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Not for release or distribution, directly or indirectly, within, into or in the United States or to or for the account or benefit of persons in the United States, Australia, Canada, Japan or any other jurisdiction where such offer or sale would violate the relevant securities laws of such jurisdiction.
For Immediate Release
1 September 2023
Adalan Ventures Plc
("Adalan" or the "Company")
Audited annual results
Adalan Ventures plc (the 'Company' or 'Adalan'), announces its audited annual results for the year ended 31 December 2022.
The results follow at the bottom of this announcement, the annual report and notice of Annual General Meeting will be posted to shareholders shortly.
Further information can be found at the corporate website: https://adalanventures.com/
Enquiries:
Adalan Ventures Plc | |
Siro Cicconi |
Tel: +44 (0) 73 9377 9849 |
Optiva Securities Limited | |
Vishal Balasingham | Tel: +44 (0) 20 3137 1902 |
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ADALAN VENTURES PLC (FORMERLY ZAIM CREDIT SYSTEMS PLC)
Opinion
We have audited the financial statements of Adalan Ventures PLC for the year ended 31st December 2022 which comprise the statement of comprehensive income, the statement of financial position, the statements of cash flows, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies and the financial reporting framework that has been applied in the preparation of the financial statements and applicable law.
In our opinion:
· the financial statements give a true and fair view of the state of the company's affairs as at 31st December 2022 and of the loss for the year then ended;
· financial statements have been properly prepared in accordance with UK adopted International Accounting Standards and as applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements 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 as applied to listed entities, 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.
Material uncertainty related to going concern
We draw attention to note 1.1 in the financial statements, which explains that the Company has incurred significant operating losses and negative cash flows from operations. The Company forecasts include additional funding requirements upon which the Company is dependant. The directors are satisfied that these funding requirements will be met. These events or conditions, along with other matters as set out in note 1.1 indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
Key audit matter | How our audit addressed the key audit matter |
Management override of controls There is a presumed risk that management is able to override controls.
| We have reviewed journal adjustments and the rationale behind them and have considered whether these have been subject to potential management bias. From our procedures carried out no adverse issues were identified with regards to management override of controls. |
Accounting for disposal of investment in subsidiary During the financial year control of the operating subsidiary was lost and the investment has been accounting for as disposal. |
We have reviewed the basis on which the directors have concluded that there has been a loss of control of the subsidiary. We have reviewed the journal entries and calculations relating to the disposal of the subsidiary and impairment of any amount due from the subsidiary. |
Preparation of group accounts
The Company has not produced group accounts following disposal of its sole subsidiary during the financial year on the basis no group existed at the financial year end.
|
As the company has prepared accounts under UK-adopted IFRS then it does not need to prepare group accounts where a group does not exist at the end of the financial year end.
If a company disposes of all its subsidiary undertakings during the year, it will not be required to prepare group financial statements as a matter of law. This contrasts with the position under IFRS Accounting Standards as issued by the IASB. Such a company will fall outside of the scope of the requirements of the Act even though IFRS 10 would require the preparation of consolidated financial statements in these circumstances.
|
Going concern assumption
The Company is dependent upon recapitalisation to generate sufficient cash flows to meet continued operational costs and continue trading.
|
Going concern was addressed as a key audit matter and has been addressed within the 'conclusions' relating to going concern' section of the audit report. |
Our application of materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the Company financial statements as a whole to be £13,111, based on approximately 4% of the Company's net liabilities.
We use a different level of materiality ('performance materiality') to determine the extent of our testing for the audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment. We determined performance materiality to be £9,835.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and directors' remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £655. Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgments, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the activity undertaken.
The financial statements consists of 1 reporting unit.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the part of the directors' remuneration report to be audited has been properly prepared in accordance with Companies Act 2006
· 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.
Directors' remuneration
Under the Companies Act 2006, we are also required to report if in our opinion certain disclosures of directors' remuneration have not been made or the part of the directors remuneration have not been made or the part of the directors' remuneration report to be audited is not in agreement with the accounting standards and returns.
We have nothing to report in respect of these matters.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
· the parent company financial statements and the part of the directors' remuneration report to be audited are not in agreement with the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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 and parent 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 the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council's website, to detect material misstatements in respect of irregularities, including fraud.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
· the senior statutory auditor ensured 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 digital marketing and advertising 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 Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental, health and safety legislation and anti-money laundering regulations.
· 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.
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 set out in the Company financial statements were indicative of potential bias;
• 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;
• reviewing correspondence with HMRC and the company's legal advisor.
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 collusion.
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 auditor's report.
Other matters which we are required to address
The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Company or the parent company and we remain independent of the Company and the parent company in conducting our audit. Our audit opinion is consistent with the additional report to the audit committee.
Appointment
We were originally appointed by the board on 23 October 2019 to audit the financial statements for the period ending 31 December 2018. Our total uninterrupted period of engagement is 5 years, covering the period ended 31 December 2018 to 31 December 2022.
Use of this 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
BENJAMIN BIDNELL
Senior Statutory Auditor
For and on behalf of
SHIPLEYS LLP
Chartered Accountants and Statutory Auditor
10 Orange Street, Haymarket, London, WC2H 7DQ
31 August 2023
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2022
| Note | 2022 £ | 2021 £ |
Interest income | 4,247 | - | |
Interest expenses | - | - | |
Interest expense - lease liabilities | - | - | |
Net interest income |
| 4,247 | - |
Allowance for ECL/impairment of loans to customers | - | - | |
Net interest income after allowance for ECL/impairment of loans to customers | 4,247 | - | |
Gains less losses from dealing in foreign currency | (871) | (8,871) | |
Other operating income | 52,659 | 3,869 | |
Operating income |
| 56,035 | (5,002) |
Impairment of Loan | (159,254) | ||
Staff costs | (225,683) | - | |
Charge for share based options | - | (30,047) | |
Operating expenses | 8 | (154,416) | (536,256) |
Investment in subsidiary written off | (10,438,409) | - | |
Profit /(loss) before income tax |
| (10,921,727) | (571,305) |
Income tax expense | 9 | - | - |
Net profit / (loss) |
| (10,921,727) | (571,305) |
|
|
|
|
Net other comprehensive income that may be reclassified to profit or loss |
|
|
|
Foreign exchange differences arising on translation into presentation currency | - | - | |
Total comprehensive expense | (10,921,727) | (571,305) |
Earnings per share 11
Basic, profit/loss for the year attributable to
ordinary equity holders of the parent ( 2.36p) (0.18p)
Diluted, profit/loss for the year attributable to
ordinary equity holders of the parent (2.36p) (0.16p)
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022
| Note | 2022 | 2021 |
£ | £ | ||
Assets |
|
|
|
Cash and cash equivalents | 35,468 | 211,833 | |
Other assets | 7 | - | 130,076 |
Investment in subsidiary | - | 10,438,409 | |
Total assets |
| 35,468 | 10,780,319 |
Liabilities |
|
|
|
Other liabilities | 10 | 373,962 | 197,086 |
Total liabilities |
| 373,962 | 197,086 |
Equity |
|
|
|
Charter capital | 5 | 4,619,750 | 4,619,750 |
Shares to be issued Reserve | 800,000 | 800,000 | |
Additional capital | 6,755,628 | 6,755,628 | |
Share options reserve | 248,146 | 248,146 | |
Accumulated deficit | (12,762,019) | (1,840,292) | |
Total equity |
| (338,495) | 10,583,232 |
Total liabilities and equity |
| 35,468 | 10,780,319 |
The above Company Statement of Financial Position should be read in conjunction with the accompanying notes, the loss for the period was £10,921,727 (2021: £571,305).
The Financial Statements were authorised for issue by the Board of Directors on 31 August 2023
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2022
| Charter capital
|
Shares to be issued Reserve
| Additional capital
| Accumulated deficit
|
Share options reserve | Totalequity
| |
Balance at 31 December 2020 | 4,369,750 | 800,000 | 6,078,128 | (1,268,987) | 218,099 | 10,196,990 | |
Comprehensive loss for 2021 | - |
- | - | (571,305) |
- | (571,305) | |
Issued during the year | 250,000 |
- | 677,500 | - | - | 927,500 | |
Share-based payments | - | - | - | - | 30,047 | 30,047 | |
Balance at 31 December 2021 | 4,619,750 | 800,000 | 6,755,628 | (1,840,292) | 248,146 | 10,583,232 | |
| ||||||
Comprehensive loss for 2022 | - | - | - | (10,921,727) | - | (10,921,727) |
Share-based payments | - | - | - | - | - | - |
Balance at 31 December 2022 | 4,619,750 | 800,000 | 6,755,628 | (12,762,019) | 248,146 | (338,495) |
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
| 2022 | 2021 |
Cash flows from operating activities | ||
Loss for the period | (10,921,727) | (571,305) |
Correction for non-cash transaction | 10,597,663 | 30,047 |
Cash flows from/(used in) operating activities before changes in operating assets and liabilities | (324,064) | (541,258) |
| ||
Adjustments for | ||
Increase in trade and other receivables, VAT | (29,178) | (3,599) |
Increase in trade and other payables | 176,876 | 10,347 |
Cash generated from operations |
(176,365) |
(534,510) |
Net cash flows used in operating activities | (176,365) | (534,510) |
Cash flows from investing activities |
|
|
Investment in subsidiary | - | (342,320) |
Net cash flows from investing activities | - | (342,320) |
Cash flows from financing activities | ||
Issue of ordinary shares (including share premium) | - | 1,000,000 |
Share issue costs | - | (72,500) |
Net cash flows from financing activities | - | 927,500 |
|
|
|
Net change in cash and cash equivalents | (176,365) | 50,670 |
Cash and cash equivalents at the beginning of the year | 211,833 | 161,163 |
Cash and cash equivalents at the end of the year | 35,468 | 211,833 |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
6 Earnings per share
(I) Basic earnings per share
The Company presents basic and diluted earnings per share information for its ordinary shares. Basic earnings per share are calculated by dividing the profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the reporting period. Diluted earnings per share are determined by adjusting the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
7 Trade and other receivables
| 2022 | 2021 |
Loan to Zain Holdings LLC Impairment of loan | £ 159,254 (159,254) | £ 130,076
|
- | 197,086 |
8 Operating Expenses
|
| 2022 £ | 2021 £ |
Advertising and marketing | - | - | |
Consulting services | 10,937 | - | |
Depreciation of right-of-use assets | - | - | |
State duty | - | - | |
Communication | 1,451 | - | |
Banking services | 404 | 2,789 | |
Postal services | - | - | |
Investor Relations | 19,897 | - | |
Writing off VAT | - | 70,583 | |
Rental expenses | - | - | |
Material expenses | - | - | |
Security | - | - | |
Other expenses | 121,727 | 462,884 | |
Total operating expenses |
| 154,416 | 536,256 |
Operating expenses include the cost of audit for the company of £20,000 (2021: £20,000). The audit of the group financial statements in £nil (2021: 20,000). These amounts are included in other expenses.
9. Income Tax
In 2022, the Group generated a significant tax loss and therefore has no tax expense (as at 31 December 2021, the Company has no current income tax expenses). The current income tax rate applicable to the Group's is 20% (2021: 20%).
A reconciliation between the theoretical and the actual taxation charge is provided below.
| 2022 | 2021 |
IFRS loss before taxation | £ (10,911,002) | £ 801,497 |
Theoretical tax charge at the applicable statutory rate | - | (160,299) |
Non-deductible expenses and other differences | 10,911,002 | 31,189 |
Unrecognised deferred tax asset | - | 10,263 |
Income tax expense for the year | - | (118,847) |
10. Trade and other payables
| 2022 | 2021 |
Trade payables Accruals | £ - 90,318 | £ 112,057 27 |
Other payables - taxation and security payments | 283,644 | 85,002 |
373,962 | 197,086 | |
11. Ultimate Controlling Party
The ultimate controlling party is Zaim Holding SA which holds 69.2% of the share capital.
12. Impairment of investment in subsidiary
Following the investigation by the Company into the loss of control of its previously wholly owned subsidiary Zaim Express LLC, the financial statements include the write down of the full carrying value of the investment of 10,438,409 as the Directors view the fair value of any potential redress being nil.
13. Subsequent Events
No events have occurred subsequent to the year end
14. Related Party Transactions
As per IFRS, there were no related party transactions. In the year December 2022