Company Registration No. 06506067 (England and Wales)
IIFL WEALTH (UK) LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
IIFL WEALTH (UK) LTD
COMPANY INFORMATION
Directors
Ms S Jain
(Appointed 16 August 2019)
Mr A Garg
Company number
06506067
Registered office
68 St Margarets Road
Edgware
Middlesex
HA8 9UU
Auditor
Ashley King Ltd
68 St. Margarets Road
Edgware
Middlesex
HA8 9UU
Business address
41 Lothbury
London
EC2R 7HG
IIFL WEALTH (UK) LTD
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 5
Profit and loss account
6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 20
IIFL WEALTH (UK) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 1 -
The directors present the strategic report for the year ended 31 March 2020.
Review of the business
The principal activity of the company is to provide investment advisory and support services and also acts as a global distributor to investment funds.
The Company is r
egulated by the Financial Conduct Authority (FCA) in U.K.
Results and key performance indicators
The Company has performed in accordance with its strategic objectives for the year given the challenging operating environment. The company had profits before taxation and the results for the year are shown on the profit and loss account set out on page 6.
The profit and loss account of the Company also shows the key performance indicators, which are considered to be turnover, gross profit and operating profit.
Changes in the shareholder funds are set out on the Statement of Changes in Equity on page 9 of these statements.
The Company's position at the balance sheet date is shown on page 8.
Business environment
The Company’s focus has been on Professional Clients and Eligible Counterparties. This market is highly comparative and there is some downward pressure on margins.
Strategy
The Company will continue to grow within the market and are currently looking at new opportunities. The Company has adequate capital and liquidity to fund the growth of the Company and is in a position to take advantage of suitable opportunities as they arise.
Principal risks and uncertainties
The process of risk management is addressed through a framework of policies, procedures and internal controls. Compliance with regulations, legal and ethical standards is a priority for the Company and is managed throughout the operational activities of the business.
Future developments
The Company plans to consolidate its market presence and may consider increasing capacity by recruiting suitable additional staff members.
Ms S Jain
Director
7 May 2020
IIFL WEALTH (UK) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2020.
Principal activities
The principal activity of the company continued to be that of providing investment services and other monetary intermediation.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Ms S Jain
(Appointed 16 August 2019)
Mr A Garg
Mr S Vakil
(Resigned 9 October 2019)
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
The auditors, Ashley King Ltd, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Ms S Jain
Director
7 May 2020
IIFL WEALTH (UK) LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2020
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
IIFL WEALTH (UK) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF IIFL WEALTH (UK) LTD
- 4 -
Opinion
We have audited the financial statements of IIFL Wealth (UK) Ltd (the 'company') for the year ended 31 March 2020 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2020 and of its loss for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and the provisions available for small entities, in the circumstances set out in note 20 to the financial statements
, 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
IIFL WEALTH (UK) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IIFL WEALTH (UK) LTD
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Rajendrakumar Patel (Senior Statutory Auditor)
for and on behalf of Ashley King Ltd
11 May 2020
Chartered Accountants
Statutory Auditor
68 St. Margarets Road
Edgware
Middlesex
HA8 9UU
IIFL WEALTH (UK) LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2020
- 6 -
2020
2019
Notes
£
£
Turnover
3
1,170,464
1,262,710
Cost of sales
(200,364)
(46,121)
Gross profit
970,100
1,216,589
Administrative expenses
(981,300)
(1,338,945)
Operating loss
4
(11,200)
(122,356)
Interest receivable and similar income
7
162
3
Loss before taxation
(11,038)
(122,353)
Tax on loss
8
5,739
13,856
Loss for the financial year
(5,299)
(108,497)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
IIFL WEALTH (UK) LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2020
- 7 -
2020
2019
£
£
Loss for the year
(5,299)
(108,497)
Other comprehensive income
-
-
Total comprehensive income for the year
(5,299)
(108,497)
IIFL WEALTH (UK) LTD
BALANCE SHEET
AS AT 31 MARCH 2020
31 March 2020
- 8 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
9
1,015
33,760
Current assets
Debtors
10
187,312
117,393
Cash at bank and in hand
37,891
90,612
225,203
208,005
Creditors: amounts falling due within one year
11
(81,199)
(85,708)
Net current assets
144,004
122,297
Total assets less current liabilities
145,019
156,057
Provisions for liabilities
12
-
(5,739)
Net assets
145,019
150,318
Capital and reserves
Called up share capital
15
150,000
150,000
Profit and loss reserves
16
(4,981)
318
Total equity
145,019
150,318
The financial statements were approved by the board of directors and authorised for issue on 7 May 2020 and are signed on its behalf by:
Ms S Jain
Director
Company Registration No. 06506067
IIFL WEALTH (UK) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2018
150,000
108,815
258,815
Year ended 31 March 2019:
Loss and total comprehensive income for the year
-
(108,497)
(108,497)
Balance at 31 March 2019
150,000
318
150,318
Year ended 31 March 2020:
Loss and total comprehensive income for the year
-
(5,299)
(5,299)
Balance at 31 March 2020
150,000
(4,981)
145,019
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
- 10 -
1
Accounting policies
Company information
IIFL Wealth (UK) Ltd is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
68 St Margarets Road, Edgware, Middlesex, HA8 9UU.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares
;
-
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash
f
low and related notes and disclosures
;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of IIFL Securities Limited, company No L99999MH1996PLC132983. These consolidated financial statements are available from its registered office, IIFL House, Sun Infotech Park, Road No.16V, Plot No. B-23, Thane Industrial Area, Wagle Estate, Thane -400604, Mumbai, India
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 11 -
1.3
Turnover
Turnover represents fees and commissions receivable net of any VAT.
Fee income represents revenue earned under a wide variety of contracts to provide marketing and business support services. Revenue is recognised as earned when, and to the extent that, the firm obtains the right to consideration in exchange for its performance under these contracts. It is measured at the fair value of the right to consideration, which represents amounts chargeable to clients, including expenses and disbursements but excluding value added tax.
Revenue is generally recognised as contract activity progresses so that for incomplete contracts it reflects the partial performance of the contractual obligations. For such contracts the amount of revenue reflects the accrual of the right to consideration by reference to the value of work performed. Revenue not billed to clients is included in debtors and payments on account in excess of the relevant amount of revenue are included in creditors.
Fee income that is contingent on events outside the control of the firm is recognised when the contingent event occurs.
Amounts recoverable under ongoing work in progress, is included in debtors, and are stated at the net sales value after provision for contingencies and anticipated future losses.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 12 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 13 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 14 -
1.9
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
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.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2020
2019
£
£
Turnover analysed by class of business
Fees receivable
1,005,000
1,215,000
Marketing and Distribution income
165,464
47,710
1,170,464
1,262,710
2020
2019
£
£
Other significant revenue
Interest income
162
3
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
1,170,464
1,262,710
Turnover relates to services rendered in the United Kingdom.
4
Operating loss
2020
2019
Operating loss for the year is stated after charging:
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
7,255
-
Fees payable to the company's auditor for the audit of the company's financial statements
7,500
7,500
Depreciation of owned tangible fixed assets
6,415
10,661
Loss on disposal of tangible fixed assets
26,329
-
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Consultants and support staff
7
8
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
617,381
946,850
Social security costs
77,724
123,150
Pension costs
9,260
8,273
704,365
1,078,273
6
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
222,017
233,200
Remuneration disclosed above include the following amounts paid to the highest paid director:
2020
2019
£
£
Remuneration for qualifying services
117,126
200,017
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Interest on bank deposits
-
3
Other interest income
162
-
Total income
162
3
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 17 -
8
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
-
(14,011)
Deferred tax
Origination and reversal of timing differences
(5,739)
155
Total tax credit
(5,739)
(13,856)
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Loss before taxation
(11,038)
(122,353)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
(2,097)
(23,247)
Tax effect of expenses that are not deductible in determining taxable profit
2,209
2,862
Unutilised tax losses carried forward
(6,333)
7,204
Deferred tax adjustments in respect of prior years
482
(675)
Taxation credit for the year
(5,739)
(13,856)
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 18 -
9
Tangible fixed assets
Fixtures, fittings & equipment
£
Cost
At 1 April 2019
45,700
Disposals
(43,237)
At 31 March 2020
2,463
Depreciation and impairment
At 1 April 2019
11,940
Depreciation charged in the year
6,415
Eliminated in respect of disposals
(16,907)
At 31 March 2020
1,448
Carrying amount
At 31 March 2020
1,015
At 31 March 2019
33,760
10
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
153,981
47,710
Corporation tax recoverable
14,011
14,011
Other debtors
16,165
35,876
Prepayments and accrued income
3,155
19,796
187,312
117,393
11
Creditors: amounts falling due within one year
2020
2019
£
£
Trade creditors
70,067
71,012
Other creditors
2,228
-
Accruals and deferred income
8,904
14,696
81,199
85,708
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 19 -
12
Provisions for liabilities
2020
2019
Notes
£
£
Deferred tax liabilities
13
-
5,739
13
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2020
2019
Balances:
£
£
ACAs
-
5,739
2020
Movements in the year:
£
Liability at 1 April 2019
5,739
Credit to profit or loss
(5,739)
Liability at 31 March 2020
-
14
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
9,260
8,273
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
15
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
150,000 Ordinary Shares of £1 each
150,000
150,000
IIFL WEALTH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 20 -
16
Profit and loss reserves
2020
2019
£
£
At the beginning of the year
318
108,815
Loss for the year
(5,299)
(108,497)
At the end of the year
(4,981)
318
17
Operating lease commitments
Operating lease payments represent rents payable by the company. At the period end the company did not have long term lease commitments. In the previous period the company had a lease for an average term of 5 years with rentals fixed for an average of 3 years with an option to extend for a further 2 years period.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2020
2019
£
£
Within one year
26,226
68,597
Between two and five years
-
68,597
26,226
137,194
18
Related party transactions
During the year the company rendered marketing support and business support services to group undertakings. The total fees for the year was £
1,170,464
(2019 - £1,262,710).
At the period end there was a balance of £153,981 (2019 - £ 47,710) due to the company from group undertakings.
19
Ultimate controlling party
The company is under control of
IIFL Securities Limited
, registered in Mumbai, Maharashtra, India
20
Non-audit services provided by auditor
In common with many businesses of our size and nature we use our auditor to prepare and submit returns to the tax authorities and assist with the preparation of the financial statements.
2020-03-31
2019-04-01
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