TIDMZAIM
RNS Number : 1640L
Adalan Ventures PLC
01 September 2023
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").
INDEPENT 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
There is a presumed risk that management and the rationale behind them and
is able to override controls. 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 We have reviewed the basis on which
During the financial year control the directors have concluded that
of the operating subsidiary was lost there has been a loss of control
and the investment has been accounting of the subsidiary.
for as disposal. 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
The Company has not produced group under UK-adopted IFRS then it does
accounts following disposal of its not need to prepare group accounts
sole subsidiary during the financial where a group does not exist at
year on the basis no group existed the end of the financial year end.
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 Going concern was addressed as
to generate sufficient cash flows a key audit matter and has been
to meet continued operational costs addressed within the 'conclusions'
and continue trading. 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
GBP13,111, 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 GBP9,835.
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 GBP655. 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 YEARED 31 DECEMBER 2022
2022 2021
Note GBP GBP
------------------------------------------- ---- ------------ ----------
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 5 6,035 (5,002)
Impairment of Loan (159,254)
Staff costs (225,683) -
( 30 , 047
Charge for share based options - )
Operating expenses 8 (154,416) (536,256)
Investment in subsidiary written off (10,438,409) -
Profit /(l oss) 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 20 2 1
----------------------------- ---- -------------- -----------
GBP GBP
Assets
211 , 83
Cash and cash equivalents 35,468 3
Other assets 7 - 130,076
Investment in subsidiary - 10,438,409
10, 780
Total assets 35,468 , 31 9
----------------------------- ---- -------------- -----------
Liabilities
1 97 ,
Other liabilities 10 373,962 086
1 97 ,
Total liabilities 373,962 086
----------------------------- ---- -------------- -----------
Equity
Charter capital 5 4,6 1 9,750 4,6 1 9,750
Shares to be issued Reserve 800 ,000 800 ,000
6,7 55 , 6 6,7 55
Additional capital 28 , 6 28
Share options reserve 248,146 248,146
(1 ,840
Accumulated deficit (12 , 762,019) , 292 )
----------------------------- ---- -------------- -----------
10, 583
Total equity (338,495) , 232
----------------------------- ---- -------------- -----------
10, 7
8 0 , 31
Total liabilities and equity 35,468 9
----------------------------- ---- -------------- -----------
The above Company Statement of Financial Position should be read
in conjunction with the accompanying notes, the loss for the period
was GBP10,921,727 (20 21 : GBP 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 YEARED 31 DECEMBER
2022
Shares to be
issued Reserve Additional Accumulated Share options Total
Charter capital capital deficit reserve equity
---------------- --------------- --------------- ---------------- ---------------- --------------- -----------
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 , 5 00
Share-based
payments - - - - 30,047 30,047
Balance at 31
December 2021 4,619,750 800,000 6,755,628 (1 , 840,292) 2 4 8, 146 10 ,583,232
---------------- --------------- --------------- ---------------- ---------------- --------------- -----------
Comprehensive loss for 2022 - - - (10,921,727) - (10,921,727)
Share-based payments - - - - - -
Balance at 31 December 2022 4,6 1 9,750 800,000 6,7 55 , 62 8 (12 , 762,019) 2 48 , 146 (338,495)
----------------------------- ----------- ------- ------------- -------------- ---------- ------------
STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2022
2022 20 2 1
---------------------------------------------------- ------------ -----------
Cash flows from operating activities
(57 1 ,
Loss for the period (10,921,727) 3 0 5 )
Correction for non-cash transaction 10,597,663 30 , 047
Cash flows from/(used in) operating activities ( 541 ,
before changes in operating assets and liabilities (324,064) 258 )
Adjustments for
( 3 ,5 99
Increase in trade and other receivables , VAT (2 9 ,178) )
Increase in trade and other payables 176,876 10 ,3 47
( 176,365
Cash generated from operations ) (534,510)
---------------------------------------------------- ------------ -----------
(5 34 ,
Net cash flows used in operating activities (176,365) 510 )
---------------------------------------------------- ------------ -----------
Cash flows from investing activities
( 342 ,
Investment in subsidiary - 3 2 0 )
( 342 ,
Net cash flows from investing activities - 3 2 0 )
---------------------------------------------------- ------------ -----------
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 1 6 1, 163
---------------------------------------------------- ------------ -----------
Cash and cash equivalents at the end of the 2 11, 83
year 35,468 3
---------------------------------------------------- ------------ -----------
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
--------------------------- ----------- --------
GBP GBP
Loan to Zain Holdings LLC 159,254 130,076
Impairment of loan (159,254)
- 197,086
----------- --------
8 Operating Expenses
20 2
2022 1
GBP GBP
------------------------------------ --------- -------
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 1 5 4,416 536,256
------------------------------------- --------- -------
Operating expenses include the cost of audit for the company of
GBP20,000 (2021: GBP20,000). The audit of the group financial
statements in GBPnil (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
--------------------------------------------------- ------------- ----------
GBP GBP
IFRS loss before taxation (10,911,002) 801, 497
Theoretical tax charge at the applicable statutory ( 1 60 , 2
rate - 9 9)
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
------------------------------------------------ ------- --------
GBP GBP
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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