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EMFI Capital Limited
























Annual report and financial statements



For the year ended 31 December 2022



Registered number: 11380609

 
EMFI Capital Limited


Company Information


Director
Usman Sheikh 




Registered number
11380609



Registered office
25 Dering Street

London

W1S 1AW




Independent auditor
Buzzacott LLP

130 Wood Street

London

EC2V 6DL





 
EMFI Capital Limited


Contents



Page
Director's report
 
1 - 2
Strategic report
 
3 - 4
Independent auditor's report
 
5 - 8
Statement of comprehensive income
 
9
Statement of financial position
 
10
Statement of changes in equity
 
11
Statement of cash flows
 
12
Notes to the financial statements
 
13 - 20


 
EMFI Capital Limited

 
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').

Director

The director who served during the year was:

Usman Sheikh 

Director's responsibilities statement

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 2006He 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.

Results and dividends

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).

Matters covered in the Strategic report

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

 
EMFI Capital Limited
 
Director's report (continued)
For the year ended 31 December 2022

Disclosure of information to auditor

The director at the time when this Director's report is approved has confirmed that:
 
so far as  is aware, there is no relevant audit information of which the company's auditor is unaware, and

 has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This report was approved by the sole director
 





Usman Sheikh
Director

Date: 29 September 2023

Page 2

 
EMFI Capital Limited


Strategic report
For the year ended 31 December 2022

Principal activity

EMFI Capital is a Wealth Manager and Safeguarding firm.

Business review and future developments

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 and uncertainties

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. 

Director's statement of compliance with duty to promote the success of the company
 
(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—

(a) the likely consequences of any decision in the long term
 
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

 
EMFI Capital Limited


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)

(b) the need to foster the company's business relationships with suppliers, customers and others
 
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. 

(c) the impact of the company's operations on the community and the environment
 
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. 

(d) the desirability of the company maintaining a reputation for high standards of business conduct
 
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.

(e) the need to act fairly as between members of the company

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:.



Usman Sheikh
Director

Date: 29 September 2023

Page 4

 
 
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Independent auditor's report to the members of EMFI Capital Limited
For the year ended 31 December 2022

Opinion


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 policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the company's affairs as at 31 December 2022 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.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


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

 
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Independent auditor's report to the members of EMFI Capital Limited (continued)
For the year ended 31 December 2022

Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditor's report thereon.  The 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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.


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 identified material misstatements in the Director's report or the Strategic report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


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 director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Director's responsibilities statement, 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 have no realistic alternative but to do so.


Page 6

 
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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
 

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

 
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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.


Use of our report
 

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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.





Jonathan West (Senior Statutory Auditor)
for and on behalf of
Buzzacott LLP
Statutory auditor
130 Wood Street
London
EC2V 6DL

30 September 2023
Page 8

 
EMFI Capital Limited


Statement of comprehensive income
For the year ended 31 December 2022

2022
2021
Note
$
$

  

Turnover
  
1,397,431
424,469

Cost of sales
  
(195,047)
(305,494)

Gross profit
  
1,202,384
118,975

Administrative expenses
  
(464,954)
(113,922)

Operating profit
  
737,430
5,053

Interest receivable and similar income
  
187,790
-

Interest payable and similar expenses
  
(32,827)
-

Profit before tax
  
892,393
5,053

Tax on profit
 10 
(198,430)
(175)

Profit for the financial year
  
693,963
4,878

  

All amounts relate to continuing operations.
There was no other comprehensive income for 2022 or 2021.
The notes on pages 13 to 20 form part of these financial statements.

Page 9

 
EMFI Capital Limited - Registered number: 11380609

Statement of financial position
As at 31 December 2022

As restated
2022
2021
Note
$
$

  

Current assets
  

Debtors
  
7,426,369
8,665,461

Cash and cash equivalents
  
2,021,967
280,264

  
9,448,336
8,945,725

Creditors: amounts falling due within one year
  
(8,533,326)
(8,724,678)

Net current assets
  
 
 
915,010
 
 
221,047

Total assets less current liabilities
  
915,010
221,047

  

Net assets
  
915,010
221,047


Capital and reserves
  

Called up share capital 
  
235,848
235,848

Profit and loss account
  
679,162
(14,801)

  
915,010
221,047


The financial statements were approved and authorised for issue and signed by the sole director on 29 September 2023:




Usman Sheikh
Director

The notes on pages 13 to 20 form part of these financial statements.

Page 10

 
EMFI Capital Limited


Statement of changes in equity
For the year ended 31 December 2022


Called up share capital
Profit and loss account
Total equity

$
$
$


At 1 January 2021
235,848
(19,679)
216,169



Profit for the year
-
4,878
4,878



At 1 January 2022
235,848
(14,801)
221,047



Profit for the year
-
693,963
693,963


At 31 December 2022
235,848
679,162
915,010


The notes on pages 13 to 20 form part of these financial statements.

Page 11

 
EMFI Capital Limited


Statement of cash flows
For the year ended 31 December 2022

As restated
2022
2021
$
$

Cash flows from operating activities

Profit for the financial year
693,963
4,878

Adjustments for:

Interest paid
32,827
-

Interest received
(187,790)
-

Taxation charge
198,430
175

Decrease/(increase) in debtors
1,239,092
(8,665,461)

(Decrease)/increase in creditors
(1,300,368)
8,665,461

Increase in amounts owed to groups
910,410
54,217

Corporation tax received/(paid)
176
(175)

Net cash generated from operating activities

1,586,740
59,095


Cash flows from investing activities

Interest received
187,790
-

Net cash from investing activities

187,790
-

Cash flows from financing activities

Interest paid
(32,827)
-

Net cash used in financing activities
(32,827)
-

Net increase in cash and cash equivalents
1,741,703
59,095

Cash and cash equivalents at beginning of year
280,264
221,169

Cash and cash equivalents at the end of year
2,021,967
280,264


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,021,967
280,264

2,021,967
280,264


The notes on pages 13 to 20 form part of these financial statements.

Page 12

 
EMFI Capital Limited

 
Notes to the financial statements
For the year ended 31 December 2022

1.


General information

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

 
2.1

Basis of preparation of financial statements

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:

 
2.2

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is USD. In the prior year, the financial statements were presented in GBP. All prior year balances have been converted at the applicable exchange rate and presented in USD.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'administrative expenses'.

Page 13

 
EMFI Capital Limited

Notes to the financial statements
For the year ended 31 December 2022

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue 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:
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.4

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.5

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.6

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates income.

 
2.7

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.8

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the company's cash management.

Page 14

 
EMFI Capital Limited

Notes to the financial statements
For the year ended 31 December 2022

2.Accounting policies (continued)

 
2.9

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.10

Financial instruments

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.

  
2.11

Title transfer collateral arrangements

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.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the year-end date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.
The 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

 
EMFI Capital Limited

 
Notes to the financial statements
For the year ended 31 December 2022

4.


Turnover

All turnover was derived from the company's principal activity.
All turnover arose from activities performed within the United Kingdom.


5.


Operating profit

The operating profit is stated after charging:

2022
2021
$
$

Exchange differences
(38,578)
5,571


6.


Auditor's remuneration

2022
2021
$
$

Fees payable to the company's auditor for the audit of the company's financial statements
8,441
-

Fees payable to the company's auditor and its associates in respect of:

Audit-related assurance services
9,044
-

Taxation compliance services
1,809
-

All non-audit services not included above
16,580
-


The financial statements for the year ended 31 December 2021 was not audited by the current auditor. 





7.


Employees




The company has no employees other than the director, who did not receive any remuneration (2021 -$NIL).


8.


Interest receivable

2022
2021
$
$


Other interest receivable
187,790
-

187,790
-

Page 16

 
EMFI Capital Limited

 
Notes to the financial statements
For the year ended 31 December 2022

9.


Interest payable and similar expenses

2022
2021
$
$


Bank charges
32,827
-

32,827
-


10.


Taxation


2022
2021
$
$

Corporation tax


Current tax on profits for the year
198,430
175


198,430
175


Total current tax
198,430
175

Deferred tax

Total deferred tax
-
-


Taxation on profit on ordinary activities
198,430
175

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2021 -lower than) the standard rate of corporation tax in the UK of 19% (2021 -19%). The differences are explained below:

2022
2021
$
$


Profit on ordinary activities before tax
892,393
5,053


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 -19%)
169,555
960

Effects of:


Expenses not deductible for tax purposes
36,128
-

Exchange difference arising on movement between opening and closing spot rates
(7,253)
(785)

Total tax charge for the year
198,430
175

Page 17

 
EMFI Capital Limited

 
Notes to the financial statements
For the year ended 31 December 2022
 
10.Taxation (continued)


Factors that may affect future tax charges

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.


11.


Debtors

As restated
2022
2021
$
$


Trade debtors
7,138,107
8,665,461

Other debtors
288,262
-

7,426,369
8,665,461


Included in trade debtors are $7,138,107 (2021 - $8,514,428) in respect of amounts held under TTCAs.


12.


Cash and cash equivalents

2022
2021
$
$

Cash at bank and in hand
2,021,967
280,264

2,021,967
280,264



13.


Creditors: amounts falling due within one year

As restated
2022
2021
$
$

Trade creditors
7,168,895
8,537,860

Amounts owed to group undertakings
1,097,228
186,818

Corporation tax
198,606
-

Accruals and deferred income
68,597
-

8,533,326
8,724,678


Included in trade creditors are $7,138,107 (2021 - $8,514,428) in respect of amounts held under TTCAs.

Page 18

 
EMFI Capital Limited

 
Notes to the financial statements
For the year ended 31 December 2022

14.


Share capital

2022
2021
$
$
Allotted, called up and fully paid



175,000 (2021 -175,000) Ordinary shares of £1.00 each
235,848
235,848



15.


Reserves

Profit and loss account

Includes all current and prior period retained profits and losses.


16.


Contingent liabilities

There were no contingent liabilities at 31 December 2022 or 31 December 2021.


17.


Capital commitments

The company had no capital commitments at 31 December 2022 or 31 December 2021.



18.


Change in functional and presentational currency

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.


19.


Prior year adjustment

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

 
EMFI Capital Limited

 
Notes to the financial statements
For the year ended 31 December 2022

20.


Related party transactions

The financial statements do not include disclosure of transactions between the company and other entities which
are wholly owned within the group headed by EMFI Group Limited. This is because as a subsidiary whose shares are wholly owned within the group, the company is not required to disclose such transactions, under Financial Reporting Standard 102 paragraph 33.1A Related Party Disclosures.
During the year, expenses totalling $288,262 (2021 - $nil) were paid on behalf of EMFI Opportunities Fund Limited.
At 31 December 2022, $288,262 (2021 - $nil) was due from EMFI Opportunities Fund Limited.
EMFI Opportunities Fund Limited is a related party by virtue of being controlled by the director.


21.


Controlling party

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