Company registration number 07073413 (England and Wales)
TRADE NATION FINANCIAL UK LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
TRADE NATION FINANCIAL UK LTD
COMPANY INFORMATION
Directors
Mr R Davidson
Mr K Taylor
Mr S Lane
Mr A Sharpe
(Appointed 11 July 2023)
Company number
07073413
Registered office
6th Floor
14 Bonhill Street
London
England
EC2A 4BX
Auditor
Crowe U.K. LLP
Aquis House
49-51 Blagrave Street
Reading
Berkshire
RG1 1PL
TRADE NATION FINANCIAL UK LTD
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 26
TRADE NATION FINANCIAL UK LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -

The directors present the strategic report for the year ended 30 November 2023.

Fair review of the business

The principal activity of the company is to provide spread betting and contracts for difference products based on financial markets to its clients and partners through online trading platforms. These partners and clients include retail, professional and corporate clients across many different regions. The company also provides back office and technology services to related businesses.

 

The company's activities are regulated by the Financial Conduct Authority (FCA) in London, licence number 525164.

 

The company primarily derives its income from the dealing spread its clients pay to trade on the above products and from the risk associated with the making of markets in these products and provision of back office services to the group.

 

The company continues to grow the number of individual clients and has been successful in acquiring new business at costs that remain commercial.

 

The company's focus is to grow its own brand, Trade Nation and to further enhance the customer experience to increase retention rates and encourage continued brand loyalty.

 

The UK retail market resulted in an increased turnover under its FCA licence and continues to be a key operational jurisdiction for the business. Whilst overall turnover including management charges fell in 2023, other related entities operating in different jurisdictions, which are supported by the company, continued to see growth in customer numbers.

 

The investment and development of the UK entity, in particular staff headcount and marketing advertising has resulted in an overall net loss in 2023. The business however remains optimistic about the future and will continue to invest in new opportunities as they arise.

 

The key financial and other performance indicators during the year were as follows:

 

2023
2022
Change
£000s
£000s
%
Turnover
13,398
14,057
(5%)
Operating (loss)/profit
(2,608)
1,236
(311%)
(Loss)/profit after tax
(2,209)
1,180
(287%)
Shareholders' funds
10,294
12,503
(18%)
Operating profit margin
(19%)
9%
TRADE NATION FINANCIAL UK LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
Principal risks and uncertainties

The principal activity of the company outlined above gives rise to exposure to financial and operations risks in the ordinary course of business. Financial (market) risks are managed in accordance with the company's risk policy, whilst operational risks are managed through continued safeguarding and mitigation of such risks.

 

The key risks that the company face are summarised below:

 

Credit Risk including Counterparty Credit Risk

Credit risk is the risk that a counterparty fails to perform its obligations, resulting in financial losses. Credit risk considers the likelihood of default and dilution of asset exposures in the non-trading book. Counterparty credit risk looks at the likelihood of default of the counterparty to the trade to which the company is exposed to. The company's main credit risk is institution exposures to its clearing banks. The company has counterparty credit risk institution exposures to market counterparties and, to a lesser degree, retail exposures to individual clients.

 

Counterparty credit risk derives from the company's trading process, that is, a retail client will trade with the company who may, in accordance with its risk policy, offset the market risk with one or more of its market counterparties. This means that the company has counterparty credit risk exposure to its market counterparties.

 

The company mitigates credit risk in a number of ways. The company only accept retail clients that pass certain suitability criteria as per directives from the Financial Conduct Authority (FCA). The company offers a number of risk management tools that enable clients to manage their exposures, including guaranteed and non-guaranteed stops, stop and order limits, the ability to hedge positions and full trading capability on a wide range of devices.

 

Market Risk

Market risk is the risk that the fair value of financial assets and financial liabilities will change due to movements in market prices. The company has position risk for each client trade where there is no offsetting trade placed with its market counterparties or where other client trades do not net off its exposure. The company also carries foreign-exchange risk due to the fact that the company has multiple currency accounts. The foreign-exchange risk is mitigated by the company's internal processes which prevent a build-up of excessive foreign currency balances.

 

Liquidity Risk

Liquidity risk is the risk that the company will be unable to meet payment obligations as they fall due.

 

The company manages liquidity risk by ensuring that sufficient liquidity to meet financial liabilities is available under both normal and stressed conditions.

 

The company is regulated by the Financial Conduct Authority (FCA) and continues to ensure that it complies to FCA client money (CASS) requirements in relation to the segregation and administration of client funds accounts.

TRADE NATION FINANCIAL UK LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -
Operational Risk

Operational risk is the risk of financial loss due to inadequate or failed internal processes and systems. It can also arise from human error or external events that the company cannot influence.

 

The company manages operational risk by implementing a system of internal controls, which identify operational risks and safeguard against them accordingly.

 

The reliability of the company's client trading platforms is key to minimalising operational risk and the company invest significantly in IT infrastructure to ensure that client trading platforms are scalable and resilient. All IT and data security systems conform to relevant standards.

 

The company has a Disaster Recovery/Business Continuity Plan to ensure clients receive a consistent and uninterrupted level of service, supported through regular testing.

 

Regulatory Risk

Regulatory risk is the risk that any breaches of regulations could lead to sanctions, fines, reputational damage and, in extreme situations, loss of licence.

 

The company regards regulatory risk as one of the most significant risks and ensures that it continues to meet regulatory requirements by investing significant time and resources to manage regulatory risk.

 

The company's compliance team are responsible for providing a robust line of defence to ensure that processes and controls comply with regulatory obligations.

Concentration Risk

Concentration risk is defined as all risk exposures with a loss potential large enough to threaten the solvency or financial position of the company through other exposures mentioned above.

 

The company has no significant exposure to any one particular client or group of connected clients.

Objectives for next 12 months

The company’s ultimate shareholder continues to support and invest globally in the Trade Nation client experience, delivering bespoke content and high levels of service. This is underpinned by transparent and fair client charges, fixed even when market volatility increases, that offer traders some of the best value to be found anywhere in the marketplace.

 

The group continues to review the number of regulatory licences and intends to further extend its global coverage, expanding opportunities for increased marketing, customer acquisition and higher revenues.

 

The group remains confident that the brand positioning of Trade Nation will continue to win and retain customers and that its championing of fair and fixed costs is a key differentiator in a crowded and competitive marketplace. The companies results post year end have been favourable to budget, with the Directors continued focus on achieving the financial objectives.

TRADE NATION FINANCIAL UK LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 4 -
Section 172(1) Statement

Directors' duties

The directors of Trade Nation Financial UK Ltd ("the Company") act in good faith in making decisions they consider will be most likely to promote the success of the Company for the benefit of its members and key stakeholders. The directors aim to carefully consider the interests of, and the impact of strategic decisions and initiatives on other stakeholders in the company, in order to factor these into their decision-making processes. The implementation of proactive and effective communication channels is a key objective for the directors, as is the focus and awareness of all stakeholders as to the Company's direction and objectives in any given period.

 

Employees

Directors are committed to improving company culture, engaging during the year with third party providers to implement bespoke behaviour-based education, development and training programmes accessible to all staff and departments. This is an ongoing process which includes regular assessment of staff engagement and supporting healthy and effective working relations. The directors are committed to promoting both physical and mental wellbeing, especially at a time of changing working practices and patterns. Keeping staff proactively informed of key issues and business development through structured, secure and effective communication channels is an essential element of developing a stable and motivated workforce. By promoting inclusion in the workplace, together with training and development opportunities, the directors seek to attract and retain a talented and motivated workforce.

 

Customers

The directors commit considerable time, effort and resources to understanding and responding to the needs of the Company's customers with a view to establishing and maintaining long term relationships and nurturing customer loyalty. Product development and enhancement is driven by customer feedback and engagement, helping to increase levels of new customer acquisition and existing customer retention.

 

Suppliers

The directors have strengthened internal procedures to require external suppliers to be individually verified to ensure they meet with regulatory and financial security standards set by the Company. The Company has also established robust procedures for supplier dispute resolution in a timely and fair manner.

 

Community and the environment

The Company promotes and encourages community and charitable contributions and recognises the importance of its environmental responsibilities. The Company seeks to implement policies aimed at reducing any potential detrimental environmental impact of its activities.

 

Standards and conduct

The Company has a series of defined codes of practice regarding ethical standards and the conduct of business. These are clearly communicated to every staff member, with periodic refresher training, and adherence to these codes of practice is expected and enforced.

On behalf of the board

Mr S Lane
Director
22 March 2024
TRADE NATION FINANCIAL UK LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 5 -

The directors present their annual report and financial statements for the year ended 30 November 2023.

Principal activities

The principal activity of the company is to provide spread betting and contracts for difference products based on financial markets to its clients and partners through online trading platforms. The company also provides back office and technology services to related businesses.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr R Davidson
Mr A H Merry
(Resigned 1 March 2023)
Mr K Taylor
Mr S Lane
Ms E E Akintujoye
(Resigned 31 May 2023)
Mr A Sharpe
(Appointed 11 July 2023)
Auditor

The auditor, Crowe U.K. LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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 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.

TRADE NATION FINANCIAL UK LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 6 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr S Lane
Director
22 March 2024
TRADE NATION FINANCIAL UK LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TRADE NATION FINANCIAL UK LTD
- 7 -
Opinion

We have audited the financial statements of Trade Nation Financial UK Ltd (the 'company') for the year ended 30 November 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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:

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 UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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.

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 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

TRADE NATION FINANCIAL UK LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TRADE NATION FINANCIAL UK LTD
- 8 -
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 strategic report or the directors' 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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are 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 directors determine 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 directors are 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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

TRADE NATION FINANCIAL UK LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TRADE NATION FINANCIAL UK LTD
- 9 -

We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 and FCA Regulations. We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items.

 

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the company’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the company for fraud. The laws and regulations we considered in this context for the UK operations were employment and taxation legislation.

 

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of controls by management and timing of recognition of income. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals and reviewing accounting estimates for biases and designing audit procedures to test the timing of income.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

 

These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 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.

Jeremy Cooper
Senior Statutory Auditor
For and on behalf of Crowe U.K. LLP
25 March 2024
Chartered Accountants
Statutory Auditor
Aquis House
49-51 Blagrave Street
Reading
Berkshire
RG1 1PL
TRADE NATION FINANCIAL UK LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
13,398,407
14,056,877
Cost of sales
(287,080)
(300,255)
Gross profit
13,111,327
13,756,622
Administrative expenses
(15,719,773)
(12,521,058)
Operating (loss)/profit
4
(2,608,446)
1,235,564
Interest receivable and similar income
8
66,969
6,426
(Loss)/profit before taxation
(2,541,477)
1,241,990
Tax on (loss)/profit
9
332,867
(61,822)
(Loss)/profit for the financial year and total comprehensive (loss)/income
(2,208,610)
1,180,168

The income statement has been prepared on the basis that all operations are continuing operations.

TRADE NATION FINANCIAL UK LTD
STATEMENT OF FINANCIAL POSITION
AS AT 30 NOVEMBER 2023
30 November 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
90,943
72,837
Current assets
Debtors
12
8,101,244
15,301,227
Cash at bank and in hand
10,694,372
6,563,461
18,795,616
21,864,688
Creditors: amounts falling due within one year
14
(8,592,465)
(9,434,821)
Net current assets
10,203,151
12,429,867
Net assets
10,294,094
12,502,704
Capital and reserves
Called up share capital
17
3,088,467
3,088,467
Share premium account
447,953
447,953
Profit and loss reserves
6,757,674
8,966,284
Total equity
10,294,094
12,502,704
The financial statements were approved by the board of directors and authorised for issue on 22 March 2024 and are signed on its behalf by:
Mr S Lane
Director
Company registration number 07073413 (England and Wales)
TRADE NATION FINANCIAL UK LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 December 2021
3,088,467
447,953
7,786,116
11,322,536
Year ended 30 November 2022:
Profit and total comprehensive income
-
-
1,180,168
1,180,168
Balance at 30 November 2022
3,088,467
447,953
8,966,284
12,502,704
Year ended 30 November 2023:
Loss and total comprehensive loss
-
-
(2,208,610)
(2,208,610)
Balance at 30 November 2023
3,088,467
447,953
6,757,674
10,294,094
Profit and loss reserves
Profit and loss reserves represent cumulative profits and losses, net of dividends paid and adjustments.
Share premium
Share premium reserve represents the amount received for share issues in excess of the nominal value of the shares issued.
TRADE NATION FINANCIAL UK LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
22
3,717,870
(6,256,432)
Income taxes refunded
414,162
143,964
Net cash inflow/(outflow) from operating activities
4,132,032
(6,112,468)
Investing activities
Purchase of tangible fixed assets
(59,687)
(72,943)
Interest received
58,566
6,426
Net cash used in investing activities
(1,121)
(66,517)
Net increase/(decrease) in cash and cash equivalents
4,130,911
(6,178,985)
Cash and cash equivalents at beginning of year
6,563,461
12,742,446
Cash and cash equivalents at end of year
10,694,372
6,563,461
TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 14 -
1
Accounting policies
Company information

Trade Nation Financial UK Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 6th Floor, 14 Bonhill Street, London, England, EC2A 4BX.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

The financial statements have been prepared on the going concern basis which assumes that the company will continue in business for the foreseeable future.true

 

The directors have reviewed the company's processes to control the financial risks to which they are exposed, including available liquidity, regulatory capital position and the annual budget. The going concern assessment factors in those considerations and the ability of the company’s UK regulated business to continue to comply with FCA requirements.

 

In addition to the risks identified in the Directors' Report, the directors have considered the cash balance held by the company, the expected continuation of the management charge income from the group companies and the projected administrative and other costs for the forthcoming 12 months from the date of signing of the financial statements, and consider there to be adequate resources in place. On this basis, the company is considered to be a going concern.

1.3
Turnover

Trading revenue represents gains and losses arising on client trading activity, primarily in financial spread betting, contracts for difference or binary bets.

 

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the company and the revenue can be reliably measured.

 

Trading revenue is reported gross of introductory partner commission as these amounts are directly linked to trading revenue. Introductory partner commissions are disclosed as an expense in arriving at net operating income.

 

Management charges represent fees charged to group entities for the provision of management services.

1.4
Intangible fixed assets - goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2016, has been amortised evenly over its estimated useful life of five years. The acquisition has been disposed of fully in the current financial year.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 15 -

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Patents & licences
Fully impaired and not being amortised
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Computers
33% on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
Cash and cash equivalents

The company holds funds on behalf of clients in accordance with the rules of the UK Financial Conduct Authority (FCA) and other regulatory bodies and are classified as 'cash and cash equivalents'. The amounts held at the year end are disclosed in the notes to the financial statements.

TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors, loans to fellow group companies and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities

Basic financial liabilities, including creditors, loans from fellow group companies and are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

 

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The Assets of the plan are held separately from the Company in independently administered funds.

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

In the directors' opinion, the accounting estimates or judgements that relate to the useful economic life of intangible assets, including patents and licences as well as development costs, are significant. During the prior year the directors made an assessment of the useful economic life of the development costs intangible asset, following which it was agreed that it would be prudent to fully impair the asset. The directors consider that this judgement is still appropriate.

 

The assessment of certain accruals and other provisions (for example, R&D and tax advisor fees, recoverable VAT) is also judgemental. The accruals or provisions held represent management’s view of the likely payables or receivables.

 

Management has also assessed means of recoverability for all debt owed by related parties and judges all receivables to be recoverable in the normal course of business.

 

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.

TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 19 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Rendering of services
2,686,104
1,350,499
Management charges
10,712,303
12,706,378
13,398,407
14,056,877
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
2,668,039
1,272,367
Europe
2,409
9,699
Asia
11,441
51,459
Africa
2,439
9,822
North America
10,713,697
12,711,994
Rest of world
382
1,536
13,398,407
14,056,877
2023
2022
£
£
Other revenue
Interest income
66,969
6,426
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
215,751
(28,988)
Depreciation of owned tangible fixed assets
41,581
22,470
(Profit)/loss on disposal of tangible fixed assets
-
1,046
Operating lease charges
429,972
313,255
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
29,700
27,000
TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 20 -
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Administration
83
66

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
6,334,215
4,585,386
Social security costs
725,394
578,888
Pension costs
278,929
166,889
7,338,538
5,331,163
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
546,840
510,842
Company pension contributions to defined contribution schemes
47,967
17,515
Compensation for loss of office
278,200
-
0
873,007
528,357

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2022 - 5).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
204,297
196,660
Company pension contributions to defined contribution schemes
11,316
6,130
8
Interest receivable and similar income
2023
2022
£
£
Interest income on financial assets measured at amortised cost
Interest on bank deposits
66,969
6,426
TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 21 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
232,541
Credit in respect of prior periods
(57,867)
(170,719)
Total current tax
(57,867)
61,822
Deferred tax
Origination and reversal of timing differences
(275,000)
-
0
Total tax (credit)/charge
(332,867)
61,822

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(2,541,477)
1,241,990
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.00% (2022: 19.00%)
(584,540)
235,978
Tax effect of expenses that are not deductible in determining taxable profit
36,805
3,975
Limitation of tax losses recognised
299,280
-
0
Change in unrecognised deferred tax assets
-
0
(3,183)
Adjustments in respect of prior years
(57,867)
(170,719)
Difference in tax rate used for deferred tax asset
(22,000)
-
0
Effect of super deduction enhanced capital allowances
(4,545)
(4,158)
Effect of change in future tax rate applied to deferred tax
-
0
(71)
Taxation (credit)/charge for the year
(332,867)
61,822

At the reporting date, the Company had adjusted losses carried forward of £2,401,215 (2022: £nil). These tax losses have no expiry date. A deferred tax asset of £275,000 (2022: £2,071) has been recognised in respect of these losses due to uncertainty around the timing and value of future profits, against which they can be relieved.

TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 22 -
10
Intangible fixed assets
Goodwill
Patents & licences
Total
£
£
£
Cost
At 1 December 2022
180,000
64,055
244,055
Disposals
(180,000)
(64,055)
(244,055)
At 30 November 2023
-
0
-
0
-
0
Amortisation and impairment
At 1 December 2022
180,000
64,055
244,055
Disposals
(180,000)
(64,055)
(244,055)
At 30 November 2023
-
0
-
0
-
0
Carrying amount
At 30 November 2023
-
0
-
0
-
0
At 30 November 2022
-
0
-
0
-
0
11
Tangible fixed assets
Computers
£
Cost
At 1 December 2022
144,358
Additions
59,687
Disposals
(36,757)
At 30 November 2023
167,288
Depreciation and impairment
At 1 December 2022
71,521
Depreciation charged in the year
41,581
Eliminated in respect of disposals
(36,757)
At 30 November 2023
76,345
Carrying amount
At 30 November 2023
90,943
At 30 November 2022
72,837
TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 23 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Corporation tax recoverable
9,743
590,176
Amounts owed by group undertakings
6,104,493
13,587,130
Other debtors
162,843
284,528
Prepayments
1,549,165
839,393
7,826,244
15,301,227
Deferred tax asset (note 15)
275,000
-
0
8,101,244
15,301,227

Amounts owed by group undertakings are unsecured, interest free, have no fixed repayment terms and are repayable on demand.

13
Cash at bank and in hand

Included within cash at bank and in hand are client account funds of £4,439,944 (2022: £3,527,142).

14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
198,250
428,994
Amounts owed to group undertakings
2,944,018
4,075,473
Corporation tax
-
0
232,541
Other taxation and social security
211,524
173,802
Other creditors
53,952
42,513
Client funds owing
4,528,020
3,473,485
Accruals
656,701
1,008,013
8,592,465
9,434,821

Amounts owed to group undertakings are unsecured, interest free, have no fixed repayment terms and are repayable on demand.

15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Assets
Assets
2023
2022
Balances:
£
£
Tax losses
275,000
-
TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
15
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Liability at 1 December 2022
-
Credit to profit or loss
(275,000)
Asset at 30 November 2023
(275,000)

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
278,929
166,889

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

 

Included within other creditors is £53,952 (2022 - £31,121) relating to amounts due to be paid into the company's defined contribution pension scheme.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
3,088,467
3,088,467
3,088,467
3,088,467

Each share is entitled to one vote in any circumstances.

18
Contingent liability

During the year, the Company had taken out a marketing contract that contained a potential future liability if certain conditions are to be met. The total maximum potential liability to the company contingent on these conditions would total £600,000 including VAT and would be payable in the next financial year. This would be split £240,000 in respect of 2023 and £360,000 in respect of the year ended 30 Nov 2024.

 

Of the amount for November 2023 the Directors have considered the position at the year end and believe that an element of this is highly likely to come to fruition and therefore have accrued £168,000 towards the total liability as at 30th Nov 2023, being the element of the liability that relates to this financial year. In respect of the balance relating to this year, £72,000 is a contingent liability at the balance sheet.

TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 25 -
19
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
251,068
348,000
Between two and five years
-
0
251,068
251,068
599,068
20
Related party transactions

Total remuneration of key management personnel during the year was £703,264 (2022 - £567,809).

 

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic or Ireland', not to disclose related party transactions with other group entities.

21
Ultimate controlling party

The immediate parent company is Finsa Capital Holdings Limited registered at 1st Floor House, Cumbrae House, Market Street, Douglas, IM1 2PQ, Isle of Man.

 

The ultimate controlling party is Mr J White.

22
Cash generated from/(absorbed by) operations
2023
2022
£
£
(Loss)/profit for the year after tax
(2,208,610)
1,180,168
Adjustments for:
Taxation (credited)/charged
(332,867)
61,822
Investment income
(66,969)
(6,426)
(Gain)/loss on disposal of tangible fixed assets
-
1,046
Depreciation and impairment of tangible fixed assets
41,581
22,470
Movements in working capital:
Decrease/(increase) in debtors
6,894,550
(9,652,216)
(Decrease)/increase in creditors
(609,815)
2,136,704
Cash generated from/(absorbed by) operations
3,717,870
(6,256,432)
TRADE NATION FINANCIAL UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 26 -
23
Analysis of changes in net funds
1 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
6,563,461
4,130,911
10,694,372
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