|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Information
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contents
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Director's report
For the year ended 31 December 2022
The director presents his report and the financial statements for EMFI Capital Limited ('the company') for the year ended 31 December 2022. The company is a member of the group headed by EMFI Group Limited ('EMFI').
The director who served during the year was:
The director is responsible for preparing the Strategic report, the Director's 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 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 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 for the company'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 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 to enable him 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.
The profit for the year, after taxation, amounted to $693,963 (2021 - $4,878).
The director did not recommend a dividend during the year (2021 - $nil).
The company has chosen, in accordance with s.414C(11) of the Companies Act 2006, to set out in the Strategic report
information required by Schedule 7 of the Large and Medium-sized Companies (Accounts and Reports) Regulations 2008 to be contained in the Director's report. It has done so in respect of risk exposure, future developments, and engagement with suppliers, customers and others.
Page 1
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Director's report (continued)
For the year ended 31 December 2022
This report was approved by the sole director:
Page 2
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strategic report
For the year ended 31 December 2022
EMFI Capital is a Wealth Manager and Safeguarding firm.
In the 12 months to 31st December 2022, it has consolidated 2021’s nascent business operations. This may be shown by Key Performance Indicators (KPI’s) Net Assets and Income. This has seen the company increase in its Net Assets from FY21 to FY22. This has been accomplished by an increase in Income of more than 3 times. EMFI Capital having operated this business line from May 2021. The large increase is part reflective of the fact that 2022 was the first complete 12 month period of holding client money and assets.
The main driver of its KPI’s has been an increase in EMFI Capital’s client portfolio accounts. Increasing client assets leads to greater brokerage and custody fees and affords EMFI Capital the opportunity to strengthen its sub-custodian network. Positive reinforcement from its income and net assets, to its trading and custody relationships, leaves the director optimistic the company’s growth will continue. EMFI Capital specialises in servicing emerging markets fixed income assets, and offers balanced portfolios through execution in equities and custody of mutual funds. 2023’s continued central bank interest rises will encourage capital flows into international bond markets. Moreover, global equities and mutual fund prices are widely forecasted to stabilise in 2023 after suffering turbulence since 2020. Against the macro-economic prospects of the asset classes under service, EMFI Capital continues to reinvest the proceeds from its business in its staff and proprietary technology. This is to ensure it maintains steady growth in its selected KPI’s, allowing it to meet its varied obligations as a services provider, an employer and a financial institution under regulatory supervision. From 1 January 2022, the company's functional currency was deemed to be USD (previously GBP) as the majority of trading is in USD denominated instruments. Related fees are charged in the same currency. The presentational currency of the company also became USD (previously GBP).
Principal risks to the company’s objectives are the global macro-economic outlook. Sovereign issuer defaults in emerging markets could depress the value client assets held, a counterweight of this is a potential uptick in trading activity. A prolonged economic downturn or a recurrence and spreading of 2023’s US banking crises has led to outflows to money market funds and systemically important financial institutions. The company’s fixed income specialty is viewed as a hedge against this scenario materially affecting EMFI Capital.
(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the
success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
EMFI Capital Limited takes a long term view of its financial and human resource materials. The board oversee
this on daily basis not only taking decisions on behalf of the company but implementing their day-to-day management. The company incentivises long term thinking in its corporate structure by alignment between its director and ultimate beneficial owner.
Page 3
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strategic report (continued)
For the year ended 31 December 2022
Director's statement of compliance with duty to promote the success of the company (continued)
As a company subject to regulation and supervision, who must perform checks against the clients and
counterparties we onboard. EMFI Capital is able to put to work experience, data and its screening tools in the selection, engagement and periodic review of suppliers, customers and others indirectly affected by our network of suppliers and customers. The company seeks to engage with credit worthy financial institutions for supply of services in this way benefitting its customers. In a similar manner EMFI will ensure customers are screened against regulatory watchlists to ensure it onboards customers with sufficiently clean reputation.
Stakeholders are considered as part of the company’s relationships from critical providers such as financial
institutions to suppliers of stationary. The company seeks to engage with suppliers and customers with strong environmental and sustainability credentials. Providers are reviewed against adverse media in engaging with the client and on an ongoing basis after this.
High standard of business conduct are paramount for the success of the company. EMFI provides relevant
training to all staff, whether they be employees or contractors, on an annual basis in pursuit of this objective. Staff in controlling functions or are client orientated receive further training. All staff must on joining and annually must attest to having read and understood the company’s Manuals. This creates an opportunity for staff to engage with the company’s policies and query them with senior management.
The company balances a number of competing interests amongst staff and senior management. Currently the
Company’s CEO and sole ultimate beneficial owner are the same individual and direction from the board is aligned.
(2) Where or to the extent that the purposes of the company consist of or include purposes other than the benefit
of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes. The company primary purpose is for the benefit of its members. (3) The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company. The duty to consider or act in the interests of creditors of the company does not apply as of writing of this statement. The company is solvent, with positive net assets and meeting its regulatory capital requirements.
This report was approved and signed by the sole director:.
Page 4
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Independent auditor's report to the members of EMFI Capital Limited
For the year ended 31 December 2022
We have audited the financial statements of EMFI Capital Limited (the 'company') for the year ended 31 December 2022, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 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 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.
Page 5
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Independent auditor's report to the members of EMFI Capital Limited (continued)
For the year ended 31 December 2022
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Director's report and the Strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Director's report and the Strategic report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Director's report or the Strategic report.
Page 6
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Independent auditor's report to the members of EMFI Capital Limited (continued)
For the year ended 31 December 2022
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:
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 investment advisory businesses;
∙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 through discussions with directors and other management at the planning stage, and from our knowledge and experience of investment advisory businesses;
∙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; and
∙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.
We assessed the extent of compliance with the laws and regulations identified above through:
∙making enquiries of management; and
∙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; and
∙reviewed a reconciliation from bank exports to the trial balance for 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;
∙reviewed accounting estimates and evaluated where judgements or decisions made by management indicated bias
on the part of the company's management;
∙carried out substantive testing to check the occurrence and cut-off of expenditure; and
∙tested the completeness of revenue by comparing reports generated by the trading platform to entries in the nominal ledger.
Page 7
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Independent auditor's report to the members of EMFI Capital Limited (continued)
For the year ended 31 December 2022
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 8
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of comprehensive income
For the year ended 31 December 2022
Page 9
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of financial position
As at
The financial statements were approved and authorised for issue and signed by the sole director on
The notes on pages 13 to 20 form part of these financial statements.
Page 10
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of changes in equity
For the year ended 31 December 2022
Page 11
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of cash flows
For the year ended 31 December 2022
Page 12
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
For the year ended 31 December 2022
EMFI Capital Limited is a private company limited by shares and incorporated in England and Wales. Its registration number is 11380609 and its registered office and principal place of business is 25 Dering Street, London, England, W1S 1AW.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' ('FRS 102') and the Companies Act 2006.
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's accounting policies (see note 3). The following principal accounting policies have been applied:
Functional and presentation currency
Transactions and balances
Page 13
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
For the year ended 31 December 2022
2.Accounting policies (continued)
Page 14
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
For the year ended 31 December 2022
2.Accounting policies (continued)
The company only enters into transactions that result in the recognition of basic financial instruments like trade and other debtors and creditors.
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, such as the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. 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 Statement of comprehensive income. 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.
The company has Title Transfer Collateral Arrangements ('TTCAs') whereby the firm has full ownership of client funds for the purpose of securing or otherwise covering present or future, actual, contingent or prospective obligations.
The company holds the money on behalf of clients in accordance with the client money rules of the UK Financial Conduct Authority (FCA). Such monies are classified as TTCAs in accordance with the relevant regulatory requirements. These balances have been disclosed as Debtors on the Statement of financial position, with the corresponding liability included in Trade creditors. 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 funds (see note 2.11) and the company's functional currency (see note 18).
Page 15
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
For the year ended 31 December 2022
All turnover was derived from the company's principal activity.
All turnover arose from activities performed within the United Kingdom.
Page 16
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
For the year ended 31 December 2022
Page 17
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
For the year ended 31 December 2022
10.Taxation (continued)
With effect from 1 April 2023 the rate of corporation tax increased. From this date, the rate will taper from 19% for
businesses with profits of less than £50,000 to 25% for businesses with profits over £250,000.
Page 18
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
For the year ended 31 December 2022
Profit and loss account
There were no contingent liabilities at 31 December 2022 or 31 December 2021.
From 1 January 2022, the company's functional currency was considered to be USD. The presentational currency is also USD. The prior year accounts were presented in GBP. Comparatives have been presented in USD.
The change in functional currency was due to a majority of the company's trading activity being in USD denominated instruments. Related fees are charged in the same currency.
In the prior year, amounts due from clients totalling $151,033, and and an equal amount owed to a group company, were not recognised as the company was deemed to act as agent in the transaction. The company acted as principal, therefore a prior year adjustment has been made, which has no impact on retained earnings brought forward.
Page 19
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the financial statements
For the year ended 31 December 2022
The immediate and ultimate parent undertaking of the company is EMFI Group Limited.
The largest and smallest group of undertakings for which group accounts are prepared which include the company is that headed by EMFI Group Limited, whose registered office is 25-26 Dering Street, London, W1S 1AW. These accounts are publicly available from Companies House at Crown Way, Cardiff, CF14 3UZ. The ultimate controlling party is Usman Sheikh.
Page 20
|