Registered number:
11920779
XPATE LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
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XPATE LTD
COMPANY INFORMATION
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A Kaufhers
(resigned
24 February 2021
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A Zotova
(appointed
22 February 2021
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Chartered Accountants
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Statutory Auditor
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XPATE LTD
CONTENTS
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Independent auditors' report
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Statement of comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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XPATE LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2021
xpate ltd ("the Company") is a fintech start-up that enhances global payments using a design-centric approach to serve growing business needs.
The Company makes the payment process easier, faster and accessible to everyone by introducing the first true drag and drop payment experience in the world uniting all payment methods in one account.
The Company is an e-wallet system both for retail and business customers who aim to make the financial sphere of their lives comfortable and hassle-free. Covering end-to-end payment needs of businesses worldwide we are going to offer: SEPA and SWIFT multi currency payments Individual IBAN (International Bank Account Number) accounts Visa, Mastercard, Union Pay card processing Currency exchange at competitive rates OCT (Original Credit Transaction) Payouts, Mass Payouts, Batch Payouts, Alternative Payment methods (APMs) and Card-to Card Transfer.
During year 2020/2021 some important developments were made
:
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IBAN issuance in adherence with SEPA Credit Transfer rules & regulations and registering with EPC which will allow the opening of individual accounts for the customers. Additionally, registering with SEPAIO to meet UK reachability requirements
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In January 2021 the Company has obtained Mastercard Principal membership . As a principal member, the Company has started to work directly with Mastercard in order to offer its innovative solution to new clients, bolster its merchant acquiring portfolio, and take advantage of an extended range of products and services to strengthen its offering in the market.
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In April xpate Stacks was launched (https://xpate.com/stacks), a tool that unifies finances in one place and which is understandable for everyone. MVP of xpate Stacks offered personal bank accounts details in EUR to both private individuals and businesses.
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xpate Stacks launched RUB as the second currency in cooperation with Raiffeisen Bank. GBP as the third currency is planned to be launched jointly with ClearBank in Q4 2021.
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The Company has connected to the SWIFT network.
The Company is headquartered in London, UK and authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 (Reference number EMD/901021/JJ) for the issuance of electronic money and payment instruments. Our rapidly growing team is based across three offices in London, Riga and Singapore.
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XPATE LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
Principal risks and uncertainties
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Liquidity risk
The Company’s key targets are financial punctuality and avoidance of any delays with settlements to the merchants. The key factor for mitigating liquidity risk that xpate Ltd implemented is a permanent monitoring/accounting of xpate Ltd’s current assets and their sustainable management. Due to the fact that the business process includes relationships not only with merchants, but also with counterparties (service providers), xpate Ltd ensures a detailed study of each service provider. It is necessary to make sure that the service provider is reliable and xpate Ltd will observe the terms of cooperation. Detailed analysis of financial flows, transactional uploads and the reconciliation of financial statements are performed within the calculation, which guarantees relevance and accuracy of data when making settlements. In cooperation with third parties, we are trying to minimize the settlement period in order to reach a daily settlement and avoid any funds being held with third parties for prolonged periods. As an additional measure, xpate Ltd is holding excessive amounts of own funds as a constant reserve in case of liquidity risk occurrence.
Market risk
The Company employees are from various fields to explore trends and upcoming changes in the market which allows us to prepare for such changes beforehand, thus ensuring continuity in the business processes and the provision of the most relevant solutions. New targeted niche product development allows us to regularly add new client verticals into our portfolio by getting market share from new markets.
Business risk
Business risk includes the risk of system failure, the impact of a market downturn and loss of key personnel to the business of xpate Ltd. xpate Ltd adheres to the practice of using previously agreed service providers, thereby reducing the risk of financial and reputational losses. More extensive resources are allocated for realization of particularly important tasks, dividing the tasks amongst several employees and implementing them with the “Need-to-know”, “Least privilege” and “Separation of duties” principles. Hence, the “four-eye” principle is implemented, significantly reducing the likelihood of inaccuracy, as well as supporting continuity by ensuring there will be no pending tasks in case of employee resignations. xpate Ltd has been training its staff on an ongoing basis, providing the opportunity to get the latest information which significantly increases their competence. Another important factor is setting certain tasks for every employee, setting criteria for assessing their performance and a custom motivational program based not only on financial reward. All of these factors can lead to considerable operational performance as well as mitigating business risk.
Operational risk
The Company has been training its staff on an ongoing basis, encouraging development not only in a narrow profile of a business unit, but also in other directions within the company. Hence, employees become more competent and are able to make strategically correct decisions. Important decisions are taken by the committee where several employees from different business lines may present their views on an issue thereby reducing the risk of making wrong decisions that may lead to financial and reputational losses.
Regulatory risk
The employees of xpate Ltd are in permanent communication with different authorities in order to obtain the maximum information within the minimum period of time. xpate Ltd ensures that the merchants adopt governance practices that align with industry “good practice”, understand both regulator expectations and business processes and challenges by performing analysis of the requirements, identifies process improvement opportunities to ensure the effective and consistent management of compliance and regulatory obligations and has the ability to manage regulatory change.
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XPATE LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
Capital management risk
The Company is regulated by Financial Conduct Authority (FCA) and therefore has to comply with the applicable capital adequacy requirements, taking into consideration xpate Ltd's business portfolio and percentage separation between business verticals. The risk has been mitigated by management reviewing the financial position monthly and corrective actions are taken accordingly.
Financial key performance indicators
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The Company achieved a turnover of €2,251,430 (2020: €54,500) and a profit of €87,657 (2020: €16,176).
Other key performance indicators
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The Company is putting a lot of effort to attract merchants and to keep their satisfaction level very high.
Directors' statement of compliance with duty to promote the success of the Company
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The Directors of the Company is acutely aware of the requirement for them to act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In considering this duty the Director considers the following stakeholders:
Shareholders
The Director has regular contact with the shareholder in order to maximise the Company's long-term growth prospects and the opportunity for a dividend stream.
Customers
The Company's customer base is a related party and the clients best interests are served in accordance with their risk appetite.
Suppliers
The Company has various key supplier relationships which work more as a partnership to ensure the smooth running of the business.
Community and the environment
The Company actively seeks to reduce its carbon footprint by virtue of its entirely online and paperless business. The Director also encourages regular attendance at industry related networking events in order to build and maintain strong relationships within the community.
This report was approved by the board
and signed on its behalf.
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M Safro
Director
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XPATE LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2021
The directors present their report and the financial statements for the year ended 30 April 2021.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic report, the Directors' report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
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select suitable accounting policies for the Company's financial statements and then apply them consistently;
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make judgments and accounting estimates that are reasonable and prudent;
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The principal activity of the Company is that of financial intermediation and management consultancy activities.
The profit for the year, after taxation, amounted to €
87,657
(2020 -
€
16,176
)
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No dividend has been declared in the year.
The directors who served during the year were:
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A Kaufhers
(resigned
24 February 2021
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A Zotova
(appointed
22 February 2021
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XPATE LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
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Application for principal membership with Visa to deliver more convenient, secure, and faster payment transactions for xpate’s clients across the European Economic Area and beyond. Principal membership will show that xpate Ltd is committed to having robust controls, policies and procedures in place as defined by Visa.
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xpate ltd is in a process of participation in CENTROlink payment system
operated by the Bank of Lithuania, providing the gateway to the Single Euro Payments Area (SEPA). Via its infrastructure, the Bank of Lithuania provides technical access to SEPA for all types of payment service providers – banks, credit unions, e-money or payment institutions – licensed in the European Economic Area (EEA). CENTROlink is connected to STEP2 and RT1 European payment infrastructures. It is foreseen to connect to the Eurosystem’s TIPS to increase pan-European reachability of instant payments. The payment service provider who has a single access point to CENTROlink benefits from all system connections without any additional investments.
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Indirect access to GBP clearing in order to serve UK customers and partners and to receive settlements from Visa and Mastercard.
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Trademark registration under UK brand under Madrid protocol (EU covered) to ensure brand protection.
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Joining associations like Emerging Payments Association, European Payment Institutions Federation, Fintech Circle to expand the network and gain brand recognition with key decision makers across the industry.
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Account opening in Tier-1 banks in order to expand bank network and ensure maximum security for the clients.
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Partnerships with acquirers under a Payment Facilitator model in order to provide highly qualified processing services. The purpose of developing an extensive acquiring partnership list is to have the best acceptance rates in each country of processing as well as to minimise risks.
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London-based team expansion up to 10 people by the end of Q4 to have strong presence across the UK market.
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Virtual cards issuing as a part of the core services portfolio expansion allowing to meet and exceed customer demand.
Disclosure of information to auditors
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Each of the persons who are
directors at the time when this Directors' report is approved has confirmed that:
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so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
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the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
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XPATE LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2021
Post balance sheet events
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There have been no significant events affecting the Company since the year end.
Under section 487(2) of the Companies Act 2006, Berg Kaprow Lewis LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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M Safro
Director
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XPATE LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XPATE LTD
We have audited the financial statements of xpate Ltd (the 'Company') for the year ended 30 April 2021, which comprise the Statement of financial position, the Statement of cash flows, the Statement of changes in equity
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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give a true and fair view of the state of the Company's affairs as at 30 April 2021 and of its profit for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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XPATE LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XPATE LTD (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
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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
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the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors
' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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As explained more fully in the Directors' responsibilities statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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XPATE LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XPATE LTD (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
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Enquiring of management around actual and potential litigation and claims;
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Reviewing financial statement disclosures and testing to supporting documentation
with applicable laws and regulations;
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Performing audit work over the risks of management override of controls, including
and other adjustments for appropriateness, evaluating business rationale of significant
the normal course of business and reviewing accounting estimates for bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
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Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
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Conclude on the appropriateness of the directors
' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
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Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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XPATE LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF XPATE LTD (CONTINUED)
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Michael Wedge FCA
(Senior Statutory Auditor)
for and on behalf of
Berg Kaprow Lewis LLP
Chartered Accountants
Statutory Auditor
London
3 November 2021
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XPATE LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2021
Profit for the financial year
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Other comprehensive income
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Total comprehensive income for the year
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The notes on pages 15 to 25 form part of these financial statements.
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XPATE LTD
REGISTERED NUMBER:
11920779
STATEMENT OF FINANCIAL POSITION
AS AT
30 APRIL 2021
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
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M Safro
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The notes on pages 15 to 25 form part of these financial statements.
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XPATE LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
30 APRIL 2021
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Comprehensive income for the period
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Total comprehensive income for the period
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Shares issued during the period
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Comprehensive income for the year
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Total comprehensive income for the year
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Total transactions with owners
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The notes on pages 15 to 25 form part of these financial statements.
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XPATE LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2021
Cash flows from operating activities
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Profit for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Decrease/(increase) in debtors
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Corporation tax (paid)/received
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Net cash used in financing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 15 to 25 form part of these financial statements.
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
The principal activity of xpate Ltd ("the Company") is that of financial intermediation and management consultancy activities.
The Company is limited by shares and is incorporated in England and Wales.
The registered office is Level 18, 40 Bank Street, Canary Wharf, London, E14 5NR.
2.
Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
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The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The financial statements have been prepared on the going concern basis, which assumes that the Company will continue to be able to meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements.
The Company made a profit of €87,657 during the year, reporting net current liabilities of €219,268 and an overall net asset position of €495,305. The Company, as for any business, relies upon the generation of profits and cash to create working capital to meet its liabilities as they fall due. Based on the results to date and future projections, the Directors are confident that the Company will continue to meet its liabilities as they fall due, looking forward at least twelve months from the date of signing these financial statements. The Directors have a reasonable expectation that the Company has adequate resources to meet future working capital requirements and to continue in operational existence for the foreseeable future and they consider it appropriate to prepare the financial statements on a going concern basis. As a result, the Directors have prepared the financial statements on a going concern basis.
Although the Covid-19 pandemic has resulted in an uncertain environment, the Directors have a reasonable expectation, based on their assessment of the Company's financial position and resources, that it will continue in operational existence for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements, and will be able to meet its debts as they fall due. The Directors therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements.
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
2.
Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is Euros.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Profit and loss account within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Revenue consists of intercompany recharges that are recognised when the costs is incurred.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
2.
Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of financial position date, except that:
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The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
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Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
2.
Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
(i) Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the Statement of Comprehensive Income.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
2.
Accounting policies (continued)
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Financial instruments (continued)
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(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors and accruals, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iii) Offsetting
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgments (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
There are no judgements or estimates which materially affect the amounts in the accounts.
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All turnover arose within the United Kingdom.
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
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The operating profit is stated after charging:
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Other operating lease rentals
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Defined contribution schemes
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Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements
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Cost of defined contribution scheme
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The average monthly number of employees, including directors, during the year was 33 (2020 - 2).
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to no directors
(2020 -
NIL
)
.
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Foreign tax on income for the year
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Factors affecting tax charge for the year
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The tax assessed for the year/period is the same as
(2020 - the same as)
the standard rate of corporation tax in the UK of
19
%
(2020 -
19
%)
as set out below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year/period in excess of depreciation
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Adjustments to tax charge in respect of prior periods
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Other differences leading to an increase (decrease) in the tax charge
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Total tax charge for the year
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Factors that may affect future tax charges
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The UK Government announced its intention to increase the rate of UK corporation tax from 19% to 25% with effect from 1 April 2023. The increase in the rate of UK corporation tax was enacted in the Finance Act 2021 which received Royal Assent on 10 June 2021.
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
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Charge for the year on owned assets
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
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Charge for the year on owned assets
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Prepayments and accrued income
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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Allotted, called up and fully paid
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310,000
(2020 - 310,000
)
Ordinary
shares of £
1.10
each
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Profit and loss account
Includes all current period retained profits and losses.
Prior year figures have been restated for presentational purposes. Administration expenses has increased by €526 and a subsequent decrease to distribution cost for €526. The prior year profit and net asset position of the Company has not been impacted.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to €9,609 (2020 - €Nil).
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XPATE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2021
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Commitments under operating leases
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At 30 April 2021 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Transactions with directors
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Included in other debtors are amounts due from a director of €NIL (2020: €367,143). Interest is charged on this loan at the official HMRC rate and the loan has been repaid in full post year end.
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Related party transactions
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Included within sales is €2,251,430 (2020: €54,500) made to a company in which a director has an interest. Included within trade debtors is €Nil (2020: €44,500) in relation to the same company.
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The controlling party is M Safro.
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