Company Registration No. 09170961 (England and Wales)
SQUARE GLOBAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
SQUARE GLOBAL LIMITED
COMPANY INFORMATION
Directors
H.J. Uzan
D.P. Even
Y. A. Sarfati
Company number
09170961
Registered office
843 Finchley Road
London
NW11 8NA
Auditor
Glazers
843 Finchley Road
London
NW11 8NA
Business address
First Floor, Empire House
175 Piccadilly
London
W1J 9EN
SQUARE GLOBAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
SQUARE GLOBAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 1 -
The directors present the strategic report for the year ended 30 September 2020.
Fair review of the business
The company is authorised and regulated in the United Kingdom by the Financial Conduct Authority.
The directors are satisfied with the results for the year.
Principal risks and uncertainties
Currency risk
Foreign exchange risk arises from cash flows relating to commercial transactions and recognised assets and liabilities. Transaction exposure occurs when the Company receives or pays cash in a currency different from GB pounds, the functional currency of the entity.
Credit risk
The Company is exposed to concentrations of credit risk. Trade debtors are concentrated in the financial institutions sector and amounted to £3,606,736 (2019: £4,209,106).
Liquidity risk
As part of the company's obligations under the Capital Requirements Directive, an Internal Capital Adequacy Assessment Process (ICAAP) document is prepared annually. The ICAAP is used by the Board to assess the Company's risks, determine the actions necessary to mitigate those risks and the current and future capital requirements. Following BIPRU 12 Liquidity Standards, the company maintains a Liquidity Policy to manage liquidity risk.
Brexit
Following the agreement of the UK-EU Trade and Cooperation Agreement in December 2020, the company is continuing to closely track Brexit developments. The company continues to take steps in order to meet any requirements and guidance that become applicable. At present it is not possible to fully quantify the impact that new requirements will have on the company.
The potential impacts of Brexit have been considered by the directors and resulted in the incorporation of our French subsidiary which has been registered with the local equivalent of the Financial Conduct Authority. The company commenced trading on 1st October 2020 and will minimise any adverse impact of Brexit.
Development and performance
In January 2017 we opened a branch office in France which traded profitably until 30 September 2020 when its trade was transferred to our French subsidiary.
In 2019, we incorporated subsidiaries in France and Hong Kong, both have been registered with the local regulators but have remained dormant.
Our client base has grown significantly and we continue exploring avenues for further growth.
Key performance indicators
Turnover has increased by 6% to £25,242,105 from £23,731,790 in 2019.
At the year end the company had net assets of £8,856,880 (2019: £4,661,159).
SQUARE GLOBAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 2 -
Section 172 Statement
Section 172 of the Companies Act 2006 requires directors to take into account the interest of stakeholders and other matters in their decision making.
The directors have regard to the interests of the company’s employees, including clients, stock brokers, service providers, suppliers and investors, the impact of company’s activities on the community, the environment and the company’s reputation for good trading business conduct when making decisions. In this context, acting in good faith and fairly, the directors consider what is most likely to promote the success of the company for all its members in log term. This report explain how the directors of the company engages with stakeholders.
The directors places great value on the expertise and professionalism found with the company, the directors collectively have strong relationships with the employees, facilitated by a structured HR process and regular team meetings where matters can be raised. The company aims to work responsibly with all stakeholders, including its clients, stock brokers, service providers suppliers and investors and aims to foster strong relationships with all stakeholders.
The company has retained most of the employee and stock brokers team through the Covid-19 pandemic in recognition of the loner term interest of stakeholders, and provided IT and related facilities for employees and stock brokers to work from home during the pandemic.
H.J. Uzan
Director
25 January 2021
SQUARE GLOBAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2020.
Principal activities
The company's principal activity continued to be that of an interdealer brokerage firm.
Branches
During the year there was a branch office in France. This branch ceased trading on 30 September 2020 when the trade was transferred to our French subsidiary.
Results and dividends
The results for the year are set out on page 8.
Ordinary interim dividends were paid amounting to £1,567,602. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
H.J. Uzan
A. Boublil
(Resigned 25 June 2020)
D.P. Even
Y. A. Sarfati
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Foreign currency risk
The company’s principal foreign currency exposures arise from trading with overseas companies and in currencies other than its functional currency. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Future developments
So far, we have been led by our clients and their needs, and this will remain the case. On one hand, we are continuing to expand our coverage in the markets where we are already active, on the other we are exploring several new markets where our clients would benefit from our value-added approach, and where there is a perceived need for our services.
Auditor
In accordance with the company's articles, a resolution proposing that Glazers be reappointed as auditor of the company will be put at a General Meeting.
SQUARE GLOBAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 4 -
Energy and carbon report
[Amend this as an introductory paragraph or use as an explanation concerning lower user status] As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
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
H.J. Uzan
Director
25 January 2021
SQUARE GLOBAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 5 -
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.
SQUARE GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SQUARE GLOBAL LIMITED
- 6 -
Opinion
We have audited the financial statements of Square Global Limited (the 'company') for the year ended 30 September 2020 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 30 September 2020 and of its profit 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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.
SQUARE GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SQUARE GLOBAL LIMITED
- 7 -
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: https://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.
Philippe Herszaft ACA (Senior Statutory Auditor)
For and on behalf of Glazers
25 January 2021
Chartered Accountants
Statutory Auditor
843 Finchley Road
London
NW11 8NA
SQUARE GLOBAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 8 -
Year
Year
ended
ended
30 September
30 September
2020
2019
Notes
£
£
Turnover
3
25,242,105
23,731,790
Cost of sales
(7,094,241)
(4,746,360)
Gross profit
18,147,864
18,985,430
Administrative expenses
(10,858,394)
(9,769,961)
Operating profit
4
7,289,470
9,215,469
Interest payable and similar expenses
7
(4,160)
(1,629)
Profit before taxation
7,285,310
9,213,840
Tax on profit
8
(1,521,987)
(1,844,371)
Profit for the financial year
5,763,323
7,369,469
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SQUARE GLOBAL LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2020
30 September 2020
- 9 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
10
233,467
199,759
Investments
11
146,010
146,010
379,477
345,769
Current assets
Debtors
14
6,665,429
6,257,545
Cash at bank and in hand
5,322,016
1,555,213
11,987,445
7,812,758
Creditors: amounts falling due within one year
15
(3,471,161)
(3,473,770)
Net current assets
8,516,284
4,338,988
Total assets less current liabilities
8,895,761
4,684,757
Provisions for liabilities
Deferred tax liability
16
38,881
23,598
(38,881)
(23,598)
Net assets
8,856,880
4,661,159
Capital and reserves
Called up share capital
18
180,002
180,002
Profit and loss reserves
19
8,676,878
4,481,157
Total equity
8,856,880
4,661,159
The financial statements were approved by the board of directors and authorised for issue on 25 January 2021 and are signed on its behalf by:
H.J. Uzan
Director
Company Registration No. 09170961
SQUARE GLOBAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2018
180,002
6,987,729
7,167,731
Period ended 30 September 2019:
Profit and total comprehensive income for the period
-
7,369,469
7,369,469
Issue of share capital
18
1
-
1
Dividends
9
-
(9,876,041)
(9,876,041)
Reduction of shares
18
(1)
(1)
Balance at 30 September 2019
180,002
4,481,157
4,661,159
Year ended 30 September 2020:
Profit and total comprehensive income for the year
-
5,763,323
5,763,323
Dividends
9
-
(1,567,602)
(1,567,602)
Balance at 30 September 2020
180,002
8,676,878
8,856,880
SQUARE GLOBAL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 11 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
7,380,777
9,319,815
Interest paid
(4,160)
(1,629)
Income taxes paid
(1,995,756)
(1,443,875)
Net cash inflow from operating activities
5,380,861
7,874,311
Investing activities
Purchase of tangible fixed assets
(84,313)
(117,104)
Proceeds on disposal of subsidiaries
(146,010)
Net cash used in investing activities
(84,313)
(263,114)
Financing activities
Proceeds from issue of shares
1
Redemption of shares
(1)
Dividends paid
(1,567,602)
(9,876,041)
Net cash used in financing activities
(1,567,602)
(9,876,041)
Net increase/(decrease) in cash and cash equivalents
3,728,946
(2,264,844)
Cash and cash equivalents at beginning of year
1,555,213
3,745,697
Effect of foreign exchange rates
37,857
74,360
Cash and cash equivalents at end of year
5,322,016
1,555,213
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 12 -
1
Accounting policies
Company information
Square Global Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
843 Finchley Road, London, NW11 8NA.
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 under the historical cost convention. The principal accounting policies adopted are set out below.
Group accounts are not prepared on the basis that the subsidiaries are immaterial both individually and collectively.
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.
1.3
Turnover
Turnover represents
commissions receivable on brokerage services.
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:
Land and buildings Leasehold
5 years
Fixtures, fittings & equipment
15% 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
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 13 -
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.6
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.
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.
1.7
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.
1.8
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.
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 14 -
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.
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.
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 15 -
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.
1.9
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.
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.
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1
Accounting policies
(Continued)
- 16 -
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
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
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.
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.
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 17 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2020
2019
£
£
Turnover analysed by class of business
Commissions
25,242,105
23,731,790
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
22,181,368
22,133,411
France
3,060,737
1,598,379
25,242,105
23,731,790
4
Operating profit
2020
2019
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(228,957)
(74,360)
Depreciation of owned tangible fixed assets
50,605
29,058
Operating lease charges
174,559
104,400
5
Auditor's remuneration
2020
2019
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
18,000
16,000
For other services
All other non-audit services
29,231
21,233
The non audit services are in respect of regulatory reporting requirements and tax compliance services.
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 18 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Directors
4
4
Brokers
28
26
Administrative
4
4
Total
36
34
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
5,029,079
4,455,043
Social security costs
1,106,959
661,911
Pension costs
114,549
89,884
6,250,587
5,206,838
7
Interest payable and similar expenses
2020
2019
£
£
Other finance costs:
Other interest
4,160
1,629
8
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
1,441,626
1,816,831
Adjustments in respect of prior periods
4,201
9,589
Total UK current tax
1,445,827
1,826,420
Foreign current tax on profits for the current period
60,877
Total current tax
1,506,704
1,826,420
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
8
Taxation
2020
2019
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
15,283
17,951
Total tax charge
1,521,987
1,844,371
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Profit before taxation
7,285,310
9,213,840
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
1,384,209
1,750,630
Tax effect of expenses that are not deductible in determining taxable profit
65,905
70,799
Adjustments in respect of prior years
4,201
9,589
Deferred tax movement
15,283
17,951
Capital allowances in excess of depreciation
(8,488)
(19,271)
Branch tax not recoverable
60,877
14,673
Taxation charge for the year
1,521,987
1,844,371
The tax charge includes £60,877 (2019: £14,673) in respect of the French branch profits.
9
Dividends
2020
2019
£
£
Interim paid
1,567,602
9,876,041
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 20 -
10
Tangible fixed assets
Land and buildings Leasehold
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 October 2019
51,517
249,934
301,451
Additions
84,313
84,313
At 30 September 2020
51,517
334,247
385,764
Depreciation and impairment
At 1 October 2019
36,125
65,567
101,692
Depreciation charged in the year
10,303
40,302
50,605
At 30 September 2020
46,428
105,869
152,297
Carrying amount
At 30 September 2020
5,089
228,378
233,467
At 30 September 2019
15,392
184,367
199,759
11
Fixed asset investments
2020
2019
Notes
£
£
Investments in subsidiaries
12
146,010
146,010
12
Subsidiaries
Details of the company's subsidiaries at 30 September 2020 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Square Global HK Limited
7/F The L Plaza, 376-375 Queens Road Central, Hong Kong
Dormant
Ordinary
100.00
-
Square Global Holdings (US) Inc.
1209 Ornage Street, Delaware 19801, USA
Investment holding company
Ordinary
100.00
-
Square Global Markets US LLC
708 Third Avenue, New York NY 10017, USA
Dormant
Ordinary
0
100.00
Square Global SAS
11 Avenue Declasse, 75008 Paris, France
Dormant
Ordinary
100.00
-
13
Financial instruments
2020
2019
£
£
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 21 -
14
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
3,606,736
4,209,107
Corporation tax recoverable
31,419
Amounts owed by group undertakings
1,407,892
1,143,185
Other debtors
1,401,405
656,135
Prepayments and accrued income
118,896
87,199
6,534,929
6,127,045
2020
2019
Amounts falling due after more than one year:
£
£
Other debtors
130,500
130,500
Total debtors
6,665,429
6,257,545
A rent deposit paid in respect of the London office is recoverable after more than one year.
15
Creditors: amounts falling due within one year
2020
2019
£
£
Trade creditors
54,533
104,845
Corporation tax
640,235
1,160,706
Other taxation and social security
80,355
106,046
Other creditors
211,578
253,019
Accruals and deferred income
2,484,460
1,849,154
3,471,161
3,473,770
16
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:
£
£
Accelerated capital allowances
38,881
23,598
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
16
Deferred taxation
(Continued)
- 22 -
2020
Movements in the year:
£
Liability at 1 October 2019
23,598
Charge to profit or loss
15,283
Liability at 30 September 2020
38,881
17
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
114,549
89,884
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.
At the period end £4,996 (2019: £4,959) was payable to the pension provider.
18
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
18,000,000 Ordinary shares of 1p each
180,000
180,000
2 Ordinary 'H' and 'P' shares of £1 each
2
2
180,002
180,002
Each ordinary £0.01 share carries one vote and has equal rights to dividends.
Each ordinary £1 share is entitled to a fixed dividend plus a share of desk profit. They carry no voting rights.
19
Profit and loss reserves
2020
2019
£
£
At the beginning of the year
4,481,157
6,987,729
Profit for the year
5,763,323
7,369,469
Dividends declared and paid in the year
(1,567,602)
(9,876,041)
At the end of the year
8,676,878
4,481,157
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 23 -
20
Operating lease commitments
Lessee
The commitment relates to the company's London office.
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
174,000
174,000
Between two and five years
130,500
304,500
304,500
478,500
21
Related party transactions
At the year end £1,249,203 (2019: £1,143,185) was owed by the subsidiary company Square Global Holdings Inc. This amount is interest free and repayable upon demand.
At the year end £158,689 (2019: £nil) was owed by the subsidiary company Square Global SAS. This amount is interest free and repayable upon demand,
22
Ultimate controlling party
In the opinion of the directors there is no ultimate controlling party in the period under review.
23
Cash generated from operations
2020
2019
£
£
Profit for the year after tax
5,763,323
7,369,469
Adjustments for:
Taxation charged
1,521,987
1,844,371
Finance costs
4,160
1,629
Depreciation and impairment of tangible fixed assets
50,605
29,058
Foreign exchange gains on cash equivalents
(37,857)
(74,360)
Movements in working capital:
Increase in debtors
(439,303)
(357,206)
Increase in creditors
517,862
506,854
Cash generated from operations
7,380,777
9,319,815
SQUARE GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2020
- 24 -
24
Analysis of changes in net funds
1 October 2019
Cash flows
Exchange rate movements
30 September 2020
£
£
£
£
Cash at bank and in hand
1,555,213
3,728,946
37,857
5,322,016
2020-09-30
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