Company registration number 06819047 (England and Wales)
HANTEC MARKETS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HANTEC MARKETS LIMITED
COMPANY INFORMATION
Directors
B Nurmohamed
Man-Woon James Yu
Richard Cohen
Ngok Fung Lam
C B Tang
C J Barrett
(Appointed 30 January 2023)
Company number
06819047
Registered office
43 - 45 Dorset Street
London
W1U 7NA
Auditor
Fisher, Sassoon & Marks
43-45 Dorset Street
London
W1U 7NA
Business address
5 - 6 Newbury Street
London
England
EC1A 7HU
HANTEC MARKETS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Income statement
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
HANTEC MARKETS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The Company's business developed generally in line with the board's expectations and the results for the period and the financial position at the period end were considered satisfactory, given the increasing competition and regulation within the sector.

 

A small operating loss of £47,437 was reported for the year. This was caused by additional IT expenditure incurred towards the end of the year due to the introduction of a new technology strategy. We anticipate that this investment in the development of new technologies will contribute significantly to the future profitability of the business.

 

The directors expect that the Company's financial results next year will return to profitability.

Principal risks and uncertainties

The principal activity of the Company was dealing in Contract for Differences, gives rise to financial risks in the ordinary course of business. The risk management undertaken mitigates the risks as detailed in the company’s Internal Capital Adequacy and Risk Assessment (ICARA). The ICARA provides an ongoing assessment of the risks that the Company believes have the potential to have a significant detrimental impact on its financial performance. The board sets the strategy and policies for the management of these risks and assigns the management and monitoring of these risks as appropriate. The main financial risks arising from the Company's business activities are set out below.

 

Market Risk

 

Market risk is the risk of losses in positions arising from movements in CFD market prices. Client trades are hedged thereby mitigating the risk of movements in market prices.

 

Foreign Currency Risk

 

Foreign currency risk is a financial risk that exists when a financial transaction is denominated in a currency other than that of the base currency of Hantec Markets Limited. Foreign currency risk is managed by the finance department to minimise any potential losses arising from exposure.

 

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The company's credit risk stems from two sources; Customers and banks and financial institutions. The company operates a margin system whereby clients deposit cash upfront prior to trading to be used as collateral against possible losses. Should a client's net equity position fall below the required maintenance margin, which is required to keep their positions open, and the client does not provide additional margin to cover their position, the client's position will be liquidated until the remaining net equity position exceeds the required maintenance margin.The company holds accounts with several banks and financial institutions which are only opened after suitable checks have been made to assess the financial soundness of the entity, and is reassessed on a regular basis.

 

Liquidity Risk

 

Liquidity risk is the risk that the company will not have sufficient funds to meet its liabilities as they fall due. This risk is managed through forecasting its ongoing business operations for the next 12 months which are reviewed regularly as well as maintaining liquid assets in accordance with FCA financial requirements.

 

Operational Risk

 

Operational risk is the risk of losses stemming from inadequate or failed internal processes, people and systems or from external events. The company manages operational risk through the proper documentation of processes, segregation of duties and a regular and comprehensive review of internal controls.

 

 

HANTEC MARKETS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Development and performance

The Company had net assets of £5.4 million (2022: £5.4 million) which included £3.8 million of cash balances. Accordingly the Company has a strong balance sheet and is well placed to achieve its long term strategy.

Key performance indicators

Key financial performance indicators are turnover £6,810,934 (2022 £5,513,878 ) an increase of 24% . Operating loss of £47,437 (2022 profit £36,058 ) and reduction in net assets from £5,447,196 to £5,391,778 .The decrease in net assets was due to the loss for the year.

 

The company does not have any key non financial indicators.

Directors' statement of compliance with duty to promote the success of the Company

Under S172 the directors must act in a way that they consider, in good faith, would be most likely to promote the success of the company. The directors are very aware of this requirement and in fulfilling this duty they consider the following stakeholders:

 

Shareholders

The firm is a privately held company, its immediate and ultimate parent is Hantec Markets Holdings Limited which is a company incorporated in Hong Kong. The Directors have regular contact with the group directors which includes representatives from the institutional shareholders ensuring that the business strategy of the firm is aligned with strategic objectives of the group.

 

Clients

The firm has a varied customer base and has always been a client focused organization. Treating clients fairly is ingrained in the firm. The directors have organized teams and functions to ensure compliance with all relevant regulations and provide a reliable and trustworthy product and service to clients.

 

Employees

The firm 's employees are integral to the success of the business. The continued recruitment, development and retention of the firm's employees remains key to the success of the business. The firm has a structure of management and staff meetings held on a regular basis to provide information and decision-making processes and enable the Directors to interact freely with employees. The firm offers rewards and benefits to assist employees with their career development, wellbeing and future planning.

 

Suppliers and Business Relationships

The firm has a number of key suppliers and business relationships which we work with closely to ensure the smooth operation of the business. These key relationships are reviewed periodically to ensure that the technology, product and service offerings are beneficial to the firm and its clients.

 

Conduct

The. firm provides regular training to all staff in all aspects of its operations including anti money laundering, anti­ bribery and corruption. treating customers fairly and other regulatory requirements. The firm promotes high standards and its policies ensure all staff and directors act fairly within the business.

 

Community and the environment

The firm and group sponsor and supports various different organizations and will continue to be aware of its carbon footprint and measures to reduce this footprint.

 

 

 

HANTEC MARKETS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

On behalf of the board

B Nurmohamed
Director
18 April 2024
HANTEC MARKETS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities
The principal activity of the company is that of provision of investment services and acting as principal to its clients in foreign exchange and derivatives including index Contracts For Difference ("CFD").

The company is authorised by the Financial Conduct Authority to deal in and arrange investment business.
Results and dividends

The results for the year are set out on page 9.

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:

B Nurmohamed
Man-Woon James Yu
Richard Cohen
Ngok Fung Lam
A C Sharpe
(Resigned 30 January 2023)
C B Tang
C J Barrett
(Appointed 30 January 2023)
Supplier payment policy
The company's current policy concerning the payment of trade creditors is to:
- settle the terms of payment with suppliers when agreeing the terms of each transaction;
- ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
- pay in accordance with the company's contractual and other legal obligations.
Financial instruments
Liquidity risk

The Company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the Company has sufficient liquid resources to meet the operating needs of the businesses.

Foreign currency risk

The Company’s principal foreign currency exposures arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling.

Credit risk

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfill credit rating criteria approved by the Board.

 

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Post reporting date events

There are no matters to report.

Future developments

The directors are confident about the Company's progress and believe the company is well placed to make further progress during the coming year.

HANTEC MARKETS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Auditor

The auditor, Fisher, Sassoon & Marks, 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.

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
B Nurmohamed
Director
18 April 2024
HANTEC MARKETS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF HANTEC MARKETS LIMITED
- 6 -
Opinion

We have audited the financial statements of Hantec Markets Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, 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:

HANTEC MARKETS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF HANTEC MARKETS LIMITED
- 7 -
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.

The extent to which the audit was considered capable of detecting irregularities including fraud

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:

 

HANTEC MARKETS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF HANTEC MARKETS LIMITED
- 8 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

 

To address the risk of fraud through management bias and override of controls, we:

 

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or through collusion.

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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Jonathan Marks
Senior Statutory Auditor
For and on behalf of Fisher, Sassoon & Marks
18 April 2024
Chartered Accountants
Statutory Auditor
43-45 Dorset Street
London
W1U 7NA
HANTEC MARKETS LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
6,810,934
5,513,878
Administrative expenses
(6,858,371)
(5,477,820)
Operating (loss)/profit
4
(47,437)
36,058
Interest receivable and similar income
7
-
0
19,519
Interest payable and similar expenses
8
(4,105)
(4,493)
(Loss)/profit before taxation
(51,542)
51,084
Tax on (loss)/profit
9
(3,876)
(26,261)
(Loss)/profit for the financial year
(55,418)
24,823

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

HANTEC MARKETS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
£
£
(Loss)/profit for the year
(55,418)
24,823
Other comprehensive income
-
-
Total comprehensive income for the year
(55,418)
24,823
HANTEC MARKETS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
210,148
194,728
Investments
11
-
0
960,854
210,148
1,155,582
Current assets
Debtors
13
1,722,739
2,918,558
Cash at bank and in hand
3,807,847
3,198,301
5,530,586
6,116,859
Creditors: amounts falling due within one year
14
(294,078)
(1,760,677)
Net current assets
5,236,508
4,356,182
Total assets less current liabilities
5,446,656
5,511,764
Creditors: amounts falling due after more than one year
15
(54,878)
(64,568)
Net assets
5,391,778
5,447,196
Capital and reserves
Called up share capital
18
3,000,000
3,000,000
Share premium account
338,015
338,015
Profit and loss reserves
2,053,763
2,109,181
Total equity
5,391,778
5,447,196
The financial statements were approved by the board of directors and authorised for issue on 18 April 2024 and are signed on its behalf by:
B Nurmohamed
Director
Company registration number 06819047 (England and Wales)
HANTEC MARKETS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
3,000,000
338,015
2,084,358
5,422,373
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
24,823
24,823
Balance at 31 December 2022
3,000,000
338,015
2,109,181
5,447,196
Year ended 31 December 2023:
Loss and total comprehensive income
-
-
(55,418)
(55,418)
Balance at 31 December 2023
3,000,000
338,015
2,053,763
5,391,778
HANTEC MARKETS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
24
(222,244)
(467,744)
Interest paid
(4,105)
(4,493)
Income taxes paid
(26,261)
(11,585)
Net cash outflow from operating activities
(252,610)
(483,822)
Investing activities
Purchase of tangible fixed assets
(85,018)
(5,456)
Proceeds from disposal of tangible fixed assets
(3,990)
-
0
Proceeds from disposal of subsidiaries
960,854
-
0
Interest received
-
0
19,519
Net cash generated from investing activities
871,846
14,063
Financing activities
Payment of finance leases obligations
(9,690)
(10,571)
Net cash used in financing activities
(9,690)
(10,571)
Net increase/(decrease) in cash and cash equivalents
609,546
(480,330)
Cash and cash equivalents at beginning of year
3,198,301
3,678,631
Cash and cash equivalents at end of year
3,807,847
3,198,301
HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

Hantec Markets Limited is a private company limited by shares incorporated in England and Wales. The registered office is 43 - 45 Dorset Street, London, W1U 7NA.

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

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover represents amounts receivable for undertaking brokerage services in contracts for differences and provision of management services to group companies.

 

Brokerage services is measured at net consideration received/paid on all realised and the net market value of open positions with clients and all other counterparties.

 

The recognition of income results directly from the recognition on financial assets and liabilities on an aggregate basis by each asset class determine the net gain or loss for that asset class in accordance with FRS 102 section 11.48. CFD positions are viewed as a single asset class.

 

Management service fee revenue derived from group companies is for the provision of business and management services in accordance with the contractual cost plus pricing agreements.

 

1.4
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:

Leasehold improvements
33% Straight Line basis
Fixtures, fittings & equipment
20% Straight Line basis
Computer equipment
20% Straight Line basis
Motor vehicles
20% Straight Line basis

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.

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.5
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.8
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 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.

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities

Basic financial liabilities, including creditors, 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 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

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.

 

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.

1.9
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.

1.10
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

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.

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
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.

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

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.16

Client monies

The Company holds money on behalf of clients in accordance with the client money rules of its regulator. Client monies held in segregated bank and settlement accounts in accordance with regulations and the corresponding liabilities to these clients are not recognised in the Balance Sheet. At 31 December 2023, amounts held by the Company on behalf of clients in accordance with the Client Assets Rules of the Financial Conduct Authority amounted to £9,697,118 (2022: £16,794,177).

 

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.

 

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 directors do not consider there to be any critical judgements or key sources of estimation uncertainty involved in the preparation of the company's financial statements.

 

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Commission from broking
3,583,625
2,856,156
Management service fee
3,227,309
2,657,722
6,810,934
5,513,878
2023
2022
£
£
Other revenue
Interest income
-
19,519

The Company's income is derived from trading in CFDs as principal which, for the purposes of segmental analysis, is considered by the directors to be a single global market.

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
38,239
(56,254)
Fees payable to the company's auditor for the audit of the company's financial statements
13,000
14,125
Depreciation of owned tangible fixed assets
47,773
46,458
Depreciation of tangible fixed assets held under finance leases
21,825
21,825
Loss on disposal of tangible fixed assets
3,990
-
Operating lease charges
133,822
101,931
5
Employees

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

2023
2022
Number
Number
Management
3
4
Sales/support
28
21
Admin/operation
12
13
Total
43
38

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,460,195
2,026,755
Social security costs
278,336
253,251
Pension costs
104,197
103,460
2,842,728
2,383,466
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
516,073
370,362
Company pension contributions to defined contribution schemes
27,305
28,164
543,378
398,526

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Directors' remuneration
(Continued)
- 21 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
297,000
232,295
Company pension contributions to defined contribution schemes
24,000
24,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
-
0
19,519
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
-
0
19,519
8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
4,105
4,478
Other interest
-
0
15
4,105
4,493
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
3,876
26,261
HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 22 -

The actual 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
(51,542)
51,084
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(9,793)
9,706
Tax effect of expenses that are not deductible in determining taxable profit
8,173
6,877
Permanent capital allowances in excess of depreciation
(7,728)
(3,287)
Depreciation on assets not qualifying for tax allowances
13,224
12,965
Taxation charge for the year
3,876
26,261
10
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
69,155
74,459
293,318
109,115
546,047
Additions
66,000
-
0
19,018
-
0
85,018
At 31 December 2023
135,155
74,459
312,336
109,115
631,065
Depreciation and impairment
At 1 January 2023
26,894
38,168
255,339
30,918
351,319
Depreciation charged in the year
23,052
10,817
13,904
21,825
69,598
At 31 December 2023
49,946
48,985
269,243
52,743
420,917
Carrying amount
At 31 December 2023
85,209
25,474
43,093
56,372
210,148
At 31 December 2022
42,261
36,291
37,979
78,197
194,728

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Motor vehicles
56,372
78,197

Assets acquired under hire purchase are secured against the hire purchase agreement.

 

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
11
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
-
0
960,854
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 & 31 December 2023
960,854
Impairment
At 1 January 2023
-
Disposals
960,854
At 31 December 2023
960,854
Carrying amount
At 31 December 2023
-
At 31 December 2022
960,854

During the year, the company disposed its subsidiary undertaking in Jordan.

12
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,512,613
2,497,978
Carrying amount of financial liabilities
Measured at amortised cost
345,080
1,798,984
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors and trading assets
267,019
151,588
Amounts due from group undertakings
1,149,150
2,319,257
Other debtors
189,755
105,440
Prepayments and accrued income
116,815
342,273
1,722,739
2,918,558
HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
16
10,571
10,571
Trade creditors and trading liabilities
166,672
155,257
Amounts owed to group undertakings
-
0
1,464,780
Corporation tax
3,876
26,261
Accruals and deferred income
112,959
103,808
294,078
1,760,677
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
16
54,878
64,568
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
10,571
10,571
In two to five years
54,878
71,285
65,449
81,856
Less: future finance charges
-
0
(6,717)
65,449
75,139

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is three years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
104,197
103,460

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.

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
3,000,000
3,000,000
3,000,000
3,000,000
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
142,833
85,000
Between two and five years
132,000
70,833
274,833
155,833
20
Events after the reporting date

There are no matters to report.

 

 

21
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
537,247
393,231
Transactions with related parties

During the year the company entered into the following transactions with related parties:

The company has taken advantage of the exemption in Financial Reporting Standard 102 Section 33.1A 'Related Party Disclosures' not to disclose transactions with other members of the group on the grounds that 100% of the voting rights are controlled within the group.

During the year, the company paid £85,000 to Propone Limited, as company's office rent. N Nurmohamed is the director of Propone Limited and a shareholder of a group company.

The following amounts were outstanding at the reporting end date:

At the year end, the company was owed £30,124 (2022: £67,640) by Hantec Markets (Australia) Pty Limited and was owed £1,149,150 (2022: owed to £1,464,780) by Hantec Markets Limited (Mauritius).

 

HANTEC MARKETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
22
Directors' transactions

During the year, the company paid non executive director fees of £15,000 (2022: £15,000) to R Cohen, and £21,250 to M Yu.

23
Ultimate controlling party

The Company's immediate parent undertaking is Hantec Markets Holdings Limited, a company incorporated in Hong Kong.

 

There is no ultimate controlling party.

The largest and smallest group of undertaking for which group accounts have been drawn up which include the company is headed by Hantec Markets Holdings Limited. They are available at unit 4609, COSCO Tower, 183 Queen's Road Central, Hong Kong.

24
Cash absorbed by operations
2023
2022
£
£
(Loss)/profit for the year after tax
(55,418)
24,823
Adjustments for:
Taxation charged
3,876
26,261
Finance costs
4,105
4,493
Investment income
-
0
(19,519)
Loss on disposal of tangible fixed assets
3,990
-
Depreciation and impairment of tangible fixed assets
69,598
68,283
Movements in working capital:
Decrease/(increase) in debtors
1,195,819
(1,894,024)
(Decrease)/increase in creditors
(1,444,214)
1,321,939
Cash absorbed by operations
(222,244)
(467,744)
25
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
3,198,301
609,546
3,807,847
Obligations under finance leases
(75,139)
9,690
(65,449)
3,123,162
619,236
3,742,398
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