The directors present the strategic report for the Period ended 30 June 2023.
The revenue of £3,934,511 during the period was generated from provision of human resources, facilities, professional and administration services, earning a profit of £260,705.
The risk of regulatory changes adversely impacts Wirex International’s position and capacity to conduct business.
The Group has proactively engaged regulators to gain clarity on the evolving regulatory landscape affecting the digital asset industry. The Group will continue to deploy its resources to diligently monitor the market and regulatory environment for threats and opportunities.
The risk of loss resulting from inadequate or failed policies or controls, key people and knowledge, systems and external events in respect of new product implementations, entering new markets and sustainability of key agreements with banking partnerships.
The Group actively monitors its operations and documents key business processes to facilitate knowledge transfers in the event of team member turnover. The Group conducts regular third-party penetration testing.
The risk of loss resulting from data protection or privacy failures and incomplete, inaccurate or untimely reporting of financial and operating information leading to potential fines, penalties or sanctions.
The Group has a robust and growing team of compliance professionals that ensure that all members of staff have sufficient training to ensure adherence to reporting and other regulatory requirements. Compliance, Legal and Finance teams across the Group combine efforts to ensure timely and accurate reporting to regulatory bodies.
The risk of loss resulting from employee and third-party fraud risk as well as product and engineering risks.
The Group employs strict protocols to ensure that customer data and assets are safeguarded. This includes ongoing monitoring of platform activity and reconciliation of transactions against platform data.
The risk that Wirex International does not have sufficient financial resources to meet its commitments as they fall due.
Wirex Group maintains adequate levels of liquidity to ensure that it continues to meet foreseeable and unexpected needs. Daily monitoring and control processes are in place to address internal and regulatory liquidity requirements.
The risk related to Wirex International Limited that it will not continue to be a going concern.
The directors have forecasted the cashflows of the Group and have determined that there are sufficient resources for Wirex International Limited to meet its debts as they fall due for the foreseeable future, and therefore they have prepared the financial statements of the Company on a going concern basis.
In assessing the going concern of the Group, the directors perform stress testing analysis to determine the impact of significant withdrawals of customer funds and have determined that whilst they are confident they have the liquid resources available to meet the expected levels of withdrawals, they acknowledge that under the most extreme scenarios of customer withdrawals there could be a shortfall of available liquid assets and therefore uncertainty in relation to going concern at the Group level. Given that the company currently depends on the Group, there is consequently an uncertainty regarding the company's ability to continue as a going concern as well.
The Board monitors the progress of the company by reference to the following KPls:
| 2023 |
| £ |
Revenue | 3,934,511 |
Gross profit | 332,154 |
Net assets | 260,805 |
Future developments
Key elements of the company's business strategy include:
Maintaining positive earnings through the calendar year 2024;
Supporting and growing the Wirex brand;
Continuing to provide affiliated companies with efficient and value adding services;
Supporting affiliated entities’ retention and growth;
Effectiveness in risk management and compliance through enhanced transaction monitoring, anti-money laundering and know your customer controls, policies and procedures.
General confirmation of Directors' duties
Wirex's Board has a clear framework for determining the matters within the company. Certain financial and strategic thresholds have been determined to identify matters requiring Board consideration and approval.
When making decisions, each Director ensures that they act in the way they consider, in good faith, would most likely promote the company's success for the benefit of its members as a whole, and in doing so have regard (among other matters) to:
S172(1) (A) "The likely consequences of any decision in the long term"
The Directors recognise how our operations are viewed by different parts of society and before decisions are made they consult with various internal committees. Given the complexity of the industry we operate in, the Directors have taken the decisions they believe best support Wirex's strategic ambitions.
S172(1) (B) "The interests of the company's employees"
The Directors recognise that Wirex employees are fundamental and core to our business and delivery of our strategic ambitions. The success of our business depends on attracting, retaining and motivating employees. From ensuring that we remain a responsible employer, from pay and benefits to our health, safety and workplace environment, the Directors factor the implications of decisions on employees and the wider workforce, where relevant and feasible.
S172(1) (C) "The need to foster the company's business relationships with suppliers, customers and others"
Delivering our strategy requires strong mutually beneficial relationships with suppliers, customers and regulators. Wirex seeks the promotion and application of certain general principles in such relationships. The ability to promote these principles effectively is an important factor in the decision to enter into or remain in such relationships. The businesses continuously assess the priorities related to customers and those with whom we do business, and the Board engages with the businesses on these topics, for example, within the context of business strategy updates and investment proposals.
S172(1) (D) "The impact of the company's operations on the community and the environment"
This aspect is inherent in our strategic ambitions, most notably in our ambitions to thrive through the global digital currency transition. As such, the Board receives information on these topics to provide relevant information for specific Board decisions.
S172(1) (E) "The desirability of the company maintaining a reputation for high standards of business conduct"
The Board periodically reviews and approves clear frameworks, to ensure that its high standards are maintained both within the businesses and the business relationships we maintain. This, complemented by the ways the Board is informed and monitors compliance with relevant governance standards, help ensure its decisions are taken and Wirex acts in ways that promote high standards of business conduct.
S172(1) (F) "The need to act fairly as between members of the company"
After weighing up all relevant factors, the Directors consider which course of action best enables delivery of our strategy in the long term, taking into consideration the impact on stakeholders. In doing so, our directors act fairly between the Company's members.
On behalf of the board
The directors present their annual report and financial statements for the Period ended 30 June 2023.
The profit for the year, after taxation, amounted to £260,705.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
The independent auditors, MMBA London Ltd, (Chartered Certified Accountants and Statutory Auditors) will be proposed for reappointment for the year ended 30 June 2024 in accordance with section 485 of the Companies Act 2006.
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.
Basis for opinion
Conclusions relating to going concern
We draw attention to note 1.4 to the financial statements, which indicates that the company is reliant on the continued support of the group headed by Wirex Holdings Limited ('the group') in order for the company to meet its debts as they fall due.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial Period 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.
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.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
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:
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements, including how fraud may occur by enquiring of management of its own consideration of fraud. In particular, we looked at where management made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain.
We also considered potential financial or other pressures, opportunity and motivations for fraud. As part of this discussion, we identified the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations and how management monitor these processes. Appropriate procedures included the review and testing of manual journals and key estimates and judgements made by management.
We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates, drawing on our broad sector experience, and considered the risk of acts by the Company that were contrary to these laws and regulations, including fraud.
We focused on laws and regulations that could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006, UK tax legislation and other sector specific laws and regulations.
We made enquiries of management with regards to compliance with applicable laws and regulations and corroborated any necessary evidence to relevant information, for example, minutes of the Directors meetings, minutes of departmental meetings held, legal reports provided by the compliance department and correspondence between the Company and its solicitors.
Our tests also included agreeing the financial statements disclosures to underlying supporting documentation and enquiries with management. We did not identify any key audit matters relating to irregularities, including fraud. As in all of our audits, we also addressed the risk of management override of internal controls including testing journals and evaluation whether there was evidence of bias by the management that represented a risk of material misstatement due to fraud.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
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.
The income statement has been prepared on the basis that all operations are continuing operations.
Wirex International Limited is a private company limited by shares incorporated in England and Wales. The registered office is 9th Floor 107 Cheapside, London, EC2V 6DN.
The financial statements have been prepared for the period from 14 March 2022 to 30 June 2023. This is the company's first set of financial statements since its incorporation on 14 March 2022.
The financial statements are presented in pound sterling, which is the functional currency of the company. The financial statements have been prepared in accordance with Financial Reporting Standard 101 (FRS 101) 'Reduced Disclosure Framework'.
As this is the company's first reporting period, there are no comparative figures presented.
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 company has taken advantage of the following disclosure exemptions under FRS 101:
· the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present
comparative information in respect of:
1. paragraph 79(a)(iv) of IAS 1;
2. paragraph 73(e) of IAS 16 Property, Plant and Equipment;
3. paragraph 118(e) of IAS 38 Intangible Assets;
· the requirements of paragraphs l0(d), lO(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of
IAS 1 Presentation of Financial Statements;
· the requirements of IAS 7 Statement of Cash Flows;
· the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures; and
· the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)-134(f) and 135(c)-135(e) of IAS
36 Impairment of Assets.
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.
Basic financial assets, which include trade and other receivables 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, 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.
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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
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.
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.
The average monthly number of persons (including directors) employed by the company during the Period was:
Their aggregate remuneration comprised:
The actual charge for the Period can be reconciled to the expected charge/(credit) for the Period based on the profit or loss and the standard rate of tax as follows:
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. At 30 June 2023, the company owed £3,068 to a defined contribution plan for its employees.