LIQUID_CAPITAL_MARKETS_LI - Accounts

The directors present the strategic report and financial statements for the year ended 31 December 2020.

As part of the ongoing consideration of the company's business plan, the directors continue to review derivatives products not currently traded for profitable trading opportunities together with identifying opportunities for further cost efficiencies.  The company 's turnover was £16.5 million (2019 :- £16 million) and loss for the year was £876,000 (2019:-£1,582,000)

The company had net assets of £11 million (2019 :- £11.6 million) at 31 December 2020. The company continues to have a strong balance sheet and is well placed to achieve its long term strategy.

The key performance indicators for profit generated during the year include gross profit (47% v 51% (2019)) and net loss (5% v 10% (2019)).

Principal risks and uncertainties

As a market maker the directors consider that the key financial risk exposure faced by the company relate to the need to maintain sufficient capital to satisfy the credit requirements of the General Clearing Member, working capital needs, and the exposure to market risk, interest rate and credit risk on open positions.

The company's financial risk management objectives are therefore to minimise the key financial risks through having clearly defined internal control procedures, daily monitoring of open positions, cash flow and provision of timely management information to ensure these risks are kept within the parameters set by the directors. A more detailed explanation of the risks to which the company is exposed, and its strategy for managing these risks is included in the directors’ report.

The directors continue to monitor the impact of Brexit and Covid-19 on the company's operations.

The directors of the company have acted in a way that they consider, in good faith, would most likely promote the success of the company for the benefit of its shareholders, employees and customers as a whole, and in doing so, the directors have considered (amongst other matters):

• the likely consequences of any decision in the long term,

• the interest of the company's employees,

• the need to foster the company's business relationships with customer and others,

• the impact of the company's operations on the community and environment,

• the desirability of the company maintaining a reputation for high standards of business conduct, and

• the need to act fairly among shareholders, employees and customers of the company.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2020.

The principal activity of the company is that of a market maker in financial futures and options contracts.

The results for the year are set out on page 8.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The company's current policy concerning the payment of trade creditors is to:

• settle the terms of payment with suppliers when agreeing the terms of each transaction;

• ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and

• pay in accordance with the company's contractual and other legal obligations.

The valuation of the company's open position at bid offer spread rate includes a liquidity risk factor adjustment; therefore ensuring financial instruments are presented at fair value. Financial instruments held for trading by the company are all transacted on exchange traded liquid markets. As positions are generally held for the short term the markets traded tend to be liquid in nature.

On a daily basis the company reconciles all positions held for trading and uses this information together with off-the-shelf margining tools to estimate daily margin requirements. Capital allocated to each trading book is closely monitored by risk and each trading book is informed of its limits intra-day so they can adjust their positions and come back within those limits by the close of day as necessary. The company's close control over capital ensures margin requirements do not exceed cash available.

The company is exposed to interest rate risk through market value fluctuations of balance sheet items (i.e. price risk) through changes in interest income, interest expense and through interest rate bearing derivative positions held in the market. The assessment of these positions for risk factors is based on expectations of future interest rate movements. Valuations are monitored on a daily basis.

The company operates globally and uses the pound sterling as its reporting currency and is thus exposed to foreign exchange risk arising from various currency combinations. Foreign currency denominated assets and liabilities together with expected cash flows give rise to foreign exchange exposures. Due to changes in global markets, currency combinations will also change within a financial year.

The foreign exchange policy of the company is to hedge material foreign exchange exposures. Exposures are hedged by means of matching assets with liabilities and holding material cash balances in Euros, Australian dollars and United States dollars.

The company has negligible credit risk arising from its trading activities. The company's trading activities are conducted through exchanges where it is normal market practice for the counterparty's obligations to be guaranteed by the exchange. Therefore any issuer or settlement risk from a counterparty defaulting is not significant. The company is exposed to credit risk in relation to the exchange and clearing houses. The margining requirements imposed by the exchanges and clearing houses are designed to reduce the risk of bankruptcy of the exchanges and clearing houses. As a result the company considers the credit risk in relation to exchanges and clearing houses to be low.

Market risk is the risk that the fair value of future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchange rates, and underlying and implied volatility prices. Market risk is the risk of loss in portfolio value as a result of movements in these financials market values. The group is exposed to market risk primarily related to trading activities in exchange traded derivative financial instruments on fixed income, equity and commodity markets in Europe and Asia and some cash products. The group employs a dedicated risk management team who actively monitor these variables in real time and exposures to ensure the group's risk profile is in keeping with the mandate set by the board.

There is no single metric to capture market risk, therefore, the group's management use several risk measures including internal risk models, exchange and geographic concentration risk, scenario risk, Greek risk analysis and position micromanagement. Key risks are reported to business management on a daily basis.

The company continues to undertake research and development in respect of its bespoke trading platform.

The directors are continuing to review derivatives products not currently traded for potential trading opportunities supported by tight cost controls.

The directors also continue to monitor the impact of Brexit and Covid-19 on the company's operations.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

The auditor, Fisher, Sassoon & Marks, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each director in office at the date of approval of this annual report confirms that:

•     so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

•     the director has taken all the steps that he / she ought to have taken as a director in order to make himself / herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

We have audited the financial statements of Liquid Capital Markets Limited (the 'company') for the year ended 31 December 2020 which comprise the Income Statement, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, 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 101 ‘Reduced Disclosure Framework’ (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 2020 and of its loss 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• 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.

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 and the directors' report.

We have nothing to report in respect of the following matters where 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.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the financial services sector;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Financial Conduct Authority (FCA), Companies Act 2006, taxation legislation, data protection, anti-bribery, anti-money-laundering, employment, environmental and health and safety legislation;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

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

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and

• understanding the design of the company’s remuneration policies.

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

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates as set out in note 1.16 were indicative of potential bias; and

• investigated the rationale behind significant or unusual transactions.

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

• agreeing financial statement disclosures to underlying supporting documentation;

• reading the minutes of meetings of those charged with governance;

• enquiring of management as to actual and potential litigation and claims; and

• reviewing correspondence with HMRC, relevant regulators including the FCA and reviewing the company’s compliance monitoring procedures and findings.

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

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

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

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework applicable in the UK and Republic of Ireland” (“FRS 101”), applicable accounting standards and the requirements of the Companies Act 2006.

The financial statements have been prepared on the historical cost basis except for the revaluation of the principal accounting policies adopted are set out below.

The company has taken advantage of the following disclosure exemptions under FRS 101:

• the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share Based Payment;

• the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64 (o)(ii), B64(p), B64(q)(ii), B66 and B67of IFRS 3 Business Combinations. Equivalent disclosures are included in the consolidated financial statements of Liquid Capital Group Sàrl in which the entity is consolidated;

• the requirements of paragraph 33 (c) of IFRS 5 Non Current Assets Held for Sale and Discontinued Operations;

• the requirements of IFRS 7 Financial Instruments: Disclosures;

• the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;

• the requirement in paragraph 38 of IAS 1 ‘Presentation of Financial Statements’ to present comparative information in respect of: (i) paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant and Equipment (iii) paragraph 118 (e) of IAS 38 Intangibles Assets, (iv) paragraphs 76 and 79(d) of IAS 40 Investment Property and (v) paragraph 50 of IAS 41 Agriculture;

• the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 39 to 40 ,111 and 134-136 of IAS 1 Presentation of Financial Statements;

• the requirements of IAS 7 Statement of Cash Flows;

• the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

• the requirements of paragraph 17 of IAS 24 Related Party Disclosures;

• the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member ; and

• the requirements of paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.

As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to share based payments, financial instruments, capital management, presentation of a cash flow statement, presentation of comparative information in respect of certain assets, standards not yet effective, impairment of assets, business combinations, discontinued operations and related party transactions.

Where required, equivalent disclosures are given in the group accounts of Liquid Capital Group Sàrl. The group accounts of Liquid Capital Group Sàrl are available to the public and can be obtained as set out in note 24.

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

Revenue represents the net income from futures and options trading. Transactions in derivative financial instruments are recorded on the trade date.

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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 income statement.

At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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.

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. i.e. the date that the company commits to purchase or sell the asset. Derivatives are recognised on a trade date basis.

Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.

Financial assets are initially measured at fair value plus transaction costs.

Financial assets are classified as at FVTPL when the financial asset is held for trading. This is the case if:

•     the asset has been acquired principally for the purpose of selling in the near term, or

•     on initial recognition it is part of a portfolio of identified financial instruments that the manages together and has a recent actual pattern of short-term profit taking, or

•     it is a derivative that is not designated and effective as a hedging instrument.

Derivatives include future, forward foreign exchange contracts and options on interest rates, foreign currencies and equities. Derivatives are recorded at fair value and carried as assets when the net fair value by currency, exchange and expiry is positive and as liabilities when the net fair value is negative. Changes in fair value of derivatives held for trading are included in revenue.

In determining the fair value of the open positions, adjustments are made to reflect positions, initially valued at mid market prices, at an appropriate bid or offer rate.

Under IAS 39, investments not held for trading were classified as Available for Sale measured at fair value with gains and losses arising from changes in fair value recoginsed in other comprehensive income. Under IFRS 9, the company has not irrevocably elected to recognise these investments as financial assets at fair value through other comprehensive income and therefore, will be classified as financial assets at fair value through profit and loss

Trade Receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Financial assets, other than those measured at fair value through profit or 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 of the investment have been affected.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Financial liabilities are classified as FVTPL when the financial liability is held for trading. A financial liability is classified as held for trading if:

•     it has been incurred principally for the purpose of repurchasing it in the near term, or

•     on initial recognition it is part of a portfolio of identified financial instruments that the manages together and has a recent actual pattern of short-term profit taking, or

•     it is a derivative that is not designated and effective as a hedging instrument.

Derivatives include future, forward foreign exchange contracts and options on interest rates, foreign currencies and equities. Derivatives are recorded at fair value and carried as assets when the net fair value by currency, exchange and expiry is positive and as liabilities when the net fair value is negative. Changes in fair value of derivatives held for trading are included in revenue.

In determining the fair value of the open positions, adjustments are made to reflect positions, initially valued at mid market prices, at an appropriate bid or offer rate.

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

Equity instruments issued by the company are recorded at the proceeds received.

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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

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

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the income statement for the period.

Judgements and key sources of estimation uncertainty

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 revenue and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The key areas of judgements and estimates are as follows:

Determining the fair value of financial instruments in the absence of a quoted market price requires identification of suitable alternatives, the fair value of an instrument is based on the pricing information available which may be recent transactions or a valuation technique, neither of which may correspond to the group's perceived risk of that instrument.

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

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2019 - 1).

The charge for the year can be reconciled to the loss per the income statement as follows:

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

Other payables after more than one year represent liabilities arising the Employee share ownership plan, see note 20.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

The company operates a defined contribution retirement benefit scheme for all qualifying employees. The assets of the scheme are held separately from those of the company. The company contributes a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the company with respect to the scheme is to make the specified contributions.

The total costs charged to income in respect of defined contribution plans is £187,000 (2019: £196,000).

The Liquid Capital Group operates an employee share ownership plan, the terms of the plan allow key employees to receive future cash payments equivalent to a notional ownership of convertible preferred equity certificates (CPEC) and acquire Class B shares in Liquid Capital Group Sàrl at market value. The group has the right to acquire Class B shares at nominal value if a target valuation has not been reached within set time periods but will have an equal obligation to pay a cash bonus equivalent to either the economic net asset value of the group at this time or the uplift in the economic net asset value of the group since award. The group retains an option to acquire the Class B shares at nominal value and cancel the notional ownership of the CPECs within defined vesting periods if employees leave the group. After the vesting period has elapsed, the group has the right to acquire the Class B shares at either the economic net asset value of the group at this time or the uplift in the economic net asset value of the group since award for a period of six months following an employee leaving the company.

The liabilities for employees of the company in respect of the employee share ownership plan are accounted for by the company. The charge/(credit) to the income statement was (£90,000) 2019: £260,000.

There are no events to note.

The company's immediate parent undertaking is Liquid Capital Limited, a company registered in England and Wales. The ultimate controlling party is Liquid Capital Group Sàrl, a company registered in Luxembourg.

The smallest and largest group in which the results of the company are consolidated is that headed by Liquid Capital Group Sàrl. Group financial statements are available at 95 Queen Victoria Street, London, EC4V 4HN.

Mr. C. Siepman is the ultimate controlling party of the company by virtue of his majority shareholding in Liquid Capital Group Sàrl.