The Board of Directors present their review of the activities of the Group for the period ended 31 October 2024. The Directors, in preparing this strategic report have compiled with s414C of the Companies Act 2006.
Principal activities
The Group provides payment services related to processing electronic transactions and facilitating payments between parties, acting as an intermediary between merchants, consumers, banks, and other corporate institutions. The Group's principal operating subsidiary, Global Currency Exchange Network Limited, is authorised and regulated by the Financial Conduct Authority (FCA) under the Payment Services Regulations (Firm Reference Number: 504346). In addition, the Group's Hong Kong subsidiary is regulated there, allowing it to provide certain payment and foreign exchange services within that jurisdiction. The Group operates mainly from its UK offices in London but provides services globally. Additionally, the Group offers deliverable Foreign Exchange services outside PSR regulations. The Group’s offerings are service-orientated, streamlined propositions which are typically cheaper services than banks offer.
In addition, the Group also provides commercial hedging solutions, providing deliverable FX to shield clients’ businesses from currency volatility. Through this offering, the Group’s clients can mitigate their currency risks, ensuring stability and sustainability in client operations.
The Group also provides a mass payment service solution which facilitates global transactions, offering efficient and cost-effective solutions for disbursing funds across borders. Cost-cutting technology and seamless integration capabilities enable hassle-free mass payments, facilitating smoother transactions and enhancing operational efficiency.
The Group accepts payments from and to its customers primarily through bank transfers, offering clients the infrastructure and technology necessary to securely process these transactions. After processing payments, the Group administers the settlement process, ensuring that funds are transferred between banks, liquidity providers, the firm and clients in a timely manner.
Review of the Business
Throughout the period the Group invested significantly across the business, focusing on technology upgrades, improved infrastructure and enhancing client service functions to ensure that clients continue to receive a very high level of service. This period of transformation has seen improvements across Operations, Finance, Middle Office, Reconciliations, Compliance and Legal, resulting in greater efficiencies in client onboarding journeys, faster transaction speeds, a more efficient payment experience and improved operational resilience. A large part of the investment programme has been the hiring of new experienced employees across functions. To support increased staffing levels, the Group moved into new, larger offices in St Pauls, London.
This strategy has been fully supported by the Board and the Group has had continual support from its shareholders through this phase of development and growth.
In September 2024 the Group was acquired by Valiant FX Bidco Limited. The Directors are confident that this new ownership brings the capital and strategic alignment required for the Group to scale both in the UK and globally. The new ownership has already invested significantly into the infrastructure of the business and further shareholder investment is planned, both in terms of financial support as well as strategic experience, to improve operations and increase revenue particularly through existing relationships in the investment sector.
This period has been affected by the sale transaction with short-term cost increases incurred to facilitate completion. These costs are considered one-off exceptional items and will not be recurring costs. The Group also settled a historical liability claim in the period. These exceptional items resulted in a loss for the period.
Although total turnover increased given the extended reporting period, pro-rating the 18-month revenue to a 12-month equivalent demonstrates that underlying revenues were marginally lower compared to the prior year 12-month period. Despite this, the Group again transacted over £10bn in transaction volume over the period with no material operational resilience issues. It is pleasing that the Group is able to achieve these consistent levels of operational performance without compromising the high level of client service that the Group’s reputation has been built on.
During the period, the net assets of the Group increased significantly, driven mainly by capital issued from its Parent entity. This capital has allowed the Group to invest and the outlook for the next financial year is to continue to take advantage of the efficiencies gained from this investment whilst also providing clients with an even greater transaction experience following migration of the Group’s services onto a new enhanced platform.
Employees
The Group’s employees remain fundamental to the achievement of its strategic objectives and successful delivery of its business plan. In addition to being a responsible employer in respect to pay and benefits, the Group continues to engage with employees to ascertain which training and development opportunities should be made available to improve productivity and individual employees’ potential within the business.
Clients, suppliers and others
The Directors believe that understanding the needs and requirements of its client base is an essential component to a successful business. As such, the Group aims to maintain strong relationship management and a high level of engagement with clients. Client satisfaction is monitored through client experience reports and ratings which in turn helps inform decision making. Similarly, maintaining strong relationships with the Group’s suppliers and other stakeholders (including banking, liquidity and technology partners) contributes to the high level of service that the Group can offer clients.
Environment and Community
The Directors take sustainability and environmental responsibility seriously and have in place diversity and inclusion policies to encourage a culture of fairness and equality. The Group supports several local community initiatives and has actively supported employees in undertaking charitable endeavours close to their hearts. The Group has also introduced an employee electric car scheme to support carbon emission reduction.
Governance and regulation
The Directors operate the business in a responsible manner and are committed to ensuring that relevant policies, procedures and frameworks are in place to foster a culture of high ethical standards covering compliance and corporate governance. These policies include areas such as GDPR, terrorist financing, anti-money laundering and safeguarding. Employees are expected to act within a set of common values that are designed to bring transparency, trust, respect and a level of conduct that allows the Group to thrive in a highly regulated industry.
Ownership
In September 2024 the Group was acquired and is now 100% owned by Valiant FX Bidco Limited.
Principal risks and uncertainties
The risk environment is characterised as the failure to deliver services clients require in a compliant manner. The Group’s Risk framework approach is through a three lines of defence model, with responsibility for risk spread throughout the business. The first line of defence is assumed at an operating level, the second line, focused on the monitoring and control of risk, is undertaken by the Business risk committee, risk management function and the compliance function. The responsibility for the third line of defence sits with the Board itself since it has statutory and regulatory duties to ensure that all internal controls are appropriate and functioning adequately. The main risk areas identified by the Directors are summarised below:
Liquidity risk: This risk arises if the Group fails to meet its payment obligations as they fall due. This risk is mitigated by cashflow modelling to ensure that there is sufficient liquidity to meet its forward-looking obligations and needs. The Group actively monitors its liquidity by maintaining adequate liquid assets and closely monitoring cash absorption. The Group maintains a recovery plan which has identified a number of leading indicators for risks or threats and a series of corrective steps that could deliver liquidity to the Group should it be required.
Credit risk: This risk arises if a counterparty, whether a financial institution or a client, defaults on their contractual obligation to the Group resulting in financial losses. Whilst financial counterparty credit risk is inherent to the business model the Group operates, the Group mitigates the risk by only using institutions with good credit ratings and is actively working on continual improvements to its counterparty concentration policy. In respect of client credit risk, the Group ensures that it maintains sufficient cash collateral to mitigate the risk of financial loss as a result of default. The Directors acknowledge that the risk of clients defaulting is increased during periods of high volatility and therefore has heightened monitoring in place. The processes and procedures in place reduce credit risk to a low level.
Operational risk: This risk arises as a direct or indirect loss resulting from inadequate planning, control, policies and/or procedures. These risks can be affected by technology, employees and other external factors. The Group has developed and tested bespoke transaction, reconciliation and reporting systems to ensure that all polices and procedures are line with regulations and that these systems allow the business to increase efficiencies as well as mitigate risk.
Financial/FX risk: This risk arises through the provision of foreign exchange services and the associated currency fluctuations that may occur. All transactions that clients engage with the Group are managed with a one-for-one FX transaction with the Group’s liquidity providers. For forward transactions, collateral/margin is requested from clients at the point of execution and then managed and monitored for exchange rate movements throughout the life cycle of the transaction.
Internal control risk: This risk arises from the potential gaps or weaknesses in any system of internal controls that permits error or fraud to occur and potentially cause losses to the Group. This risk is mitigated by ensuring that policies and procedures are comprehensive and clearly documented and adherence is periodically tested.
Regulatory risk: This risk arises if the Group does not comply with the range of regulations and its license obligations. The Group is exposed to law and regulation changes in several areas including tax treatment, reporting and disclosure requirements, consumer duty, financial promotions etc and the risk becomes heightened as the Group expands its regulatory footprint. The Group continues to make significant investment in its Compliance and Risk functions to address these risks, primarily through technology, systems and personnel with extensive knowledge of the regulatory environment that the Group operated in. The Directors believe that its in house professional teams and external advisors ensure that the Group addresses regulatory issues before they can crystallise into risk to the Group.
Companies Act 2006 s172(1) statement
The Directors are responsible for promoting the success of the Group for the benefit of its member as a whole, having regard to the stakeholders and matters set out in s172(1)(a-f) of the Companies Act 2006.
The Directors acknowledge their duties to promote the success of the Group and ensure wider engagement with stakeholders. The Directors meet regularly with the Group’s Executive Committee in order to fulfil these duties and external advice is sought where necessary. The Directors have also ensured that the governance framework in place adequately delegates decision-making to the most appropriate employees of the Group.
The Directors believe that treating the Group’s counterparties with integrity, transparency and respect is key to fostering strong, long-lasting relationships. Enhancing the Group’s reputation through dedicated client support, care and fair treatment is a core objective. Operational efficiencies and improvements are an integral part of the Group’s strategy and contribute to these objectives.
The Group remains committed to being a responsible organisation. The behavioural expectations of the Group’s employees, clients, shareholders, as well as the community that it acts in are all considered during material decision making. The link between the Group’s values and success is closely associated and the Group is invested in ensuring that its collective values are instilled throughout the business, which in turn will contribute to the Group achieving its strategic objectives.
On behalf of the board
The directors present their report with the financial statements of the company and the group for the period ended 31 October 2024.
GC Partners has been a trading name of Global Currency Exchange Network Limited since 2018.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
The auditor, Azets Audit Services, is deemed to be reappointed as auditor of the company in accordance with section 487(2) of the Companies Act 2006.
As the group has not consumed more than 60,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
After some investigation, the directors are confident that GC Partners have adequate resources to continue in operational existence for the foreseeable future. |
We have audited the financial statements of GC Partners Group Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 October 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group or parent 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 the report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we 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. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential 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 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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the period was £300,000 (2023: £2,570,000).
Nature of and reason for the change
During the period ended 31 October 2024, the Company changed its revenue recognition policy for deliverable foreign exchange spot and forward transactions. Revenue is now recognised on trade execution and measured as the net spread between the client rate and the rate obtained from liquidity providers, in accordance with FRS 102 Section 23. Management considers the new policy more reliable and more relevant because it reflects the point at which pricing is fixed and the customer is contractually committed. Previously, revenue on forward contracts was recognised following receipt of the minimum margin deposit and matching with the currency supplier, and certain fees were recognised at maturity.
Transition and basis of restatement
The change has been applied retrospectively in accordance with FRS 102 Section 10. Comparative information has been restated, and the opening balance at 1 May 2022 has been adjusted through retained earnings.
Quantitative impact of the restatement
Profit and loss account – year ended 30 April 2023
£ | As previously reported | Policy adjustment | As restated |
Revenue | 43,641,989 | 290,028 | 43,932,017 |
Cost of sales | (24,217,884) | (10,546) | (24,228,430) |
Profit for the year | 3,499,162 | 279,482 | 3,778,644 |
Balance sheet – as at 30 April 2023
£ | As previously reported | Policy adjustment | As restated |
Debtors due within one year | 8,022,261 | 2,170,663 | 10,192,924 |
Other creditors | 2,898,682 | 1,216,649 | 4,115,331 |
Profit and loss reserves | 2,406,263 | 954,014 | 3,360,277 |
There is no impact on cash flows. The revised revenue recognition accounting policy is presented in Note 2 Accounting policies.
GC Partners Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 6th Floor, One New Change, London, United Kingdom, EC4M 9AF.
The group consists of GC Partners Group Limited and all of its subsidiaries.
These financial statements cover the 18 month period from 1 May 2023 to 31 October 2024. The comparative figures cover the 12 month period from 1 May 2022 to 30 April 2023.
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 except for the valuation of forward exchange contracts which are not fair valued as described in note 2.5.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated financial statements incorporate the results of business combinations using the purchase method, except in respect of Global Custodial Services Limited as described below. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
For the financial statements, the effect of using the merger accounting concept is to show GC Partners Limited as if it had always been the parent undertakings of Global Custodial Services Limited. These consolidated financial statements therefore include the results of Global Custodial Services Limited from the date of its incorporation. The difference between the nominal value of the shares issued to the former shareholders of Global Custodial Services Limited and the nominal value and share premium of the ordinary share capital of Global Custodial Services Limited has been debited to a merger reserve. |
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The consolidated financial statements incorporate those of GC Partners Group Limited all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to at 31 October 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. | |
The group has adequate financial resources and a sizeable established client base generating revenue across a range of currencies and clients.
The financial statements have been prepared on a going concern basis which assumes that the group and company will continue in operational existence for the foreseeable future and will be able to meet its liabilities as they fall due for at least 12 months from the date of approval of these financial statements.
Turnover represents the gross spread/margin or fee charged for any payment and/or where money is exchanged into another currency on behalf of clients. It is accounted for on the date of trade, being the date on which authorisation is received to undertake the currency transaction and the rate is fixed such that the order can be fulfilled on the date required by the customer. For both spot and forward foreign exchange transactions, turnover is recognised on a net basis at trade execution as the spread between the client rate and the rate obtained from liquidity providers; amounts relating to executed but unsettled trades are recorded as accrued income within trade and other receivables until settlement.
Where the Company enters into a forward contract with a client, it simultaneously enters into a matched contract with a currency supplier; the Company does not take market risk on these back-to-back arrangements. Revenue on such forward contracts is recognised on trade execution when the customer is contractually committed and pricing is fixed.
Revenue is also recognised in respect of administration and other fees charged for treasury management and payment services when the related services are performed. Where cash is deposited by clients for remittance to beneficiaries but is not converted to another currency, the fees for such services are recognised in revenue when the service is performed.
The Company updated its revenue recognition policy during the period ended 31 October 2024; see Change in accounting policies for details of the prior-period restatement.
The whole of the turnover of the group is attributable to the principal activity of the business.
The group provides services globally through international representatives and offices in Spain, Portugal, Dubai, and Singapore, generating revenue from an international client base across a range of currencies. All foreign exchange trades are carried out in the UK and the directors consider that all revenue is generated in the United Kingdom, and therefore no segmental analysis is necessary.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
Goodwill represents the difference between amounts paid on the cost of a business combination and the fair value of the group's share of identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated Statement of Comprehensive Income over its useful economic life, which is considered to be 10 years.
Where the cost of the business combination exceeds the fair value of the group's interest in the assets, liabilities and contingent liabilities acquired, negative goodwill arises. The group, after consideration of the assets, liabilities and contingent liabilities acquired and the cost of the combination, recognises negative goodwill on the balance sheet and releases this to the profit and loss, up to the fair value of non-monetary assets acquired, over the periods in which the non-monetary assets are recovered and any excess over the fair value of non-monetary assets over the fair value of non-monetary assets in the income statement over the period expected to benefit.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
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.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, 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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Amounts payable to clients
Amounts payable to clients comprise amounts received in advance from clients in respect of foreign exchange transactions prior to the maturity date of a trade, currency owed to clients post maturity date awaiting settlement, and the market movements on client open transactions. Client balances held in foreign currency are translated into sterling at the rates ruling at the statement of financial position date.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Determine whether leases entered into by the Group either as a lessor or a lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
Determine whether there are indicators of impairment of the Group's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Tangible fixed assets, other than investment properties, are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on the number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programs are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Determining whether or not the company's investments in its subsidiaries and participating interests have been impaired requires estimation of the value of in use of the investments. The value in use calculations requires the entity to estimate the future cash flows expected to arise from the investments and suitable discount rates in order to calculate the present value. The carrying value of investments in subsidiaries and participating interests at the reporting date was £14,374,561 (2023: £5,672,741).
In addition, fees were paid to another auditor for audit of the financial statements of the company’s subsidiaries of £Nil (2023: £30,450) and for non-audit services of £Nil (2023: £43,290).
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023: 2).
The actual (credit)/charge for the period can be reconciled to the expected (credit)/charge for the period based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 October 2024 are as follows:
Registered office addresses are as follows:
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The Company has issued one class of share capital, comprising ordinary shares. Each ordinary share confers full voting rights, entitlement to dividends as declared, and a right to participate in the distribution of surplus assets upon winding up. There are no preferences or restrictions attached to the ordinary shares.
In accordance with the Company’s articles of association, the directors may declare interim dividends. All other dividends require approval by an ordinary resolution of the shareholders, based on a recommendation from the directors as to the amount. Dividends must not exceed the amount recommended and must be paid in accordance with shareholders’ respective rights. There are no restrictions on the repayment of capital other than those set out in the Companies Act 2006.
On 21 October 2024, GC Partners Group Limited was acquired by Valiant FX Bidco Limited.
On this date, GC Partners Group Limited allotted a further 8,700,000 ordinary shares of £1 each at par value, for a total consideration of £8,700,000.
All shares issued during the year were fully paid and rank pari passu with existing ordinary shares in all respects.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The company is subject to a claim relating to payments made on behalf of London Capital & Finance in 2018. No provision has been recognised as the outcome is uncertain. A full claim form/particulars have not been received yet. This form only came in towards the end of the time for claims which highlights the speculative nature. An estimate of potential financial effect is not practicable at this time; no reimbursement is expected.
The directors have evaluated events after the reporting period up to the date these financial statements were authorised for issue. There have been no events since 31 October 2024 that require adjustment to, or disclosure in, these financial statements.
Included within amounts owed to related parties is a balance of £Nil (2023: £7,650) due to GCEN Servicos Unipessoal Lda, a company with common directors. During the year, expenses of £285,329 (2023: £155,252) were recharged from GCEN Servicos Unipessoal Lda.
Included within the debtors is a balance of £625,000 owed by M Cox (2023: £Nil). This balance is unsecured and interest of £Nil (2023: £Nil) was payable to the company.
During the year expenses totalling £3,741,821 were paid to Numito Limited (2023: £1,124,000) a company of which M Cox is a director.
During the year, GC Partners Limited made gifts totalling £Nil (2023: £2,570,000) to Global Currency Exchange Network Group Limited Employee Ownership Trust. Global Currency Exchange Network Group Limited Employee Ownership Trust held the entire share capital of GC Partners Limited in 2023. The shares were transferred to Valiant FX Bidco Limited on 21 October 2024.
Included within cash at bank is amounts held on behalf of clients of which £84,404,672 (2023: £45,941,349) is safeguarded in accordance with regulatory obligations, with the corresponding liabilities included under financial liabilities in note 16.
The ultimate controlling party of the Company and the Group is Valiant FX Topco Limited, a company incorporated in England and Wales.
During the period ended 31 October 2024, the Group undertook a review of the classification of certain assets previously recognised as tangible fixed assets. Following this review, it was determined that these assets more appropriately meet the definition of intangible assets under Section 18 of FRS 102. As a result, a prior period adjustment has been made to reclassify these assets from tangible fixed assets to intangible assets. This adjustment has been applied retrospectively in accordance with Section 10 of FRS 102.
This reclassification does not affect the depreciation or amortisation policies previously applied to these assets, as the useful economic lives and valuation methods remain unchanged. The restatement has been made to ensure that the financial statements provide more relevant and reliable information about the nature of the entity’s assets.
During the period, the Group also changed their revenue recognition policy, which also has changes detailed below. For full information on this change in accounting policy, see Note 1.
The comparative figures for the prior period have been restated to reflect this reclassification and accounting policy change. The impact of the adjustments are shown below: