit risk and not a longer period, even if contract extension or renewal is common
business practice.
The measurement of ECL is based on probability weighted average credit loss. As a result, the measurement of the
loss allowance should be the same regardless of whether it is measured on an individual basis or a collective basis (although
measurement on a collective basis is more practical for large portfolios of items).
The Group has measured its ECL at a counterparty-level which is then aggregated to a product and segment level.
In relation to the assessment of whether there has been a significant increase in credit risk it can be necessary to perform
the assessment on a collective basis as noted below.
i. Probability of Default
PD is an estimate of the likelihood of default over a given time horizon. It is estimated as at a point in time. PDs are
determined using the one-factor Merton-Vasicek model and transforms TTC PDs to a 1-month Forward-in-Time (FiT) PD
for each period of a loan’s contractual life by decomposing the portfolio into systematic and idiosyncratic risk factors. The
systematic factor captures risks relevant to the entire portfolio and is assumed to be correlated to the overall macroeconomy.
The idiosyncratic factor captures counterparty-specific characteristics. These statistical models are based on market
data (where available), as well as internal data comprising both quantitative and qualitative factors. PDs are estimated
considering the contractual maturities of exposures and estimated prepayment rates. The estimation is based on current
conditions, adjusted to take into account estimates of future conditions that will impact PD.
The Group estimates the remaining lifetime PD of exposures and how these are expected to change over time. The Group
uses the Moody’s RiskCalc tool to assign a risk rating to each counterparty which represents the probability of default. The
factors considered in this process include macro-economic data including GDP per region – UK, Americas, Eurozone, Asia,
Sub-Saharan Africa (SSA), and Middle East & North Africa (MENA). The Group generates a ‘base case’ scenario of the
future direction of relevant economic variables as well as a representative range of other possible forecast scenarios. The
Group then uses these forecasts, which are probability-weighted, to adjust its estimates of PDs.
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Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
e) ECL continued
ii. Loss Given Default
The LGD is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows
due and those that the lender would expect to receive, taking into account cash flows from any collateral. The LGD model
for portfolio incorporates information on time of recovery, recovery rates and seniority of claims. The calculation is on a
discounted cash flow basis, where the cash flows are discounted by the original effective interest rate (‘EIR’) of the loan.
iii. Exposure at Default
The EAD is the estimated total value of the Group’s exposures at the time of default. It includes all the outstanding amounts,
including the account balance, interest, fees, and arrears as well as any default penalty and recovery fees associated with
defaulted account. For the balance sheet exposure the EAD specifically includes committed but undrawn amount together
with interest.
f) Groupings based on shared risks characteristics
When ECL is measured on a collective basis, (aggregating the results of each individual calculation) the financial instruments
are grouped on the basis of shared risk characteristics, such as: instrument type, credit risk grade, and regional split.
The groupings are reviewed on a regular basis to ensure that each group is comprised of homogenous exposures.
g) Impairment of financial assets
The Group’s impairment loss on financial assets, undrawn commitments and financial guarantees that are subject to the
expected credit loss model are as shown below:

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Impairment recognised in profit or loss: |  |
Increase in ECL provision for cash and balances at central banks | – | –
Increase/(decrease) in ECL for loans and advances on demand to banks | 21 | (1)
(Decrease)/increase in ECL for other loans and advances to banks | (62) | 70
Increase in ECL for other loans and advances to non-banks | 448 | 205
Increase in ECL unsettled transaction exposures | – | 4
Increase in ECL provision for investment in debt securities | 1 | 11
Increase in ECL for other assets | 42 | 2
(Decrease)/increase in ECL for accrued income | (2) | 4
Total impairment recognised in profit or loss for financial assets | 448 | 295
Increase in ECL for guarantees | 1 | 31
Increase in ECL for acceptances | 3 | –
(Decrease)/increase in ECL for confirmations | (6) | 8
(Decrease)/increase in ECL for Liquidity as a Service | (43) | 271
Total impairment loss/ (recovery) recognised in profit or loss | 404 | 342

CAB Payments Holdings plc | Annual Report and Accounts 2023212
37. Credit Risk continued
h) Credit quality
An analysis of the Group’s credit rating, maturity and credit risk concentrations per class of financial asset is provided in the
following tables.
i. Portfolio grading
The table below displays a breakdown of the portfolio in terms of credit quality. Instruments with strong credit characteristics
are categorised as ‘investment grade’ (risk grades 0 to 3), while those with higher credit risk are categorised as ‘sub-
investment grade’ (risk grades 4 to 7).
The table below comprise the maximum credit exposure by portfolio grading.
Exposure by grade

| Consolidated |
|  | Restated
| 2023 | 2022
| £’000 | £’000
On-balance sheet exposure |  |
Cash and balances at central banks | 528,396 | 607,358
Investment grade | 528,396 | 607,358
Loans and advances on demand to banks | 135,203 | 91,470
Investment grade | 115,274 | 78,754
Sub-investment grade | 19,929 | 12,716
Other loans and advances to banks | 137,597 | 84,494
Investment grade | 78,253 | 50,334
Sub-investment grade | 59,344 | 34,160
Other loans and advances to non-banks | 8,712 | 12,455
Investment grade | – | –
Sub-investment grade | 8,712 | 12,455
Unsettled transactions | 8,417 | 16,987
Investment grade | 1,608 | 8,511
Sub-investment grade | 6,809 | 8,476
Investment in debt securities | 353,042 | 414 ,074
Investment grade | 353,042 | 414,074
Sub-investment grade | – | –
Other assets | 11,257 | 4,056
Investment grade | 2,493 | 1
Sub-investment grade | 8,764 | 4,055
Accrued income | 1,218 | 429
Investment grade | 391 | –
Sub-investment grade | 827 | 429
Total on-balance sheet exposure | 1,183,842 | 1,231,323
Investment grade | 1,079,457 | 1,159,032
Sub-investment grade | 104,385 | 72,291

1
1
2
2
1 Prior year balances have been restated. Refer to Note 13.
2 Prior year balances have been restated. Refer to Note 18.
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Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
h) Credit quality continued
i. Portfolio grading continued
The table below summarises the total off-balance sheet exposure.

| Consolidated |  |
Exposure by grade | 2023 |  | 2022
off-balance sheet exposure | £’000 |  | £’000
Financial guarantees | 1,911 |  | 4,000
Investment grade | – |  | –
Sub-investment grade | 1,911 |  | 4,000
Acceptances | 4,228 |  | 15,000
Investment grade | 1,482 |  | –
Sub-investment grade | 2,74 | 6 | 15,000
Confirmations |  | 9,173 | 23,000
Investment grade |  | 3,680 | –
Sub-investment grade |  | 5,493 | 23,000
Liquidity as a service |  | 14,884 | 4,721
Investment grade |  | – | –
Sub-investment grade |  | 14,884 | 4,721
Total off-balance sheet exposure |  | 30,196 | 46,721
Investment grade |  | 5,162 | –
Sub-investment grade |  | 25,034 | 46,721

CAB Payments Holdings plc | Annual Report and Accounts 2023214
37. Credit Risk continued
h) Credit quality continued
ii. Breakdown by country/region
The table below describes the gross carrying amount by location for each asset class.
Exposures by region

| Consolidated |
|  | Restated
| 2023 | 2022
| £’000 | £’000
Cash and balances | 528,396 | 607,358
UK | 528,396 | 607,358
Loans and advances on demand to banks | 135,203 | 91,470
Africa | 15,647 | 11,674
China | 1,489 | 1,041
Europe | 22,759 | 13,209
Far East | 3,414 | 1,986
Japan | 15,758 | 6,226
Middle East | 872 | 8,656
Other | 1,580 | 2,984
UK | 23,490 | 13,260
Americas | 50,194 | 32,434
Other loans and advances to banks | 137,597 | 84,494
Africa | 52,021 | 37,197
China | 8,079 | 27,358
Europe | 10,486 | 1,055
Far East | 15,492 | –
Japan | – | –
Middle East | 33,424 | 19,286
Other | – | –
UK | 15,260 | 137
Americas | 2,836 | 2,461
Other loans and advances to non-banks | 8,712 | 12,455
Africa | 5,544 | 142
China | – | –
Europe | 352 | 3,078
Far East | – | –
Japan | – | –
Middle East | – | –
Other | – | –
UK | 2,816 | 9,235
Americas | – | –

1
1
1 Prior year balances have been restated. Refer to Note 13.
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Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
h) Credit quality continued
ii. Breakdown by country/region continued
Exposures by region

| Consolidated |
|  | Restated
| 2023 | 2022
| £’000 | £’000
Unsettled transactions | 8,417 | 16,988
Africa | 5,286 | 8,938
China | – | –
Europe | 1,419 | 72
Far East | 656 | 7, 287
Japan | – | –
Middle East | 413 | –
Other | – | –
UK | 644 | 611
Americas | – | 80
Investments in debt securities | 353,042 | 414,074
Africa | – | 24,283
Europe | 194,872 | 145,823
Far East | 65,036 | 49,268
Middle East | – | –
Other | 29,923 | 17, 314
UK | – | 19,698
Americas | 63,211 | 157,688
Other assets | 11,257 | 4,056
Africa | 7, 533 | 2,003
Europe | 41 | –
Far East | 8 | –
Middle East | – | –
Other | – | –
UK | 3,675 | 1,289
Americas | – | 764
Accrued income | 1,218 | 429
UK | 1,218 | 429
Americas | – | –
Total on-balance sheet exposure | 1,183,842 | 1,231,323
1 Prior year balances have been restated. Refer to Note 18. |  |

1
1
CAB Payments Holdings plc | Annual Report and Accounts 2023216
37. Credit Risk continued
h) Credit quality continued
ii. Breakdown by country/region continued
The total off balance sheet exposure is broken down below.

| Consolidated |  |
| 2023 |  | 2022
Off-balance sheet exposures by region | £’000 |  | £’000
Financial guarantees | 1,911 |  | 4,000
Africa | 1,589 |  | 4,000
Europe | – |  | –
Far East | – |  | –
Middle East | – |  | –
Other | – |  | –
UK | 87 |  | –
Americas | 235 |  | –
Acceptances | 4,228 |  | 15,000
Africa | 2,74 | 6 | 15,000
Europe |  | – | –
Far East |  | – | –
Middle East |  | – | –
Other |  | – | –
UK |  | – | –
Americas |  | 1,482 | –
Confirmations |  | 9,173 | 23,000
Africa |  | 5,494 | 23,000
Europe |  | – | –
Far East |  | – | –
Middle East |  | – | –
Other |  | – | –
UK |  | – | –
Americas |  | 3,680 | –
Liquidity as a service |  | 14,884 | 4,721
Africa |  | 544 | 4,721
Europe |  | 1,875 | –
Far East |  | – | –
Middle East |  | – | –
Other |  | – | –
UK |  | 12,465 | –
Americas |  | – | –
Total off-balance sheet exposure |  | 30,196 | 46,721
Total exposure |  | 1,214,038 | 1,278,044

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Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
h) Credit quality continued
iii. Breakdown by maturity
The table below describes the gross carrying amount per maturity for each asset class.

| Consolidated |
Exposure by maturity | 2023 | 2022
on-balance sheet exposure | £’000 | £’000
Cash and balances at central banks | 528,396 | 607,358
3 months or less | 528,396 | 607,358
More than 3 months | – | –
Loans and advances on demand to banks | 135,203 | 91,470
3 months or less | 135,203 | 91,470
More than 3 months | – | –
Other loans and advances to banks | 137,597 | 84,494
3 months or less | 137,597 | 84,494
More than 3 months | – | –
Other loans and advances to non-banks | 8,712 | 12,455
3 months or less | 8,712 | 12,455
More than 3 months | – | –
Unsettled transactions | 8,417 | 16,987
3 months or less | 8,417 | 16,987
More than 3 months | – | –
Investment in debt securities | 353,042 | 414 ,074
3 months or less | 353,042 | 414,074
More than 3 months | – | –
Other assets | 11,257 | 4,056
3 months or less | 11,257 | 4,056
More than 3 months | – | –
Accrued income | 1,218 | 429
3 months or less | 1,218 | 429
More than 3 months | – | –
Total on-balance sheet exposure | 1,183,842 | 1,231,323

1
1
2
2
1 Prior year balances have been restated. Refer to Note 13.
2 Prior year balances have been restated. Refer to Note 18.
CAB Payments Holdings plc | Annual Report and Accounts 2023218
37. Credit Risk continued
h) Credit quality continued
iii. Breakdown by maturity continued
The total off balance sheet exposure is broken down below.

| Consolidated |
Exposure by maturity | 2023 | 2022
Off-balance sheet exposures | £’000 | £’000
Financial guarantees | 1,911 | 4,000
3 months or less | 1,911 | 4,000
More than 3 months | – | –
Acceptances | 4,228 | 15,000
3 months or less | 4,228 | 15,000
More than 3 months | – | –
Confirmations | 9,173 | 23,000
3 months or less | 9,173 | 23,000
More than 3 months | – | –
Liquidity as a service | 14,884 | 4,721
3 months or less | 14,884 | 4,721
More than 3 months | – | –
Total off-balance sheet exposure | 30,196 | 46,721
Total exposure | 1,214,036 | 1,278,044

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Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
h) Credit quality continued
iv. Loss allowance
The tables below describes gross carrying amount, loss allowance, and carrying amount after loss allowance per class of assets.

| Consolidated |
|  | Restated
| 2023 | 2022
On-balance sheet exposure | £’000 | £’000
Cash and balances at central banks |  |
Gross carrying amount | 528,396 | 607,358
Loss allowance | – | –
Carrying amount after loss allowance | 528,396 | 607,358
Loans and advances on demand to banks |  |
Gross carrying amount | 135,203 | 91,470
Loss allowance | (25) | (4)
Carrying amount after loss allowance | 135,178 | 91,466
Other loans and advances to banks |  |
Gross carrying amount | 137,597 | 84,494
Loss allowance | (27) | (63)
Carrying amount after loss allowance | 137,570 | 84,431
Other loans and advances to non-banks |  |
Gross carrying amount | 8,712 | 12,455
Loss allowance | (496) | (230
Carrying amount after loss allowance | 8,216 | 12,224
Unsettled transactions |  |
Gross carrying amount | 8,417 | 16,988
Loss allowance | – | (2)
Carrying amount after loss allowance | 8,417 | 16,985
Investment in debt securities |  |
Gross carrying amount | 353,042 | 414 ,074
Loss allowance | (14) | (13)
Carrying amount after loss allowance | 353,028 | 414,061
Other assets |  |
Gross carrying amount | 11,257 | 4,056
Loss allowance | (57) | (60)
Carrying amount after loss allowance | 11,200 | 3,996
Accrued income |  |
Gross carrying amount | 1,218 | 429
Loss allowance | (3) | (5)
Carrying amount after loss allowance | 1,215 | 424
Total on-balance sheet gross carrying amount | 1,183,842 | 1,231,323
Total loss allowance | (621) | (377)
Total on-balance carrying amount after loss allowance | 1,183,221 | 1,230,946

1
1
2
2
1 Prior year balances have been restated. Refer to Note 13.
2 Prior year balances have been restated. Refer to Note 18.
CAB Payments Holdings plc | Annual Report and Accounts 2023220
37. Credit Risk continued
h) Credit quality continued
iv. Loss allowance continued
The off-balance sheet exposure is broken down below.

| Consolidated |
| 2023 | 2022
Off-balance sheet exposure | £’000 | £’000
Financial guarantees contracts |  |
Gross carrying amount | 1,912 | 4,000
Loss allowance | (2) | (1)
Carrying amount after loss allowance | 1,910 | 3,999
Acceptances |  |
Gross carrying amount | 4,228 | 15,000
Loss allowance | (3) | (1)
Carrying amount after loss allowance | 4,225 | 14,999
Confirmations |  |
Gross carrying amount | 9,173 | 23,000
Loss allowance | (3) | (6)
Carrying amount after loss allowance | 9,170 | 22,994
Liquidity as a service |  |
Gross carrying amount | 14,884 | 4,721
Loss allowance | (228) | (72)
Carrying amount after loss allowance | 14,656 | 4,649
Total off-balance sheet exposure | 30,196 | 46,721
Total loss allowance | (236) | (79)
Total off-balance sheet exposure after loss allowance | 29,960 | 46,642
Total exposure | 1,214,038 | 1,278,044
Total loss allowance | (857) | (456)
Total exposure after loss allowance | 1,213,181 | 1, 277, 5 8 8

221
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
h) Credit quality continued
v. Breakdown as a function of staging
An analysis of The Group’s expected credit loss per class of financial asset, internal rating, and staging without taking into
account the effects of any collateral or other credit enhancements is provided in the following tables.

|  | 2023 |  |  | 2022 |
|  | £’000 |  |  | £’000 |
Consolidated |  |  |  |  |  |
ECL | Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3
Cash and balances at central banks | – | – | – | – | – | –
Investment grade | – | – | – | – | – | –
Sub-investment grade | – | – | – | – | – | –
Loans and advances on demand to banks | 25 | – | – | 4 | – | –
Investment grade | – | – | – | – | – | –
Sub-investment grade | 25 | – | – | 4 | – | –
Other loans and advances to banks | 27 | – | – | 63 | – | –
Investment grade | 1 | – | – | – | – | –
Sub-investment grade | 27 | – | – | 63 | – | –
Other loans and advances to non- banks | 14 | 450 | 32 | 230 | – | –
Investment grade | – | – | – | – | – | –
Sub-investment grade | 14 | 450 | 32 | 230 | – | –
Unsettled transactions | 13 | – | – | 2 | 1 | –
Investment grade |  | – | – | – | – | –
Sub-investment grade | 13 | – | – | 2 | 1 | –
Investment in debt securities | 14 | – | – | 13 | – | –
Investment grade | 14 | – | – | 13 | – | –
Sub-investment grade | – | – | – | – | – | –
Other asset exposures | 27 | 1 | 16 | 59 | – | –
Investment grade | – | – | – | – | – | –
Sub-investment grade | 27 | 1 | 16 | 59 | – | –
Accrued income | 3 | – | – | 5 | – | –
Investment grade | – | – | – | – | – | –
Sub-investment grade | 3 | – | – | 5 | – | –
Total on-balance sheet ECL | 122 | 451 | 48 | 375 | 1 | –
Total on-balance sheet ECL |  | 621 |  |  | 376 |

CAB Payments Holdings plc | Annual Report and Accounts 2023222
37. Credit Risk continued
h) Credit quality continued
v. Breakdown as a function of staging continued
The off-balance sheet breakdown of ECL per instrument at each stage is shown below:

Year |  | 2023 |  |  | 2022 |
|  | £’000 |  |  | £’000 |
ECL |  |  |  |  |  |
Off-balance sheet items | Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3
Financial guarantees | 2 | – | – | 1 | – | –
Investment grade | – | – | – | – | – | –
Sub-investment grade | 2 | – | – | 1 | – | –
Acceptances | 3 | – | – | 1 | – | –
Investment grade | – | – | – | – | – | –
Sub-investment grade | 3 | – | – | 1 | – | –
Confirmation | 3 | – | – | 6 | – | –
Investment grade | – | – | – | – | – | –
Sub-investment grade | 3 | – | – | 6 | – | –
Liquidity as a service | 7 | 221 | – | 72 | – | –
Investment grade | – | – | – | – | – | –
Sub-investment grade | 7 | 221 | – | 72 | – | –
Total off-balance sheet ECL | 15 | 221 | – | 79 | – | –
Total off-balance sheet ECL | – | 236 | – | – | – | –
Total ECL per stage | 137 | 672 | 48 | 455 | 1 | –
Total ECL |  | 857 |  |  | 456 |

223
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
37. Credit Risk continued
h) Credit quality continued
v. Breakdown as a function of staging continued
The on balance sheet and off-balance sheet breakdown of maximum exposure per instrument at each stage is shown below.

|  |  | 2023 |  |  | 2022 |
|  |  | £’000 |  |  | £’000 |
Maximum exposure per staging |  |  |  |  |  |  |
On-balance sheet items | Stage 1 |  | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3
Cash and balances at central banks | 528,396 |  | – | – | 607,358 | – | –
Loans and advances on demand to banks | 134,882 |  | 322 | – | 91,380 | 89 | –
Other Loans and advances to banks | 137, | 59 8 | – | – | 84,494 | – | –
Other Loans and advances to non-banks |  | 2,531 | 6,092 | – | 12,455 | – | –
Unsettled Transactions |  | 7,3 65 | 1,035 | – | 15,985 | 1,003 | –
Investment in debt securities |  | 353,042 | – | – | 414,074 | – | –
Other asset exposures |  | 8,057 | 3,109 | 89 | 4,056 | – | –
Accrued income |  | 1,218 | – | – | 429 | – | –
Total on-balance sheet |  |  |  |  |  |  |
maximum exposure |  | 1,173,089 | 10,558 | 89 | 1,230,231 | 1,092 | –
Total on-balance sheet |  |  |  |  |  |  |
maximum exposure |  |  | 1,183,736 |  |  | 1,231,323 |
Off-balance sheet items |  |  |  |  |  |  |
Financial guarantees |  | 1,899 | 12 | – | 4,000 | – | –
Acceptances |  | 4,228 | – | – | 15,000 | – | –
Confirmation |  | 9,173 | – | – | 23,000 | – | –
Liquidity as a service |  | 685 | 14,199 | – | 4,721 | – | –
Total off-balance sheet |  |  |  |  |  |  |
maximum exposure |  | 15,985 | 14,211 | – | 46,721 | – | –
Total off-balance sheet |  |  |  |  |  |  |
maximum exposure |  |  | 30,196 |  |  | 46,721 |
Total maximum exposure per stage |  | 1 ,189,074 | 24,769 | – | 1,276,952 | 1,092 | –
Total maximum exposure per stage |  |  | 1,213,932 |  |  | 1,278,044 |

vi. Coverage ratios table
The tables below analyse the coverage ratio.

|  | 2023 |  |  | 2022 |
| Gross carrying |  |  | Gross carrying |  |
Coverage ratios | amount | ECL | Coverage | amount | ECL | Coverage
On-balance sheet | £’000 | £’000 | ratio % | £’000 | £’000 | ratio %
Stage 1 | 1,173,089 | 122 | 0.01% | 1,230,231 | 375 | 0.03%
Stage 2 | 10,558 | 451 | 4.27% | 1,092 | 1 | 0.09%
Stage 3 | 89 | 48 | 53.93% | – | – | –
Total on-balance sheet | 1,183,736 | 621 | 0.05% | 1,231,323 | 376 | 0.03%
Off–balance sheet |  |  |  |  |  |
Stage 1 | 15,985 | 15 | 0.09% | 46,721 | 79 | 0.17%
Stage 2 | 14,211 | 221 | 1.56% | – | – | –
Stage 3 | – | – | – | – | – | –
Total – off-balance sheet | 30,196 | 236 | 0.78% | 46,721 | 79 | 0.17%
Total | 1,213,932 | 857 | 0.07% | 1,278,044 | 455 | 0.04%

CAB Payments Holdings plc | Annual Report and Accounts 2023224
37. Credit Risk continued
h) Credit quality continued
vii. Movement in loss allowances across the stages
The tables below analyse the movement of the loss allowance during the year per class of assets with movements in stages.
Consolidated

|  | 2023 |  |  | 2022 |
|  | £’000 |  |  | £’000 |
| Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3
Loss allowance at beginning of period | 454 | 2 | – | 113 | 1 | –
Loans expired/closed from previous period | (448) | (2) | – | (91) | (1) | –
New loans Issued | 843 | 8 | – | 432 | 1 | –
Expected credit loss before changes |  |  |  |  |  |
in loss allowance | 849 | 8 | – | 454 | 1 | –
Change in loss allowance | (712) | – | – | (1) | – | –
Transfer to Stage 1 | – | – | – | – | – | –
Transfer to Stage 2 | (664) | – | – | (1) | – | –
Transfer to Stage 3 | (48) | – | – | – | – | –
Transfers in | – | 664 | 48 | – | 1 | –
Adjustments in expected credit loss | 92 | 8 | – | 2 | – | –
Loss allowance at end of period | 137 | 672 | 48 | 454 | 2 | –
Total loss allowance at end of period |  | 857 |  |  | 456 |

38. Liquidity Risk
Information on the policy for liquidity risk is in the Strategic Report. The risks relating to discontinued operations up to 20
June 2022 were managed in the same manner as the rest of the Group at this time. From the date of transfer these risks
resided with fair value of the disposal group held for sale up to date of completion of sale. (Note 10).
The liquidity (undiscounted) cashflow profile of the Group’s financial assets and financial liabilities (including interest
receivable/payable on maturity) is as follows:

|  |  | Consolidated |  |  |
| Less than | 3 months | 1 year | 2 years | More than |
| 3 months | – 1 year | – 2 years | – 5 years | 5 years | Total
Assets 2023 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Cash and balances at central banks | 529,835 | – | – | – | – | 529,835
Money market funds | 518,764 | – | – | – | – | 518,764
Loans and advances on demand to banks | 135,239 | – | – | – | – | 135,239
Other loans and advances to banks | 73,416 | 65,011 | – | – | – | 138,427
Other loans and advances to non-banks | 8,216 | – | – | – | – | 8,216
Derivative financial assets | 3,795 | 34 | – | – | – | 3,829
Unsettled transactions | 8,417 | – | – | – | – | 8,417
Investment in debt securities | 105,534 | 169,033 | 70,263 | 20,713 | – | 365,543
Investment in equity securities | – | – | – | – | 495 | 495
Other assets | 5,721 | – | – | – | – | 5,721
Accrued income (others) | 1,215 | – | – | – | – | 1,215
| 1,390,152 | 234,078 | 70,263 | 20,713 | 495 | 1,715,700

225
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
38. Liquidity Risk continued
Liabilities 2023

|  |  |  |  | Consolidated |  |  |
|  |  | Less than | 3 months | 1 year | 2 years | More than |
|  |  | 3 months | – 1 year | – 2 years | – 5 years | 5 years | Total
|  |  | £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Non-derivative liabilities |  |  |  |  |  |  |  |
Customer accounts | 1, | 457,25 | 4 | 83,136 | 6,051 | – | – | 1,546,441
Unsettled transactions |  |  | 20,081 | – | – | – | – | 20,081
Other liabilities |  |  | 6,223 | – | – | – | – | 6,223
Accruals |  |  | 18,367 | – | – | – | – | 18,367
Lease liabilities |  |  | 134 | 238 | 181 | 331 | – | 884
|  |  | 1,502,059 | 83,408 | 6,232 | 331 | – | 1,591,996
Derivative liabilities |  |  |  |  |  |  |  |
Derivative financial instruments |  |  | 9,645 | 34 | – | – | – | 9,679

|  |  | Consolidated |  |  |
| Less than | 3 months | 1 year | 2 years | More than |
Assets | 3 months | – 1 year | – 2 years | – 5 years | 5 years | Total
As restated (2022) | £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Cash and balances at central banks | 607,358 | – | – | – | – | 607,358
Money market funds | 209,486 | – | – | – | – | 209,486
Loans and advances on demand to banks | 90,209 | – | – | – | – | 90,209
Other loans and advances to banks 3 | 73,213 | 12,252 | – | – | – | 85,465
Loans and advances to non-banks | 12,447 | – | – | – | – | 12,447
Derivative financial assets | 6,551 | 16 | – | – | – | 6,567
Unsettled transactions | 16,071 | – | – | – | – | 16,071
Investment in debt securities | 101,323 | 243,385 | 66,844 | 10,125 | – | 421,677
Investment in equity securities | – | – | – | – | 488 | 488
Other assets | 5,242 | – | – | – | – | 5,242
Accrued income (others) | 856 | – | – | – | – | 856
| 1,122,756 | 255,653 | 66,844 | 10,125 | 488 | 1,455,866

3
4
2/4
CAB Payments Holdings plc | Annual Report and Accounts 2023226
38. Liquidity Risk continued

|  |  | Consolidated |  |  |
| Less than | 3 months | 1 year | 2 years | More than |
| 3 months | – 1 year | – 2 years | – 5 years | 5 years | Total
Liabilities (2022) | £’000 | £’000 | £’000 | £’000 | £’000 | £’000
Non-derivative liabilities |  |  |  |  |  |
Customer accounts | 1,134,194 | 171,357 | – | – | – | 1,305,551
Unsettled transactions | 25,782 | – | – | – | – | 25,782
Other liabilities | 5,551 | – | – | – | – | 5,551
Accruals | 19,364 | – | – | – | – | 19,364
Lease liabilities | 108 | 359 | 346 | 468 | – | 1,281
Provisions | 79 | – | – | – | – | 79
| 1,185,078 | 171,716 | 346 | 468 | – | 1,357,608
Derivative liabilities |  |  |  |  |  |
Derivative financial instruments | 4,520 | 23 | – | – | – | 4,543

1
1 Excludes non-financial liabilities such as HM Revenue & Customs.
2 Excludes non-financial assets such as corporation tax refund and VAT refund.
3 The prior year balance has been restated. Refer to Note 13 for further details thereon.
4 The prior year balance has been restated. Refer to Note 18 for further details thereon.
a) Company financial assets and liabilities
The liquidity (undiscounted) cashflow profile of the Company’s financial assets and financial liabilities (including interest
receivable/payable) is as follows:
Assets (2023)

|  |  | Company |  |
| Less than | 3 months | 1 year | 2 years |
| 3 months | – 1 year | – 2 years | – 5 years | Total
| £’000 | £’000 | £’000 | £’000 | £’000
Loans and Advances to banks | 658 | – | – | – | 658
Intercompany receivables | 4,239 | – | – | – | 4,239
Other Assets | 188 | – | – | – | 188
Total | 5,085 | – | – | – | 5,085

Liabilities (2023)

|  |  | Company |  |
| Less than | 3 months | 1 year | 2 years |
| 3 months | – 1 year | – 2 years | – 5 years | Total
| £’000 | £’000 | £’000 | £’000 | £’000
Intercompany payables | 19,406 | – | – | – | 19,406
Accruals | 1,022 | – | – | – | 1,022
Other Liabilities | 422 | – | – | – | 422
Total | 20,850 | – | – | – | 20,850

Liabilities (2022)

|  |  | Company |  |
| Less than | 3 months | 1 year | 2 years |
| 3 months | – 1 year | – 2 years | – 5 years | Total
| £’000 | £’000 | £’000 | £’000 | £’000
Intercompany payables | 1,198 | – | – | – | 1,198
Total | 1,198 | – | – | – | 1,198

The Company does not have any significant trade obligations or liabilities to meet, and the financial liabilities of the
Company largely constitute intercompany payables to its subsidiary, CAB. Although, this liability is payable on demand,
management does not expect its subsidiary to demand payment. The Company had no financial assets in 2022.
Where the Company is required to make any outward payments other than above intercompany payables, its subsidiary
CAB advances the cash to the Company as needed. Therefore, the Company’s liquidity risk is negligible.
227
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
39. Currency Risk
The Group does not have any structural exposure. The table below shows the Group’s transactional currency exposures in
its book, i.e. those non-structural exposures that give rise to the net currency gains and losses recognised in the statements
of profit or loss and other comprehensive income. Such exposures comprise the monetary assets and monetary liabilities of
the Group that are not denominated in sterling.
At 31 December, these financial instruments were as follows:

|  |  |  |  | Consolidated – Net foreign currency monetary (liabilities) / assets in £’000 |  |
2023 | Currency | US Dollar | Euro | KES | UGX | Other | Total
(Liabilities)/assets |  | (281,532) | (97,714) | 410 | (153) | 12,822 | (366,167)
Net forward purchases/(sales) |  | 282,402 | 97,077 | (309) | – | (10,177) | 368,993
|  | 870 | (637) | 101 | (153) | 2,645 | 2,826
Change in assets/(liabilities) due |  |  |  |  |  |  |
to a change in currency value by + 100 basis points |  | 9 | (6) | 1 | (2) | 26 | 28
- 100 basis points |  | (9) | 6 | (1) | 2 | (26) | (28)

2022 | Currency | US Dollar | Euro | KES | UGX | Other | Total
(Liabilities)/assets |  | (358,485) | (52,910) | 419 | 390 | (1,304) | (411,890)
Net forward purchases |  | 360,651 | 52,007 | 119 | – | 5,137 | 417, 914
|  | 2,166 | (903) | 538 | 390 | 3,833 | 6,024
Change in assets / (liabilities) due |  |  |  |  |  |  |
to a change in currency value by + 100 basis points |  | 217 | (90) | 54 | 39 | 3,830 | 4,045
- 100 basis points |  | (217) | 90 | (44) | (39) | (3,830) | (4,045)

An analysis of the total financial instruments,, split between GBP and other currencies, is as follows:

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Assets |  |
Denominated in other currencies | 1,040,623 | 757,150
Liabilities and equity |  |
Denominated in other currencies | 1,406,167 | 1,162,160

A 10% appreciation in the value of GBP against all other currencies would decrease the Group’s profit or loss value by
£283k (2022: £668k decrease).
A 10% depreciation in the value of GBP against all other currencies would increase the Group’s profit or loss value by £283k
(2022: £668k increase).
All of the Company’s assets and liabilities in 2023 (2022: GBP) were denominated in GBP.
Therefore, the Company is not subjected to currency risk .
CAB Payments Holdings plc | Annual Report and Accounts 2023228
40. Interest Rate Risk
a) Interest rate sensitivity
Part of the Group’s return on financial instruments is obtained from controlled mismatching of the dates on which the
instruments mature or, if earlier, the dates on which interest receivable on financial assets and interest payable on financial
liabilities are next reset to market rates. The table below summarises these re-pricing mismatches on the Group’s book as
at 31 December 2023. Items are allocated to time bands by reference to the earlier of the next contractual interest rate
re-pricing date and the maturity date. All the financial assets / financial liabilities are based on fixed interest. The repricing
table therefore is prepared on the basis that maturity date equals repricing date. It should be noted that the Group manages
its interest rate risk on a behavioural basis where a portion of client deposits are treated as being rate insensitive.
b) Interest rate repricing

|  |  |  | Consolidated £’000 |  |
|  | More than three | More than six | More than one |  |
|  | months but not | months but not | year but not |  |
Interest Rate Repricing | Not more than | more than six | more than one | more than five | Non-interest |
2023 | three months | months | year | years | bearing | Total
Assets |  |  |  |  |  |
Cash and balances at central banks | 528,396 | – | – | – | – | 528,396
Money market funds | 518,764 | – | – | – | – | 518,764
Loans and advances on demand to banks | 135,178 | – | – | – | – | 135,178
Other loans and advances to banks | 74,366 | 50,701 | 12,503 | – | – | 137, 570
Loans and advances to non-banks | 8,216 | – | – | – | – | 8,216
Derivative financial assets | 3,795 | 15 | 19 | – | – | 3,829
Unsettled transactions | – | – | – | – | 8,417 | 8,417
Investment in debt securities | 104,424 | 56,322 | 110,547 | 89,336 | – | 360,629
Investments in equity securities | – | – | – | – | 495 | 495
Other assets | 330 | – | – | – | 5,391 | 5,721
Accrued income | – | – | – | – | 1,215 | 1,215
Total assets | 1,373,469 | 107,038 | 123,069 | 89,336 | 15,518 | 1,708,430

1
1 Excludes non-financial assets such as corporation tax refund and VAT refund.

|  |  |  | Consolidated £’000 |  |
|  | More than three | More than six | More than one |  |
|  | months but not | months but not | year but not |  |
Interest rate repricing | Not more than | more than six | more than one | more than five | Non-interest |
2023 liabilities | three months | months | year | years | bearing | Total
Customer accounts | 1,456,217 | 37,686 | 43,334 | 5,652 | – | 1,542,889
Derivative financial liabilities | 9,645 | 15 | 19 | – | – | 9,679
Unsettled transactions | – | – | – | – | 20,081 | 20,081
Other liabilities | – | – | – | – | 7,107 | 7,107
Accruals | – | – | – | – | 18,367 | 18,367
Shareholders’ funds | – | – | – | – | 131,530 | 131,530
Total liabilities | 1,465,862 | 37,701 | 43,353 | 5,652 | 177,085 | 1,729,653
Interest rate sensitivity gap | (92,393) | 69,337 | 79,716 | 83,684 | (161,567) | (21,223)
Cumulative gap | (92,393) | (23,056) | 56,660 | 140,344 | (21,223) |

1
1 Includes financial liabilities and lease liabilities.
229
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
40. Interest Rate Risk continued
b) Interest rate repricing continued

|  |  |  | Consolidated £’000 |  |
|  | More than three | More than six | More than one |  |
|  | months but not | months but not | year but not |  |
Interest Rate Repricing | Not more than | more than six | more than one | more than five | Non-interest |
2022 (Restated) | three months | months | year | years | bearing | Total
Assets |  |  |  |  |  |
Cash and balances at central banks | 607,358 | – | – | – | – | 607,358
Money market funds | 209,486 | – | – | – | – | 209,486
Loans and advances on demand to banks | 90,209 | – | – | – | – | 90,209
Other loans and advances to banks 1 | 73,213 | 12,252 | – | – | – | 85,465
Loans and advances to non-banks | 12,447 | – | – | – | – | 12,447
Derivative financial assets | 6,551 | 16 | – | – | – | 6,567
Unsettled transactions | – | – | – | – | 16,071 | 16,071
Investment in debt securities | 98,675 | 64,460 | 175,103 | 75,823 | – | 414,061
Investments in equity securities | – | – | – | – | 488 | 488
Other assets | – | – | – | – | 5,242 | 5,242
Accrued income | – | – | – | – | 856 | 856
Total assets | 1,097, 939 | 76,728 | 175,103 | 75,823 | 22,657 | 1,448,250

1
2
2
1 The prior year balance has been restated. Refer to Note 13 for further details thereon.
2 The prior year balance has been restated. Refer to Note 18 for further details thereon.

|  |  |  |  | Consolidated £’000 |  |
|  |  | More than three | More than six | More than one |  |
|  |  | months but not | months but not | year but not |  |
Interest rate repricing |  | Not more than | more than six | more than one | more than five | Non-interest |
2022 | Liabilities | three months | months | year | years | bearing | Total
Customer accounts |  | 1,134,309 | 128,369 | 42,873 | – | – | 1,305,551
Derivative financial liabilities |  | 4,520 | 23 | – | – | – | 4,543
Unsettled transactions |  | – | – | – | – | 25,782 | 25,782
Other liabilities |  | – | – | – | – | 5,551 | 5,551
Accruals |  | – | – | – | – | 19,364 | 19,364
Provisions |  | – | – | – | – | 79 | 79
Shareholders’ funds |  | – | – | – | – | 115,958 | 115,958
Total liabilities |  | 1,138,829 | 128,392 | 42,873 | – | 166,734 | 1,476,828
Interest rate sensitivity gap |  | (40,890) | (51,664) | 132,230 | 75,823 | (144,077) | (28,578)
Cumulative gap |  | (40,890) | (92,554) | 39,676 | 115,499 | (28,578) |

1
1 Includes financial liabilities and lease liabilities.
Following a parallel shift in interest rates, the Group’s net asset value and profit would change as follows:

| 2023 | 2022
Parallel Shift (consolidated) | £’000 | £’000
+ 200bp | 157 | (58)
– 200bp | (181) | 45

None of the Company’s assets or liabilities in 2023 or 2022 earned interest. Therefore, the Company is not subjected
to interest risk.
CAB Payments Holdings plc | Annual Report and Accounts 2023230
41. Capital Management
Capital risk is the risk that the Group has insufficient capital resources to meet the minimum regulatory requirements
in all jurisdictions where regulated activities are undertaken, to support its credit rating and to support its growth and
strategic options.
a) Capital risk management
As for liquidity and market risks, the Assets & Liabilities Committee is responsible for ensuring the effective management of
capital risk throughout the Group. Specific levels of authority and responsibility in relation to capital risk management have
been assigned to the appropriate committees.
b) Externally imposed capital requirements
Companies within the Group are subject to regulatory requirements (on an entity and / or a consolidated basis) imposed by
the PRA and/or the FCA. Such regulations include the requirement, at all times, to carry sufficient regulatory capital to meet
the underlying capital requirements.
Capital risk is measured and monitored using limits set in relation to capital, all of which are calculated in accordance
with relevant regulatory requirements.
The Group’s regulatory capital consists solely of Common Equity Tier 1 capital which includes ordinary share capital,
retained earnings, investment revaluation reserve and foreign currency translation reserve after deductions for goodwill,
intangible assets and other regulatory adjustments relating to items that are included in equity but are treated differently
for capital adequacy purposes.
The Group and its regulated trading subsidiary calculate those capital requirements on a daily basis and, using a traffic
light warning system based on an internal buffer, reports to the Assets and Liabilities Committee, or, should the need arise,
the Board. The Group’s capital plans are developed with the objective of maintaining capital that is adequate in quantity
and quality to support the Group’s risk profile, regulatory and business needs. Capital forecasts are continually monitored
against relevant internal target capital ratios to ensure they remain appropriate and consider risks to the plan including
possible future regulatory changes.
The Group manages capital risk on an ongoing basis through other means such as:
• Stress testing: internal group-wide stress testing is undertaken to quantify and understand the impact of sensitivities
on the capital plan and capital ratios arising from stressed macroeconomic conditions. Reverse stress testing is also
performed to identify the extent of stress that could be survived before limits are breached.
• Risk mitigation: as part of the stress testing process, actions are identified that should be taken to mitigate the risks that
could arise in the event of material adverse changes in the current economic and business environment.
• Senior management awareness and transparency: Capital management information is readily available at all times to
support the Group’s executive management’s strategic and day-to-day business decision making, as may be required.
Full details of the capital adequacy requirements for each of the Group’s regulated entities are provided in its Pillar 3
disclosures which can be found on the website of CPH (cabpayments.com). The Pillar 3 disclosures are not audited.
c) Capital management in relation to the Company
The Company manages its capital to ensure that it will be able to continue as going concerns while maximising the return to
shareholders through the optimisation of the debt and equity balance. The Company’s overall strategy remains unchanged
from 2022. The Company is not subject to any externally imposed capital requirements.
The capital structure of the Company consists of equity (called-up share capital, merger relief reserve and retained earnings
as disclosed in Notes 27 and 29).
231
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
42. Classification of Financial Instruments
The carrying values of the financial assets and financial liabilities are summarised by category below:

| Consolidated |
|  | (Restated)
| 2023 | 2022
Financial assets | £’000 | £’000
Mandatorily measured at fair value through profit or loss |  |
Money market funds | 518,764 | 209,486
Derivative financial instruments – foreign exchange related contracts | 3,829 | 6,567
| 522,593 | 216,053
Measured at amortised cost |  |
Cash and balances at central banks | 528,396 | 607,358
Loans and advances on demand to banks | 135,178 | 90,209
Other loans and advances to banks | 137,570 | 85,465
Other loans and advances to non-banks | 8,216 | 12,447
Investment in debt securities | 353,028 | 414,061
Unsettled transactions | 8,417 | 16,071
Other assets (excluding non-financial assets) | 5,721 | 13,233
Accrued income | 544 | 856
| 1,177,070 | 1,239,700
Measured at fair value through other comprehensive income |  |
Investment in equity securities | 495 | 488

1
1
2
2
1 The prior year balance has been restated. Refer to Note 13 for further details thereon.
2 The prior year balance has been restated. Refer to Note 18 for further details thereon.

|  | Consolidated
| As at 31 December 2023 | As at 31 December 2022
Financial liabilities | £’000 | £’000
Mandatorily measured at fair value through profit or loss |  |
Derivative financial instruments – FX related contracts | 9,679 | 4,543
| 9,679 | 4,543
Measured at amortised cost |  |
Client accounts | 1,542,889 | 1,305,551
Unsettled transactions | 20,081 | 25,782
Other liabilities (excluding non-financial liabilities) | 6,223 | 9,051
Lease liabilities | 884 | 1,281
Accruals | 18,367 | 19,364
| 1,588,444 | 1,361,029

CAB Payments Holdings plc | Annual Report and Accounts 2023232
42. Classification of Financial Instruments continued

| Company |
| 2023 | 2022
Financial assets measured at amortised cost | £’000 | £’000
Other assets | 773 | –
Intercompany receivables | 4,239 | –
| 5,012 | –

| Company |
| 2023 | 2022
Financial liabilities measured at amortised cost | £’000 | £’000
Intercompany payables | 19,406 | 1,198
Other liabilities | 422 | 321
| 19,828 | 1,519

1
1 Intercompany payables are balances borrowed by the Company from a subsidiary company to be used in its operation.
There were no loss allowances recognised for the Company’s financial assets as the carrying amount is insignificant.
The Company had no financial assets valued at FVTPL as at 31 December 2023 and 31 December 2022.
43. Fair Value Measurements
a) Fair value methodology
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Where available fair values are determined at prices quoted in active
markets. In some instances, such price information is not available for all instruments and the Group applies valuation
techniques to measure such instruments. These valuation techniques make maximum use of market observable data but
in some cases, management estimate unobservable market inputs within the valuation model. There is no standard model
and different assumptions would generate different results. To provide an indication about the reliability of the inputs
used in determining fair value, the Group has classified its financial instruments that are measured at fair value into the
three levels of fair value hierarchy explained further below, based on the lowest level input that is significant to the entire
measurement of the instrument.
b) Fair value hierarchy
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities
Inputs to level 1 fair value are quoted prices (unadjusted) in active markets for identical assets. An active market is one in
which transactions for the asset occurs with sufficient frequency and volume to provide pricing information on an on-going
basis.
233
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
43. Fair Value Measurements continued
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivative
financial instruments) is determined using valuation techniques which maximise the use of observable market data and
rely as little as possible on entity-specific estimates. If all significant inputs required to fair value such an instrument are
observable, the instrument is included in level 2.
Fair values of derivative financial instruments (FX contracts), money market funds, investment in equity securities and
investment in debt securities are included in level 2.
Money market funds and exchange traded funds are valued at fair value based on the price a willing buyer would pay for
the asset. Any gain or loss is taken through the profit and loss account. The money market funds include contractual terms
such that they are traded at par until the total market value of the underlying instruments deviates from that par value by
a certain amount (typically 20bps). The funds have each traded at par at all times since the initial investment by the Group.
The fair value of the Group’s investment in debt securities is determined by using discounted cash flow models that use
market interest rates as at the end of the period.
Level 3 – Unobservable inputs for the asset or liability
Inputs to level 3 fair values are based on unobservable inputs for the assets at the last measurement date. If all significant
inputs required to fair value an instrument are observable then the instrument is included in level 2, if not it is included
in level 3.
There were no transfers between fair value hierarchy level during the year (2022: nil). There were no changes in valuation
techniques used during the year (2022: nil)
c) Financial assets and liabilities through FVTPL and FVTOCI are categorised at Level 2 fair value hierarchy

Financial assets and financial |  |
liabilities at fair value through |  | Inputs (including any significant
profit or loss | Valuation techniques | unobservable inputs)
Derivative financial | The Mark-to-Market (MTM) calculation for foreign currency forwards is | Reuters quoted spot
assets | performed within Core Banking System (CBS) based on market inputs | rates and forward points.
| pulled from Reuters at the end of each trading day. |
| CBS applies a straight-line interpolation calculation to derive the |
| requisite forward points for each currency based on the maturity date |
| of the transaction – these points are added to the spot rate to derive a |
| revaluation rate. |
Money market funds | Net asset value based on the valuation of the underlying level 1 | Quoted market prices but
| investments. | not for identical assets.
Investment in equity | In order to undertake its business, the Group utilises the Swift payment | The fair value is
securities | system, the conditions of which oblige participants to invest in the | calculated annually
| shares of SWIFT, in proportion to participants’ financial contributions to | based on price received
| SWIFT. | from Swift and is
|  | approved annually
|  | at reporting period.
Derivative financial | The MTM calculation for FX Forwards is performed within CBS based | Reuters quoted spot
liabilities | on market inputs pulled from Reuters at the end of each trading day. | rates and forward points.
| CBS applies a straight-line interpolation calculation to derive the |
| requisite forward points for each currency based on the maturity date |
| of the transaction – these points are added to the spot rate to derive |
| a revaluation rate. |

CAB Payments Holdings plc | Annual Report and Accounts 2023234
43. Fair Value Measurements continued
d) Financial assets and financial liabilities at fair value through profit or loss
Forward foreign exchange contracts have been transacted to economically hedge assets and liabilities in foreign currencies
with movements recognised at fair value through profit or loss.
The gains, losses, and changes in fair values of financial assets at fair value through profit or loss recorded in the consolidated
statement of profit or loss and other comprehensive income is as follows:

| Consolidated |
| 2023 | 2022
| £’000 | £’000
Revaluation of money market funds | – | –
Fair value gain or loss on forward FX contracts | 88,417 | 63,352
| 88,417 | 63,352

1
1 The (loss)/gain on the FX contracts typically offsets the gain / loss of a similar magnitude following the revaluation of non GBP denominated asset /liabilities on the
statement of financial position throughout the year.
e) Fair values of financial assets that are measured at amortised cost
For the Group and the Company, apart from the fixed rate bonds, the carrying amounts of financial assets and liabilities
measured at amortised cost are approximately the same as their fair values due to their short-term nature. The fair value
of the fixed rate bonds is provided below.
f) Impairment and risk exposure
Information about the impairment of financial assets, their credit quality and the Group’s exposure to credit risk can be
found in the accounting policy note for financial instruments and Note 42.
g) Financial liabilities measured at amortised cost
For the Group and the Company, the carrying amounts of financial liabilities at amortised cost are approximately the same
as their fair values due to their short-term nature.
h) Financial liabilities measured at fair value
The valuation levels of the financial assets and financial liabilities accounted for at fair value are as follows:
Asset/(liability) type – 2023

|  | Consolidated |
| Level 2 |  | Sensitivity
| £’000 | Stress | £’000
Financial assets at fair value |  |  |
– Money market funds | 518,764 | 1% increase in interest rates | (895)
– Derivative financial assets | 3,829 | £ exchange-rate rise of 1% | (299)
– Investment in equity securities | 495 | Equity price +5% | 24
Financial liabilities at fair value |  |  |
– Derivative financial liabilities | (9,679) | £ exchange-rate rise of 1% | (3,390)
| 513,409 |  | (4,560)

|  | Consolidated |
| Level 2 |  | Sensitivity
Asset/(liability) type – 2022 | £’000 | Stress | £’000
Financial assets at fair value |  |  |
– Money market funds | 209,486 | 1% increase in interest rates | (107)
– Derivative financial assets | 6,567 | £ exchange-rate rise of 1% | (3,098)
– Investment in equity securities | 488 | Equity price +5% | 24
Financial liabilities at fair value |  |  |
– Derivative financial liabilities | (4,543) | £ exchange-rate rise of 1% | (1,093)
| 211,998 |  | (4,274)

These are all recurring fair value measurements. There were no financial assets classified as Level 1 and Level 3, and there
were no movements between fair value levels.
235
Overview Strategic Report Governance AppendixFinancial Statements
Notes to the Financial Statements continued
for the year ended 31 December 2023
43. Fair Value Measurements continued
i) Fair value and carrying amount of investment in debt securities

|  |  | Consolidated |
| 2023 |  | 2022 |
| £’000 |  | £’000 |
| Carrying value | Fair value | Carrying value | Fair value
Fixed rate bonds |  |  |  |
– US Treasury Bills (excluding accrued interest) | 7,8 45 | 7,775 | 66,207 | 65,636
– Other fixed rate bonds (excluding accrued interest) | 343,070 | 342,907 | 345,321 | 341,889
Accrued interest | 2,113 | 2,113 | 2,533 | 2,533
| 353,028 | 352,795 | 414,061 | 410,058

Note: the fair values of the fixed rate bonds are based on market quoted prices. They are classified as level 1 fair values
in the fair value hierarchy due to the liquid nature of the bond holdings, having observable and transparent secondary
market pricing.
44. Earnings Per Share
The calculation of the basic and diluted earnings per share at reporting date is based on the following data:

| Consolidated |
| 2023 | 2022
Earnings/(losses) attributable to owners of the Group: | £’000 | £’000
Continuing operations | 22,866 | 31,068
Discontinued operations | (153) | (67)
| 22,713 | 31,001

| Year ended 31 December |  |
|  | 2023 | 2022 3
Weighted average number of ordinary shares |  | ’000 | ’000
Class A ordinary shares | 68,000 | 68,000
Class B ordinary shares | 5,913 | 5,913
– Class B ordinary shares at beginning of reporting date |  | 10 | 10
– Class B share split 1 (Note 27) | 5,903 | 5,903
Weighted average number of Class A and Class B ordinary shares | 73,913 | 73,913
Add effect of redesignation of shares, share split and issuance |  |  |
of shares during the period |  |  |
Redesignation of Class A and Class B ordinary shares during the period | (73,913) | (73,913)
New class of ordinary shares issued during the period | 237,18 | 6 | 221,739
Redesignation of class A and class B shares into new class of shares | 73,913 | 73,913
New ordinary shares from share split | 147,826 | 147,826
Issuance of additional new ordinary shares to former shareholders of CTH | 15,447 | –
Weighted average number of ordinary shares for basic and diluted EPS | 237,18 | 6 | 221,739

1
1
2
1 These shares are assumed to have been issued retrospectively and at the beginning of the periods presented as there was no change in resources on issuance
thereof in line with IAS 33.28.
2 These shares were issued during the year (July 2023) to former external shareholders of CTH and have been weighted accordingly.
3 For comparability and consistent presentation, the weighted average number of ordinary shares for 2022 was determined on the same basis as the 2023 numbers
except for the shares issued to minority shareholders of CTH which resulted in a change of resources.
CAB Payments Holdings plc | Annual Report and Accounts 2023236
44. Earnings Per Share continued

| 31 December |
| 2023 | 2022
| pence | pence
Basic and diluted earnings per share |  |
Continued operations | 10 | 14
Discontinued operations | – | –
Total basic earnings per share attributable to owners of the Company | 10 | 14

As required by IAS 33, the earnings per share calculation takes account of the share split which took place on 5 July 2023.
The resulting number of shares has been included in the comparative calculation.
45. Consideration of Climate Change
Financial statement preparation includes the consideration of the impact of climate change on the consolidated financial
statements. There has been no material impact identified on the financial reporting judgement and estimates. In particular,
the directors considered the impact of climate change in respect of the:
• Going concern of the Group for a period of at least twelve months from the date of approval of the consolidated financial
statements;
• Assessment of impairment of non-financial assets including goodwill;
• Carrying value and useful economic lives of property, plant and equipment;
• Fair value of financial assets and liabilities. These are generally based on market indicators which include the market’s
assessment of climate risk;
• Economic scenarios used for measurement of expected credit losses and the behavioural lifetime of assets against the
expected time horizons of when climate risks may materialise;
• Forecasting of the Group’s future UK taxable profits, which impacts deferred tax recognition; and
• Impact on debtors within the next twelve month (stage 1) or lifetime (stage 2 and stage 3 facilities), for impact on the
related ECL calculation.
Whilst there is currently no material short-term impact of climate change expected, the Group acknowledges the long-term
nature of climate risk and continues to monitor and assess climate risks.
46. Events after the reporting period
A. London Bridge lease
The Group completed on a lease agreement for office space at 3 London Bridge, SE1 9SG, London on 25 January 2024.
Right of use of asset balance and a lease liability balance will be recognised on the consolidated statement
of financial position 2024 and interest expense and depreciation will be recognised on the consolidated statement
of profit or loss and other comprehensive income from 2024 onwards. The Group has committed to the following
undiscounted lease payments:

| 2023 | 2022
| £’000 | £’000
Not later than one year | – | –
Later than one year and not later than five years | 8,345 | –
Later than five years | 15,513 | –
| 23,858 | –

There are no other events after the reporting period requiring disclosure or further adjustments to the financial information.
47. Board Approval
The Consolidated Financial Statements, together with the Company Financial Statements, for the year ended 31 December
2023 were approved by the Board of Directors and authorised for issue on 25 March 2024.
237
Overview Strategic Report Governance AppendixFinancial Statements
Appendix
240 Shareholder Information
241 Alternative Performance Measures
243 Glossary
247 Contact Details
238 CAB Payments Holdings plc | Annual Report and Accounts 2023
239
Overview Strategic Report Governance AppendixFinancial Statements
Shareholder Information
Financial Calendar 2024
26 March 2024 Full year results
9 May 2024 AGM
30 June Half year end
September Half year results
31 December 2024 Financial year end
March 2025 2024 Full year results
Ordinary Shares
The Company’s ordinary shares are traded on the London Stock Exchange (ticker: CABP; ISIN: GB00BMCYKB41;
SEDOL:BMCYKB4).
AGM
The Company’s AGM will be held at 2.00pm on Thursday, 9 May 2024 at TheNews Building, 3 London Bridge Street,
London SE1 9SG.
Company’s Registrar
Enquiries concerning shareholdings, change of address or other particulars should be directed in the first instance to the
Company’s registrar, Equiniti, on +44 (0)371 384 2030. Equiniti also provides a range of online shareholder information
services at www.shareview.co.uk, where shareholders can check their holdings and find practical help on transferring
shares or updating their details.
Shareholder Security
Shareholders are advised to be wary of any unsolicited advice, offers to buy shares at a discount or offers of free reports
about the Company.
Details of any share dealing facilities that the Company endorses will be included in the Company’s mailings or on our
website. More detailed information can be found at www.fca.org.uk/consumers.
CAB Payments Holdings plc | Annual Report and Accounts 2023240
Alternative Performance Measures (APMs)
CAB Payments uses Alternative Performance Measures (APMs) when presenting its financial results. Management
believe these provide stakeholders with additional useful information to interpret the underlying performance of the
business. They are used by the Directors and management to monitor performance.
APMs used within this Annual Report are supplemental to, but not a substitute for IFRS measures presented within the
Financial Statements. They may not be comparable with the APMs of other companies.
APM How the metric is used Calculation definition Calculation
Gross Income
or Income
As a fast-growing organisation, the Group’s focus
is on driving income growth through controlled
investment, whether as capital expenditure or
through operating costs.
Total income, net of interest
expense.
Consolidated
statement of
profit or loss
EBITDA The key measure of profitability used internally
at Executive Committees and Board and with
externally with investors.
Calculated as Profit before Tax
and IFRS16 lease liability interest,
depreciation and amortisation.
Although it is typical to calculate
EBITDA before interest, our net
interest income is generated from
operational client deposits and
subsequent re-investment to
generate returns for the shareholder
and therefore remains included
within EBITDA.
Note 3:
segmental
reporting note
Adjusted
EBITDA
The Group believes that Adjusted EBITDA is a
useful measure for investors because it is closely
tracked by management to evaluate Group’s
performance for making financial, strategic and
operating decisions, as well as aiding investors to
understand and evaluate the underlying trends
in the Group’s performance period on period, in a
comparable manner.
EBITDA before non-recurring
operating expenses.
Note 3:
segmental
reporting note
Adjusted
EBITDA Margin
A measure of profitability, by understanding how
much of the income is converted to profit.
Adjusted EBITDA as a percentage of
Gross Income
See Table 1
Operating Free
Cash Flow
Measure of cash flow generated by the business.
It is a non-statutory measure used by the Board
and the senior management team to measure
the ability of the Group to support future business
expansion, distributions or financing.
Adjusted EBITDA before the cost
of purchasing property, plant and
equipment, the cost of intangible
asset additions and the cost of lease
payments.
See Table 2
Operating Free
Cash Flow
Conversion
A measure used by the Group to understand how
much of the Group’s profitability (measured as
adjusted EBITDA), is converted to available capital
for future business growth.
Free cash flow as a percentage of
Adjusted EBITDA
See Table 2
Wholesale FX
and Payment FX
income
Wholesale FX and Payment FX income is
measured collectively by Group as the underlying
economic drivers are the same. The income,
volume and margins are all measured and
monitored, along with the underlying currencies,
to help the Group understand broader income
performance.
The reported figures represents the accumulative
income from all trades undertaken during the
year, where the income of a single transaction has
been generated from the bid / ask spread and any
associated payment fees if the Foreign Exchange
is then forward to a third party beneficiary.
Net foreign exchange gain. Consolidated
statement of
profit or loss
241
Overview Strategic Report Governance AppendixFinancial Statements
APM How the metric is used Calculation definition Calculation
Alternative
Interest Income
Group measures and monitors net interest income
by its underlying commercial driver, which enables
evaluation of performance with consideration
of return on capital deployed and product
profitability.
Interest income and expense is
captured by source into the general
ledger, with interest expense
subsequently spread across product
type through an internal transfer
pricing mechanism.
See table 3
Table 1
Adjusted EBITDA margin Reference
2023
£’000
2022
£’000
Adjusted EBITDA Note 3 (ii) A 64,633 54,983
Gross income (defined as total income,
net of interest expense)
Consolidated
statement of
profit or loss
B 137, 0 68 109,435
Adjusted EBITDA margin A / B 47% 50%
Table 2
Operating free cash flow: Reference
2023
£’000
2022
£’000
Adjusted EBITDA Note 3 (ii) A 64,633 54,983
Less: additions of tangible fixed assets Note 19 (422) (355)
Less: additions of intangible fixed assets Note 21 (6,982) (4,538)
Less: cash payments made on property leases Note 20 B (462) (252)
Operating free cash flow B 56,767 49,838
Operating free cash flow conversion B / A 88% 91%
Table 3
Alternative Interest Income: Reference
2023
£’000
2022
£’000
Net interest income Consolidated
statement of profit
or loss
21,499 6,773
Gains on money market funds Consolidated
statement of profit
or loss
11,036 3,584
Net gain on financial assets and financial liabilities
mandatorily held at fair value through profit or loss
Consolidated
statement of profit
or loss
1,232 1,009
Total 33,767 11,366
Net interest income from cash management 31,711 10,065
Trade finance net interest income 1,571 1,193
Liquidity as a service net interest income 485 108
Total 33,767 11,366
Alternative Performance Measures (APMs) continued
CAB Payments Holdings plc | Annual Report and Accounts 2023242
Glossary
In the Annual Report and Accounts, the Group or CAB Payments refers to CAB Payments Holdings plc and its
subsidiaries, the Company or CPH refers to CAB Payments Holdings plc, CAB refers to Crown Agents Bank Limited and
CTH refers to CAB Tech HoldCo Limited, a 100% subsidiary of the Company.
The following definitions apply throughout this document unless the context requires otherwise:
Active Client A client that has generated income within the last twelve months
Addressable Market The market addressable by the Group, comprising primarily developed to emerging markets
flows, excluding non-LCU flows and non-focus geographies
Admission The ordinary shares of the Company were admitted to the premium listing segment of the
Official List of the FCA and to trading on the Main Market of the London Stock Exchange on
11 July 2023
AML/CTF laws Laws and regulations relating to corrupt and illegal payments, counter-terrorism financing,
anti-bribery and corruption and adherence to anti-money laundering obligations, as well
as laws, sanctions and economic trade restrictions relating to doing business with certain
individuals, groups and countries
APAC Asia Pacific Region
API The Group’s EMpower FX application programming interface
APM
Alternative Performance Measures as defined on pages 241 to 242
B2B Business to Business
Banking Services One of the Group’s three business lines
BEIS Department for Business, Energy & Industrial Strategy
BN A billion, ie 1,000 million
BRICS BRICS is an intergovernmental organisation comprising Brazil, Russia, India, China, South
Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates.
CAB Crown Agents Bank Limited, a regulated subsidiary of the Group
CAGR Compound Annual Growth Rate
CAIM Crown Agents Investment Management Limited a wholly owned subsidiary of the Company
until it was sold on 31 March 2023
CAPEX Expenditures made for goods or services that are recorded on a company's balance sheet
CBS Core Banking System, the Group's banking software
CCY Currency
CD Certificate of deposits
CEO Chief Executive Officer
CET1 Common Equity Tier 1
CFO Chief Financial Officer
CHIPS Clearing House Interbank Payments System
CRD IV Capital Requirements Directive IV
CRR the Capital Requirements Regulation (Regulation (EU) 575/2013)
CTO Chief Technology Officer
Currency corridor Specific combinations of sending currency and receiving currency pairs, or, in some cases,
country combinations
DEFRA Department for Environment, Food & Rural Affairs
EAD Exposure at default
EBT Employee benefit trust
ECL Expected Credit Loss
EIR Effective interest rate
EMFI Emerging Market Financial Institutions
ERMF Enterprise Risk Management Framework
ESG Environmental, Social and Governance
243
Overview Strategic Report Governance AppendixFinancial Statements
EU European Union
EVP Corporate title: Executive Vice President
FCA Financial Conduct Authority
FDI Foreign Direct Investment
FinTech Financial Technology
FIT Forward-in-time
FTEs Full Time Employees, including temporary contractors and consultants filling in for permanent
roles
FVTOCI Fair value through other comprehensive income
FVTPL Fair value through profit and loss
FX Foreign Exchange. When referring to the Group’s services, it refers to one of the Group’s
business lines, including the Group’s spot foreign exchange trading services
G10 Belgium, Canada, France, Italy, Japan, the Netherlands, the United Kingdom, and the United
States, Switzerland and the central banks of Germany and Sweden
GDP Gross Domestic Product
GHG Greenhouse Gas
GUI the Group’s EMpower FX graphical user interface
HQLA High Quality Liquid Assets
ICAAP Internal Capital Adequacy Assessment Process
IDO International Development Organisation
IFRS UK-adopted international accounting standards
ILAAP Internal Liquidity Adequacy Assessment Process
Indirect Nostro A bank account held by CAB with another bank who then relies on a domestic bank
denominated in a foreign currency
IPO Initial Public Offering
IRRBB Interest rate risk in the banking book
JCF JCF Nominees Limited, a wholly owned subsidiary of the Company until it was sold on 31
March 2023
KPI Key Performance Indicator
KYC Know Your Customer
LATAM Latin America region
LCR Liquidity Coverage Ratio
LGD Loss given Default
Local Bank Account Network Demand accounts in the Group’s name held with various local banks across the globe which
provide the Group with direct access to local currency where it has such deposits
LTIP Long term incentive plan
LSE London Stock Exchange
MENA Middle East and North Africa
MMB Major Market Banks
MN A Million
MTM Mark to market
NBFI Non-Bank Financial Institution
NCI Non-controlling interest
Netting The practice of using funds received from one customer to fulfil an order in that same
currency from another customer in order to capture both bid and ask spreads on the
transaction
NGO Non-Governmental Organisation
Non-LCU Non-local currency, cross border payments that take place with no FX transaction
Glossary continued
CAB Payments Holdings plc | Annual Report and Accounts 2023244
Nostro A bank account held by CAB in another country, denominated in a foreign currency
NRR Net revenue retention
NSFR Net Stable Funding Ratio
OCI Other comprehensive income
OECD countries The 38 member countries of the Organisation for Economic Co-operation and Development
OLAR Overall Liquidity Adequacy rule
Payments One of the Group’s three business lines
PD Probability of default
PLC Public Limited Company
PPE Property plant and equipment
PRA Prudential Regulation Authority
RAS Risk Appetite Statement
Registrar Equiniti Limited
Reorganisation Certain steps taken by the group prior to Admission as part of a reorganisation of its
corporate structure, which resulted in all shareholders of CTH (other than the Company)
exchanging shares in CTH for Ordinary Shares in the Company
Revenue When referring to the Group’s financial results means “total income, net of interest expense”
SBTi Science Based Targets initiative
SDG Sustainable Development Goals
SEC US Securities and Exchange Commission
SECR Streamlined Energy and Carbon Reporting
SPPI Solely Payment of Principal and Interest principle under IFRS 9
Supranational An international organisation with powers or influence that transcend national boundaries or
governments
SVP Corporate Title: Senior Vice President
SWIFT Society for Worldwide Interbank Financial Telecommunication
TAM Target Addressable Market
TCFD Task Force on Climate-related Financial Disclosures
TL Tolerance Limits
Take rate A combination of the dealing profit (i.e. the spread between any buy / sell of two FX
trades undertaken), the margin added to the transaction (i.e. the fee element agreed with
the customer for the transaction), and any additional fees charged; and the take rate is
calculated as FX and cross-currency payments income divided by FX and cross currency
payments volumes
Target Market The Group’s core market today, which excludes large transactions (over $50 million
transaction size) as well as China, India and the above-mentioned free format flows
(including sanctioned markets)
Target Market Assessment The approval process, which has determined that the Ordinary Shares are: (i) compatible
with an end target market of retail investors and investors who meet the criteria of
professional clients and eligible counterparties, each as defined in Chapter 3 of the FCA
Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all
permitted distribution channels
Total income When referring to the Group’s financial results means “total income, net of interest expense”
TN Trillion
TPP Third Party Currency Provider
TTC Through-the-cycle
UKLA United Kingdom Listing Authority
VP Corporate Title: Vice President
WTT Well to tank factors reported under scope 3 emissions representing those that are produced
indirectly by the Group
245
Overview Strategic Report Governance AppendixFinancial Statements
Currency abbreviations
BDT Bangladeshi Taka
DKK Danish Krone
EUR Euro
GBP British Pound Sterling
GHS Ghanaian cedi
KES Kenyan Shilling
MWK Malawian Kwacha
NGN Nigerian Naira
SDG Sudanese Pound
USD United States Dollar
UGX Ugandan Shilling
XAF
Central African Franc: Currency of six independent states in Central Africa: Cameroon, Central African Republic,
Chad, Republic of the Congo, Equatorial Guinea and Gabon
XOF West African Franc: Currency used by eight independent states in West Africa: Benin, Burkino Faso, Cote d’Ivoire,
Guinea-Bissau, Mali, Niger, Senegal and Togo
Glossary continued
CAB Payments Holdings plc | Annual Report and Accounts 2023246
Contact Details
Registered office
CAB Payment Holdings plc
Quadrant House
The Quadrant
Sutton
SM2 5AS
Tel: +44 (0)203 903 3000
Website: www.cabpayments.com
Auditor
Mazars
30 Old Bailey
London
EC4M 7AU
Tel: +44 (0)20 7063 4000
Website: www.mazars.co.uk
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
United Kingdom
Tel: +44 (0)371 384 2030
Text phone (for shareholders with
hearing difficulties): 0371 384 2255 (UK)
+44 (0)121 415 7028 (overseas)
Website: www.shareview.co.uk
Brokers (joint)
Barclays Bank PLC
1 Churchill Place
London
E14 5HP
Tel: (0)207 623 2323
Website: www.barclays.com
Canaccord Genuity Limited
88 Wood Street
London
EC2V 7QR
Tel: (0)207 523 8000
Website: www.canaccordgenuity.com
J. P. Morgan Cazenove
25 Bank Street
London
E14 5JP
Tel: (0)207 742 4000
Website: www.jpmorgan.com
Financial PR adviser
FTI Consulting Limited
200 Aldersgate
Aldersgate Street
London
EC1A 4HD
United Kingdom
Tel: +44 (0)20 327 1000
Website: www.fticonsulting.com
247
Overview Strategic Report Governance AppendixFinancial Statements
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CBP024049
CAB Payments Holdings plc Annual Report and Accounts 2023
CAB Payments Holdings plc
Quadrant House
The Quadrant
Sutton SM2 5AS
cabpayments.com
0123 456 7890