Company Registration No. 05614477 (England and Wales)
SPREAD CO LIMITED
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
SPREAD CO LIMITED
COMPANY INFORMATION
Directors
Mr Ajay Pabari
Mr Bharat Thakrar
Mr Julian Costley
Company number
05614477
Registered office
22 Bruton Street
London
W1J 6QE
Auditors
Fisher, Sassoon & Marks
43-45 Dorset Street
London
W1U 7NA
Business address
Argyle House
Joel Street
Northwood Hills
Middlesex
HA6 1LN
SPREAD CO LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
SPREAD CO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
The directors present the strategic report for the year ended 31 December 2024.
Review of the business
The Company carried on the business of providing execution only trading in Contracts For Difference, Financial Spread Bets, Market Making and Financing. Financing Revenue is generated by charging interest on short stock and leverage provided to clients on the trading positions held by clients. These services are provided to retail, professional and corporate clients.
The Company recorded a net trading profit of £3.2m compared to a loss of £5.7m in 2023 which was due to improved market volatility in financial markets and products.
Principal risks and uncertainties
The directors consider that the key financial risk exposures faced by the Company are:
Market Risk: This arises where positions are not fully hedged as the Company operates a policy of taking on some principal exposure. The board sets limits for all markets where it has principal exposure and its risk management systems allows it to monitor the risk in real time and hedge when appropriate levels are reached.
Liquidity Risk: This arise where the Company is unable to meet its payment obligations when they are due. This is managed by actively maintaining adequate liquidity assets.
Credit Risk: This arises if a financial institution defaults on its financial obligation to the company resulting in a financial loss to the Company. This is mitigated by only working with institutions with good credit rating and diversifying its risk with a number of counterparties and by not offering its clients any credit facilities.
Regulatory Risk: This arises if the Company does not comply with the range of regulations and is mitigated by continuous investment in legal and compliance resources.
System Risk: This risk arises from the Company’s reliance on systems to deliver its services to its clients. The Company continuously invests in developing the infrastructure and functionality of its trading systems.
Operation Risk: The Company's operational risk is the risk that the company will derive losses through inherent failure in its processes, personnel, technology, infrastructure or external forces impacting on any of these. These risks are countered through regular assessment of the likelihood of these risks as part of the company's ongoing internal risk management procedures, including maintaining a fully up-to-date risk register and the company's ICARA, and contingency planning for how to deal with such risks arising.
Key performance indicators
Financial key performance indicators are revenue £9,044,133 (2023: (£1,795,934) Negative turnover) and net assets which at the year end had increased to £9,452,642 (2023: £5,291,985). The increase in net assets was due to the profit after tax of £4,270,750 (2023: loss (5,872,778).
SPREAD CO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
Directors' statement of compliance with duty to promote the success of the Company
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):
Shareholders: As a privately held entity, the firm's operational trajectory is intricately entwined with the strategic imperatives of its parent company, Valiant HoldingsLimited incorporated in United Kingdom. Regular discourse with group directors and shareholders ensures strategic congruence and alignment with overarching objectives.
Clients: A cornerstone of the firm's ethos lies in the unwavering commitment to client-centricity. Anchored by the principles of equitable treatment, specialised teams and functions diligently ensure regulatory compliance, thereby ensuring the delivery of dependable products and services to valued clientele.
Employees: Acknowledging the indispensable role played by the workforce, the firm prioritizes initiatives aimed at recruitment, professional development, and retention. Structured managerial forums facilitate transparent communication, fostering an environment conducive to idea exchange. Moreover, a comprehensive rewards framework underscores the commitment to employee welfare and career progression.
Suppliers and Business Relationships: The cultivation and sustenance of robust partnerships with suppliers and business associates are paramount to operational continuity. Regular review mechanisms ascertain mutual value creation, underpinning the seamless functioning of the business ecosystem.
Conduct: Adherence to stringent ethical standards permeates every facet of the organisational culture. Rigorous training modules, encompassing anti-money laundering protocols, anti-bribery measures, and regulatory compliance, epitomize the unwavering commitment to fair and ethical conduct.
Community and Environment: The firm's corporate stewardship extends beyond the boardroom, exemplified by active engagement with community initiatives and environmental sustainability endeavors. Conscious efforts to mitigate the carbon footprint underscore the commitment to corporate social responsibility.
Mr Ajay Pabari
Director
16 April 2025
SPREAD CO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Principal activities
The principal activity of the company is that of acting as principal as market maker to its clients in foreign exchange and derivatives including share and index Contracts For Difference ('CFD') and Spread Betting.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr Ajay Pabari
Mr Bharat Thakrar
Mr Julian Costley
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £110,000. The directors do not recommend payment of a final dividend.
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 risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset. Under FCA regulations, the company's directors are required to produce a estimate of the maximum amount of liquid assets that the company would require to meet its ongoing business operations during each quarter for the next 12 months and ensure that the company has sufficient liquid asset such that it could be wound down in an orderly manner. Due to the high level of cash and cash equivalent reserves held by the Company in comparison to its liabilities, no additional sources of funds are currently deemed necessary. This is tested annually as detailed in the company's ICARA.
Interest rate risk
The risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. This risk represents an insignificant
change in value as the Company does not have any loan liabilities and as the business model does not rely upon interest income, the only potential adverse effect would be negative interest rates on balances held.
Currency risk
The risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. This risk fluctuates in value (both
favourably and adversely) dependent on the exchange rates applicable at each revaluation date.
SPREAD CO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
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.
Customers:
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.
Banks and financial institutions:
The company holds accounts in several banks and financial institutions.An account with a bank or a financial institution will only be opened after suitable checks have been made to assess the credit risk of that entity, and is reassessed on a regular basis.
The maximum exposure to credit risk at the reporting time is the fair value of derivative assets, cash deposits, prepayments and other debtors at the balance sheet date. Credit risk of derivative assets is mitigated by cash collateral held (maintenance margin). Credit risk of institutions holding cash deposits is mitigated by depositing cash with financially sound institutions. As at 31 December 2023 no amounts are past due or impaired.
Price risk
The risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The company uses hedging strategies to minimise its exposure to price risk.
Research and development
The company continues to undertake research and development in respect of its bespoke trading platform, Saturn Trader.
Post reporting date events
There no post reporting date events to report.
Future developments
The directors are not currently proposing to make any significant changes to the company's operations but will continue to monitor the impact of regulatory changes.
Strategic Report
The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report.
Auditor
The auditor, Fisher, Sassoon & Marks, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
SPREAD CO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 5 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr Ajay Pabari
Director
16 April 2025
SPREAD CO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 6 -
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
SPREAD CO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPREAD CO LIMITED
- 7 -
Opinion
We have audited the financial statements of Spread Co Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, 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:
give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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:
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.
SPREAD CO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPREAD CO LIMITED (CONTINUED)
- 8 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
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.
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 Financial Conduct Authority (FCA), Companies Act 2006, taxation legislation, anti-money-laundering, and employment legislation;
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.
SPREAD CO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPREAD CO LIMITED (CONTINUED)
- 9 -
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; 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, relevant regulators including the FCA and reviewing the company’s compliance monitoring procedures and findings.
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.
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.
Jonathan Marks (Senior Statutory Auditor)
For and on behalf of Fisher, Sassoon & Marks, Statutory Auditor
Chartered Accountants
43-45 Dorset Street
London
W1U 7NA
16 April 2025
SPREAD CO LIMITED
STATEMENT OF TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
9,044,133
(1,759,934)
Cost of sales
(2,460,230)
(1,729,099)
Gross profit/(loss)
6,583,903
(3,489,033)
Administrative expenses
(3,801,637)
(3,119,994)
Operating profit/(loss)
4
2,782,266
(6,609,027)
Interest receivable and similar income
8
609,635
534,106
Interest payable and similar expenses
9
(2,115)
Profit/(loss) before taxation
3,391,901
(6,077,036)
Taxation
10
878,849
204,258
Profit/(loss) for the financial year
18
4,270,750
(5,872,778)
Total comprehensive income for the year
4,270,750
(5,872,778)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SPREAD CO LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
10,403
24,124
Current assets
Debtors
13
6,379,141
5,893,458
Investments
14
689,800
1,541,409
Cash at bank and in hand
11,953,785
7,336,718
19,022,726
14,771,585
Creditors: amounts falling due within one year
15
(9,580,484)
(9,503,814)
Net current assets
9,442,242
5,267,771
Net assets
9,452,645
5,291,895
Capital and reserves
Called up share capital
17
4,400,000
4,400,000
Profit and loss reserves
18
5,052,645
891,895
Total equity
9,452,645
5,291,895
The financial statements were approved by the board of directors and authorised for issue on 16 April 2025 and are signed on its behalf by:
Mr Ajay Pabari
Director
Company registration number 05614477 (England and Wales)
SPREAD CO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2023
4,400,000
8,764,673
13,164,673
Year ended 31 December 2023:
Loss and total comprehensive income
-
(5,872,778)
(5,872,778)
Dividends
11
-
(2,000,000)
(2,000,000)
Balance at 31 December 2023
4,400,000
891,895
5,291,895
Year ended 31 December 2024:
Profit and total comprehensive income
-
4,270,750
4,270,750
Dividends
11
-
(110,000)
(110,000)
Balance at 31 December 2024
4,400,000
5,052,645
9,452,645
SPREAD CO LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
3,065,184
(4,146,537)
Interest paid
(2,115)
Income taxes refunded
204,284
Net cash inflow/(outflow) from operating activities
3,269,468
(4,148,652)
Investing activities
Purchase of tangible fixed assets
(4,332)
(16,528)
Proceeds from disposal of tangible fixed assets
687
Repayment of loans
851,609
424,443
Interest received
603,998
518,920
Other income received from investments
5,637
15,186
Net cash generated from investing activities
1,457,599
942,021
Financing activities
Dividends paid
(110,000)
(2,000,000)
Net cash used in financing activities
(110,000)
(2,000,000)
Net increase/(decrease) in cash and cash equivalents
4,617,067
(5,206,631)
Cash and cash equivalents at beginning of year
7,336,718
12,543,349
Cash and cash equivalents at end of year
11,953,785
7,336,718
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 14 -
1
Accounting policies
Company information
Spread Co Limited is a company limited by shares incorporated in England and Wales. The registered office is 22 Bruton Street, London, W1J 6QE and the principal place of business is Argyle House, Joel Street, Northwood Hills, Middlesex, HA6 1NW.
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 on the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of the following disclosure exemptions under FRS 102:
The requirements of Section 11 paragraphs 11.39 to 11.48A and Section 12 paragraphs 12.26 to 12.29A providing the equivalent disclosures required by this FRS are included in the consolidated financial statements of the group in which the entity is consolidated.
The requirement of Section 33 Related Party Disclosures paragraph 33.7.
As permitted by FRS 102, the company has taken advantage of the disclosure exemptions available under that standard in relation to financial instruments and related party transactions.
Where required, equivalent disclosures are given in the group accounts of Valiant Holdings Limited. The group accounts of Valiant Holdings Limited are available to the public and can be obtained at First Floor North Argyle House, Joel Street, Northwood Hills, Middlesex, HA6 1LN.
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 is the consideration received/ paid net of rebates on all realised positions and fair market value of open CFD positions with clients and all other counter parties, including overnight charges and credits.
The recognition of income results directly from the recognition and measurement of assets and liabilities in accordance with FRS 102 section 2.41. Turnover is recognised on financial assets and liabilities on an aggregate basis by each asset class to determine the net gain or loss for that asset class in accordance with FRS section 11.48. CFD positions are viewed as single assets.
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
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:
Plant and machinery
33.33 % on Straight line basis
Fixtures, fittings & equipment
33.33 % on Straight line basis
Computer equipment
33.33 % on 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.
1.5
Trade debtors and trade creditors
Trade debtors represent balances with counterparties where the cash held on account and the valuation of the financial derivative open positions results in an amount receivable by the company. Derivative and physical share positions entered into with counterparties are in order to hedge market exposure resulting from derivative transactions placed by clients. These are carried at fair value and profit and losses are included in revenue.
Trade creditors represent balances with operating suppliers, commissions payable to brokers and clients where the cash held on account and the valuation of financial derivative open positions results in an amount payable to the company. This does not include clients who have an amount payable to the company but whose amount payable is segregated for client money purposes (see accounting policy below).
1.6
Cash at bank and in hand
Cash consists of deposits repayable on demand from financial institutions that are free from contractual encumbrances. These balances exclude client money held by the company.
1.7
Client money
The company holds money on behalf of its clients in accordance with the client money rules of its regulator, the Financial Conduct Authority ('FCA'). Client monies held in segregated accounts in accordance with regulations and the corresponding liabilities to these clients are not recognised in the Balance Sheet because the company is not beneficially entitled to them. At 31 December 2024, amounts held by the company on behalf of clients in accordance with the Client Asset Rules of the FCA amounted to £3,398,401 (2023: £6,029,910).
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 balance sheet 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.
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
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.
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.
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 17 -
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, 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.
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 18 -
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
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 are included in turnover for the period.
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Net revenue from trading
9,044,133
(1,759,934)
2024
2023
£
£
Other revenue
Bank interest received
584,259
503,061
Other interests received on financial instruments
19,739
15,859
Income from other fixed assets investments
5,637
15,186
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
3
Turnover and other revenue
(Continued)
- 19 -
The total turnover of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom. The Company's income is derived from trading as market maker, foreign exchange, derivatives including shares and index Contracts For Difference ('CFD') and Spread Betting as principal which, for the purposes of segmental analysis, is considered by the directors to be a single global market.
4
Operating profit/(loss)
2024
2023
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
(1,090)
22,095
Depreciation of owned tangible fixed assets
17,366
20,618
Operating lease charges
44,010
44,011
5
Auditors' remuneration
2024
2023
Fees payable to the company's auditor and its associates:
£
£
For audit services
Audit of the company's financial statements
11,500
11,500
Audit of other group subsidiaries
2,500
2,500
14,000
14,000
For other services
Taxation compliance services
500
500
All other non-audit services
5,135
4,400
5,635
4,900
6
Employees
The average monthly number of persons employed by the company during the year was:
2024
2023
Number
Number
Brokers and traders
7
8
IT support
8
8
Sales and marketing
3
3
Administration and operations
11
10
29
29
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
6
Employees
(Continued)
- 20 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,253,973
1,761,822
Social security costs
270,972
185,909
Pension costs
27,015
23,765
2,551,960
1,971,496
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
389,157
208,725
Company pension contributions to defined contribution schemes
1,321
1,321
390,478
210,046
Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
348,325
208,725
Company pension contributions to defined contribution schemes
1,321
1,321
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
584,259
503,061
Other interest income
19,739
15,859
Total interest revenue
603,998
518,920
Income from fixed asset investments
Income from other fixed asset investments
5,637
15,186
Total income
609,635
534,106
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
584,259
503,061
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 21 -
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
2,115
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
150,997
(204,258)
Deferred tax
Origination and reversal of timing differences
(1,029,846)
Total tax credit
(878,849)
(204,258)
The actual credit 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:
2024
2023
£
£
Profit/(loss) before taxation
3,391,901
(6,077,036)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.00%)
847,975
(1,397,718)
Tax effect of expenses that are not deductible in determining taxable profit
50,120
145
Tax effect of utilisation of tax losses not previously recognised
(472,138)
Unutilised tax losses carried forward
1,397,117
Change in unrecognised deferred tax assets
(1,029,846)
Depreciation on assets not qualifying for tax allowances
2,973
456
Research and development tax credit
(204,258)
Research and development enhanced expenditure adjustment
(277,933)
Taxation credit for the year
(878,849)
(204,258)
The company carried forward trading losses of £4,119,383 (2023: £6,207,944).
11
Dividends
2024
2023
£
£
Interim paid
110,000
2,000,000
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
12
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2024
27,223
917
42,334
70,474
Additions
1,070
3,262
4,332
Disposals
(917)
(34,633)
(35,550)
At 31 December 2024
27,223
1,070
10,963
39,256
Depreciation and impairment
At 1 January 2024
11,041
230
35,079
46,350
Depreciation charged in the year
9,824
342
7,200
17,366
Eliminated in respect of disposals
(230)
(34,633)
(34,863)
At 31 December 2024
20,865
342
7,646
28,853
Carrying amount
At 31 December 2024
6,358
728
3,317
10,403
At 31 December 2023
16,182
687
7,255
24,124
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
5,233,820
5,552,788
Corporation tax recoverable
204,258
Other debtors
10,794
19,365
Prepayments and accrued income
104,681
117,047
5,349,295
5,893,458
Deferred tax asset
1,029,846
6,379,141
5,893,458
14
Current asset investments
2024
2023
£
£
Loans
689,800
1,541,409
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
15
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
8,663,003
9,331,749
Amounts due to group undertakings
105,580
38,354
Corporation tax
151,023
Other taxation and social security
60,743
62,665
Other creditors
2,187
Accruals and deferred income
597,948
71,046
9,580,484
9,503,814
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
27,015
23,765
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.
17
Share capital
2024
2023
£
£
Ordinary share capital
Issued and fully paid
4,400,000 Ordinary Shares of £1 each
4,400,000
4,400,000
18
Profit and loss reserves
2024
2023
£
£
At the beginning of the year
891,895
8,764,673
Adjusted balance
891,895
8,764,673
Profit/(loss) for the year
4,270,750
(5,872,778)
Dividends declared and paid in the year
(110,000)
(2,000,000)
At the end of the year
5,052,645
891,895
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 24 -
19
Operating lease commitments
As lessee
Operating lease payments represent rentals payable by the company for its office. The current lease term is for 5 years commencing from 14th March 2021.
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:
2024
2023
£
£
Within 1 year
44,010
44,010
Years 2-5
9,169
53,179
53,179
97,189
20
Related party transactions
The company is owed £689,800 (See note 14) under a Joint Venture Agreement (JVC) by High Links 5 Limited which is a property development company registered in England and Wales. The company is controlled by a family member of Ajay Pabari. A bad debt provision of £200,000 was provided for in the year due to losses arising from the property venture resulting in the borrower being unable to repay the loan in full.The loan carries interest at 1% per annum and entitlement to 20% profit on the sale of properties developed by the High Links 5 Limited. The interest charge amounted to £13,780 (2023: £15,859) for the year. The company has also received £5,637 which is its share of profit under the JV Agreement from the sale of one unit during the year.
At the year end, the company owed £105,580 (2023: £38,534) to the group undertakings which is unsecured and interest free.
21
Events after the reporting date
There no post reporting date events to report.
22
Controlling party
The reporting entity is owned by Spread Co UK Ltd incorporated in England and Wales. The ultimate holding company is Valiant Holdings Limited, a company incorporated in England and Wales, who prepares consolidated accounts which can be obtained from First Floor North Argyle House, Joel Street, Northwood Hills, Middlesex, HA6 1LN. No individual has effective control of the ultimate holding company.
SPREAD CO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 25 -
23
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit/(loss) after taxation
4,270,750
(5,872,778)
Adjustments for:
Taxation credited
(878,849)
(204,258)
Finance costs
2,115
Investment income
(609,635)
(534,106)
Depreciation and impairment of tangible fixed assets
17,366
20,618
Movements in working capital:
Decrease/(increase) in debtors
339,905
(556,029)
(Decrease)/increase in creditors
(74,353)
2,997,901
Cash generated from/(absorbed by) operations
3,065,184
(4,146,537)
24
Analysis of changes in net funds
1 January 2024
Cash flows
31 December 2024
£
£
£
Cash at bank and in hand
7,336,718
4,617,067
11,953,785
2024-12-312024-01-01falsefalsefalseCCH SoftwareCCH Accounts Production 2025.100Mr Bharat ThakrarMr Julian CostleyMr Julian Costley056144772024-01-012024-12-3105614477bus:ChiefExecutive2024-01-012024-12-3105614477bus:Director12024-01-012024-12-3105614477bus:Director22024-01-012024-12-3105614477bus:Director32024-01-012024-12-3105614477bus:RegisteredOffice2024-01-012024-12-31056144772024-12-31056144772023-01-012023-12-3105614477core:RetainedEarningsAccumulatedLosses2023-01-012023-12-3105614477core:RetainedEarningsAccumulatedLosses2024-01-012024-12-31056144772023-12-3105614477core:PlantMachinery2024-12-3105614477core:FurnitureFittings2024-12-3105614477core:ComputerEquipment2024-12-3105614477core:PlantMachinery2023-12-3105614477core:FurnitureFittings2023-12-3105614477core:ComputerEquipment2023-12-3105614477core:CurrentFinancialInstruments2024-12-3105614477core:CurrentFinancialInstruments2023-12-3105614477core:ShareCapital2024-12-3105614477core:ShareCapital2023-12-3105614477core:RetainedEarningsAccumulatedLosses2024-12-3105614477core:RetainedEarningsAccumulatedLosses2023-12-3105614477core:ShareCapital2022-12-3105614477core:RetainedEarningsAccumulatedLosses2022-12-3105614477core:ShareCapitalOrdinaryShareClass12024-12-3105614477core:ShareCapitalOrdinaryShareClass12023-12-3105614477core:RetainedEarningsAccumulatedLosses2023-12-310561447712024-01-012024-12-310561447712023-01-012023-12-31056144772023-12-31056144772022-12-3105614477core:PlantMachinery2024-01-012024-12-3105614477core:FurnitureFittings2024-01-012024-12-3105614477core:ComputerEquipment2024-01-012024-12-3105614477core:UKTax2024-01-012024-12-3105614477core:UKTax2023-01-012023-12-310561447722024-01-012024-12-310561447722023-01-012023-12-3105614477core:PlantMachinery2023-12-3105614477core:FurnitureFittings2023-12-3105614477core:ComputerEquipment2023-12-3105614477core:WithinOneYear2024-12-3105614477core:WithinOneYear2023-12-3105614477core:BetweenTwoFiveYears2024-12-3105614477core:BetweenTwoFiveYears2023-12-3105614477bus:PrivateLimitedCompanyLtd2024-01-012024-12-3105614477bus:FRS1022024-01-012024-12-3105614477bus:Audited2024-01-012024-12-3105614477bus:FullAccounts2024-01-012024-12-31xbrli:purexbrli:sharesiso4217:GBP