Dolfinancials Limited - Period Ending 2021-12-31
Dolfinancials Limited - Period Ending 2021-12-31
Registration number:
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Dolfinancials Limited
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Brebners
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Dolfinancials Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Statement of Income and Retained Earnings |
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Consolidated Statement of Financial Position |
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Statement of Financial Position |
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Consolidated Statement of Changes in Equity |
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Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Notes to the Financial Statements |
Dolfinancials Limited
Company Information
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Directors |
S Tsyupko A Tsyupko |
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Registered office |
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Auditor |
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Dolfinancials Limited
Strategic Report for the Year Ended 31 December 2021
The directors present their strategic report for the year ended 31 December 2021.
Principal activity
The principal activity of the group is the delivery of an electronic money payments platform to business partners in a Software-as-a-Service model. The subsidiary, Paybase Limited is registered with the FCA and has been granted the status of Authorised Electronic Money Institution.
The principal activity of the company is that of an investment holding company.
Fair review of the business
The electronic money payments platform was brought into working order and launched to fee paying business partners in 2019. Revenue is therefore now being generated from the platform. However significant costs have still been incurred in 2021 in relation to the ongoing support of the platform offering.
The consolidated loss for the year amounted to £186,718 compared to a loss of £3,025,505 in 2020. However the most significant overhead in 2021 related to amortisation of development costs of £438,012.
HMRC research and development taxation credits of £144,368 (2020: £252,658) were received in the year which assisted with working capital management.
The consolidated statement of financial position shows a deficit of assets of £7,093,141 at 31 December 2021. The group is supported by the parent undertaking and at this date an amount of £5,738,934 was due to the parent undertaking. The parent undertaking remains committed to the activities of the group.
Dolfinancials Limited
Strategic Report for the Year Ended 31 December 2021
Principal risks and uncertainties
Outlook
The payments platform includes electronic money payments infrastructure capabilities that are provided to business partners as a SaaS product, with revenue from these services being generated. Now that core development of the platform is complete, the ultimate beneficial owner together with the board of directors is assessing potential business sale opportunities in the market.
Risk Assessment
The board have carried out an ongoing assessment of the risks facing the group, through their monthly meetings. COVID-19 has had a negative impact on the business with increased business and operational risk. However, preventative measures are being taken and the entity has sufficient capital resources through the ongoing support of the parent company.
As the core focus of the business has been the UK market, we do not foresee Brexit having a significant impact on the business in 2022 or thereafter.
Regulation
The subsidiary undertaking Paybase Limited is authorised by the Financial Conduct Authority as an Electronic Money Institution.
Credit Risk
Credit risk is the risk that counterparties will not be able to meet their obligations as they fall due. The group
has a limited number of counterparties and there are regular credit reviews of counterparty limits to ensure
debtors remain at a reasonable level.
Operational Risk
The directors maintain a strong governance and control environment and further, the size of the group lends itself to good levels of control. The group seeks to continually improve its operating efficiencies and standards.
Approved by the
.........................................
Director
Dolfinancials Limited
Directors' Report for the Year Ended 31 December 2021
The directors present their report and the for the year ended 31 December 2021.
Directors of the group
The directors who held office during the year were as follows:
Disclosure of information in the Strategic report
The group has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the Strategic Report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the Directors' Report. It has done so in respect of financial risk management and future developments.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved by the
.........................................
Director
Dolfinancials Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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 group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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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 and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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.
Dolfinancials Limited
Independent Auditor's Report to the Members of
Dolfinancials Limited
Opinion
We have audited the financial statements of Dolfinancials Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021, which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 group's and the company's affairs as at 31 December 2021 and of the group's loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that the group had a deficiency of net assets of £7,093,141 at 31 December 2021 and was dependent upon the continued support of the parent undertaking and a director. Additionally, this note refers to the uncertainty connected with the global Covid-19 pandemic. As stated in note 2 these matters indicate that a material uncertainty exists that may cast significant doubt on the group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the entity was unable to continue as a going concern. Our opinion is unmodified in respect of this matter.
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.
Dolfinancials Limited
Independent Auditor's Report to the Members of
Dolfinancials Limited
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept 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 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 Statement of Directors' Responsibilities [set out on page 5], 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 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.
Dolfinancials Limited
Independent Auditor's Report to the Members of
Dolfinancials Limited
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the Group and the industry in which it operates, we determined that the principal risks of non-compliance with laws and regulations related to the reporting framework (FRS 102 and the Companies Act 2006), UK corporate taxation laws and FCA regulations. These risks were communicated to our audit team and we remained alert to any indications of non-compliance throughout our audit.
We understood how the Group is complying with relevant legislation by making enquiries of management. We also considered the results of our audit procedures and to what extent these corroborate this understanding and assessed the susceptibility of the company’s financial statements to material misstatement. This included consideration of how fraud might occur and evaluation of management’s incentives and opportunities for fraudulent manipulation of the financial statements.
We designed our audit procedures to identify any non-compliance with laws and regulations. Such procedures included, but were not limited to, inspection of any regulatory or legal correspondence; challenging assumptions and judgements made by management; identifying and testing journal entries with a focus on large or unusual transactions as determined based on our understanding of the business; and identifying and assessing the effectiveness of controls in place to prevent and detect fraud.
Owing to the inherent limitations of an audit, there remains a risk that a material misstatement may not have been detected, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance with laws and regulations and cannot be expected to detect all instances of non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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For and on behalf of
130 Shaftesbury Avenue
W1D 5AR
Dolfinancials Limited
Consolidated Statement of Income and Retained Earnings for the Year Ended 31 December 2021
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Note |
2021 |
2020 |
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Turnover |
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Cost of sales |
( |
( |
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Gross loss |
( |
( |
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Administrative expenses |
( |
( |
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Other operating income |
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Operating loss |
( |
( |
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Interest payable and similar charges |
( |
( |
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(118,373) |
(98,591) |
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Loss before tax |
( |
( |
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Taxation |
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Loss for the financial year |
( |
( |
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Profit/(loss) attributable to: |
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Owners of the company |
( |
( |
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Retained earnings brought forward |
(9,168,301) |
(6,395,454) |
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Retained earnings carried forward |
(9,210,651) |
(9,168,301) |
Dolfinancials Limited
Consolidated Statement of Financial Position as at 31 December 2021
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Note |
2021 |
2020 |
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Fixed assets |
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Intangible assets |
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Tangible assets |
- |
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Current assets |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current liabilities |
( |
( |
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Net liabilities |
( |
( |
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Capital and reserves |
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Called up share capital |
1,767,510 |
1,767,510 |
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Share premium reserve |
350,000 |
350,000 |
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Retained earnings |
(9,210,651) |
(9,168,301) |
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Equity attributable to owners of the company |
(7,093,141) |
(7,050,791) |
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Shareholders' deficit |
(7,093,141) |
(7,050,791) |
Approved and authorised by the
.........................................
Director
Company registration number: 09684267
Dolfinancials Limited
Statement of Financial Position as at 31 December 2021
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Note |
2021 |
2020 |
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Fixed assets |
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Investments |
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Current assets |
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Debtors |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current liabilities |
( |
( |
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Net liabilities |
( |
( |
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Capital and reserves |
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Called up share capital |
1,767,510 |
1,767,510 |
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Share premium reserve |
350,000 |
350,000 |
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Retained earnings |
(7,626,434) |
(7,472,745) |
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Shareholders' deficit |
(5,508,924) |
(5,355,235) |
The company made a loss after taxation for the financial year of £153,689 (2020 - £1,394,762).
Approved and authorised by the
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Company registration number: 09684267
Dolfinancials Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2021
Equity attributable to the parent company
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Share capital |
Share premium |
Profit and loss account |
Total |
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At 1 January 2020 |
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( |
( |
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Loss for the year |
- |
- |
( |
( |
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Total comprehensive income |
- |
- |
( |
( |
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At 31 December 2020 |
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( |
( |
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Share capital |
Share premium |
Profit and loss account |
Total |
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At 1 January 2021 |
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( |
( |
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Loss for the year |
- |
- |
( |
( |
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Total comprehensive income |
- |
- |
( |
( |
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At 31 December 2021 |
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( |
( |
Dolfinancials Limited
Statement of Changes in Equity for the Year Ended 31 December 2021
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Share capital |
Share premium |
Profit and loss account |
Total |
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At 1 January 2020 |
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( |
( |
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Loss for the year |
- |
- |
( |
( |
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Total comprehensive income |
- |
- |
( |
( |
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At 31 December 2020 |
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( |
( |
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Share capital |
Share premium |
Retained earnings |
Total |
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At 1 January 2021 |
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( |
( |
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Loss for the year |
- |
- |
( |
( |
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At 31 December 2021 |
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( |
( |
Dolfinancials Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2021
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Note |
2021 |
2020 |
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Cash flows from operating activities |
|||
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Loss for the year |
( |
( |
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Adjustments to cash flows from non-cash items |
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Depreciation and amortisation |
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Loss on disposal of tangible assets |
- |
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Finance costs |
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Income tax |
( |
( |
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Impairment loss (reversal) on intangible assets |
(131,319) |
971,890 |
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( |
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Working capital adjustments |
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Decrease in trade and other debtors |
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(Decrease)/increase in trade and other creditors |
( |
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Cash generated from operations |
( |
( |
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Income taxes received |
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Net cash flow from operating activities |
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Cash flows from investing activities |
|||
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Acquisitions of tangible assets |
- |
( |
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Cash flows from financing activities |
|||
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Interest paid |
( |
( |
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Payments to finance lease creditors |
( |
- |
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Net cash flows from financing activities |
( |
( |
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Net decrease in cash and cash equivalents |
( |
( |
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Cash and cash equivalents at 1 January |
31,291 |
41,220 |
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Cash and cash equivalents at 31 December |
30,203 |
31,291 |
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Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
The principal activity of the group is the delivery of an electronic money payments platform to partners in a Software-as-a-Service model. The principal activity of the company is that of an investment holding company.
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.
Basis of preparation
These financial statements have been prepared using the historical cost convention except any items disclosed in the accounting policies as being shown at fair value and are presented in sterling, which is the functional currency of the entity.
Summary of disclosure exemptions
The parent company satisfied the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:
(a) No cash flow statement has been presented for the company.
(b) Disclosure in respect of financial instruments has not been presented.
(c) No disclosure has been given for the aggregate remuneration of key management personnel.
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Basis of consolidation
The consolidated financial statements include the results of the company and its subsidiary undertakings drawn up to 31 December each year. No profit or loss account has been prepared for the company as permitted by Section 408 of the Companies Act 2006.
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill or negative goodwill.
Goodwill arising on business contributions is written off to the profit and loss account on acquisition.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Material uncertainty in relation to going concern
The consolidated statement of income for the year ended 31 December 2021 shows a loss for the year of £186,718 and the consolidated statement of financial position shows a net deficiency of assets amounting to £7,093,141 with net current liabilities of £7,293,141 at that date.
The group has no bank facilities and relies upon share capital and loans provided by the parent undertaking and the director. At 31 December 2021 an amount of £1,112,604 was due to a director and an amount of £5,738,934 was due to the ultimate parent undertaking and its own group undertakings, all of whom have agreed to not call for repayment until such time as the group has sufficient working capital.
The directors have also been monitoring and responding to the remaining effects of the COVID-19 pandemic with restrictions now fully lifted.The full impact of COVID-19 combined with other economic factors cannot be known at present, however the directors' view is that the impact will be manageable.
The trading subsidiary's latest management accounts show further losses were incurred subsequent to 31 December 2021 however the subsidiary has been sold post year end providing significant cashflow to the parent undertaking. The directors are also reducing overheads wherever possible and are reconsidering the best way to exploit the now complete and operational platform which could involve the sale of the developed platform.
The ultimate parent undertaking has confirmed it will continue to support the group and to provide further working capital to meet the parent's obligations. However the ability of the parent undertaking to continue to support the group is also affected by the economic environment in Cyprus, upon which Brexit and political uncertainty in Europe has had an impact and the latest audited financial statements of the parent undertaking included a reference to a material uncertainty in relation to going concern.
The directors believe however that the ultimate parent undertaking will remain in a position to provide continued support as it has done so to date whilst the board concentrate on the strategic direction for the business, which could include a sale of the developed platform and related intellectual property rights.
Accordingly the directors believe that the group has adequate resources to continue in operational existence for the foreseeable future. For these reasons they continue to adopt the going concern basis in preparing the financial statements. However the factors above represent a material uncertainty in relation to going concern.
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant judgements
Including those involving estimations, the judgements that management have made in the process of applying the company's accounting policies that have a significant effect on the amounts recognised in the financial
statements are as follows:
• Carrying value of investments
The company makes an estimate of the recoverable value of investments in subsidiary undertakings. The directors of Dolfinancials Limited consider the recoverable amount of the investment in subsidiary undertakings to be equal to the agreed in principal sale price of the subsidiary undertaking to a third party.
• Recoverability of intra group indebtedness
The company makes an estimate of the recoverable value of amounts due to group undertakings. Included within amounts due to group undertakings is a loan provided to a subsidiary undertaking to provide working capital. The directors of Dolfinancials Limited consider the amount recoverable in full due to support provided to the subsidiary undertaking by the ultimate parent company.
Including those involving estimations, the judgements that management have made in the process of applying the group's accounting policies that have a significant effect on the amounts recognised in the financial
statements are as follows:
• Carrying value of the software development
The group makes an estimate of the carrying value of intangible assets. Included in intangible assets is an amount capitalised in respect of software development costs. The directors of Dolfinancials Limited consider the carrying value of the capitalised software development costs to be equal to the agreed in principal sale price of the subsidiary undertaking holding the intangible assets.
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Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the company's activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.
The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company's activities.
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Government grants
Government grants are recognised by applying the accruals model where there is reasonable assurance that:
(a) the entity will comply with the conditions attaching to them; and
(b) the grants will be received.
Grants relating to revenue are recognised in income on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate. Grant amounts relating to assets are recognised in income on a systematic basis over the expected useful life of the asset.
Where part of a grant relating to an asset is deferred it is recognised as deferred income and not deducted from the carrying amount of the asset and released to profit and loss over the expected useful life of the asset.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively.
Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
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Asset class |
Depreciation method and rate |
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Computer equipment |
3 years straight line |
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Intangible assets
Separately acquired trademarks and licences are shown at historical cost.
Trademarks, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.
Trademarks, licences and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
|
Asset class |
Amortisation method and rate |
|
Intellectual property |
5 years straight line |
|
Platform development |
3 years straight line |
Research and Development expenditure
Research expenditure is written off in the period in which it is incurred.
Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met:
• It is technically feasible to complete the intangible asset so that it will be available for use or sale;
• There is the intention to complete the intangible asset and use or sell it;
• There is the ability to use or sell the intangible asset;
• The use or sale of the intangible asset will generate probable future economic benefits;
• There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and
• The expenditure attributable to the intangible asset during its development can be measured reliably.
Expenditure that does not meet the above criteria is expensed as incurred.
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expenses over the lease term, on a straight-line basis.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
|
Revenue |
The analysis of the group's revenue for the year from continuing operations is as follows:
|
2021 |
2020 |
|
|
Rendering of services - UK |
|
|
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
|
2021 |
2020 |
|
|
Government grants |
|
|
|
Miscellaneous other operating income |
17,465 |
- |
|
|
|
|
Operating loss |
Arrived at after charging/(crediting)
|
2021 |
2020 |
|
|
Depreciation expense |
|
|
|
Amortisation expense |
|
|
|
Impairment (reversal)/loss |
( |
|
|
Foreign exchange (gains)/losses |
( |
|
|
Loss on disposal of property, plant and equipment |
- |
|
|
Interest payable and similar expenses |
|
2021 |
2020 |
|
|
Interest expense on other finance liabilities |
|
|
|
Staff costs |
The aggregate payroll costs were as follows:
|
2021 |
2020 |
|
|
Wages and salaries |
- |
|
|
Social security costs |
- |
|
|
Redundancy costs |
- |
|
|
- |
|
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
The average number of persons employed by the company during the year, was
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
|
2021 |
2020 |
|
|
Administration and support |
- |
|
|
Other departments |
- |
|
|
- |
|
The average number of persons employed by the company during the year, was
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2021 |
2020 |
|
|
Remuneration |
- |
|
|
Auditor's remuneration |
|
2021 |
2020 |
|
|
Audit of these financial statements |
6,000 |
4,850 |
|
Other fees to auditors |
||
|
All other non-audit services |
|
|
|
Audit of the financial statements of a subsidiary undertaking |
6,500 |
7,650 |
|
|
|
|
Taxation |
Tax charged/(credited) in the income statement
|
2021 |
2020 |
|
|
Current taxation |
||
|
UK corporation tax |
( |
( |
|
Total current income tax |
( |
( |
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2020 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2021 |
2020 |
|
|
Loss before tax |
( |
( |
|
Corporation tax at standard rate |
( |
( |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
|
Effect of tax losses |
( |
|
|
Tax increase from effect of capital allowances and depreciation |
|
|
|
Tax decrease from effect of research and development expenditure |
( |
( |
|
Total tax credit |
( |
( |
|
Intangible assets |
Group
|
Software platform development |
Intellectual property |
Total |
|
|
Cost or valuation |
|||
|
At 1 January 2021 |
|
|
|
|
At 31 December 2021 |
|
|
|
|
Amortisation |
|||
|
At 1 January 2021 |
|
|
|
|
Amortisation charge |
|
- |
|
|
Impairment |
( |
- |
( |
|
At 31 December 2021 |
|
|
|
|
Carrying amount |
|||
|
At 31 December 2021 |
|
- |
|
|
At 31 December 2020 |
|
- |
|
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
|
Tangible assets |
Group
|
Furniture, fittings and equipment |
Total |
|
|
Cost or valuation |
||
|
At 1 January 2021 |
|
|
|
At 31 December 2021 |
|
|
|
Depreciation |
||
|
At 1 January 2021 |
|
|
|
Charge for the year |
|
|
|
At 31 December 2021 |
|
|
|
Carrying amount |
||
|
At 31 December 2021 |
- |
- |
|
At 31 December 2020 |
|
|
|
Investments |
Company
|
2021 |
2020 |
|
|
Investments in subsidiaries |
|
|
|
Subsidiaries |
£ |
|
Cost or valuation |
|
|
At 1 January 2021 |
|
|
Provision |
|
|
At 1 January 2021 |
7,305,478 |
|
Provision |
|
|
At 31 December 2021 |
7,369,408 |
|
Carrying amount |
|
|
At 31 December 2021 |
|
|
At 31 December 2020 |
|
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
The principal subsidiary undertaking is Paybase Limited, which was wholly owned throughout. The registered address of Paybase Limited is: 130 Shaftesbury Avenue, 2nd Floor, London, England, W1D 5EU.
|
Debtors |
|
Group |
Company |
|||
|
2021 |
2020 |
2021 |
2020 |
|
|
Trade debtors |
|
|
- |
- |
|
Amounts due from group undertakings |
|
- |
|
|
|
Other debtors |
|
|
- |
- |
|
Prepayments |
- |
|
- |
- |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
Group |
Company |
|||
|
2021 |
2020 |
2021 |
2020 |
|
|
Cash at bank |
|
|
- |
- |
|
Bank overdrafts |
( |
( |
( |
( |
|
Cash and cash equivalents in statement of cash flows |
30,203 |
31,291 |
(169) |
(181) |
|
Creditors |
|
Group |
Company |
|||
|
2021 |
2020 |
2021 |
2020 |
|
|
Due within one year |
||||
|
Loans and borrowings |
|
|
|
|
|
Trade creditors |
|
|
- |
|
|
Amounts due to group undertakings |
|
|
|
|
|
Social security and other taxes |
|
|
- |
- |
|
Outstanding defined contribution pension costs |
- |
|
- |
- |
|
Other payables |
|
|
|
|
|
Accruals |
|
|
|
|
|
|
|
|
|
|
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
|
Share capital |
Allotted, called up and fully paid shares
|
2021 |
2020 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
1,750,000 |
|
1,750,000 |
|
|
|
17,510 |
|
17,510 |
|
|
|
|
|
|
There are no restrictions on the repayment of capital or the declaration of dividends.
The A Ordinary Shares and the B Ordinary Shares confer the same rights as to voting, dividends and capital.
|
Commitments, guarantees and obligations |
Group
The total of future minimum lease payments is as follows:
|
2021 |
2020 |
|
|
Due within one year |
- |
|
The charge to profit and loss in the year amounts to £16,490 (2020: £211,428).
|
Analysis of changes in net debt |
Group
|
At 1 January 2021 |
Cash flows |
At 31 December 2021 |
|
|
Cash and cash equivalents |
|||
|
Cash |
31,472 |
(1,100) |
30,372 |
|
Borrowings |
|||
|
Short term borrowings |
15,138 |
(9,589) |
5,549 |
|
|
|||
|
|
( |
|
|
Dolfinancials Limited
Notes to the Financial Statements for the Year Ended 31 December 2021
Company
|
At 1 January 2021 |
Cash flows |
At 31 December 2021 |
|
|
Cash and cash equivalents |
|||
|
Overdrafts |
(181) |
12 |
(169) |
|
( |
|
( |
|
|
|
|||
|
Related party transactions |
In accordance with FRS102 paragraph 33.1A, exemption is taken not to disclose transactions in the year or amounts falling due between undertakings where 100% of the voting rights are controlled within the group.
Group transactions
At 31 December 2021 an amount of £1,236,171 (2020: £990,075) was due from the group to an undertaking not wholly owned within the group. Interest of £54,556 (2020: £30,668) was payable during the year.
At 31 December 2021 an amount of £1,112,882 (2020: £1,112,604) was due to a director. Interest for the year of £42,604 (2020 £43,561) is payable at 5% per annum.
At 31 December 2021 an amount of £161,583 (2020: £154,558) was due to a company under the control of a director in respect of working capital provided. Interest for the year of £7,136 (2020 £7,281) is payable at 5% per annum.
Compensation to key management personnel
The directors are considered to be key management personnel. Amounts payable to directors are shown in note 8 to the financial statements.
|
Parent and ultimate parent undertaking |
The company's immediate and ultimate parent undertaking is Jareck Limited, incorporated in Cyprus. Jareck Limited's registered office is: 52, A Apriliou, Athienou, Larnaca, 7600, Cyprus.
The ultimate controlling entity is S Tsyupko.
|
Non adjusting events after the financial period |
|
|