Company Registration No. 09312253 (England and Wales)
CURRENCY GLOBAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
CURRENCY GLOBAL LIMITED
COMPANY INFORMATION
Director
V Popat
Company number
09312253
Registered office
1 Poultry
London
EC2R 8EJ
Auditor
KLSA LLP
Kalamu House
11 Coldbath Square
London
EC1R 5HL
Bankers
Metro Bank PLC
One Southampton Row
London
WC1B 5HA
Lloyds Bank PLC
25 Gresham Street
London
EC2V 7HN
CURRENCY GLOBAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
CURRENCY GLOBAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 1 -
The director presents the strategic report for the year ended 31 December 2020.
Review of the business
Turnover for the year ended 31 December 2020 amounted to £72m compared to £86m for the previous year and the operating profit for the year was £380 compared to £75k in 2019.
The director is satisfied with the performance of the company during the year which was impacted by change in personnel and the COVID-19 pandemic.
The director further intends to pursue strategies that would enhance the growth of the company and result in improved performance.
Future developments
The directors aim to
invest in people, technology, products and services to improve the value offered to existing and
new clients.
Principal risks and uncertainties
The principal risks and uncertainties facing the company include operating in a competitive market and credit risk.
Risks are reviewed by the board and appropriate strategies have been put in place to mitigate and monitor them.
Credit risk
Credit risk represents the loss that the company would incur if a client failed to meet its contractual obligation.
Credit risk is mitigated by the company's credit assessment process and further taking collateral from clients as and when required.
Market risk
Market risk is the risk that the value of an open currency position decreases due to currency rate movement driven by market factors.
Market risk is mitigated by real time evaluation of all open client positions and taking additional collateral from clients as and when required to ensure there is no risk to the company. Furthermore, the company does not hold positions for speculative purposes.
Key performance indicators
The directors use both financial and non-financial performance indicators to monitor the company's position.
The key financial performance indicators of the company are foreign currency transactions of £72m (2019: £86m), gross profit of £444k (2019: £493k) and operating profit of £2k (2019: £75k).
The director consider these performance indicators to be satisfactory.
CURRENCY GLOBAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
COVID-19 and Going concern
COVID-19 has presented itself as an opportunity and a potential threat to our business. As a result of COVID-19, we have been creative in targeting clientele that have thrived in this current environment and as a result maintained turnover better than the industry.
The company has a large, diverse client base, ranging from small businesses to PLCs, across a multitude of sectors. Furthermore, the currency pair requirements of these clients are well distributed. Therefore, the impact and risk of COVID to date hasn't been and is not expected to be significant, because if a certain sector is affected or if a certain currency is affected, it is anticipated that this will be made up from clients that are in other sectors or that have the opposite currency requirements.
The company has chosen to adopt the going concern assumption in preparing its financial statements as it has continued to operate within expectations.
V Popat
Director
22 December 2021
CURRENCY GLOBAL LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 3 -
The director presents his report and financial statements for the year ended 31 December 2020.
Principal activities
The principal activity of the company continued to be that of commercial foreign exchange of currency.
The company is authorised and regulated by the Financial Conduct Authority (FCA) under The Payment Services Regulations 2017 for the provision of payment services. The company is also registered with Her Majesty's Revenue & Customs (HMRC) as a Money Service Business under The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
V Popat
Auditor
In accordance with the company's articles, a resolution proposing that KLSA LLP be reappointed as auditor of the company will be put at a General Meeting.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is 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 director is required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
CURRENCY GLOBAL LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 4 -
On behalf of the board
V Popat
Director
22 December 2021
CURRENCY GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CURRENCY GLOBAL LIMITED
- 5 -
Opinion
We have audited the financial statements of Currency Global Limited (the 'company') for the year ended 31 December 2020 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2020 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 director 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 director is 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.
CURRENCY GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CURRENCY GLOBAL LIMITED
- 6 -
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 director's
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the director's
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, the director is 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 director determines 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
director is
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
director
either
intends
to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
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
.
CURRENCY GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CURRENCY GLOBAL LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities , including fraud and non-compliance with laws and regulations
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:
-
financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, and health and safety legislation.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
-
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
-
considering the internal controls in place 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:
-
performed analytical procedures to identify any unusual or unexpected relationships;
-
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
-
investigated the rationale behind significant or unusual transactions
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
-
agreeing financial statement disclosures to underlying supporting documentation;
-
compliance of safeguarding requirements with organisational procedures;
-
auditing the risk of management override of controls, including through testing other adjustments for appropriateness;
-
enquiring of management as to actual and potential litigation and claims.
There are inherent limitations in the audit procedures described above; any instance of non-compliance with laws and regulations and fraud which is far removed from transactions reflected in the financial statements would diminish the likelihood of detection. Furthermore, the risk of not detecting a material misstatement due to fraud is greater than the risk of not detecting one resulting from error. Fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentation, or through an act of collusion that would mitigate internal controls.
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.
CURRENCY GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CURRENCY GLOBAL LIMITED
- 8 -
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 him 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.
Shilpa Chheda (Senior Statutory Auditor)
For and on behalf of KLSA LLP
22 December 2021
Chartered Accountants
Statutory Auditor
Kalamu House
11 Coldbath Square
London
EC1R 5HL
CURRENCY GLOBAL LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 9 -
2020
2019
Notes
£
£
Turnover
3
72,460,676
86,878,318
Cost of sales
(72,015,944)
(86,384,975)
Gross profit
444,732
493,343
Administrative expenses
(466,922)
(418,203)
Other operating income
22,576
Operating profit
4
386
75,140
Interest receivable and similar income
7
35
104
Amounts written off investments
8
1,924
Profit before taxation
2,345
75,244
Tax on profit
9
Profit for the financial year
2,345
75,244
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CURRENCY GLOBAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
- 10 -
2020
2019
£
£
Profit for the year
2,345
75,244
Other comprehensive income
-
-
Total comprehensive income for the year
2,345
75,244
CURRENCY GLOBAL LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2020
31 December 2020
- 11 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
10
20,650
23,255
Current assets
Debtors
12
7,227,265
13,096,441
Cash at bank and in hand
224,646
580,779
7,451,911
13,677,220
Creditors: amounts falling due within one year
13
(7,201,628)
(13,421,887)
Net current assets
250,283
255,333
Total assets less current liabilities
270,933
278,588
Creditors: amounts falling due after more than one year
14
(50,000)
(60,000)
Net assets
220,933
218,588
Capital and reserves
Called up share capital
16
360,000
360,000
Profit and loss reserves
(139,067)
(141,412)
Total equity
220,933
218,588
The financial statements were approved and signed by the director and authorised for issue on 22 December 2021
V Popat
Director
Company Registration No. 09312253
CURRENCY GLOBAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2019
360,000
(216,656)
143,344
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
75,244
75,244
Balance at 31 December 2019
360,000
(141,412)
218,588
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
2,345
2,345
Balance at 31 December 2020
360,000
(139,067)
220,933
CURRENCY GLOBAL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 13 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
18
(405,129)
248,251
Investing activities
Purchase of tangible fixed assets
(1,039)
Interest received
35
104
Net cash (used in)/generated from investing activities
(1,004)
104
Financing activities
Repayment of borrowings
(250,000)
Proceeds of new bank loans
50,000
Net cash generated from/(used in) financing activities
50,000
(250,000)
Net decrease in cash and cash equivalents
(356,133)
(1,645)
Cash and cash equivalents at beginning of year
580,779
582,424
Cash and cash equivalents at end of year
224,646
580,779
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 14 -
1
Accounting policies
Company information
Currency Global Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
1 Poultry, London, EC2R 8EJ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The company is financed by equity,
true
shareholders
and
credit
facilities. The company is therefore dependent upon its
shareholders
for continued financial support.
At the reporting date, the net current assets exceeded the net current liabilities by £
250,283
(201
9
: £
255,333
)
and the net assets of the company are £220,933 (2020: £218,588)
.
The company was able to utilise the support offered by the UK Government's Coronavirus Job Retention Scheme, with staff placed on furlough leave from April 2020. As at the date of these financial statements, all staff have returned to work and the company has returned to normal operations.
The company has received confirmation from its shareholders that they will continue to provide financial support and will not recall any amounts due from the company unless the company is in a position to pay such amounts.
The director has given careful consideration to the liquidity of the company and has prepared these financial statements on a going concern basis. In addition, the director isn't aware of any unlikely event, conditions and business risks beyond this point that may cast a significant doubt on the company's ability to continue as a going concern.
On the basis of this, the director has a reasonable expectation that the company will continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements. These financial statements are prepared on the going concern basis.
In accordance with their responsibilities, the director ha
s
considered the appropriateness of the going concern basis for the preparation of the financial statements
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 15 -
1.3
Turnover
Turnover 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.
Turnover represents the net margin value of currency transactions undertaken by the company's foreign currency dealing business and associated transaction charge income.
The following criteria must also be met before turnover is recognised:
- Turnover is recognised after receiving the client's authorisation to undertake a currency transaction for immediate or forward delivery and the transaction has been processed and internally verified by the company.
- The company has adopted trade date accounting for all traded currency transactions. Turnover generated from such transactions is recognised on the date the entity commits itself to the purchase or sale of an asset.
- Where the company enters into contracts for forward deliveries of foreign currency with its client, the company also enters into separate matched forward contracts with its banking counterparties.
- Day one profit earned on the spread of matched currency contracts is recognised within turnover.
- Any gain or loss on traded currency contracts are recognised immediately in the statement of comprehensive income with an adjustment made for any credit or other risk exposure.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
25% reducing balance method
Computer equipment
15% reducing balance method
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 16 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash at bank and in hand
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
The main other financial instruments defined by FRS 102 of the company are the foreign currency forward contracts and foreign currency swap contracts. Any unsettled foreign currency forward contracts at year end are initially measured at transaction price and subsequently measured at fair value through profit and loss.’
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 17 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Amounts payable to clients
Amounts payable to clients comprise amounts received in advance from clients in respect of foreign exchange transactions prior to the maturity date of a trade, and currency owed to clients awaiting disbursement after the maturity date of trade.
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 18 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 19 -
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.12
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.
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 20 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
We have exercised judgement in evaluating the impact of Covid-19 on the financial statements.
Critical judgements
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Holiday pay accrual
Employees lose their right to unused holidays at the year end, therefore the company does not accrue for any future liability.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software and IT equipment.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Fair value of other financial instruments
The rates used to calculate the fair value of other financial instruments can have a significant effect on their valuation. These variables are subject to fluctuations in external market rates and specific trading conditions.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2020
2019
£
£
Other significant revenue
Interest income
35
104
Grants received
22,576
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 21 -
4
Operating profit
2020
2019
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(22,576)
Fees payable to the company's auditor for the audit of the company's financial statements
5,700
5,427
Depreciation of owned tangible fixed assets
3,644
4,104
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
6
5
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
259,194
217,081
Social security costs
28,408
20,523
Pension costs
918
288,520
237,604
6
Director's remuneration
2020
2019
£
£
Remuneration for qualifying services
60,000
60,000
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Interest on bank deposits
35
104
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
35
104
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 22 -
8
Amounts written off investments
2020
2019
£
£
Fair value gains/(losses) on financial instruments
Gain on forward contracts
1,924
9
Taxation
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Profit before taxation
2,345
75,244
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
446
14,296
Tax effect of expenses that are not deductible in determining taxable profit
813
830
Gains not taxable
(367)
Tax effect of utilisation of tax losses not previously recognised
(1,387)
Unutilised tax losses carried forward
(15,126)
Permanent capital allowances in excess of depreciation
495
Taxation charge for the year
-
-
10
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 January 2020
57
42,928
42,985
Additions
1,039
1,039
At 31 December 2020
57
43,967
44,024
Depreciation and impairment
At 1 January 2020
57
19,673
19,730
Depreciation charged in the year
3,644
3,644
At 31 December 2020
57
23,317
23,374
Carrying amount
At 31 December 2020
20,650
20,650
At 31 December 2019
23,255
23,255
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 23 -
11
Financial instruments
2020
2019
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
6,895,442
12,599,155
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
6,772,323
12,421,543
12
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
293,664
459,164
Derivative financial instruments
6,895,442
12,599,155
Other debtors
37,828
37,825
Prepayments and accrued income
331
297
7,227,265
13,096,441
13
Creditors: amounts falling due within one year
2020
2019
Notes
£
£
Other borrowings
15
60,000
Derivative financial instruments
6,772,323
12,421,543
Other creditors
360,926
994,931
Accruals and deferred income
8,379
5,413
7,201,628
13,421,887
14
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Bank loans and overdrafts
15
50,000
Other borrowings
15
60,000
50,000
60,000
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 24 -
15
Loans and overdrafts
2020
2019
£
£
Bank loans
50,000
Loans from related parties
60,000
60,000
110,000
60,000
Payable within one year
60,000
Payable after one year
50,000
60,000
The loan from related parties is unsecured, interest-free and repayable on demand.
The bank loan refers to Bounce Bank Loan received from Metro Bank. The loan is unsecured and bears an interest of 2.5%. This has subsequently been paid back in full after the year end.
16
Share capital
2020
2019
2020
2019
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
360,000
360,000
360,000
360,000
CURRENCY GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 25 -
17
Related party transactions
Included within other creditors is an amount due to the shareholders of the company of £60,000 (2019: £60,000). This amount is unsecured, interest free and repayable on demand.
18
Cash (absorbed by)/generated from operations
2020
2019
£
£
Profit for the year after tax
2,345
75,244
Adjustments for:
Investment income
(35)
(104)
Depreciation and impairment of tangible fixed assets
3,644
4,104
Other gains and losses
(1,924)
-
Movements in working capital:
Decrease in debtors
5,871,100
3,814,398
Decrease in creditors
(6,280,259)
(3,645,391)
Cash (absorbed by)/generated from operations
(405,129)
248,251
19
Analysis of changes in net funds
1 January 2020
Cash flows
31 December 2020
£
£
£
Cash at bank and in hand
580,779
(356,133)
224,646
Borrowings excluding overdrafts
(60,000)
(50,000)
(110,000)
520,779
(406,133)
114,646
2020-12-31
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