ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
COMPANY INFORMATION
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IKON EUROPE LTD
CONTENTS
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IKON EUROPE LTD
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The Director presents the Group Strategic Report for the year ended 31 December 2020.
The principal activity of the Company is that of being a holding company of IKON Finance Limited. The principal activities of the Group in the year under review was once again entering into a VREQ with the FCA in order to reposition the Group.
The firm is committed to returning to the direct provision of providing comprehensive foreign exchange ('FX') and Contracts for Difference ('CFDs') trading and related services to institutional clients globally. The profit and loss of the Group is dependent on the trading volumes of its introduced clients. In June 2019, the subsidiary entered into a voluntary request for removal of permissions (‘VREQ’) with the Financial Conduct Authority (“the FCA”). However, management remain committed to return to business. During the year, the Company continued to carry out its operations under VREQ and incurred only expenses to maintain the existence of the Group and parent Company. However, the Group made a profit before taxation £280,404 (2019: loss £677,960) at the year end as the subsidiary received a settlement payment of £501,402.
Due to the subsidiary not returning to business in 2020, the risk profile of the Group is considerably reduced to the point that some risks are not applicable.
Reputational risk The Group's reputational risk is considered to be significantly reduced. However, it remains managed through effective policies, procedures and oversight via the compliance monitoring programme to ensure on-going adherence to the regulatory environment in which the Group operates. Technology redundancy and resiliency The Group is not currently dependent on technology and thus the resilience of technology which the Group, and clients, would utilise to conduct core activities is not considered a significant risk. However, the Group continues to maintain and regularly review its infrastructure. prior to returning to business, core mission critical vendors and their performance will be assessed. New clients When the Group returns to business, it is dependent upon the on-boarding of new business to build its income stream and build out the value of the subsidiary. However, due to aforementioned reasons, the subsidiary did not on-board any new clients in 2020. Regulatory change The regulatory environment continues to change in the UK and other regions and such changes continue to be monitored by the Group so that it can respond appropriately to ensure on-going compliance in this environment. Financial risk management Despite the Group not returning to business in the year, the Group has in place a risk management programme that seeks to limit adverse effects on the financial performance of the Group.
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IKON EUROPE LTD
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
Credit risk
The Group is not exposed to any significant third-party credit risk. All sums are deemed small or are held with reputable institutions that are deemed to have a low credit risk rating. Liquidity and Financial solvency risk The Group's solvency is monitored within the framework of the regulations laid down by the FCA asset out in BIPRU 12.3.15-32. During the period of non-trading, the Group remains dependent upon shareholder support for liquidity demands and financial solvency. Interest rate risk The Group is not exposed to interest rate risk. The Group has minimal interest-bearing assets, such assets being solely cash balances which may earn interest at floating rates. The Group has no dependency on such interest. The director will revisit the appropriateness of this policy should the Group's operations change in size or nature. Currency risk Administrative expenditure and cash balances are denominated in British Pound Sterling and so foreign exchange risk is low. Due to the Group not trading at year-end, the business was not exposed to any currency risk arising from core activities. All client balances and client money are held in equal and opposite offsetting currency balances, hence eliminating any currency risk. Residual currency risk resides in non-base currency expenses which do not materially exist. Impact of COVID-19 The Director has considered the impact of the current COVID-19 pandemic on the Group's operations, with a particular focus on its effect on the Group's customers, suppliers and employees. The Director does not consider this to be cause for material uncertainty in respect of the Group's or Company’s ability to continue as going concerns. The Group has adapted well, successfully employing contingency plans, and the Director considers that the Group has access to sufficient financial resources to continue for the foreseeable future, despite the current crisis.
Given the nature and size of the business, the Director is of the opinion that analysis using KPIs is not necessary for an understanding of the development, performance or position of the business.
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IKON EUROPE LTD
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
The Director of the subsidiary is aware of his duty under s.172 of the Companies Act 2005 to act in a way which he considers, in good faith, would be most likely to promote the success of the subsidiary for the benefit of its members as a whole and, in doing so, to have regard to:
1. The likely consequence of decision in the long term: The Director considers the long term impact for the business, stakeholders, employees, customers and communities when taking decisions for the subsidiary. 2. The interest of the subsidiary's employees: The Director considers the long term implications for an employee's career when recruiting and putting in place relevant training programmes. 3. The need to continue to build relationships with customers: Building relationships with customers and treating them fairly is very important to the Director. As the subsidiary is FCA regulated, policies are in place to ensure customers are treated fairly. 4. The need to continue to build relationships with suppliers. consultants and other service providers: The Director believes that building relationships with suppliers, consultants and service providers is important to the smooth running of the business and ultimately to providing a high-quality service to customers. The Director works with, and engages with, service providers regularly. 5. The impact of the subsidiary's operations on the community and the environment: The Director is conscious of the impact on environment and has taken steps to minimise this by encouraging measures such as re-cycling. 6. The desire to maintain a reputation for high standards of business conduct: The subsidiary is an FCA-regulated firm, so the Director is, and all staff are, held to high standards of business conduct prescribed by the FCA. 7. Engagement with the ultimate controlling party: At present the sole Director is the ultimate controlling party of the subsidiary. Therefore, the ultimate controlling party is involved in the day to day management of the subsidiary.
This report was approved by the board and signed on its behalf.
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IKON EUROPE LTD
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The Director presents his report and the financial statements for the year ended 31 December 2020.
The Director is responsible for preparing the Group Strategic Report, the Director's Report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the Director to prepare financial statements for each financial year. Under that law the Director has 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'. Under company law the Director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the Director is required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The Director is 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 the Group and to enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £280,404 (2019 - loss £677,960).
No dividends were proposed, approved or paid during the year (2019 - £nil).
The Director who served during the year was:
The subsidiary of the Company, IKON Finance Limited entered into a VREQ with the FCA in June 2019 and does not have any current regulatory activity permission, and as such no current capital requirement applies to the Company until it returns to business in the future. After returning to Business, the Company will prepare Pillar 3 disclosures on an annual basis, or more frequently if there is a material change in the approaches or permissions used to calculate the regulatory capital. The disclosures will be reviewed and approved by the Board of Directors and the report will be available on our website at: http://www.ikonfinance.com.
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IKON EUROPE LTD
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
In June 2019, the IKON Finance Limited entered into a voluntary request for removal of permissions with the Financial Conduct Authority. However, management remains committed to return to business and the parent company IKON Europe Limited and the ultimate controlling party showed continues support for the company. This support will remain in 2021 and the aim of the management is to consider alternative investment options according to new guidelines and regulations by the FCA.
Certain matters which are required to be disclosed in the Director's report have been omitted as they are included in the Group Strategic Report. These matters relate to the principal activity, business review, key performance indicators, and principal risk and uncertainties.
There have been no significant events affecting the Group since the year end.
The auditors, Simmons Gainsford LLP, has been appointed during 2021. According to section 485 of the Companies Act 2006, Simmons Gainsford LLP will be reappointed as the auditors.
This report was approved by the board and signed on its behalf.
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IKON EUROPE LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IKON EUROPE LTD
We have audited the financial statements of Ikon Europe Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2020, which comprise the Group Statement of Comprehensive Income, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and Company 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).
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 Group 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.
We draw attention to note 2.3 in the financial statements, which indicates that the Group may not be able to continue as a going concern as the group is in a loss due to legal costs and is dependent on ongoing financial support from its shareholder. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Our responsibilities and the responsibilities of the Director with respect to going concern are described in the relevant sections of this report.
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IKON EUROPE LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IKON EUROPE LTD (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Director is 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Director's Report.
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IKON EUROPE LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IKON EUROPE LTD (CONTINUED)
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 Group 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:
In order to identify and assess the risks of material misstatements, including fraud and noncompliance with laws and regulations that could be expected to have a material impact on the financial statements, we have considered:
∙the results of our enquiries of management and those charged with governance of their assessment of the risks of fraud and irregularities;
∙the nature of the Group, including its management structure and control systems (including the opportunity for management to override such controls);
∙management’s incentives and opportunities for fraudulent manipulation of the financial statements including the Group’s remuneration and bonus policies and performance targets; and the industry and environment in which it operates;
∙We also considered UK tax and pension legislation and laws and regulations relating to employment and the preparation and presentation of the financial statements such as the Companies Act 2006.
Based on this understanding we identified the following matters as being of significance to the Group:
∙laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, tax and pension legislation and distributable profits legislation;
∙the timing of the recognition of commercial income;
∙compliance with legislation relating to local employment law;
∙management bias in selecting accounting policies and determining estimates;
∙inappropriate journal entries; and
∙recoverability of debtors.
We communicated the outcomes of these discussions and enquiries, as well as consideration as to where and how fraud may occur in the entity, to all engagement team members.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and noncompliance with laws and regulations) comprised:
∙enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations;
∙enquiries with the same concerning any actual or potential litigation or claims;
∙discussion with the same regarding any known or suspected instances of noncompliance with laws and regulation and fraud;
∙inspection of relevant legal correspondence;
∙assessment of matters reported to management and the result of the subsequent investigation;
∙obtaining an understanding of the relevant controls during the period;
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IKON EUROPE LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IKON EUROPE LTD (CONTINUED)
∙obtaining an understanding of the policies and controls over the recognition of income and testing their implementation during the year;
∙challenging assumptions made by management in their specific accounting policies and estimates, in particular in relation to accrued purchases;
∙identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or crediting revenue or cash;
∙assessing the recovery of debtors in the period since the balance sheet date and challenging assumptions made by management regarding the recovery of balances which remain outstanding;
∙reviewing the financial statements for compliance with the relevant disclosure requirements;
∙performing analytical procedures to identify any unusual or unexpected relationships or unexpected movements in account balances which may be indicative of fraud;
∙reviewing the minutes of Board meetings and correspondence with HMRC; and
∙evaluating the underlying business reasons for any unusual transactions.
No instances of material noncompliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
14th Floor
33 Cavendish Square
W1G 0PW
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IKON EUROPE LTD
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
REGISTERED NUMBER: 07096118
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 29 form part of these financial statements.
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IKON EUROPE LTD
REGISTERED NUMBER: 07096118
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The loss of the parent Company for the year was £6,049,694 (2019 - £16,256).
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 29 form part of these financial statements.
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IKON EUROPE LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
IKON Europe Limited is a private company limited by shares and was incorporated in England and Wales. Its company registration number is 07096118. The registered office and principal place of business of the company is 20-22 Wenlock Road, London, N1 7GU.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland 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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. 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.
During the year, the Group made a profit of £280,404 (2019: loss £677,960) and as at 31 December 2020 had net assets of £471,871 (2019: £160,738). The ultimate controlling party of the Group has confirmed that it is his current intention to support the group financially for the foreseeable future and for a period of no less than 12 months from the date of approval of these financial statements.
The Director has also considered the impact of the current COVID-19 pandemic on the Group's operations, with a particular focus on its effect on the Group's customers, suppliers and employees, and the availability of support from the ultimate controlling party. The Director does not consider these to be causes for material uncertainty in respect of the Group's or Company's ability to continue as going concerns, In respect of the COVID-19 pandemic, the Group has adapted well, successfully employing contingency plans, and the Director considers that the Group has access to sufficient financial resources to continue for the foreseeable future, despite the current crisis. The financial statements have therefore been prepared on a going concern basis.
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
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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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Cash at bank and in hand includes client money, as this is considered to meet the recognition criteria of an asset. The corresponding liability is also recognised. These are not offset.
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Capital contributions are classified as equity and represent funds provided by the Company's sole shareholder and are repayable by the Company at its sole discretion.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both the Current and future
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
3.Judgments in applying accounting policies (continued)
There were no significant judgements or key sources of estimation uncertainty which would have had a significant effect on the amounts recognised in the consolidated financial statements, Other than regarding the recoverability of the fixed asset investment (see note 13) and whether to recognise a potential deferred tax asset in respect of losses carried forward (see note 9) .
The whole of the turnover is attributable to commissions receivable in accordance with the subsidiary's principal activity.
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
In the March 2021 Budget, it was announced that the Corporation Tax rate will increase to 25% for larger companies from 1 April 2023.
A potential deferred tax asset of £1,380,311 (2019 - £1,324,854) has not been recognised due to the uncertainty over the availability of future taxable profits. While the Group is undergoing organisational changes, the Director does not currently consider it appropriate to recognise the potential asset, due to the uncertainty over the availability of future taxable profits.
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
12.Tangible fixed assets (continued)
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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IKON EUROPE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Capital contributions
Profit and loss account
The ultimate controlling party is Engin Yikilmazoglu, by virtue of his controlling interest in the company.
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