The directors present the strategic report for the period ended 31 December 2020.
Aforti p lc (the "Company") was incorporated on 18 August 2020, and during the period ending 31 December 202 0 completed the acquisition of 100% of the share capital of Aforti Exchange SA, a company incorporated in Poland .
During the period t he Company issued 36,363,500 new ordinary shares at the price of £0.75 to Aforti Holding S A , as consideration for Aforti Exchange SA .
As the main trading subsidiary, Aforti Exchange SA provides foreign exchange services to business entities via a full-featured online platform. Our c lients are offered wholesale exchange rates and the possibility to negotiate fixed discounts. The Aforti Exchange p latform is the only platform for e ntrepreneurs of th is kind.
Our competitive advantages are :
We guarantee the security of transactions
We offer the most attractive foreign exchange rates
We provide free registration and operation of Aforti Exchange Platform
We do not charge any fees or commissions on foreign exchange transactions
We grant fixed discounts
We offer booking exchange rate services on 24h basis
We guarantee individual assistance of Regional Sales Directors
We employ exclusively experiences foreign exchange Dealers
We provi d e recommendations and individual foreign exchange forecasts
W e assist and ensure phone and e-mail consultations in the course of transaction execution .
Following the successful private placement rounds, Aforti p lc has acquired an EMI Licence. The proceeds also enabled the Company to implement its strategy, pursuing a listing on the London Stock Exchange.
The EMI will enable cross boarder payments, multicurrency wallets, and other PSD2-compliant capabilities. Using the EMI, the Company also intends to further develop their suite of B2B offerings, including payments and cards.
Foreign currencies : The Group deals in a variety of foreign currencies: Continual review of foreign currency movements to ensure company undertakes transactions in the most financially beneficial currency and ensuring the Group is not overly exposed in one currency.
Liquidity risk : The Group would have access to further funding from other companies in the larger Aforti Holdings SA group, if required .
Borrowing rate risk : The Group's borrowings tend to be at fixed rates over the duration of the loan, and the Group therefore tries to minimize its exposure to uncertainty from borrowing rate fluctuations .
Credit risk : The Group has a good credit standing and works hard to ensure that this is maintained.
Brexit : Changing legislative environment between post Brexit UK and EU may place additional regularity burdens on the company which make it more difficult to operate with EU based companies to investments with Europe: Reviewing strategies to monitor and address the Brexit negotiations and outcomes.
Covid-19 : The Pandemic may impact the Group ’s ability to execute an acquisition. However, the Directors will review, on an ongoing basis, the options for the Group , including raising additional funds.
Market risk : FX transactions do not generate market risk – all clients’ transactions are hedged 1 on 1 with the market.
Clients send money for FX transactions to the AFORTI segregated account. The client receives back the currency or instructs AFORTI to send it to their business partner.
The following are the key performance indicators of the business:
Sales Volume - The forecast for 2021 shows turnover over £380m and the actual sales are currently in line. The trading value on the foreign exchange platform in July 2021 was approximately PLN 404.16 million, an increase of 89.49% year-on-year. On a cumulative basis, after seven months of 2021, the total trading value on the foreign exchange platform reached approximately PLN 2,463.39 million, representing a year-on-year increase of 205.55%.
Margin - The average margin is 0.05% however the actual one is slightly higher.
OPIN (Operating Income)
New activations (Newly Acquired Clients with at least one transaction above EUR 10k) - Every month Aforti Exchange SA has around 40 new clients.
The Group ’s strategic goal is to become a pan-CEE provider of comprehensive financial solutions for SMEs , based on Electronic Money Institution license (”EMI”) obtained on Cyprus.
Aforti BIZ will become a common brand for this multi-products financial platform for SMEs on CEE market. The Group will offer three products - F actoring, FX and Debt Management.
The Group currently has four employees other than directors and recognizes that the long-term success of the business relies on effective engagement with employees.
The Group manages relationships with suppliers as closely as possible to ensure the services provided meet the Group ’s high standards.
Feedback from investors is obtained through direct interaction between the Group ’s board. The voting record at the Group ’s general meetings is monitored for any investor feedback/issues.
The Board recognizes the importance of effective communication with its shareholders. A range of corporate information is available on the Companies House and Aforti Holding S.A. (https://aforti.pl/en/) websites. This statement and the information within the Group' s Annual Report provide details to stakeholders on how the Group is governed. Group performance is communicated to its shareholders in its results announcements, with further trading updates made where required and appropriate .
The Group's research and development activities relate to the development by the main trading subsidiary, Aforti Exchange SA, of its full-featured online platform which provides foreign exchange services to business .
On behalf of the board
The directors present their annual report and audited financial statements for the period from incorporation on 18 August 2020 to 31 December 2020.
The results for the period are set out on page 10.
No ordinary dividends were paid in the period. The directors do not recommend payment of a further dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Shipleys LLP were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put forward at a General Meeting.
As the group 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.
We have audited the financial statements of Aforti plc (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2020 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated and Company Statement of Financial Position, Consolidated and Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and notes to the financial statements, including 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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
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 group's and parent 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.
Other information
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 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.
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 period 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.
In the light of the knowledge and understanding of the group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements 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.
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 parent company ' s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
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 .
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined the most significant are those that relate to the reporting framework ((FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice), the Companies Act 2006)) and the relevant tax compliance regulations in which the Company operates.
We understood how the Company is complying with those frameworks by making enquiries on the management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of board minutes and any correspondence received from regulatory bodies.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by enquiring with management during the planning, fieldwork and completion phase of our audit. We considered the controls that the Company has established to address risks identified, or that otherwise prevent, deter and detect fraud and how management monitors those controls. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk including revenue recognition. These procedures included testing manual journals and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved journal entry testing, with a focus on manual journals and journals indicating large or unusual transactions based on our understanding of the business; enquiries of the management and focus testing.
An auditor conducting an audit in accordance with ISAs (UK) is responsible for obtaining reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error and in our audit procedures described above. Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our 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.
All the activities of the Group are from continuing operations.
The Group has no other recognised items of income and expenses other than the results for the year as set out above.
As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s loss for the year was £8,100.
Aforti plc (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is 10 Orange Street, Haymarket, London, WC2H 7DQ.
The principle place of business of the Group is the trading address of the subsidiary company Aforti Exchange SA, 27th Floor, 8 Chalubinskiego Street, 00-613 Warsaw, Poland.
The Group consists of Aforti plc and all of its subsidiaries.
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 and in accordance with applicable accounting standards. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Aforti plc together with all entities controlled by the parent company (its subsidiaries) .
All financial statements are made up to 31 December 2020 . Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
After reviewing the Group ’s budget and forecasts for 2021/2022 and its medium term plans, the directors have a reasonable expectation that, though there will continue to be a trading loss in the shorter term as the business continues to grow, it will have sufficient funds and cash flows to be able to manage its liabilities as they fall due for a period of not less than 12 months from the date of approval of the financial statements.
There are also opportunities for additional funding from within the larger Aforti Holdings SA group for working capital, if required.
The trading value on the foreign exchange platform in July 2021 was approximately PLN 404.16 million, an increase of 89.49% year-on-year.
On a cumulative basis, after seven months of 2021, the total trading value on the foreign exchange platform reached approximately PLN 2,463.39 million, representing a year-on-year increase of 205.55%.
At the date of approving these financial statements the directors are not aware of any adverse impact on the Group's trading performance arising from the COVID-19 pandemic .
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
T he annual financial statements cover the period from incorporation on 18 August 2020 up to 31 December 2020, which is in line with the period end of the other companies in the group. As this is the company's first set of financial statements there are no comparative figures presented.
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. Aforti Exchange SA provides foreign exchange services to business entities via a full-featured online platform.
Revenues from the sale of currencies are converted at the rate of exchange at the date of sale.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated .
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 recognised in the profit and loss account.
Equity in vest ments are measured at fair value through profit or loss , except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably , which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I n the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
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 group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the g roup’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent c ompany financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities .
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
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.
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 m ethod 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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. Amounts 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.
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 subsequently 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
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.
In the application of the group’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 significant 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.
Investments and intangible asset impairment
The directors consider the carrying value of investments and intangible assets to be recoverable based on the trading performance and position of the respective underlying entities.
Intercompany loans
The directors make an assessment over the recoverability of amounts owed by group undertakings based on their knowledge of the trading performance of those entities and make provision for any amount which is considered irrecoverable.
The loans are repayable on demand and are unsecured and interest free.
The average monthly number of persons (including directors and key management personnel) employed by the group and company during the period was:
Their aggregate remuneration comprised:
Investment income includes the following:
The actual (credit)/charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 December 2020 are as follows:
The registered office and trading address for Aforti Exchange SA is 27th Floor, 8 Chalubinskiego Street, 00-613 Warsaw, Poland.
Further information on Aforti Exchange SA is given in note 26 "Acquisition of a business".
Other debtors due after more than one year relates to the long term discount on bills of exchange.
The bills of exchange and other borrowings are repayable by instalments and are unsecured.
The interest rate on bills of exchange depends on the length of the loan as follows: 12 months 7%, 24 months 8.2%,and 35 months 9%. For other borrowings the interest rate is 8%.
There are no other agreed terms and conditions .
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset set out above is expected to reverse through the utilisation of tax losses against future expected profits .
The shares are all ordinary shares and rank equally for voting purposes: on a show of hands each member shall have one vote, and on a poll each member shall have one vote per share held. Each share ranks equally for any dividend declared, and equally for any distribution made on a winding up. The shares are not redeemable.
This reserve represents the amount above the nominal value received for issued share capital, less transaction costs.
This reserve represents cumulative profits and losses.
On 11 December 2020 the group acquired 100 percent of the issued capital of Aforti Exchange SA.
As at 31 December 2020 the Group had no financial or operating leases in place, capital commitments or contracts for capital expenditure.
The remuneration of key management personnel is as follows.
No other transactions were undertaken with related parties as such that are required to be disclosed under FRS102.
The company's ultimate controlling party is Aforti Holdings SA , a company incorporated in Poland, whose registered office address is 27th Floor, 8 Chalubinskiego Street, 00-613 Warsaw, Poland.