Company registration number 02737924 (England and Wales)
TRAFIGURA LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
TRAFIGURA LIMITED
COMPANY INFORMATION
Directors
C Smallbone
M Swift
R Bloch
M Wainwright
Company number
02737924
Registered office
14 St George Street
London
W1S 1FE
Auditor
Bright Grahame Murray
Emperor's Gate
114a Cromwell Road
Kensington
London
SW7 4AG
TRAFIGURA LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
TRAFIGURA LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 1 -
The directors present the strategic report for the year ended 30 September 2021.
Fair review of the business
The company's turnover represents costs recharged to group companies at agreed mark up levels of either 0%
or 10%, based upon the underlying agreement with those group companies.
The directors are satisfied with the results for the year and the state of affairs of the company at the balance
sheet date.
Going Concern
The Company assessed the going-concern assumptions, during the preparation of the financial statements. The Company believes that no events or conditions including those related to the current COVID-19 pandemic
and current military conflict in Ukraine
, give rise to doubt about the ability of the Company to continue in operation in the next reporting period. This conclusion is drawn based on the knowledge of the Company, the estimated economic outlook and identified risks and uncertainties in relation thereto.
Furthermore, this conclusion is based on review of the current cash balance and expected developments in liquidity and capital. The Company has sufficient cash and headroom in its credit facilities. Therefore, it expects that it will be able to meet contractual and expected maturities and covenants. Consequently, it has been concluded that it is reasonable to apply the going-concern concept as the underlying assumption for the financial statements
.
Principal risks and uncertainties
Risk management guidelines are established at senior management level. Any risks the company is exposed to are managed through a combination of internal procedures, such as strict control mechanisms and policies.
The company has no direct exposure to cash flow risk, credit risk, liquidity risk or price risk, due to the nature of its operations. All such risks fall upon the company's intermediate holding company, Trafigura Pte. Limited.
Development and performance
The directors expect the general level of immediate future activity to remain consistent with the current year.
Key performance indicators
Given the straightforward nature of the business, the directors are of the opinion that analysis using KPIs is not necessary for an understanding of the development, performance or position of the business.
TRAFIGURA LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 2 -
Statement by the Directors in performance of their statutory duties in accordance with s 172(1) Companies Act 2006
The Directors of Trafigura Limited consider that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172 (1) (a-f) of the Companies Act 2006) in the decisions taken during the year ended 30th September 2021.
Our People
People are a key factor for our business to succeed. We are proud of the average length of service of our employees. We intend to retain people for the long term and our recruitment strategy is based on offering long careers in fairly paid and stable jobs.
We encourage our employees to have both fulfilling careers and balanced lives. We look to our employees to contribute ideas for our future growth, and share the rewards of the business where we are profitable, primarily through our discretionary annual bonus scheme.
Business Relationships
We value long term relationships with our suppliers and customers and many of our relationships span years and some span decades. We employ robust "know your customer" and "know your supplier" processes across our operations, and we are typically cautious when entering into new relationships.
Community, Environment and Reputation
We believe that a positive and strong culture is the best way to ensure a high level of professional conduct when it comes to health and safety, environment, regulations or business dealings.
Capital allocation and long term decisions
At least on an annual basis the directors review the financial budgets, resource plans and investment decisions. In making decisions concerning the business plan and future strategy, the directors have regard to a variety of matters including the interests of stakeholders, long term consequences of our capital allocation (such expenditure needed to ensure our long term viability whilst maintaining adequate liquidity), and reputation.
Decisions on the level of dividend take into account the general profitability, liquidity and funding needs of the company.
Michael Stuart Wainwright
Craig Smallbone
Director
Director
24 June 2022
TRAFIGURA LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2021.
Principal activities
The principal activity of the company continued to be that of the provision of services in consultancy, administration and data collection.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
C Smallbone
M Swift
R Bloch
M Wainwright
Results and dividends
The results for the year are set out on page 8.
Energy and emissions data
As the company has not consumed more than 40,000 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.
Auditor
The auditor, Bright Grahame Murray, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
On behalf of the board
Michael Stuart Wainwright
Craig Smallbone
Director
Director
24 June 2022
TRAFIGURA LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
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.
TRAFIGURA LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF TRAFIGURA LIMITED
- 5 -
Opinion
We have audited the financial statements of Trafigura Limited (the 'company') for the year ended 30 September 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 September 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport 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.
TRAFIGURA LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF TRAFIGURA LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the directors'
r
eport
. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have
no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
In identifying and addressing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
-
We obtained an understanding of laws and regulations that affect the company, focusing on those that had a direct effect on the financial statements or that had a fundamental effect on its operations. Key laws and regulations that we identified included the UK Companies Act, tax legislation and employment legislation.
-
We enquired of the directors, reviewed correspondence with HMRC and reviewed directors meeting minutes for evidence of non-compliance with relevant laws and regulations. We also reviewed controls the directors have in place to ensure compliance.
-
We gained an understanding of the controls that the directors have in place to prevent and detect fraud. We enquired of the directors about any incidences of fraud that had taken place during the accounting period.
-
The risk of fraud and non-compliance with laws and regulations and fraud was discussed within the audit team and tests were planned and performed to address these risks. We identified the potential for fraud in the following areas: revenue recognition, related parties outside normal course of business, management override and misappropriation of cash and other assets.
-
We reviewed financial statements disclosures and tested to supporting documentation to assess compliance with relevant laws and regulations discussed above.
-
We enquired of the directors about actual and potential litigation and claims.
-
We performed analytical procedures to identify any unusual or unexpected relationships that might indicate risks of material misstatement due to fraud.
-
In addressing the risk of fraud due to management override of internal controls we tested the appropriateness of journal entries and assessed whether the judgements made in making accounting estimates were indicative of a potential bias.
TRAFIGURA LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF TRAFIGURA LIMITED
- 7 -
Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Ahsan Miraj (Senior Statutory Auditor)
For and on behalf of Bright Grahame Murray
Chartered Accountants
Statutory Auditor
Emperor's Gate
114a Cromwell Road
Kensington
London
SW7 4AG
29 June 2022
TRAFIGURA LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 8 -
2021
2020
Notes
USD'000
USD'000
Turnover
3
39,513
39,081
Administrative expenses
(36,627)
(36,273)
Other operating income
417
443
Operating profit
4
3,303
3,251
Interest receivable and similar income
7
2
Interest payable and similar expenses
9
(4)
(37)
Profit before taxation
3,299
3,216
Tax on profit
10
(12)
(365)
Profit for the financial year
3,287
2,851
The profit and loss account has been prepared on the basis that all operations are continuing operations.
TRAFIGURA LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2021
30 September 2021
- 9 -
2021
2020
Notes
USD'000
USD'000
USD'000
USD'000
Fixed assets
Intangible assets
11
1,181
1,151
Tangible assets
12
6,970
4,777
8,151
5,928
Current assets
Debtors - other
13
11,563
10,561
Debtors - deferred tax > 1 year
15
2,797
2,556
Cash at bank and in hand
1,749
1,133
16,109
14,250
Creditors: amounts falling due within one year
14
(8,355)
(7,560)
Net current assets
7,754
6,690
Total assets less current liabilities
15,905
12,618
Capital and reserves
Profit and loss reserves
15,905
12,618
The financial statements were approved by the board of directors and authorised for issue on 24 June 2022 and are signed on its behalf by:
Michael Stuart Wainwright
Craig Smallbone
Director
Director
Company Registration No. 02737924
TRAFIGURA LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 10 -
Profit and loss reserves
USD'000
Balance at 1 October 2019
9,767
Year ended 30 September 2020:
Profit and total comprehensive income for the year
2,851
Balance at 30 September 2020
12,618
Year ended 30 September 2021:
Profit and total comprehensive income for the year
3,287
Balance at 30 September 2021
15,905
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 11 -
1
Accounting policies
Company information
Trafigura Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
14 St George Street, London, W1S 1FE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in USD as this is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest USD'000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102
and has therefore taken advantage of the disclosure exemptions available to it in respect of its financial statements. Exemptions have been taken in relation to financial instruments, presentation of cash flow statements and remuneration of key management personnel.
1.2
Going concern
At the time of approving the financial statements , the directors have a reasonable expectation
true
that the
company has adequate resources to continue in operational existence for the foreseeable future. Thus the
directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is fees receivable, exclusive of value added tax and represents can agreed mark up level, either 10% or 0%.
The company's activities consist solely of the provision of services in consultancy, administration and data collection in the United Kingdom.
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
1
Accounting policies
(Continued)
- 12 -
1.4
Intangible fixed assets other than goodwill
Intangible Assets comprise internally generated assets relating mainly to computer software and other intangible assets relating mainly to externally acquired computer software and assets. These are carried at cost less accumulated amortisation and any recognised impairment loss. Other intangible Assets such as externally acquired computer software and software licences are capitalised and amortised on a straight-line basis over their useful lives of three years. Costs relating to the development of computer software for internal use are capitalised once all the development phase recognition criteria of Section 18 of FRS 102 "Intangible Assets" are met. When the software is available for its intended use, these costs are amortised in equal annual amounts over the estimated useful life of the asset. Amortisation and impairment of computer software or licences are charged to administrative expenses in the period in which they arise.
Amortisation periods and methods are reviewed annually and adjusted if appropriate.
Cost Capitalisation
The cost of internally generated assets is capitalised as an intangible asset where it is determined by management's judgement that the ability to develop the assets is technically feasible, will be completed and that the asset will generate economic benefit that outweighs its cost. This is in line with the recognition criteria as outlined in Section 18 FRS 102 "Intangible Assets". Management determine whether the nature of the projects meets the recognition criteria to allow for the capitalised of internal costs, which include the total cost of any external products or services and labour costs directly attributable to development. During the year management have considered whether costs in relation to the time spent on specific software projects can be capitalised. Time spent that was eligible for capitalisation included time which was intrinsic to the development of new assets to be used by the company and the enhancement of existing system capabilities.
Other development costs that do not meet the above criteria are recognised as an expense when incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Research expenditure is recognised as an expense as incurred.
Amortisation 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:
Software Development
20-40% p.a. on a straight line basis
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Tangible fixed assets are stated at cost less
a provision for depreciation.
Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Leasehold property
20% p.a on a straight line basis
Fixtures, fittings and computers
20-40% p.a on a straight line basis
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
1
Accounting policies
(Continued)
- 13 -
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
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.
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.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
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.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
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
paymen
ts 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. A
m
ounts 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough 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.
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions:
Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold.
Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
The company operates a defined contribution scheme for the benefit of
certain
employees. Contributions payable are charged to the profit and loss account in the year they are payable.
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
1
Accounting policies
(Continued)
- 16 -
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
Foreign exchange
Transactions in foreign currencies are measured in the functional currency of the Company and are recorded on initial recognition in the functional currency at exchange rates approximating those prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange prevailing at the balance sheet date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on settlement of monetary items on translating monetary items at the balance sheet date are recognised in the profit and loss account.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Assessing the functional currency
The directors are required to identify the functional currency of the company. In making this judgement the directors have considered factors such as the currency which mainly influences both sales and cost prices, and the countries whose competitive forces and regulations affect those prices. Where the functional currency is not clearly identifiable, the directors use judgement to determine which currency most faithfully represents the economic effects of the underlying transactions, events and conditions.
Recognition of deferred tax assets
Management estimation is required to determine the amount of deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits together with an assessment of the effect of future tax planning strategies.
Intangible assets (capitalisation of software costs)
The cost of internally generated assets is capitalised as an intangible asset where it is determined by management's judgement that the ability to develop the assets is technically feasible, will be completed and that the asset will generate economic benefit that outweighs its cost.
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty
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.
Determining the useful economic lives of property, plant and equipment
Trafigura depreciates tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applies by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation and product life cycles.
Establishing recoverable values of impaired assets
Loans, receivables and property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be fully recoverable. If an asset's recoverable amount is less than the asset's carrying amount, an impairment loss is recognised. Loans and receivables are evaluated based on collectability. Changes in estimates could impact recoverable values of the assets.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
USD'000
USD'000
Turnover analysed by class of business
Service fees receivable
39,513
39,081
2021
2020
USD'000
USD'000
Other significant revenue
Interest income
-
2
Rent receivable
417
443
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
USD'000
USD'000
Exchange (gains)/losses
(61)
373
Depreciation of owned tangible fixed assets
3,133
3,518
Amortisation of intangible assets
635
881
Operating lease charges
3,186
2,916
Other administrative expenses not requiring separate disclosure
29,734
28,585
Total administrative expenses charged
36,627
36,273
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Administrative staff
34
31
Their aggregate remuneration, including directors' remuneration, comprised:
2021
2020
USD'000
USD'000
Wages and salaries
8,061
7,973
Social security costs
1,041
1,039
Pension costs
490
404
9,592
9,416
6
Directors' remuneration
2021
2020
USD'000
USD'000
Remuneration for qualifying services
414
389
Company pension contributions to defined contribution schemes
34
31
448
420
7
Interest receivable and similar income
2021
2020
USD'000
USD'000
Interest income
Interest on bank deposits
2
8
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
USD'000
USD'000
For audit services
Audit of the financial statements of the company
47
41
For other services
Taxation compliance services
25
28
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 19 -
9
Interest payable and similar expenses
2021
2020
USD'000
USD'000
Other interest
4
37
10
Taxation
2021
2020
USD'000
USD'000
Current tax
UK corporation tax on profits for the current period
267
303
Adjustments in respect of prior periods
(15)
Total current tax
252
303
Deferred tax
Origination and reversal of timing differences
(240)
62
Total tax charge
12
365
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
USD'000
USD'000
Profit before taxation
3,299
3,216
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
627
611
Tax effect of expenses that are not deductible in determining taxable profit
68
Adjustments in respect of prior years
(15)
Depreciation on assets not qualifying for tax allowances
13
75
Other non-reversing timing differences
(8)
Foreign exchange differences
(2)
(5)
Superdeduction relief under UK tax law
(9)
Other adjustment to deferred tax rates
(670)
(308)
Taxation charge for the year
12
365
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 20 -
11
Intangible fixed assets
Software Development
USD'000
Cost
At 1 October 2020
13,548
Additions
666
At 30 September 2021
14,214
Amortisation and impairment
At 1 October 2020
12,398
Amortisation charged for the year
635
At 30 September 2021
13,033
Carrying amount
At 30 September 2021
1,181
At 30 September 2020
1,151
Included in Software Development Additions are licence fees with a carrying value of $0.4m (2020: $0.7m) and a remaining useful economic life of 3 years.
12
Tangible fixed assets
Leasehold property
Fixtures, fittings and computers
Total
USD'000
USD'000
USD'000
Cost
At 1 October 2020
17,518
76,222
93,740
Additions
50
5,275
5,325
At 30 September 2021
17,568
81,497
99,065
Depreciation and impairment
At 1 October 2020
17,401
71,561
88,962
Depreciation charged in the year
106
3,027
3,133
At 30 September 2021
17,507
74,588
92,095
Carrying amount
At 30 September 2021
61
6,909
6,970
At 30 September 2020
117
4,660
4,777
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 21 -
13
Debtors
2021
2020
Amounts falling due within one year:
USD'000
USD'000
Corporation tax recoverable
877
575
Amounts owed by group undertakings
4,957
356
Other debtors
468
737
Prepayments and accrued income
5,261
8,893
11,563
10,561
Deferred tax asset (note 15)
2,797
2,556
14,360
13,117
14
Creditors: amounts falling due within one year
2021
2020
USD'000
USD'000
Trade creditors
2,757
622
Amounts owed to group undertakings
1,261
2,958
Taxation and social security
44
37
Other creditors
2,504
1,057
Accruals and deferred income
1,789
2,886
8,355
7,560
15
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Assets
Assets
2021
2020
Balances:
USD'000
USD'000
Capital allowances in excess of/(less than) depreciation
2,797
2,556
2021
Movements in the year:
USD'000
Asset at 1 October 2020
(2,556)
Charge to profit or loss
565
Effect of change in tax rate - profit or loss
(806)
Asset at 30 September 2021
(2,797)
The deferred tax asset is regarded as due in more than one year, as no material net reversal is expected within the next 12 months.
TRAFIGURA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 22 -
16
Retirement benefit schemes
2021
2020
Defined contribution schemes
USD'000
USD'000
Charge to profit or loss in respect of defined contribution schemes
490
404
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2021
2020
USD'000
USD'000
Ordinary share capital
2 Ordinary shares of $1.50 each
*
*
*Amount less than $1,000.
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
USD'000
USD'000
Within one year
2,616,031
Between two and five years
7,765,715
In over five years
12,098,247
22,479,993
19
Ultimate controlling party
Trafigura Group PTE Ltd,
the intermediate holding company, continues to prepare the consolidated accounts and they may be obtained from their registered offices.
Trafigura Group PTE Ltd,
10 Collyer Quay
#29-01/05 Ocean Financial Centre
Singapore
049315
The
ultimate parent
undertaking
is
Farringford Foundation, which is established under the laws of Panama.
2021-09-30
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false
CCH Software
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