The directors present the strategic report for the year ended 31 March 2024.
Ediphy Group Ltd operates a number of subsidiaries delivering services to the institutional capital markets industry. The Parent Company is headquartered in London and is currently focused on Uk based clients, including those global asset managers with a UK presence. Its major competitive advantage continues to be the use of its proprietary end-to-end technology stack to deliver both data analytics and trading workflow in an integrated manner.
Ediphy Markets Ltd is a wholly owned subsidiary providing execution services in fixed income products to institutional clients under its authorisation from the Financial Conduct Authority in the United Kingdom. Ediphy Group Ltd's other client-facing wholly owned subsidiary is Ediphy Analytics Ltd which provides workflow and analytics solutions to capital markets players. The Group's other wholly owned subsidiary, Ediphy Research Ltd, is a service company to the client-facing entities in the Group providing technology and human resources to support their activities.
The company performance was satisfactory, the revenue increased by £666,456. Although there was also an increase in some operating and administrative costs in 2024. Nevertheless these costs are very contained.
The principal risks and uncertainties faced by the company include: cyber security, financial fraud; operational risk; and loss of reputation. All these risks are addressed through a robust framework of policies, procedures and other internal controls, implemented in line the company's policy.
The company's key performance indicator is revenue. The firm's turnover is as disclosed in the statutory profit and loss account on page 6.
The directors of the company have acted in a way that they consider, in good faith, would most likely promote the success of the company for the benefit of its shareholders, employees and customers as a whole, and in doing so, the directors have considered (amongst other matters):
The likely consequences of any decisions in the long term:
The Board takes full responsibility for all strategic matters and meets both formally and informally on a regular basis. There are other subordinate forums which have a degree of delegated authority, principally the Management Committee which deals with day-to-day activities. Given the Company is relatively small, all Directors are currently involved in much of the firm’s daily activity.
The interests of the Company's employees:
All Group employees are provided interesting and meaningful opportunities, usually spanning multiple disciplinary areas. This creates a flat management structure with staff of all levels getting deep exposure to all aspects of the business. A flexible working environment is offered, with most staff having the option of working remotely. Emphasis is put on maintaining a collegiate culture where information is shared appropriately, and feedback is given in real-time. Training is provided regularly and there is a clear framework of policies and procedures which are outlined in the Employee Handbook provided to all staff that accord with the legal requirements around equality and diversity, regulatory responsibilities and employment rights. We encourage all staff to speak up about things they are concerned about and operate a whistleblowing policy in addition to fostering this open culture.
The need to foster the Company's business relationships with supplier and others:
The Company operates closely with many key third parties in a way that they are aligned with its strategic objectives ensuring that all businesses continue to run optimally. These primarily include settlement and clearing agents and trading venues, all of whom are risk assessed before onboarding and actively managed relationships. The Board operates a risk management framework including Anti-Bribery and Corruption policies and is made aware of any significant supplier issues.
The Board retains a very transparent and respectful dialogue with its regulator ensuring that they are updated as required on key strategic decisions. The Board receives regular updates on developments in financial services regulation. The regulator requires compliance with their rules to ensure the integrity of the financial markets in which the Company operates.
The desirability of the Company maintaining a reputation for high standards of business conduct:
This is demonstrated through the 'tone from the top' in how the Directors drive and support the right culture for a client facing regulated business and how this cascades to all employees. We encourage all our people to think about the impact on clients first and escalating any potential issues quickly to ensure we conduct business in the right way at all times.
The need to act fairly among all stakeholders of the Company
The Board is diligent in discharging its responsibilities to all stakeholders of the Company, balancing the rights of shareholders with the need to treat Group employees, contractors and clients equitably.
Community & Environment: The firm takes its broader responsibilities very seriously and considers environmental impact when making decisions about its suppliers (mainly relevant in choosing IT infrastructure providers). As the Company grows, it is planning on providing internship opportunities to young people in the adjacent areas to its City of London offices and other parts of the UK.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2024.
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.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company manages its cash requirements ensuring the company has sufficient liquid resources to meet the operating needs of the business.
The company’s principal foreign currency exposures arise from trading foreign currency. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in GBP.
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfill credit rating criteria approved by the Board.
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
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
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 year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the financial services sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, anti-bribery, anti-money-laundering, employment;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
understanding the design of the company’s remuneration policies.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates as set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC.
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.
Other matters which we are required to address
The comparative figures are unaudited.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Ediphy Analytics Limited is a private company limited by shares incorporated in England and Wales. The registered office is .
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 £.
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, 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 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.
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.
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 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.
The fees payable to the company's auditor for the audit of the company's annual accounts have been charged to group company, Ediphy Research Ltd.
The average monthly number of persons (including directors) employed by the company during the year was:
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
Full rights to receive notice of, attend and vote at general meetings. One share carries one vote and full rights to dividends and capital distributions (including upon winding up).
There are no events to report.
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 of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.