VALITOR LIMITED
Company Registration No. 08053178 (England and Wales)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
VALITOR LIMITED
COMPANY INFORMATION
Directors
Mr R K Alexander
K S M Trygg
H Fjeldsted
Þ Hauksson
R Lemmens
Secretary
BBA Fjeldco Limited
Company number
08053178
Registered office
BBA Fjeldco Limited
2nd Floor, Berkeley Square House
Berkeley Square
London
W1J 6BD
Auditor
Dyke Yaxley Limited
1 Brassey Road
Old Potts Way
Shrewsbury
Shropshire
SY3 7FA
VALITOR LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 25
VALITOR LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 1 -
The directors present the strategic report for the year ended 31 December 2020.
Fair review of the business
Objectives for next year will focus on becoming profitable. The company made certain shifts in focus during 2020 which were designed to strengthen its core business. The main emphasis in Valitor’s general strategy for next years will be standardization, simplification and efficiency on the acquiring side. With appropriate strategic initiatives and actions, the result will be operational cost reductions, a focused off-the shelf product offering and a positive effect on the profitability of the company. Acquiring services will continue to be offered to SMB´s directly in the UK. The business will be united under a single and standardized product offering with go-to-market approaches.
Business segments
Valitor is an acquirer for Visa, MasterCard and AMEX and provides payments services directly to merchants in the United Kingdom and Ireland. Valitor has reached several important milestones during the year with extensive restructuring to strengthen the business for the future. The operational structure has been simplified and number of cost saving projects have been completed. The company’s financial structure was strengthened with increase of share capital amounting £1.6 million in April. During the year the Company had on average of 72 full-time equivalent positions.
Risk Management
The Company faces various risks associated with its operating as financial undertakings that stem from their daily operations. Risk management is therefore a fundamental part of the Company's operations. The main pillars of active risk management are identification of risk, numerical quantification of the risks identified, the actions taken to mitigate or eliminate those risks and active monitoring.
Trust and integrity are key factors for our Company. Cyber security risks are ranked high in our priorities and focus is to ensure the confidentiality, integrity and availability of information systems and data. Valitor has established fundamental security policies and processes which are integrated into operational processes and enforced by security awareness training. The Board of Directors and Management recognize the importance of information security and the threat that cyber risks pose with a strong desire to face these challenges and a willingness to make changes where required.
Valitor values and code of ethics
It is important to Valitor that its employees can identify with and support the Company’s values. Valitor has three core values: trust, collaboration, and excellence. The most valuable assets of a financial institution are trust and integrity, values upheld by all its employees. This is how Valitor wishes to operate.
Corporate Governance
The Board of Directors of Valitor operates under both regulatory requirements and industry approved guidance on good corporate governance in order to ensure continued quality operation of the Company's corporate governance and values. Good corporate governance contributes to open and reliable relations between employees, the Board, Shareholders, customers and other stakeholders. Corporate governance at Valitor provides the foundation for responsible management and decision-making.
Future Prospects
The Board of Directors and the CEO believe it is necessary at all times to maintain sufficient equity in order to support the Company's operations and meet unexpected events.
The Board of Directors has assessed the going concern of the Company and is satisfied that the Company has the resources to continue in business in the foreseeable future. The coronavirus is having significant impact on businesses and the economy all over the world. Valitor, like other companies is facing great challenges, many of our customers are going through difficult times where the impact of the virus will affect the revenues of Valitor and create a risk for the Company as well as for our customers. Management has been closely monitoring the operation. The Company's future operating return is also affected by operating requirements set by official authorities and the card associations. Significant changes to current operating conditions may affect the Company's financial return.
VALITOR LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
Key performance indicators
In daily management, the use of KPIs support accurate decision making based on data and provide management with guidance on where to place focus. The KPIs on Board level are defined as:
o Burn rate
o Cost to Income ratio
o Cash conversion ratio
o ROE
o Volume / Cost per transaction / Number of transactions
Board level KPIs focus on the shareholders perspective and its return on the investment and are therefore mainly financial. Fundamentally the acquiring operation is a volume-based business and the insight into the cost per transaction is critical as a base determinant of all pricing policies.
Þ Hauksson
Director
23 February 2021
VALITOR LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2020.
Principal activities
The principal activity of the company is that of the provision of online and e-commerce payments solutions, acceptance solutions for small and medium size businesses in the UK & ROI with focus on standard solutions in POS and Ecom. The company operates as an authorised Electronic Money Institution by the UK’s Financial Conduct Authority under UK implementation of EMD and PSD2. The company is part of Valitor Group that provides international payment solutions emphasising its core values of trust, collaboration and excellence. Valitor's role is to provide its customers with services facilitating successful card payment transactions, thus making buying and selling easy.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr R K Alexander
K S M Trygg
H Fjeldsted
Þ Hauksson
R Lemmens
Results and dividends
Several important milestones were reached in the transformation of the Company following extensive restructuring initiated at the beginning of 2020. Wide-ranging measures were taken to strengthen the business for the future. The Company made certain shifts in focus which were designed to consolidate its core business. The main emphasis in Valitor's general strategy for 2021-2023 will be standardization, simplification and efficiency. With appropriate strategic initiatives and actions, the result will be operational cost reductions, a focused off-the shelf product offering and a positive effect on the profitability of the Company.
The COVID-19 pandemic has severely depressed revenues and earlier targets of turning around operations. The turnaround is expected to take longer than originally forecasted. The company is managing the business and has used the
G
overnment temporary job retention scheme in
the
UK where
some
of the employees
ha
ve been furloughed.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Post reporting date events
Future Prospects
No event has arisen after the reporting period and up to the approval of these Financial Statements that require additional disclosures.
The Company's Board has made an assessment of the Company's ability to continue as a going concern and is satisfied that the Company has the resources to do so in the foreseeable future. Therefore, the Financial Statements continue to be prepared on a going concern basis.
The Company has been incurring operating losses for the past years and is aiming to become profitable in
the
foreseeable future. Management has focused on optimisation of the operation, operating expenses are decreasing and the emphasis will continue to be on reducing them further. Non-profitable businesses have been sold from the Company.
Auditor
The auditor, Dyke Yaxley Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
VALITOR LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 4 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Þ Hauksson
Director
23 February 2021
VALITOR LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 5 -
The directors are responsible 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
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. 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.
VALITOR LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VALITOR LIMITED
- 6 -
Opinion
We have audited the financial statements of Valitor Limited (the 'company') for the year ended 31 December 2020 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 FRS 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 company's affairs as at 31 December 2020 and of its 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.
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
, 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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport 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.
VALITOR LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VALITOR LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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, or returns adequate for our audit have not been received from branches not visited by us; or
-
the 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 directors'
r
esponsibilities
s
tatement, 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.
VALITOR LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VALITOR LIMITED
- 8 -
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.
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 misstatement misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management.
There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
We did not identify any key audit matters relating to irregularities, including fraud.
As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material
misstatement due to fraud.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
VALITOR LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VALITOR LIMITED
- 9 -
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.
Stacey Lea (Senior Statutory Auditor)
for and on behalf of Dyke Yaxley Limited
23 February 2021
Chartered Accountants
Statutory Auditor
1 Brassey Road
Old Potts Way
Shrewsbury
Shropshire
SY3 7FA
VALITOR LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 10 -
2020
2019
Notes
£
£
Turnover
3
9,022,130
13,642,330
Cost of sales
(4,359,469)
(8,114,389)
Gross profit
4,662,661
5,527,941
Administrative expenses
(10,218,503)
(15,991,817)
Other operating income
314,823
-
Operating loss
4
(5,241,019)
(10,463,876)
Interest receivable and similar income
6
21,907
1,256
Interest payable and similar expenses
7
(54,339)
(59,917)
Loss before taxation
(5,273,451)
(10,522,537)
Tax on loss
8
-
(8,241)
Loss for the financial year
(5,273,451)
(10,530,778)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
VALITOR LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
- 11 -
2020
2019
£
£
Loss for the year
(5,273,451)
(10,530,778)
Other comprehensive income
-
-
Total comprehensive income for the year
(5,273,451)
(10,530,778)
VALITOR LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2020
31 December 2020
- 12 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
11
659,603
1,319,130
Current assets
Stocks
12
755,283
1,185,257
Debtors
13
1,028,411
2,981,361
Cash at bank and in hand
2,916,479
4,225,541
4,700,173
8,392,159
Creditors: amounts falling due within one year
14
(1,684,959)
(2,363,021)
Net current assets
3,015,214
6,029,138
Total assets less current liabilities
3,674,817
7,348,268
Capital and reserves
Called up share capital
17
5,000,000
33,226,169
Other reserves
-
(8,198,198)
Profit and loss reserves
(1,325,183)
(17,679,703)
Total equity
3,674,817
7,348,268
The financial statements were approved by the board of directors and authorised for issue on 23 February 2021 and are signed on its behalf by:
Þ Hauksson
Director
Company Registration No. 08053178
VALITOR LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
- 13 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2019
4,500,000
-
(5,304,565)
(804,565)
Year ended 31 December 2019:
Loss and total comprehensive income for the year
-
-
(10,530,778)
(10,530,778)
Issue of share capital
17
28,726,169
-
-
28,726,169
Other movements
-
(8,198,198)
(1,844,360)
(10,042,558)
Balance at 31 December 2019
33,226,169
(8,198,198)
(17,679,703)
7,348,268
Year ended 31 December 2020:
Loss and total comprehensive income for the year
-
-
(5,273,451)
(5,273,451)
Issue of share capital
17
1,600,000
-
-
1,600,000
Reduction of shares
17
(29,826,169)
-
21,627,971
(8,198,198)
Other movements
-
8,198,198
-
8,198,198
Balance at 31 December 2020
5,000,000
-
(1,325,183)
3,674,817
VALITOR LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 14 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
22
(2,584,039)
(23,456,193)
Interest paid
(54,339)
(59,917)
Income taxes paid
-
(8,241)
Net cash outflow from operating activities
(2,638,378)
(23,524,351)
Investing activities
Purchase of intangible assets
-
(1,812,554)
Purchase of tangible fixed assets
(292,591)
(2,031,220)
Interest received
21,907
1,256
Net cash used in investing activities
(270,684)
(3,842,518)
Financing activities
Proceeds from issue of shares
1,600,000
28,726,169
Net cash generated from financing activities
1,600,000
28,726,169
Net (decrease)/increase in cash and cash equivalents
(1,309,062)
1,359,300
Cash and cash equivalents at beginning of year
4,225,541
2,866,241
Cash and cash equivalents at end of year
2,916,479
4,225,541
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 15 -
1
Accounting policies
Company information
Valitor Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
BBA Fjeldco Limited, 2nd Floor, Berkeley Square House, Berkeley Square, London, W1J 6BD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
These financial statements are prepared on the going concern basis. The Company's Board has made an assessment of the Company's ability to continue as a going concern and is satisfied that the Company has the resources to do so in the foreseeable future. The Company has been incurring operating losses for the past years and is aiming to become profitable in foreseeable future. Management has focused on optimisation of the operation, operating expenses are decreasing and the emphasis will continue to be on reducing them further. Non-profitable businesses have been sold by the Company.
The turnaround after the Covid-19 pandemic is expected to take longer than originally forecasted. The company is managing the business and has used the government temporary job retention scheme in UK where part of the employees have been furloughed. Negative cashflow has been monitored closely by management and the Company is supported by its Parent Company with a potential increase in capital of £1 million if and when needed in 2021.
1.3
Turnover
Turnover represents amounts receivable for services
supplied
.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 16 -
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Development Costs
10 years
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
33% straight line
Fixtures, fittings & equipment
20% to 25% straight line
Computer equipment
25% to 33% straight line
Other assets
33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
Expenditure relating to office furniture and computer equipment is written off to the profit and loss account as it is incurred.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 17 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 18 -
1.13
Retirement benefits
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.
Defined benefit pension plan
The company also operates a defined benefit plan in respect of one director holding office during the prior period. The nature of the scheme is such that the directors can alter the final salary level to be funded based on the value of the contributions the company wishes to make. The contributions are recognised as an expense in the Statement of Comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.
1.14
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.15
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 19 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2020
2019
£
£
Other significant revenue
Interest income
21,907
1,256
Grants received
314,823
-
4
Operating loss
2020
2019
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(817)
126,538
Government grants
(314,823)
-
Fees payable to the company's auditor for the audit of the company's financial statements
18,675
3,250
Depreciation of owned tangible fixed assets
638,014
712,090
Impairment of owned tangible fixed assets
314,104
-
Amortisation of intangible assets
-
1,812,554
Operating lease charges
267,642
689,246
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
89
121
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
4,210,750
7,726,090
Social security costs
509,512
701,219
Pension costs
106,084
292,758
4,826,346
8,720,067
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 20 -
6
Interest receivable and similar income
2020
2019
£
£
Interest income
Other interest income
21,907
1,256
7
Interest payable and similar expenses
2020
2019
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
54,339
59,917
8
Taxation
2020
2019
£
£
Deferred tax
Origination and reversal of timing differences
-
8,241
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Loss before taxation
(5,273,451)
(10,522,537)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
(1,001,956)
(1,999,282)
Tax effect of expenses that are not deductible in determining taxable profit
36,301
845,349
Unutilised tax losses carried forward
873,389
1,200,120
Permanent capital allowances in excess of depreciation
92,266
(37,946)
Taxation charge for the year
-
8,241
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 21 -
9
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2020
2019
Notes
£
£
In respect of:
Property, plant and equipment
11
314,104
-
Recognised in:
Administrative expenses
314,104
-
10
Intangible fixed assets
Development Costs
£
Cost
At 1 January 2020 and 31 December 2020
1,812,554
Amortisation and impairment
At 1 January 2020 and 31 December 2020
1,812,554
Carrying amount
At 31 December 2020
-
At 31 December 2019
-
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 22 -
11
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Computer equipment
Other assets
Total
£
£
£
£
£
Cost
At 1 January 2020
5,556
256,082
205,599
1,563,983
2,031,220
Additions
-
-
-
292,591
292,591
Disposals
(5,556)
(917)
(24,413)
(996,250)
(1,027,136)
At 31 December 2020
-
255,165
181,186
860,324
1,296,675
Depreciation and impairment
At 1 January 2020
1,416
45,159
70,147
595,368
712,090
Depreciation charged in the year
1,888
59,169
76,755
500,202
638,014
Impairment losses
2,252
-
-
311,852
314,104
Eliminated in respect of disposals
(5,556)
(917)
(24,413)
(996,250)
(1,027,136)
At 31 December 2020
-
103,411
122,489
411,172
637,072
Carrying amount
At 31 December 2020
-
151,754
58,697
449,152
659,603
At 31 December 2019
4,140
210,923
135,452
968,615
1,319,130
More information on impairment movements in the year is given in note 9.
12
Stocks
2020
2019
£
£
Finished goods and goods for resale
755,283
1,185,257
13
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
345,830
1,754,947
Other debtors
155,207
435,287
Prepayments and accrued income
527,374
791,127
1,028,411
2,981,361
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 23 -
14
Creditors: amounts falling due within one year
2020
2019
Notes
£
£
Trade creditors
216,868
472,907
Amounts owed to group undertakings
18,083
89,138
Taxation and social security
178,087
218,660
Deferred income
15
39,076
22,599
Other creditors
1,149,332
1,232,590
Accruals and deferred income
83,513
327,127
1,684,959
2,363,021
15
Deferred income
2020
2019
£
£
Other deferred income
39,076
22,599
16
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
106,084
292,758
17
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
5,000,000 Ordinary Share of £1 each
5,000,000
33,226,169
5,000,000
33,226,169
On 21 April 2020
the company issued
1,600,000
£1 ordinary shares at par.
On 10 July 2020 the issued share capital of the Company was reduced from 34,826,169 £1 ordinary shares to 5,000,000 £1 ordinary shares.
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 24 -
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2020
2019
£
£
Within one year
89,424
195,307
Between two and five years
1,106
458,839
In over five years
-
240,000
90,530
894,146
19
Events after the reporting date
No event has arisen after the reporting period and up to the approval of these Financial Statements that require additional disclosures
.
20
Related party transactions
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
21
Ultimate controlling party
The company
wa
s a wholly owned subsidiary of Iteron Holding Ltd, incorporated in England & Wales, whose registered office is
Bba Fjeldco Limited, 2nd Floor Berkeley Square House, Berkeley Square, London, England, W1J 6BD
.
On 31 March 2019, Valitor Holdings hf acquired 38% of the share capital of the company from Iteron Holdings Ltd.
The company's ultimate parent company is Arion Bank hf, incorporated in Iceland, whose registered office is 19 Borgartuni, 105 Reykjavik, Iceland.
The parent undertaking of the largest and smallest group for which group accounts are prepared for the year ended 31 December 20
20
is
Arion Bank hf
.
VALITOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 25 -
22
Cash absorbed by operations
2020
2019
£
£
Loss for the year after tax
(5,273,451)
(10,530,778)
Adjustments for:
Taxation charged
-
8,241
Finance costs
54,339
59,917
Investment income
(21,907)
(1,256)
Amortisation and impairment of intangible assets
-
1,812,554
Depreciation and impairment of tangible fixed assets
952,118
712,090
Reserve movement from hive up
-
(10,042,558)
Movements in working capital:
Decrease/(increase) in stocks
429,974
(1,185,257)
Decrease/(increase) in debtors
1,952,950
(2,291,094)
Decrease in creditors
(694,539)
(2,020,651)
Increase in deferred income
16,477
22,599
Cash absorbed by operations
(2,584,039)
(23,456,193)
23
Analysis of changes in net funds
1 January 2020
Cash flows
31 December 2020
£
£
£
Cash at bank and in hand
4,225,541
(1,309,062)
2,916,479
24
Auditor's liability limitation agreement
In accordance with Companies Act 2006 (s538), we are required to disclose any auditor liability limitation agreements in effect.
A resolution was passed dated
14 November 2020
which limits the liability of the auditor to £5m for any loss or damage suffered by Valitor Limited arising out of or in connection with the provision of services provided by the auditor including negligence but not willful default.
2020-12-31
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CCH Software
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Mr R K Alexander
K S M Trygg
Mr R K Alexander
Þ Hauksson
R Lemmens
BBA Fjeldco Limited
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