|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Information
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contents
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Directors' report
for the year ended 31 December 2021
The directors present their report together with the Group strategic report and the consolidated financial statements of Admiral Markets UK Limited ('the company') and its subsidiary undertaking ('the subsidiary'), Admirals SA (PTY) Limited, (together 'the group') for the year ended
exchange ('FX') and Contracts for Difference ('CFDs') trading and related services to retail clients in Europe. The profit or loss of the company is dependent on the trading volumes of its clients. The company was incorporated in the United Kingdom and is authorised as a full scope firm by the Financial Conduct Authority ('the FCA'). During the year ended 31 December 2021, the subsidiary was not fully operational, just incurring expenses.
The loss for the year, after taxation, amounted to £
22,261
(2020 -
profit
£
730,257
)
.
No interim dividends were paid. The directors do not recommend payment of a final dividend.
The directors who served during the year were:
During 2021, the company reduced the number of branches it has outside the UK to; Germany, Lithuania, Czechia and Spain.
The directors are responsible for preparing the Directors' report, the Group strategic report and the
consolidated
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 the group and of the profit or loss of the group for that period.
Page 1
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Directors' report (continued)
for the year ended 31 December 2021
Directors' responsibilities statement (continued)
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the group's financial statements 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 group 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 the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, and Part 2 of The Companies (Miscellaneous Reporting) Regulations 2018 to be contained in the Directors' report. It has done so in respect of risk exposure, future developments, and engagement with suppliers, customers and others.
Details of the company's unaudited Pillar 3 disclosures, required under section 11 of the Financial Conduct Authority's Prudential Sourcebook for Investment Firms ('IFPRU') are included as an appendix to the financial statements.
This report was approved by the board on
Page 2
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Group strategic report
for the year ended 31 December 2021
The directors present their Group strategic report for the year ended 31 December 2021.
The company is a wholly owned subsidiary of Admirals Group AS, a company incorporated in Estonia, and part of the Admiral group of companies. The company is authorised and regulated by the Financial Conduct Authority ('FCA'). Its principal activity is the provision of a trading platform enabling customers to trade with the company in CFDs and in relation to certain securities, on a non-advisory basis.
The company acts on a matched principal basis and all client trades are offset with a fellow subsidiary company, Admiral Markets AS ('AMAS'), which operates in Estonia and is regulated by the Estonian Financial Supervision Authority. Under this arrangement the company is acting as a matched principal and to date has not held any trading positions itself, although the company had an application approved in December 2019 by the UK FCA for a full scope licence that would enable it to take on risk directly. It is the intention that the company will commence acting as matched principal for other group companies during the course of 2022. The company's main source of revenue is commission charged to AMAS based upon the volume of trades carried out by the company's clients. In addition to acting as principal to trades, AMAS provides the company with operational, administrative, marketing and IT services. During the course of 2021, the company continued to prospect for clients resident in the UK. In spite of the continuing background COVID-19 landscape, the company saw good volumes of trading by clients. The inability of the company to market to prospective clients in the EU due to Brexit led to a drop in active accounts of 20%. Pre-tax profits decreased to £94,012. Operating as an on-line business has meant that the company has not suffered under the UK and other relevant national lockdowns with all staff being able to work from home where necessary. London offices were downsized during the pandemic, but the company has recently moved and increased the size of its premises in line with expansion of business targeted at the UK market. The UK’s exit from the European Union has meant that the company has had to plan a program of closure of European branches and offices outside the UK as these no longer benefit from the European MiFID 'passport' and no marketing to new EU clients is permitted any longer. The company’s ability to continue to service its existing clients is reflected in relatively small drop in active accounts. In addition, clients are able to be on-boarded and serviced on a reverse solicitation basis as prescribed by the European Securities and Markets Authority. The company is preparing to taking a risk taking role for the Group in the coming year, for which it has a license from the UK FCA, and it will continue to place more emphasis on attracting UK clients in the post-Brexit environment. The company strengthened its corporate governance during the year by replacing an overseas director with another UK based director who fulfills the role of UK Risk Officer so that 2 of the 3 executive directors are UK resident. Quarterly Board meetings have been held to assess management information, profit & loss and other issues during 2021. There are no changes currently planned to directors’ salaries.
Page 3
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Group strategic report (continued)
for the year ended 31 December 2021
Statement of Compliance with Section 172 of the Companies Act 2006
The company considers its key stakeholders to be the following:
∙
Admirals Group AS – as the sole shareholder of the company;
∙
The company’s employees – as those who are responsible for the development and maintenance of the company’s business models, product creation, business management, robust control framework, morale and diligence;
∙
The company’s clients – as those for whom the company and its staff strive to ensure high standards of service, receipt of best results and satisfaction;
∙
The company’s service providers – as being crucial to the success of the company’s business and meeting its statutory and regulatory requirements; and
∙
The UK FCA – which the company assists in ensuring it meets its statutory objectives by ensuring high standards of compliance with its rules and requirements.
Regarding its clients, the company endeavors to ensure that:
∙
They can be confident that fair treatment of clients is central to our corporate culture;
∙
Products and services that we market and sell to them are designed to meet their specific needs and are targeted accordingly;
∙
They are provided with clear information and are kept appropriately informed before, during and after the point of sale;
∙
They are provided with products that perform as we have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect; and
∙
They do not face unreasonable barriers after a sale to submit a claim or make a complaint.
Apart from personal accountability being central to the company’s culture, our core values stem from the following FCA Conduct Rules:
∙
Acting with integrity;
∙
Acting with due care, skill and diligence;
∙
Being open and cooperative with the FCA and other regulators;
∙
Paying due regard to the interests of customers and treating them fairly; and
∙
Observing proper standards of market conduct.
To assist with demonstrating this, our Code of Ethics embraces the following values:
Compliance Compliance with all relevant regulatory and statutory requirements is essential for the trust of our stakeholders, and proper understanding of those requirements is integral to compliance. Standards All the company’s employees are required to act with the highest ethical standards and integrity, no matter who they are dealing with. Fairness The company requires treatment of people fairly, regardless of their race or racial group, sex or sexual orientation, religion or belief, age or any level of disability.
Page 4
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Group strategic report (continued)
for the year ended 31 December 2021
Statement of Compliance with Section 172 of the Companies Act 2006 (continued)
People The company expects anyone who represents it to be able to demonstrate transparency, credibility, quality, talent and teamwork. Customer Focus The company develops every product and new initiative with its clients in mind. Clients’ interests and confidentiality are central of everything we do. Successful Communication Success is built on good and effective communication between teams internally, and between us and our key stakeholders. We are continually looking for ideas and initiatives that could become a trend. The challenge is to combine innovation with delivering returns for us and our clients. Infrastructure We try to ensure our systems are flexible, scalable and with the fastest time-to-market using cloud technology for ourselves and API based solutions for our partners. Robust Information Security and compliance with relevant regulations are key. Prevention of Tax Evasion and Market Abuse The company is committed to ensuring it does not, wittingly or unwittingly, facilitate tax evasion or abusive behaviour in the markets, and requires all its staff to be able to identify suspicious practices and escalate them internally for proper assessment and reporting if deemed necessary. The Environment Nature and environment around us are changing at a challenging rate, making it essential that we react accordingly. The company has launched a green trading initiative designed to offset its own eco footprint and those of its clients. Senior Management The company expects its directors and senior managers to demonstrate at all times that they:
∙
Promote the company’s culture which aligns with its values;
∙
Reinforce the company’s culture on a day to day basis, leading by example;
∙
Manage employee performance effectively;
∙
Address poor performance;
∙
Ensure that remuneration is appropriate and does not encourage inappropriate behaviour;
∙
Have suitable training programs in place for employees, which are enforced and followed up if necessary;
∙
Have appropriate controls in place;
∙
Properly resource their areas of accountability;
∙
Encourage employees to feel able to 'speak out' about concerns or issues;
∙
Have robust governance arrangements that support decision making and challenge;
∙
Receive useful and meaningful management information;
∙
Ensure there are clear reporting lines;
∙
Ensure delegation is clearly documented and agreed; and
∙
Ensure that proper structure, oversight, reporting and challenge is in place for delegated responsibilities.
Page 5
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Group strategic report (continued)
for the year ended 31 December 2021
Principal risks and uncertainties
Market risk Market risk is defined as the risk that exposures to excessive price fluctuations in positions held by the company would cause a material loss to arise. Because all client positions are currently hedged with AMAS on a matched principal basis, this risk is fully mitigated. Credit risk The company has a low appetite for credit risk. Credit risk arises where a borrower or counterparty fails to meet their financial obligations. The main source of credit risk for the company is on deposits held at third parties. No credit is extended to clients. To mitigate this risk, all customer funds are held in segregated UK and European regulated clearing banks. The company's own funds are held across a number of European banks. Cash flow risk Cash flow risks are that the company does not have sufficient financial resources to meet its obligations as they fall due. Under the company's business model, the most likely reason for this to happen would be AMAS not being able to pay the company any amounts due, leaving the company unable to settle its obligations with its clients or vice versa. The company has controls in place to ensure that clients do not owe more than their deposit and is given reports by AMAS which demonstrate that they are operating within their own risk parameters. 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. Company policy permits, but does not demand, that these exposures may be hedged in order to fix the cost in sterling. UK Exit from the European Union The company has adapted to the constraints enforced by Brexit that have necessitated closing its network of European branches and offices, and aims to switch marketing focus from Europe to the UK.
For the year, the company had a pre-tax profit of £94,012 (2020: £893,098).
At the year end, the company had net assets of £5,166,040 (2020: £5,122,439).
This report was approved by the board on 30 March 2022
and signed on its behalf by:
Page 6
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Independent auditor's report to the members of Admiral Markets UK Limited
for the year ended 31 December 2021
We have audited the financial statements of Admiral Markets UK Limited ('the parent company') and its subsidiary ('the group') for the year ended 31 December 2021, which comprise the Consolidated statement of comprehensive income, the Consolidated and Company statements of financial position, the Consolidated and Company statements 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group 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.
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 or the 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.
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.
Page 7
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Independent auditor's report to the members of Admiral Markets UK Limited (continued)
for the year ended 31 December 2021
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Directors' report and the Group strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Directors' report and the Group strategic 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 identified material misstatements in the Directors' report and the Group strategic report.
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 Group 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:
Page 8
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Independent auditor's report to the members of Admiral Markets UK Limited (continued)
for the year ended 31 December 2021
Auditor's responsibilities for the audit of the financial statements (continued)
How the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙
the Senior Statutory Auditor ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations, including knowledge specific to auditing regulated investment brokerage firms;
∙
we made enquiries of management as to where they considered there was susceptibility to fraud, and their knowledge of actual, suspected and alleged fraud;
∙
we identified the laws and regulations that could reasonably be expected to have a material effect on the financial statements of the company through discussions with directors and other management at the planning stage, and from our knowledge and experience of regulated investment brokerage firms;
∙
the audit team held a discussion to identify any particular areas that were considered to be susceptible to misstatement, including with respect to fraud and non-compliance with laws and regulations;
∙
we interacted with component auditors throughout the audit. Interactions with component auditors included, if applicable, formal written instructions, meetings and reviewing selected audit papers;
∙
we focused our planned audit work on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company including the Companies Act 2006, The Financial Services and Markets Act 2000, employment legislation, and taxation legislation; and
∙
we considered the impact of Brexit on the company and the laws and regulations above.
We assesssed the extent of compliance with laws and regulations identified above through:
∙
making enquiries of management;
∙
making enquiries of component auditors;
∙
inspecting legal expenditure and correspondence throughout the year for any potential litigation or claims; and
∙
considering the internal controls in place that are designed to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙
determined the susceptibility of the company to management override of controls by checking the implementation of controls and enquiring of individuals involved in the financial reporting process;
∙
reviewed journal entries throughout the year to identify unusual transactions, particularly in relation to expenditure;
∙
performed analytical procedures to identify any large, unusual or unexpected transactions and investigated any large variances from the prior period;
∙
carried out substantive testing to check the occurrence and cut-off of expenditure;
∙
tested the existence of income by agreeing entries in the nominal ledger to trading statements;
∙
tested the completeness of income by reviewing contracts, recalculating expected balances and agreeing back to entries in the nominal ledgerr; and
∙reviewed the work of component auditors in the above areas, where applicable.
Page 9
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Independent auditor's report to the members of Admiral Markets UK Limited (continued)
for the year ended 31 December 2021
Auditor's responsibilities for the audit of the financial statements (continued)
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included:
∙
agreeing financial statement disclosures to underlying supporting documentation;
∙
enquiring of management as to actual and potential litigation and claims; and
∙
reviewing correspondence with HMRC, the Financial Conduct Authority and the company's legal advisors.
There are inherent limitations in our audit procedures described above. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error as they may involve deliberate concealment or collusion. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
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.
for and on behalf of
Statutory Auditor
130 Wood Street
EC2V 6DL
Page 10
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated statement of comprehensive income
for the year ended 31 December 2021
Page 11
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated statement of financial position
as at
The financial statements were approved and authorised for issue by the board on 30 March 2022 and were signed on its behalf by:
The notes on pages 17 to 31 form part of these financial statements.
Page 12
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company statement of financial position
as at
The financial statements were approved and authorised for issue by the board on
The notes on pages 17 to 31 form part of these financial statements.
Page 13
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated statement of changes in equity
for the year ended
31 December 2021
Page 14
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company statement of changes in equity
for the year ended
31 December 2021
Page 15
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated statement of cash flows
for the year ended 31 December 2021
Page 16
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
Admiral Markets UK Limited is a private company limited by shares and is incorporated in England and Wales. Its company registration number is 08171762. The registered office and principal place of business of the company is 37th Floor, One Canada Square, Canary Wharf, London, E14 5AB.
2.
Accounting policies
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company accounting policies (see note 3). The following principal accounting policies have been applied:
The consolidated financial statements present the results of the company and its subsidiary ('the group') as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Consolidated statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
Page 17
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
2.
Accounting policies (continued)
Functional and presentation currency
The company's functional and presentational currency is GBP. The subsidiary's functional and presentational currency is ZAR. 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. All other foreign exchange gains and losses are presented in the profit or loss within 'administrative expenses'. On consolidation, the results of overseas operations are translated into GBP at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in FX reserve.
Page 18
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
2.
Accounting policies (continued)
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, taking into account discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised: Rendering of services Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
Cost of sales represent the direct costs attributable to broking services. This includes commissions due to introductory brokers.
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.
Page 19
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
2.
Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of the group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated statement of comprehensive income over its useful economic life of 5 years.
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.
Page 20
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
2.
Accounting policies (continued)
The company holds money on behalf of clients in accordance with the client money rules of its regulator. Client monies held in segregated bank and settlement accounts in accordance with these rules and the corresponding liabilities to these clients are not recognised on the Consolidated or Company statements of financial position.
The company only enters into transactions that result in the recognition of basic financial instruments like trade and other debtors and creditors and loans to/from related parties.
Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. Investments in subsidiary undertakings are measured at cost less impairment. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit or loss. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when there is an 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.
Page 21
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
The directors do not consider there to be any significant judgements or key sources of estimation uncertainty involved in the preparation of these financial statements, other than regarding the treatment of client money.
The whole of the turnover is attributable to the principal activity of the company.
Page 22
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
Staff costs, including directors' remuneration during the year, were as follows:
Page 23
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
Page 24
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
11.
Taxation (continued)
On 10 June 2021, the Finance Bill 2021 received Royal Assent. The Bill confirms an increase in the corporation tax rate from 1 April 2023. From this date, the rate will taper from 19% for businesses with profit of less than £50,000 to 25% for businesses with profits over £250,000.
Page 25
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
Page 26
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
Page 27
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
13.
Tangible fixed assets (continued)
Page 28
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
Page 29
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
Profit and loss account
The profit and loss account includes all current and prior periods' retained earnings. Foreign exchange reserve Includes all foreign exchange differences on consolidation of the subsidiary.
Page 30
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
for the year ended 31 December 2021
There were no contingent liabilities at 31 December 2021 or 31 December 2020.
The group had no capital commitments at 31 December 2021 or 31 December 2020.
The entity operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the entity in an independently administered fund. The pension cost charge represents contributions payable by the entity to the fund and amounted to £6,838 (2020: £5,342). Contributions totalling £nil (2020: £nil) were payable to the fund at the reporting date.
The immediate and ultimate parent undertaking of the company is Admirals Group AS, a company incorporated in Estonia. The registered office of Admirals Group AS is Maakri 19/1, Tallinn, 10145, Estonia.
The largest and smallest group of undertakings for which consolidated financial statements have been prepared which include the company is that headed by the immediate parent undertaking. These financial statements can be obtained from the Estonian Commercial Register. The ultimate controlling party is
Page 31
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|