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Registered number: 09532185
CAPITAL INDEX (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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CAPITAL INDEX (UK) LIMITED
COMPANY INFORMATION
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T W Barwell (resigned 31 January 2024)
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Chartered Accountants & Statutory Auditor
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CAPITAL INDEX (UK) LIMITED
CONTENTS
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Independent Auditors' Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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CAPITAL INDEX (UK) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present their review of the activities of Capital Index (UK) Limited (the “Company”) for the year ending 31 December 2024. The Directors, in preparing this strategic report, have complied with s414C of the Companies Act 2006.
Capital Index (UK) Ltd is an online global financial services provider. The Company provides execution-only financial Contract For Differences (CFDs) and Spread Bets in a range of instruments including Foreign Exchange, Indices, Commodities and Bonds. The Company currently offers the “MT4” online trading platform through which appropriately assessed customers can invest. Customers are majority retail clients and Client Money is segregated and held in a trust account with a Tier 1 A-rated bank.
The Company is authorised and regulated by the Financial Conduct Authority (FCA), Firm Reference Number 709693. The office headquarters are located in London, United Kingdom and client services representatives are located in offices world-wide.
The revenue of the Company mainly derives from the transactional spread generated from client trading. Capital Index (UK) Ltd is a wholly owned subsidiary of Capital Index (Cyprus) Ltd.
The UK business continued to suffer due to the cost of living crisis, both in terms of client numbers and trades. However, the Directors are hopeful that revenues will increase in 2025 and together with a reduction in overhead costs a return to profit will be possible.
Principal risks and uncertainties
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The Company has a conservative risk appetite and is continually monitoring and assessing risks as part of its internal Capital Adequacy Capital and Risk Assessment (“ICARA”) as required by the FCA, which includes vigorous stress testing of the business model and financial projections to ensure the business is solvent, liquid and maintains adequate capital resources.
The Directors and Board of Capital Index understands the following as the main areas of risk impacting the Company:
Credit Risk
External credit risk represents the loss the Company would incur if a counterparty or financial institutions failed to perform its contractual obligations. The Company seeks to mitigate this risk by only using institutions with good credit ratings and avoiding concentration on any one given supplier. Continuous monitoring, including initial and ongoing due diligence, is performed on all key suppliers to ensure financial stability.
Internal credit risk exists where clients trade beyond their cash balance creating a margin deficiency, however, the Company ensures that sufficient cash collateral is held against open positions to avoid this risk. Automated controls prevent clients opening or running open trading positions against inadequate cash balances. Additionally, the ESMA product intervention measures have significantly reduced credit risk to clients.
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CAPITAL INDEX (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Regulatory Risk
Regulatory risk arises if the Company does not fully comply with the full range of regulations and its licence obligations. Currently the industry is receiving an increasing amount of regulatory attention and the Company is operating in a highly regulated environment. The Company is subjected to constantly evolving regulation and law changes in a number of areas including tax and VAT, betting duty, leverage limits, client KYC, AML, appropriateness, MiFID II, reporting and disclosure requirements. The Company recognises that one of the most critical regulatory areas is the safety and segregation of Client Monies. It also monitors the capital adequacy and financial resources of the Company. The Company makes a significant investment in the Compliance resource, both externally and internally, to ensure regulatory compliance is continually attained.
Operational Risk
Operational risk, inherent in all businesses, is the potential for financial and reputational loss arising from failures in internal controls, operational process or systems. It includes errors, omissions, disasters and deliberate acts such as fraud. The Company has policies and procedures to mitigate operational risk and continually monitors risk and controls through frequent Risk Committee meetings and the systematic assessment of risks under Pillar 2 framework.
As part of Operational Risk, system risk can be separately distinguished and considered individually as deemed to be so vital to the operation of the Company. It is evaluated as the financial loss incurred through sustained loss of systems caused by online trading platform down time, cyber attacks and loss of data. The Company continues to develop its technology infrastructure and operates daily backups to secure locations and invests in preventative measures such as enhanced server firewall protection, DDOS protection and ransomware mitigation. The Company has recovery programmes and backup systems in place. A comprehensive disaster recovery plan has been prepared with recovery procedures and actions to be followed in the case of damage to any vital part of the Company structure. This is reviewed constantly and tested periodically throughout the year.
Currency Risk
The principal currencies in which the Company trades are British Pounds, Euros and United States Dollars. This gives rise to currency risk on the translation of its net current assets together with a currency risk on the conversion of its non-British Pounds income into British Pounds. The Company monitors the risk on an ongoing basis and hedges this risk to the extent it considers appropriate.
Financial key performance indicators
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The Company’s 2024 trading revenue was, £856,657, a decline of 17% from £1,035,073 in the prior year. Trading profit margin for the 2024 year was 84% compared to 81% for 2023. Cash and cash equivalents as at
31 December 2024 was £346,739 (2023: £239,872).
Other key performance indicators
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Management monitors the performance of the business through the following Key Performance Indicators:
∙Volumes executed;
∙Number of trades executed;
∙Number of active clients;
∙Net Deposits;
∙Number of New Accounts;
∙Client Loss %.
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CAPITAL INDEX (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Directors' statement of compliance with duty to promote the success of the Company
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The Directors of the Company are aware of the requirement for them to act in the way that considers, in good faith, what would most likely promote the success of the company for the benefit of its members as a whole. In consideration of this duty, the Directors consider the following stakeholders:
Shareholders
The Directors have regular contact with the shareholders in order to maximise the Company’s long-term growth prospects.
Customers
The Company’s customer base is mainly retail clients. The Directors prioritise compliance with the FCA client money rules to ensure clients are protected. To ensure client protection is a key focus of the board, all Directors attend the monthly Audit, Risk and Compliance meeting where client money is discussed.
Suppliers
The Company has various key supplier relationships and each supplier is internally allocated to a senior manager to ensure the smooth running of the business relationship.
Community and the environment
The Company seeks to reduce its carbon footprint by keeping as much online as possible and promotes a paperless environment. The Ultimate Beneficial Owner (UBO) is known for his philanthropic endeavours through his foundation. More details can be found on the Company’s website.
Regulators
The company is authorised and regulated by the Financial Conduct Authority (FCA) and the Directors are committed to ensuring full compliance with our regulations and reporting requirements.
This report was approved by the board and signed on its behalf.
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CAPITAL INDEX (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the audited financial statements for the year ended 31 December 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' Report and the audited financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare audited financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' ("FRS 102"). 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 audited financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements 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;
∙prepare the audited 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 to enable them to ensure that the audited 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of audited financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.
The principal activity of the company continued to be the provision of online currency, indices and commodities brokerage services.
The loss for the year, after taxation, amounted to £18,247 (2023 - loss £256,045).
No interim dividends were paid. The directors do not recommend payment of a final dividend.
The directors who served during the year were:
T W Barwell (resigned 31 January 2024)
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CAPITAL INDEX (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The company will continue to expand its client size by means of organic growth.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Company since the year end.
Under section 487 (2) of the Companies Act 2006, BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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R M Woolfe
Director
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CAPITAL INDEX (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CAPITAL INDEX (UK) LIMITED
We have audited the financial statements of Capital Index (UK) Limited (the 'Company') for the year ended 31 December 2024, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of 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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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
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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.
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CAPITAL INDEX (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CAPITAL INDEX (UK) LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the 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.
Matters on which we are required to report by exception
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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
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As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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.
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CAPITAL INDEX (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CAPITAL INDEX (UK) LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙Enquiring of management around actual and potential litigation and claims;
∙Reviewing minutes of meetings of those charged with governance;
∙Reviewing financial statement disclosures and testing to supporting documentation with applicable laws and regulations;
∙Performing audit work over the risks of management override of controls, including and other adjustments for appropriateness, evaluating business rationale of significant the normal course of business and reviewing accounting estimates for bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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CAPITAL INDEX (UK) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CAPITAL INDEX (UK) LIMITED (CONTINUED)
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 Auditors' 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.
Ian Saunderson FCA (Senior Statutory Auditor)
for and on behalf of
BKL Audit LLP
Chartered Accountants
Statutory Auditor
London
11 June 2025
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CAPITAL INDEX (UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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Interest receivable and similar income
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Interest payable and similar expenses
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Loss for the financial year
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There was no other comprehensive income for 2024 (2023:£NIL).
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The notes on pages 14 to 27 form part of these financial statements.
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CAPITAL INDEX (UK) LIMITED
REGISTERED NUMBER: 09532185
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 27 form part of these financial statements.
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CAPITAL INDEX (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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Comprehensive income for the year
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Total comprehensive income for the year
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 14 to 27 form part of these financial statements.
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CAPITAL INDEX (UK) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Cash flows from operating activities
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Profit/(loss) for the financial year
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Depreciation of tangible assets
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(Increase)/decrease in debtors
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(Increase) in amounts owed by groups
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Increase/(decrease) in creditors
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Increase in amounts owed to groups
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Net cash used in financing activities
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Net increase/(decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 14 to 27 form part of these financial statements.
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The principal activity of Capital Index (UK) Limited ("the Company") is the provision of online global financial services.
The Company is a private company limited by shares and is incorporated in England and Wales.
The registered office address is 75 King William Street, London, England, EC4N 7BE.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention and in accordance
with United Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland ("FRS 102") and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the entity's accounting policies (see note 3).
The following principal accounting policies have been applied.
The financial statements have been prepared on the going concern basis, which assumes that the Company will continue to trade for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements, and will be able to meet its debts as they fall due.
The directors are confident that the business is well capitalised, and has in place relevant prudential risk management policies and recovery and orderly wind down plans in place as required by the FCA. Accordingly, the board stands ready to act where emerging risks are identified in both the immediate and long term to ensure the business remains a going concern.
Revenue represents commission, spread and financial revenue from online broking in Contracts for Difference (CFDs) and spread betting.
Revenue is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Cash and cash equivalents
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Cash and cash equivalents 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.
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The Company only enters into basic financial instruments and transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from
banks, other third parties and related parties.
(i) Financial assets
Basic financial assets, including trade and other debtors, are initially recognised at transaction price, 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.
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Statement of Comprehensive Income.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors, accruals and amounts due to related parties 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 receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iii) Offsetting
Financial assets and liabilities are offset and 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.
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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Matched principal transactions
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The Company acts as a CFD and spread betting broker, where each trade placed by its clients is simultaneously matched by a corresponding cover trade with a liquidity provider. Due to the matched principal transactions, the position risk is considered to be low.
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 client are not recognised on the Statement of Financial Position. At 31 December 2024, amounts held in accordance with the Client Assets Rules of the Financial Conduct Authority amounted to £2,582,763 (2023: £3,217,810).
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
No judgments (apart from those involving estimates) have been made in the process of applying the above accounting polices.
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All turnover is attributable to spread income, commissions and financing.
Analysis of turnover by country of destination:
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The operating profit/(loss) is stated after charging:
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Depreciation of tangible fixed assets
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Defined contribution pension cost
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During the year, the Company obtained the following services from the Company's auditors and their associates:
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Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
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Fees payable to the Company's auditors and their associates in respect of:
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Taxation compliance services
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Company contributions to defined contribution pension schemes
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The highest paid director received remuneration of £193,500 (2023 - £172,000).
The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,321 (2023 - £1,100).
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Interest payable and similar expenses
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Other loan interest payable
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Release of deferred tax asset
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Origination and reversal of timing differences
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 23.5%). The differences are explained below:
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Profit/(loss) on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23.5%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Adjustments to tax charge in respect of prior periods
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Other differences leading to an increase (decrease) in the tax charge
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Total tax charge for the year
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Factors that may affect future tax charges
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There are carried forward losses available to be used against future trading profits of £420,000 (£447,000).
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Charge for the year on owned assets
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts due from group companies are unsecured, interest free and repayable on demand.
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Creditors: Amounts falling due after more than one year
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Interest is accrued on the loan at a rate of 5% per annum.
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Analysis of the maturity of loans is given below:
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Amounts falling due 2-5 years
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Interest is accrued on the loan at a rate of 5% per annum.
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Charged to profit or loss
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The deferred tax asset is made up as follows:
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Decelerated capital allowances
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Allotted, called up and fully paid
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796 (2023 - 796) Ordinary shares of £1.00 each
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Share premium account
This represents the excess paid for the Ordinary shares over their nominal value.
Profit and loss account
This represents total undistributed profits.
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. Contributions totaling £9,019 (2023: £13,792) were paid during the year, with an amount left payable at the Statement of Financial Position date of £1,650 (2023: £1,170).
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Commitments under operating leases
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At 31 December 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Transactions with directors
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Included in debtors is an amount of £28,012 (2023: £30,000) owed by a former director.This has been provided against in full.
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CAPITAL INDEX (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Related party transactions
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During the year, the Company recharged costs of £942,693 (2023: £1,038,894) to the immediate parent company and is included in operating income.
Included within other debtors is a balance of £24,526 (2023: £21,936) owed from a UK registered charity where the ultimate controlling party of the Company is a trustee.
Included within amounts owed by group undertakings is a balance of £583,328 (2023: £662,621) owed from various companies within the Group.
Included within other loans is a balance of £270,000 (2023: £270,000) owed to the immediate parent Company. Interest is charged at 5% per annum and during the year £13,500 (2023: £13,500) was charged to the income statement.
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The parent company with a 100% shareholding is Capital Index (Cyprus) Ltd, a company registered in Cyprus.
The ultimate parent company is M.A.P Corporate Services Limited, a company registered in Cyprus.
Mr G Secker is the ultimate controlling party.
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