Audited Final Results

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: [phone]
Optiva Securities Limited
Vishal Balasingham	Tel: [phone]

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 There is a presumed risk that management is able to override controls.	We have reviewed journal adjustments and the rationale behind them and have considered whether these have been subject to potential management bias. From our procedures carried out no adverse issues were identified with regards to management override of controls.
Accounting for disposal of investment in subsidiary During the financial year control of the operating subsidiary was lost and the investment has been accounting for as disposal.	We have reviewed the basis on which the directors have concluded that there has been a loss of control of the subsidiary. We have reviewed the journal entries and calculations relating to the disposal of the subsidiary and impairment of any amount due from the subsidiary.
Preparation of group accounts The Company has not produced group accounts following disposal of its sole subsidiary during the financial year on the basis no group existed at the financial year end.	As the company has prepared accounts under UK-adopted IFRS then it does not need to prepare group accounts where a group does not exist at the end of the financial year end. If a company disposes of all its subsidiary undertakings during the year, it will not be required to prepare group financial statements as a matter of law. This contrasts with the position under IFRS Accounting Standards as issued by the IASB. Such a company will fall outside of the scope of the requirements of the Act even though IFRS 10 would require the preparation of consolidated financial statements in these circumstances.
Going concern assumption The Company is dependent upon recapitalisation to generate sufficient cash flows to meet continued operational costs and continue trading.	Going concern was addressed as a key audit matter and has been addressed within the 'conclusions' relating to going concern' section of the audit report.

Our application of materiality

In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.

 

Based on our professional judgement, we determined overall materiality for the Company financial statements as a whole to be £13,111, based on approximately 4% of the Company's net liabilities.

We use a different level of materiality ('performance materiality') to determine the extent of our testing for the audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment. We determined performance materiality to be £9,835. 

Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and directors' remuneration.

We agreed with the Audit Committee to report to it all identified errors in excess of £655. Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.

An overview of the scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgments, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

How we tailored the audit scope

                We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the activity undertaken.

The financial statements consists of 1 reporting unit.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

·      the part of the directors' remuneration report to be audited has been properly prepared in accordance with Companies Act 2006

·      the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Directors' remuneration

Under the Companies Act 2006, we are also required to report if in our opinion certain disclosures of directors' remuneration have not been made or the part of the directors remuneration have not been made or the part of the directors' remuneration report to be audited is not in agreement with the accounting standards and returns.

We have nothing to report in respect of these matters.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

·      adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·      the parent company financial statements and the part of the directors' remuneration report to be audited are not in agreement with the accounting records and returns; or

·      certain disclosures of directors' remuneration specified by law are not made; or

·      we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company  or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council's website, to detect material misstatements in respect of irregularities, including fraud.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

·      the senior statutory auditor ensured the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

·      we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the digital marketing and advertising sector.

·      we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental, health and safety legislation and anti-money laundering regulations.

·      we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

·      identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

·      We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

·      making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

·      considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

•       performed analytical procedures to identify any unusual or unexpected relationships;

•       tested journal entries to identify unusual transactions;

•       assessed whether judgements and assumptions made in determining the accounting estimates set out in the Company financial statements were indicative of potential bias;

•       investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

•       agreeing financial statement disclosures to underlying supporting documentation;

•       reading the minutes of meetings of those charged with governance;

•       enquiring of management as to actual and potential litigation and claims;

•       reviewing correspondence with HMRC and the company's legal advisor.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:

www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Other matters which we are required to address

The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Company or the parent company and we remain independent of the Company and the parent company in conducting our audit. Our audit opinion is consistent with the additional report to the audit committee.

Appointment

We were originally appointed by the board on 23 October 2019 to audit the financial statements for the  period ending 31 December 2018. Our total uninterrupted period of engagement is 5 years, covering the period ended 31 December 2018 to 31 December 2022.

Use of this report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed

BENJAMIN BIDNELL

Senior Statutory Auditor

For and on behalf of

SHIPLEYS LLP

Chartered Accountants and Statutory Auditor

10 Orange Street, Haymarket, London, WC2H 7DQ

 31 August 2023

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2022

	Note	2022 £	2021 £
Interest income		4,247	-
Interest expenses		-	-
Interest expense - lease liabilities		-	-
Net interest income		4,247	-
Allowance for ECL/impairment of loans to customers		-	-
Net interest income after allowance for ECL/impairment of loans to customers		4,247	-
Gains less losses from dealing in foreign currency		(871)	(8,871)
Other operating income		52,659	3,869
Operating income		56,035	(5,002)
Impairment of Loan		(159,254)
Staff costs		(225,683)	-
Charge for share based options		-	(30,047)
Operating expenses	8	(154,416)	(536,256)
Investment in subsidiary written off		(10,438,409)	-
Profit /(loss) before income tax		(10,921,727)	(571,305)
Income tax expense	9	-	-
Net profit / (loss)		(10,921,727)	(571,305)
Net other comprehensive income that may be reclassified to profit or loss
Foreign exchange differences arising on translation into presentation currency		-	-
Total comprehensive expense		(10,921,727)	(571,305)

Earnings per share                                                                      11  

Basic, profit/loss for the year attributable to

ordinary equity holders of the parent                                                                                            ( 2.36p)                  (0.18p)   

Diluted, profit/loss for the year attributable to

ordinary equity holders of the parent                                                                                           (2.36p)                     (0.16p)

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022

	Note	2022	2021
		£	£
Assets
Cash and cash equivalents		35,468	211,833
Other assets	7	-	130,076
Investment in subsidiary		-	10,438,409
Total assets		35,468	10,780,319
Liabilities
Other liabilities	10	373,962	197,086
Total liabilities		373,962	197,086
Equity
Charter capital	5	4,619,750	4,619,750
Shares to be issued Reserve		800,000	800,000
Additional capital		6,755,628	6,755,628
Share options reserve		248,146	248,146
Accumulated deficit		(12,762,019)	(1,840,292)
Total equity		(338,495)	10,583,232
Total liabilities and equity		35,468	10,780,319

The above Company Statement of Financial Position should be read in conjunction with the accompanying notes, the loss for the period was £10,921,727 (2021: £571,305).

The Financial Statements were authorised for issue by the Board of Directors on  31 August 2023

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2022

	Charter capital	Shares to be issued Reserve	Additional capital	Accumulated deficit	Share options reserve	Total 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	-	-		927,500
Share-based payments	-	-	-	-	30,047		30,047
Balance at 31 December 2021	4,619,750	800,000	6,755,628	(1,840,292)	248,146		10,583,232

Comprehensive loss for 2022	-	-	-	(10,921,727)	-	(10,921,727)
Share-based payments	-	-	-	-	-	-
Balance at 31 December 2022	4,619,750	800,000	6,755,628	(12,762,019)	248,146	(338,495)

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2022

	2022	2021
Cash flows from operating activities
Loss for the period	(10,921,727)	(571,305)
Correction for non-cash transaction	10,597,663	30,047
Cash flows from/(used in) operating activities before changes in operating assets and liabilities	(324,064)	(541,258)
Adjustments for
Increase in trade and other receivables, VAT	(29,178)	(3,599)
Increase in trade and other payables	176,876	10,347
Cash generated from operations	(176,365)	(534,510)
Net cash flows used in operating activities	(176,365)	(534,510)
Cash flows from investing activities
Investment in subsidiary	-	(342,320)
Net cash flows from investing activities	-	(342,320)
Cash flows from financing activities
Issue of ordinary shares (including share premium)	-	1,000,000
Share issue costs	-	(72,500)
Net cash flows from financing activities	-	927,500
Net change in cash and cash equivalents	(176,365)	50,670
Cash and cash equivalents at the beginning of the year	211,833	161,163
Cash and cash equivalents at the end of the year	35,468	211,833

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

6 Earnings per share

(I) Basic earnings per share

The Company presents basic and diluted earnings per share information for its ordinary shares. Basic earnings per share are calculated by dividing the profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the reporting period. Diluted earnings per share are determined by adjusting the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

7 Trade and other receivables

	2022	2021
Loan to Zain Holdings LLC Impairment of loan	£ 159,254     (159,254)	£ 130,076
	-	197,086

 

8 Operating Expenses

		2022 £	2021 £
Advertising and marketing		-	-
Consulting services		10,937	-
Depreciation of right-of-use assets		-	-
State duty		-	-
Communication		1,451	-
Banking services		404	2,789
Postal services		-	-
Investor Relations		19,897	-
Writing off VAT		-	70,583
Rental expenses		-	-
Material expenses		-	-
Security		-	-
Other expenses		121,727	462,884
Total operating expenses		154,416	536,256

Operating expenses include the cost of audit for the company of £20,000 (2021: £20,000).  The audit of the group financial statements in £nil (2021: 20,000).  These amounts are included in other expenses.

9.         Income Tax

In 2022, the Group generated a significant tax loss and therefore has no tax expense (as at 31 December 2021, the Company has no current income tax expenses). The current income tax rate applicable to the Group's is 20% (2021: 20%).

A reconciliation between the theoretical and the actual taxation charge is provided below.

	2022	2021
IFRS loss before taxation	£ (10,911,002)	£ 801,497
Theoretical tax charge at the applicable statutory rate	-	(160,299)
Non-deductible expenses and other differences	10,911,002	31,189
Unrecognised deferred tax asset	-	10,263
Income tax expense for the year	-	(118,847)

10.       Trade and other payables

	2022	2021
Trade payables Accruals	£ - 90,318	£ 112,057 27
Other payables - taxation and security payments	283,644	85,002
	373,962	197,086

11.       Ultimate Controlling Party

The ultimate controlling party is  Zaim Holding SA which holds 69.2% of the share capital.

12.  Impairment of investment in subsidiary

Following the investigation by the Company into the loss of control of its previously wholly owned subsidiary Zaim Express LLC, the financial statements include the write down of the full carrying value of the investment of 10,438,409 as the Directors view the fair value of any potential redress being nil.

13.  Subsequent Events

No events have occurred subsequent to the year end

14.       Related Party Transactions

As per IFRS, there were no related party transactions. In the year December 2022

 

END