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Company Information
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Contents
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Strategic report
For the year ended 31 March 2023
Xenfin Capital Ltd, a leading agency FX brokerage regulated by the Financial Conduct Authority (FCA), is pleased to present its strategic report for the financial year ended 31 March 2023.
Throughout the year, the Company has demonstrated resilience and adaptability in a dynamic financial landscape, achieving notable milestones and sustaining a consistent level of business.
The Company remains committed to providing unparalleled services to its clients, leveraging innovative technologies and strategic partnerships.
Despite the challenges posed by global economic uncertainties and regulatory changes, Xenfin Capital has successfully navigated the complex foreign exchange market.
Going concern Following the change of control. Xenfin Capital is now implementing the revitalised business strategy that aims to position the company for sustained growth. This section outlines the key elements of Xenfin Capital’s new strategy and the fact that the company is operating as a going concern. Strategic Vision Under the new leadership and ownership structure, Xenfin Capital has a forward-looking strategic vision that prioritises maximising existing revenue streams and also building out new fee-generating offerings. The overarching goal is to strengthen the company's financial position by diversifying its product offerings, expanding market reach, and pursuing high-margin revenue streams. Diversification of Product Offerings Recognising the dynamic nature of financial markets, Xenfin Capital is strategically diversifying its product offerings to better cater to evolving client needs. This includes the introduction of new innovative investment strategies, and tailored solutions to enhance the value proposition for clients via the introduction of a corporate advisory arm of the business which already has signed mandates that are generating fees for the business. Market Expansion The change in control has instigated a proactive approach to market expansion. Xenfin Capital is targeting new geographic regions and customer segments, leveraging its expertise to capture emerging opportunities. The company is committed to establishing a robust service offering to its clients and stakeholders. Operational Excellence Xenfin Capital is implementing streamlined processes, technological advancements, and updated risk management practices to ensure efficient operations. This focus on operations aims to enhance the overall client experience and drive recurring revenue. Integration of Environmental, Social, and Governance (ESG) Principles In response to the growing importance of ESG considerations in the financial industry, Xenfin Capital is integrating environmental, social, and governance principles into its business practices. This commitment reflects the company's dedication to responsible and sustainable investment practices, aligning with evolving societal and client-driven expectations.
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Strategic report (continued)
For the year ended 31 March 2023
Principal risks and uncertainties (continued)
Risk Management and Compliance The company places a heightened emphasis on robust risk management and compliance frameworks. Xenfin Capital is committed to upholding the highest standards of regulatory compliance, aligning its operations with industry best practices, and proactively managing risks to ensure the long-term stability of the organisation. Stakeholder Communication and Transparency In recognition of the significance of transparent communication, Xenfin Capital is enhancing its stakeholder engagement and disclosure practices. Regular and comprehensive communication with clients and regulators is integral to building trust and fostering a positive reputation in the financial services landscape. Conclusion In conclusion, Xenfin Capital’s post-change in control strategy embodies a commitment to responsible business practices and financial stability. The company's new direction is designed to create value for clients, generate sustainable returns, and grow the business.
The directors do not consider there to be any financial key performance indicators.
Regulatory Compliance: Xenfin Capital Ltd maintains a strong commitment to regulatory compliance. The Company has rigorously adhered to FCA guidelines, ensuring the highest standards of transparency, integrity, and client protection.
Technological Innovation: Recognising the importance of technological advancements in the financial industry, Xenfin Capital Ltd has continued to invest in cutting-edge solutions. This has enhanced operational efficiency and positioned the Company as a market leader in delivering seamless trading experiences. Client Satisfaction: Xenfin Capital places a premium on client satisfaction. Risk Management: In a volatile market environment, Xenfin Capital has implemented robust risk management strategies to safeguard client interests and maintain the financial stability of the Company. Employee Development: The success of Xenfin Capital is driven by a talented and dedicated team. The Company is committed to fostering a culture of continuous learning and professional development, ensuring that its employees are equipped with the skills necessary to thrive in the ever-evolving financial landscape.
In accordance with section 172(1) of the Companies Act 2006, the Directors confirm that they have acted in the
way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. The Directors have considered the interests of employees, customers, suppliers, and the impact of the Company's operations on the community and the environment in making decisions during the year.
This report was approved by the board on 4 March 2024 and signed on its behalf by:
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Directors' report
For the year ended 31 March 2023
The directors present their report and the financial statements of Xenfin Capital Limited ('the company') for the year ended 31 March 2023.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are 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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £1,243,796 (2022 - loss £2,312,616).
The directors did not pay or recommend a dividend during the year (2022 - £nil).
The directors who served during the year were:
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Directors' report (continued)
For the year ended 31 March 2023
Xenfin Capital's strategic objectives for the coming year include:
Expansion of Services: Explore opportunities to expand product and service offerings to meet the evolving needs of clients. Regulatory Adherence: Continue to uphold the highest standards of regulatory compliance, staying abreast of industry developments and proactively adapting to changes in the regulatory landscape. Technology Investment: Further investing in technology to enhance trading platforms, improve data security, and leverage emerging technologies such as artificial intelligence and blockchain. Market Positioning: Strengthen Xenfin Capital's position as a trusted partner in the FX brokerage industry through effective marketing and brand-building initiatives.
Following the balance sheet date, several significant events have transpired affecting Xenfin Capital Ltd. Notably, on 9 January 2024, the FCA sanctioned the change in control application submitted by Arda Trade AG, a Swiss entity beneficially owned by Mr. John Bowers, initially filed on 24 August 2023. This acquisition was duly completed on 31 January 2024.
As an integral part of finalising this transaction, Arda Trade AG augmented Xenfin Capital Ltd's shareholder capital from 280,000 shares in two separate tranches. The first tranche involved a direct investment of £500,000, increasing the shareholder capital by 500,000 shares. The subsequent tranche, resulting in an additional 799,975 shares, was facilitated through the conversion of a shareholder loan into equity. Consequently, the total issued share capital of Xenfin Capital Ltd has increased to 1,579,975 shares. These developments, culminating in a substantial increase in shareholder capital and the strategic acquisition by Arda Trade AG, have positioned Xenfin Capital Ltd in a robust financial standing as it enters 2024. These events are indicative of a strengthened capital base and potential for enhanced operational capacity and business performance.
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Directors' report (continued)
For the year ended 31 March 2023
The auditor, Buzzacott LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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Independent auditor's report to the members of Xenfin Capital Ltd
For the year ended 31 March 2023
We have audited the financial statements of Xenfin Capital Ltd ('the company') for the year ended 31 March 2023, which comprise the Statement of income and retained earnings, the Statement of financial position, the Statement of cash flows 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Independent auditor's report to the members of Xenfin Capital Ltd (continued)
For the year ended 31 March 2023
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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Independent auditor's report to the members of Xenfin Capital Ltd (continued)
For the year ended 31 March 2023
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 auditing foreign exchange brokerage businesses;
∙we made enquiries of management as to where they considered there was a 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 management at the planning stage, and from our knowledge and experience of foreign exchange brokerage 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;
∙reviewed journal entries throughout the year to identify unusual transactions, particularly in relation to expenditure;
∙performed analytical procedures to identify any large, unusual or unexpected transactions and investigated any large
variances from the prior period;
∙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 agreeing third party statements to entries in the nominal ledger.
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Independent auditor's report to the members of Xenfin Capital Ltd (continued)
For the year ended 31 March 2023
Auditor's responsibilities for the audit of the financial statements (continued)
In response to the risk and 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.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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
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Statement of income and retained earnings
For the year ended 31 March 2023
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Statement of financial position
As at
The financial statements were approved and authorised for issue by the board on
The notes on pages 13 to 22 form part of these financial statements.
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Statement of cash flows
For the year ended 31 March 2023
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Notes to the financial statements
For the year ended 31 March 2023
Xenfin Capital Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 25 Green Street, London, W1K 7AX.
The principal activity of the company was the provision of foreign exchange brokerage.
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 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:
The directors have a reasonable expectation that the company has adequate resources to continue in
operational existence for the period of at least 12 months from the date of signing of these accounts. In reaching this conclusion the directors have considered the following: Xenfin Capital Ltd has successfully undergone a change in control, which was duly approved by the Financial Conduct Authority (FCA). The new leadership brings a strategic vision and a well-formulated business plan aimed at enhancing Xenfin Capital’s market position and profitability. The management have conducted a thorough risk assessment, identifying mitigation strategies and contingency plans as part of the risk management process. Management view the change in control and revitalised business strategy as catalysts for growth.
Functional and presentation currency
Transactions and balances
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Notes to the financial statements
For the year ended 31 March 2023
2.Accounting policies (continued)
Revenue is recognised when it is probable that economic benefits associated with the transaction will flow to the company and the revenue can be measured reliably.
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Notes to the financial statements
For the year ended 31 March 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
The company only enters into basic financial instrument transactions that result in the recognition of financial
assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
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Notes to the financial statements
For the year ended 31 March 2023
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.
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Notes to the financial statements
For the year ended 31 March 2023
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Notes to the financial statements
For the year ended 31 March 2023
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Notes to the financial statements
For the year ended 31 March 2023
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Notes to the financial statements
For the year ended 31 March 2023
Profit and loss account
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Notes to the financial statements
For the year ended 31 March 2023
In the financial statements for the year ended 31 March 2022, Goodwill totalled £1,798,607. Goodwill related to an asset purchase agreement dated September 2014. This was to be amortised over 10 years. Goodwill was reassessed by management and determined to have a value of £nil as at 31 March 2022. As a result of this, an impairment charge of £2,098,375 has been recognised increasing administrative expenses. The amortisation charge of £299,768 has been reversed resulting in the net increase in administrative expenses of £1,798,607 for the year ended 31 March 2022. Correspondingly, the net book value of Goodwill for the year ended 31 March 2022, has decreased from £1,798,607 to £nil.
There were no contingent liabilities at 31 March 2023 or 31 March 2022.
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Notes to the financial statements
For the year ended 31 March 2023
As an integral part of finalising this transaction, Arda Trade AG augmented the company's shareholder capital from 280,000 shares in two separate tranches. The first tranche involved a direct investment of £500,000, increasing the shareholder capital by 500,000 shares. The subsequent tranche, resulting in an additional 799,975 shares, was facilitated through the conversion of a shareholder loan into equity. Consequently, the total issued share capital of Xenfin Capital Ltd has increased to 1,579,975 shares.
The parent company of Xenfin Capital Ltd during the year was Xenfin Holdings Limited whose registered office is 18 Savile Row, London W1S 3PW. The financial statements of Xenfin Holdings Limited can be obtained from the company's registered office at 18 Savile Row, London W1S 3PW. The ultimate controlling party was Duncan MacInnes.
After 31 January 2024, the parent company of Xenfin Capital Ltd is Arda Trade AG whose registered office is Talstrasse 20, 8001 Zurich, Switzerland. The ultimate controlling party is John Bowers.
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