REG - Adalan Ventures PLC - Audited Final Results
01/09/2023 13:30
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RNS Number : 1640L Adalan Ventures PLC 01 September 2023
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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/ (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 31(st) 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 31(st) 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 We have reviewed journal adjustments and the rationale behind them and have
considered whether these have been subject to potential management bias. From
There is a presumed risk that management is able to override controls. 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 We have reviewed the basis on which the directors have concluded that there
investment has been accounting for as disposal. 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
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
The Company has not produced group accounts following disposal of its sole financial year end.
subsidiary during the financial year on the basis no group existed at 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 Going concern was addressed as a key audit matter and has been addressed
flows to meet continued operational costs and continue trading. 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)
9 - -
Income tax expense
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 Additional capital Accumulated deficit Total
equity
Shares to be issued Reserve
Share options reserve
Balance at 31 December 2020 4,369,750 800,000 6,078,128 (1,268,987) 218,099 10,196,990
- - (571,305) (571,305)
Comprehensive loss for 2021 - -
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 (324,064) (541,258)
assets and liabilities
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)
(176,365) (534,510)
Net cash flows used in operating activities
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
211,833 161,163
Cash and cash equivalents at the beginning of the year
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 159,254 130,076
Impairment of loan (159,254)
- 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 - 112,057
Accruals 90,318 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
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