Company Registration No. 12821204 (England and Wales)
AFORTI PLC
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
AFORTI PLC
COMPANY INFORMATION
Directors
K Sytek
(Appointed 15 June 2021)
M Szytko
Secretary
M Szytko
Company number
12821204
Registered office
10 Orange Street
Haymarket
London
WC2H 7DQ
Independent auditor
Shipleys LLP
10 Orange Street
Haymarket
London
WC2H 7DQ
AFORTI PLC
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 10
Profit and loss account
11
Group statement of comprehensive income
12
Group balance sheet
13
Company balance sheet
14
Group statement of changes in equity
15
Company statement of changes in equity
16
Group statement of cash flows
17
Company statement of cash flows
18
Notes to the financial statements
19 - 38
AFORTI PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
In January 2021, Aforti Plc signed a conditional share purchase agreement with an EMI, an EU e-money institution licenced under applicable EU directives on payment services and e-money.
In April 2021, condition for the acquisition of a 9.90% shares in an EU electronic money institution licensed under the applicable EU directives on payment services and electronic money (“EMI”) has been fulfilled. This enabled the appointment of a new board of directors in EMI and allow it to commence operations. Once further conditions of the EMI share purchase agreement have been satisfied, including, but not limited to, obtaining approval from local EU regulators, Aforti Plc will be entitled to acquire the remaining shares in EMI.
In December 2021, the review process of the EMI licence activation application by the Licensing Department of the Central Bank of Cyprus was completed, resulting in EMI licence being finally activated. This enabled to commence the operations in Cyprus. Furthermore, the application was submitted to the Central Bank of Cyprus to passport the EMI licence to the rest of the European Union.
The passporting of the EMI licence will allow, in line with the Aforti Group’s strategy, to develop its activities in 11 East-Central European countries offering services such as currency exchange, factoring, multi-currency accounts, and currency transfers.
Aforti Plc has completed a number of successful private placements in 2021 and 2022. In total £5,090,492 has been raised by issuing 5,306,706 shares.
Key risks and uncertainties
Foreign currencies
: The
Group
deals in a variety of foreign currencies: Continual review of foreign currency movements to ensure company undertakes transactions in the most financially beneficial currency and ensuring the
Group
is not overly exposed in one currency.
Liquidity risk
: The
Group would have access to further funding from other companies in the larger Aforti Holdings SA group, if required
.
Borrowing rate risk
: The
Group's borrowings tend to be at fixed rates over the duration of the loan, and the Group therefore tries to minimize its exposure to uncertainty from borrowing rate fluctuations
.
Credit risk
: The
Group has a good credit standing and works hard to ensure that this is maintained.
Ukraine crisis
: The
crisis in Ukraine
may impact the
Group
’s ability to execute an acquisition. However, the Directors will review, on an ongoing basis, the options for the
Group
, including raising additional funds.
Market risk
: FX transactions do not generate market risk – all clients’ transactions are hedged 1 on 1 with the market.
Clients send money for FX transactions to the AFORTI segregated account. The client receives back the currency or instructs AFORTI to send it to their business partner.
Key performance indicators
The following are the key performance indicators of the business:
-
Sales Volume - The forecast for 2021 shows turnover over £380m and the actual sales are currently in line. The trading value on the foreign exchange platform in July 2021 was approximately PLN 404.16 million, an increase of 89.49% year-on-year. On a cumulative basis, after seven months of 2021, the total trading value on the foreign exchange platform reached approximately PLN 2,463.39 million, representing a year-on-year increase of 205.55%.
-
Margin - The average margin is 0.05% however the actual one is slightly higher.
-
OPIN (Operating Income)
-
New activations (Newly Acquired Clients with at least one transaction above EUR 10k) - Every month Aforti Exchange SA has around 40 new clients.
AFORTI PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Furture outlook
The Group
’s strategic goal is to become a pan-CEE provider of comprehensive financial solutions for SMEs
,
based on Electronic Money Institution license (”EMI”) obtained on Cyprus.
Aforti BIZ will become a common brand for this multi-products financial platform for SMEs on CEE market. The Group will offer three products -
F
actoring, FX
and
Debt Management.
S172 Statement
Engagement with employees
The
Group
currently has
five
employees other than directors
and
recognizes that the long-term success of the business relies on effective engagement with employees.
Engagement with suppliers
The
Group
manages relationships with suppliers as closely as possible to ensure the services provided meet the
Group
’s high standards.
Engagement with shareholders
Feedback from investors is obtained through direct interaction between the
Group
’s board. The voting record at the
Group
’s general meetings is monitored for any investor feedback/issues.
The Board recognizes the importance of effective communication with its shareholders. A range of corporate information is available on the Companies House and Aforti Holding S.A. (https://aforti.pl/en/) websites. This statement and the information within the
Group'
s Annual Report provide details to stakeholders on how the
Group
is governed.
Group
performance is communicated to its shareholders in its results announcements, with further trading updates made where required and appropriate
.
The Group's research and development activities relate to the development by the main trading subsidiary,
Aforti Exchange
SA, of its
full-featured online platform
which
provides foreign exchange services to business
.
K Sytek
Director
24 June 2022
AFORTI PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
The directors present their annual report and audited financial statements for the year ended 31 December 2021, with comparative figures for the period ended 31 December 2020.
Principal activities
Aforti
p
lc
's principal activity continued to be that of a holding company of a group which
provides foreign exchange services to SME businesses via
an
online platform with competitive rates which are lower than existing banks rates.
Results and dividends
The results for the year are set out on page 11.
No ordinary dividends were paid in the period. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
K Sytek
(Appointed 15 June 2021)
M Niemczyk
(Appointed 1 May 2021 and resigned 28 March 2022)
M Szytko
P Krolikowski
(Resigned 31 August 2021)
Post reporting date events
On 11 April 2022, Aforti plc issued 320,754 ordinary shares of 1p each at a price of £1.50 for a total consideration of £481,131.
Auditor
Shipleys LLP were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put forward at a General Meeting.
Energy and carbon report
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
AFORTI PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
Statement of directors' responsibilities
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 group and company, and of the profit or loss of the group 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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the
;
-
prepare the
on the going concern basis unless it is inappropriate to presume that the
group and
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 auditor
of the
company 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 auditor
of the
company
is
aware of that information.
Disclosure of information in the strategic report
The business review, principal risks and uncertainties and the financial key performance indicators are covered in the strategic report.
Going concern
After reviewing the Group’s budget and forecasts for 2022/2023 and its medium term plans, the directors have a reasonable expectation that, though there will continue to be a trading loss in the shorter term as the business continues to grow, it will have sufficient funds and cash flows to be able to manage its liabilities as they fall due for a period of not less than 12 months from the date of approval of the financial statements.
There are also opportunities for additional funding from within the larger Aforti Holdings SA group for working capital, if required.
The trading value on the foreign exchange platform in July 2021 was approximately PLN 404.16 million, an increase of 89.49% year-on-year.
On a cumulative basis, after seven months of 2021, the total trading value on the foreign exchange platform reached approximately PLN 2,463.39 million, representing a year-on-year increase of 205.55%.
At the date of approving these financial statements the directors are not aware of any adverse impact on the Group's trading performance arising from the crisis in Ukraine.
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
AFORTI PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 5 -
On behalf of the board
M Szytko
Director
24 June 2022
AFORTI PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AFORTI PLC
- 6 -
Opinion
We have audited the
financial statements of
Aforti plc
(the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise
the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated and Company Statement of Financial Position, Consolidated and Company Statement of Changes in Equity, Consolidated
Statement of Cash Flows and notes to the financial statements, including 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 group's and the parent company's affairs as at 31 December 2021 and of the group's loss for the year then ended;
-
the group and the parent company financial statements 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
group and
parent 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
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the
group's and
parent
company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance on 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) we identified, including 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.
AFORTI PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AFORTI PLC
- 7 -
Risk
Our response to the risk
Our response and observation
Impact of COVID-19 and the current Ukraine-russo crisis - There is a risk that the group may not be considered a going concern as a result of the impact of COVID-19 (Coronavirus) and the crisis.
We read the Directors' assessment of the risks and impacts of COVID-19 and the Ukraine crisis on the business. We compared this assessment to our own understanding of the risks, and the nature of the group's operations, products and customer base. We then conducted a review of going concern in respect of COVID-19 and the crisis which included reviewing forecasts and current trading performance, and carrying out stress testing. The work undertaken considered a period of at least twelve months from the date of approving these financial statements.
The disclosures in the financial statements adequately reflect the Directors' conclusions around the uncertainties and impact of COVID-19 and the Ukraine crisis and, that the going concern assumption remains appropriate.
Risk of fraud in revenue recognition - There is a risk that revenue is materially understated due to fraud.
We reviewed the group's revenue recognition policies and how they are applied. Where applicable revenue was then tested on a sample basis to confirm that transactions have been appropriately recorded in line with FRS 102.
The subsidiary undertaking generated significant revenues in the period for which the component auditors undertook substantive testing on. As group auditors we have reviewed the testing undertaken and have concluded that there is no evidence of fraud or material understatement.
Risk that management is able to override controls - Journals can be posted that significantly alter the financial statements.
We examined journals posted around the year end, specifically focusing on areas which are more easily manipulated.
We identified no evidence of management override in respect of inappropriate manual journals recorded in any section of the financial statements
Impairment of Goodwill and investments - Given the material nature of Goodwill recognised on acquisition of the Subsidiary investment, judgement is required to establish whether or not impairment of these assets is required. There is a risk that management's judgements and estimates over impairment are inappropriate, when considering the specific balances and the requirements of FRS 102 .
We understood the group's process for estimating any potential impairment under FRS 102. Goodwill and investments were tested substantively which included considering the recoverability of the balances post year end. Overdue balances were discussed with management and we assessed whether the accounting provision appropriately reflects the facts and circumstances.
We did not identify any evidence of material misstatement related to carrying value of Goodwill and Investments. Management continue to apply an appropriate policy in determining whether impairment is required.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be charged or influenced. We use materiality both in planning and in the scope of our audit work and in evaluating the results of our work.
AFORTI PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AFORTI PLC
- 8 -
We determine materiality for the group and the parent company to be £409,210 and this financial benchmark, which has been used throughout the audit, was determined by way of a standard formula being applied to key financial results and balances presented in the financial statements. Where considered relevant the materiality is adjusted to suit the specific risk profile of the group.
Performance materiality is the application of materiality at the individual account or balance level set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality. Performance materiality for both the group and the parent company was set at 75% of the above materiality levels, which equates to £359,762. We agreed with the audit committee that we would report to the committee all individual audit differences identified during the course of our audit in excess of £23,984. We also agreed to report differences below these thresholds that, in our view warranted reporting on qualitative grounds.
An overview of the scope of our audit
Our group audit was scoped by obtaining an understanding of the group and its environment, including the group's system of internal control, and assessing the risks of material misstatement in the financial statements at the group level.
Whilst Aforti plc is a company registered in England & Wales and its head office is located in the UK, the group's principal operations are located in Poland. In approaching the audit, we considered how the group is organised and managed. We assessed the activities of the group as being the provision of foreign exchange services to SME businesses via an online platform.
Our group audit scope focused on the group's principal operating subsidiary, being Aforti Exchange SA, which was subject to a full scope audit together with the parent company. Shipleys LLP performed the audit of the parent company and Eureka Auditing Sp. z o.o.performed the audit of the Polish component.
The group audit team was actively involved in the direction of the audit and specific audit procedures performed by the component auditor along with the consideration of findings and determination of conclusions drawn. As part of our audit strategy, we issued group audit engagement instructions and discussed the instructions with the component auditor. A senior member of the group audit team met via video conferencing with the component auditor and local management performed a review of the component audit files and we discussed the audit findings with the component auditor.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
AFORTI PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AFORTI PLC
- 9 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the
group and the parent
company and
their
environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the directors'
r
eport
. 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 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
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 parent 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 our procedures are capable of detecting irregularities, including fraud, is detailed below
.
-
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined the most significant are those that relate to the reporting framework ((FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice), the Companies Act 2006)) and the relevant tax compliance regulations in which the Group and Company operates.
-
We assessed the susceptibility of the Group and Company’s financial statements to material misstatement, including how fraud might occur by enquiring with management during the planning, fieldwork and completion phase of our audit. We considered the controls that the Group and Company has established to address risks identified, or that otherwise prevent, deter and detect fraud and how management monitors those controls. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk including revenue recognition. These procedures included testing manual journals and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
-
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved journal entry testing, with a focus on manual journals and journals indicating large or unusual transactions based on our understanding of the business; enquiries of the management and focus testing.
AFORTI PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AFORTI PLC
- 10 -
An auditor conducting an audit in accordance with ISAs (UK) is responsible for obtaining reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error and in our audit procedures described above. Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.
Shane Moloney (Senior Statutory Auditor)
For and on behalf of Shipleys LLP
24 June 2022
Chartered Accountants
Statutory Auditor
10 Orange Street
Haymarket
London
WC2H 7DQ
AFORTI PLC
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Year
Period
ended
ended
31 December
31 December
2021
2020
Notes
£
£
Turnover
3
417,449,498
26,061,385
Cost of sales
(418,580,454)
(26,829,002)
Gross loss
(1,130,956)
(767,617)
Administrative expenses
(2,326,747)
(141,671)
Other operating (expenses)/income
(4,582)
1,676
Operating loss
4
(3,462,285)
(907,612)
Interest receivable and similar income
8
39,896
2,264
Interest payable and similar expenses
9
(277,719)
(38,619)
Loss before taxation
(3,700,108)
(943,967)
Tax on loss
10
189,869
1,900
Loss for the financial year
25
(3,510,239)
(942,067)
Loss for the financial year is all attributable to the owners of the parent company.
All the activities of the Group are from continuing operations.
The Group has no other recognised items of income and expenses other than the results for the year as set out above.
AFORTI PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
Year
Period
ended
ended
31 December
31 December
2021
2020
£
£
Loss for the year
(3,510,239)
(942,067)
Other comprehensive income
Currency translation differences
(191,171)
(197,519)
Total comprehensive income for the year
(3,701,410)
(1,139,586)
Total comprehensive income for the year is all attributable to the owners of the parent company.
AFORTI PLC
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 13 -
2021
2020
Notes
£
£
£
£
Fixed assets
Goodwill
11
20,465,531
22,754,109
Other intangible assets
11
134,342
95,319
Total intangible assets
20,599,873
22,849,428
Tangible assets
12
10,908
25,541
Investments
13
1,015,885
23,113
21,626,666
22,898,082
Current assets
Debtors
16
1,286,134
2,218,719
Investments
17
5,342,233
5,688,109
Cash at bank and in hand
274,594
15,875
6,902,961
7,922,703
Creditors: amounts falling due within one year
18
(1,487,253)
(3,728,369)
Net current assets
5,415,708
4,194,334
Total assets less current liabilities
27,042,374
27,092,416
Creditors: amounts falling due after more than one year
19
-
(957,820)
Net assets
27,042,374
26,134,596
Capital and reserves
Called up share capital
22
413,496
363,636
Share premium account
23
31,468,492
26,908,990
Revaluation reserve
24
1,382
1,556
Profit and loss reserves
25
(4,840,996)
(1,139,586)
Total equity
27,042,374
26,134,596
The financial statements were approved by the board of directors and authorised for issue on 24 June 2022 and are signed on its behalf by:
24 June 2022
K Sytek
Director
AFORTI PLC
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2021
31 December 2021
- 14 -
2021
2020
Notes
£
£
£
£
Fixed assets
Investments
13
30,719,965
27,272,625
Current assets
Debtors
16
850,004
1,900
Investments
17
42,331
13,431
Cash at bank and in hand
62,206
954,541
15,331
Creditors: amounts falling due within one year
18
(50,354)
(23,430)
Net current assets/(liabilities)
904,187
(8,099)
Net assets
31,624,152
27,264,526
Capital and reserves
Called up share capital
22
413,496
363,636
Share premium account
23
31,468,492
26,908,990
Profit and loss reserves
25
(257,836)
(8,100)
Total equity
31,624,152
27,264,526
As permitted by s408 Companies Act 2006, the
c
ompany has not presented its own profit and loss account and related notes. The
c
ompany’s loss for the year was £249,736 (2020 - £8,100 loss).
The financial statements were approved by the board of directors and authorised for issue on 24 June 2022 and are signed on its behalf by:
24 June 2022
K Sytek
Director
Company Registration No. 12821204
AFORTI PLC
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 15 -
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Period ended 31 December 2020:
Loss for the period
-
-
-
(942,067)
(942,067)
Other comprehensive income:
Currency translation differences
-
-
-
(197,519)
(197,519)
Total comprehensive income for the period
-
-
-
(1,139,586)
(1,139,586)
Total contributions by and distributions to owners
Issue of share capital
363,636
26,908,990
-
-
27,272,626
Other movements
-
-
1,556
-
1,556
Balance at 31 December 2020
363,636
26,908,990
1,556
(1,139,586)
26,134,596
Year ended 31 December 2021:
Loss for the year
-
-
-
(3,510,239)
(3,510,239)
Other comprehensive income:
Currency translation differences
-
-
-
(191,171)
(191,171)
Total comprehensive income for the year
-
-
-
(3,701,410)
(3,701,410)
Total contributions by and distributions to owners
Issue of share capital
22, 23
49,860
4,559,502
-
-
4,609,362
Other movements
24
-
-
(174)
-
(174)
Balance at 31 December 2021
413,496
31,468,492
1,382
(4,840,996)
27,042,374
AFORTI PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 16 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Period ended 31 December 2020:
Loss and total comprehensive income for the period
-
-
(8,100)
(8,100)
Total contributions by and distributions to owners
Issue of share capital
363,636
26,908,990
-
27,272,626
Balance at 31 December 2020
363,636
26,908,990
(8,100)
27,264,526
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(249,736)
(249,736)
Total contributions by and distributions to owners
Issue of share capital
22, 23
49,860
4,559,502
-
4,609,362
Balance at 31 December 2021
413,496
31,468,492
(257,836)
31,624,152
AFORTI PLC
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 17 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
29
572,889
(2,716,334)
Interest paid
(277,719)
(38,619)
Net cash inflow/(outflow) from operating activities
295,170
(2,754,953)
Investing activities
Purchase of intangible assets
(64,659)
(22,982,888)
Purchase of tangible fixed assets
(11,857)
(26,765)
Proceeds on disposal of tangible fixed assets
10,665
-
Receipts from associates
371,912
-
Purchase of investments
(1,360,622)
(5,711,222)
Loans made
(42,331)
-
Interest received
39,896
2,264
Net cash used in investing activities
(1,056,996)
(28,718,611)
Financing activities
Proceeds from issue of shares
4,609,362
27,272,626
Repayment of borrowings
(3,588,817)
-
Proceeds of new bank loans
-
4,216,813
Net cash generated from financing activities
1,020,545
31,489,439
Net increase in cash and cash equivalents
258,719
15,875
Cash and cash equivalents at beginning of year
15,875
Cash and cash equivalents at end of year
274,594
15,875
AFORTI PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
30
(1,075,631)
13,430
Interest paid
(3,663)
Net cash (outflow)/inflow from operating activities
(1,079,294)
13,430
Investing activities
Purchase of investments in subsidiaries
(3,433,909)
(27,272,625)
Purchase of investments
-
(13,431)
Loans made
(42,331)
Interest received
8,378
Net cash used in investing activities
(3,467,862)
(27,286,056)
Financing activities
Proceeds from issue of shares
4,609,362
27,272,626
Net cash generated from financing activities
4,609,362
27,272,626
Net increase in cash and cash equivalents
62,206
-
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
62,206
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
1
Accounting policies
Company information
Aforti plc (“the company”)
is a
private
company
limited by shares
domiciled and incorporated in
England and Wales
.
The registered office is
10 Orange Street, Haymarket, London, WC2H 7DQ.
The principle place of business of the Group is the trading address of the subsidiary company Aforti Exchange SA, 27th Floor, 8 Chalubinskiego Street, 00-613 Warsaw, Poland.
The Group consists of Aforti plc and all of its subsidiaries.
1.1
Reporting period
T
he annual financial statements
cover the year ended 31 December 2021, with comparative figures for the period from incorporation on 18 August 2020 up to 31 December 2020.
1.2
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 and in accordance with applicable accounting standards. The principal accounting policies adopted are set out below.
1.3
Business combinations
In the parent company
financial statements, t
he cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
I
nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
1.4
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company
Aforti plc
together with
all entities controlled by the parent company (its subsidiaries)
.
All
financial statements
are made up to 31 December 2021
.
Where necessary, adjustments are made to the
financial statements
of subsidiaries to bring the accounting policies used into line with those used by other members of the
g
roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 20 -
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
1.5
Going concern
After reviewing the
Group
’s budget
and forecasts
for 202
2
/202
3
and its medium term plans, the directors have a reasonable expectation that,
though there will continue to be a trading loss in the shorter term as the business continues to grow, it will have sufficient funds and cash flows to be able to manage its liabilities as they fall due for a period of not less than 12 months from the date of approval of the financial statements.
There are also
opportunities for additional funding
from within the larger Aforti Holdings SA group for working capital,
if required.
The trading value on the foreign exchange platform in July 2021 was approximately PLN 404.16 million, an increase of 89.49% year-on-year.
On a cumulative basis, after seven months of 2021, the total trading value on the foreign exchange platform reached approximately PLN 2,463.39 million, representing a year-on-year increase of 205.55%.
At the date of approving these financial statements the directors are not aware of any adverse impact
on the Group's trading performance
arising from the
crisis in Ukraine.
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.6
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for
services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Aforti Exchange SA provides foreign exchange services to business entities via a full-featured online platform.
Revenues from the sale of currencies are converted at the rate of exchange at the date of sale.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
The Group acts as an agent and not a principal in its currency trading.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 21 -
1.7
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
1.8
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of
a
business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.9
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.
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
20% straight line
1.10
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:
Plant and equipment
20-30% 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 recognised in the
profit and loss account
.
1.11
Fixed asset investments
Equity in
vest
ments are measured at fair value through profit or loss
,
except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably
,
which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I
n the parent company
financial statements,
investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 22 -
A subsidiary is an entity controlled by the
group. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The
group
considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the
g
roup’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method.
Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the
parent c
ompany
financial statements,
investments in associates are accounted for at cost less impairment.
Entities in which the
group
has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.12
Impairment of fixed assets
At each reporting
period
end date, the
group
reviews the carrying amounts of its tangible
and intangible
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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 23 -
1.13
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.
1.14
Financial instruments
The group 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 group's
balance sheet
when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
m
ethod unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 24 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the
group's contractual obligations expire or are discharged or cancelled.
1.15
Equity instruments
Equity instruments issued by the group 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 group.
1.16
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
group’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 25 -
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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset
if, and only if, there is
a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.17
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
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.
1.18
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.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 26 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’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 significant 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.
Investments and intangible asset impairment
The directors consider the carrying value of investments and intangible assets to be recoverable based on the trading performance and position of the respective underlying entities.
Intercompany loans
The directors make an assessment over the recoverability of amounts owed by group undertakings based on their knowledge of the trading performance of those entities and make provision for any amount which is considered irrecoverable.
The loans are repayable on demand and are unsecured and interest free.
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Foreign exchange services
417,449,498
26,061,385
2021
2020
£
£
Turnover analysed by geographical market
Poland
417,449,498
26,061,385
2021
2020
£
£
Other revenue
Interest income
39,896
2,264
4
Operating loss
2021
2020
£
£
Operating loss for the year is stated after charging:
Exchange losses
3,168
-
Depreciation of owned tangible fixed assets
14,164
1,224
Amortisation of intangible assets
2,308,012
133,460
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 27 -
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
20,000
20,000
Audit of the financial statements of the company's subsidiaries
1,883
2,022
21,883
22,022
6
Employees
The average monthly number of persons (including directors and key management personnel) employed by the group and company during the year was:
Group
Company
2021
2020
2021
2020
Number
Number
Number
Number
Directors and key management personnel
5
4
-
-
Other employees
4
4
-
-
Total
9
8
Their aggregate remuneration comprised:
Group
Company
2021
2020
2021
2020
£
£
£
£
Wages and salaries
30,847
1,582
Social security costs
1,059
324
31,906
1,906
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
12,000
677
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 28 -
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
4,129
Interest receivable from group companies
35,767
2,264
Total income
39,896
2,264
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
39,896
2,264
9
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
53,709
8,691
Other interest on financial liabilities
224,010
29,928
277,719
38,619
10
Taxation
2021
2020
£
£
Deferred tax
Origination and reversal of timing differences
(189,869)
(1,900)
The actual credit 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:
2021
2020
£
£
Loss before taxation
(3,700,108)
(943,967)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
(703,021)
(179,354)
Effect of overseas tax rates
513,152
177,454
Taxation credit
(189,869)
(1,900)
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 29 -
11
Intangible fixed assets
Group
Goodwill
Development costs
Total
£
£
£
Cost
At 1 January 2021
22,885,780
97,108
22,982,888
Additions
64,659
64,659
Exchange adjustments
(6,318)
(6,318)
At 31 December 2021
22,885,780
155,449
23,041,229
Amortisation and impairment
At 1 January 2021
131,671
1,789
133,460
Amortisation charged for the year
2,288,578
19,434
2,308,012
Exchange adjustments
(116)
(116)
At 31 December 2021
2,420,249
21,107
2,441,356
Carrying amount
At 31 December 2021
20,465,531
134,342
20,599,873
At 31 December 2020
22,754,109
95,319
22,849,428
The company had no intangible fixed assets at 31 December 2021 or 31 December 2020.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 30 -
12
Tangible fixed assets
Group
Plant and equipment
£
Cost
At 1 January 2021
26,765
Additions
11,857
Disposals
(10,665)
Exchange adjustments
(1,741)
At 31 December 2021
26,216
Depreciation and impairment
At 1 January 2021
1,224
Depreciation charged in the year
14,164
Exchange adjustments
(80)
At 31 December 2021
15,308
Carrying amount
At 31 December 2021
10,908
At 31 December 2020
25,541
The company had no tangible fixed assets at 31 December 2021 or 31 December 2020.
13
Fixed asset investments
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Investments in subsidiaries
14
1,015,885
23,113
30,719,965
27,272,625
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 January 2021
23,113
Additions
994,276
Other movements
(1,504)
At 31 December 2021
1,015,885
Carrying amount
At 31 December 2021
1,015,885
At 31 December 2020
23,113
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
13
Fixed asset investments
(Continued)
- 31 -
Movements in fixed asset investments
Company
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 1 January 2021
27,272,625
-
27,272,625
Additions
3,433,909
-
3,433,909
Transfer from current asset investments
13,431
13,431
At 31 December 2021
30,719,965
-
30,719,965
Carrying amount
At 31 December 2021
30,719,965
-
30,719,965
At 31 December 2020
27,272,625
-
27,272,625
14
Subsidiaries
Details of the company's subsidiaries at 31 December 2021 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Aforti Exchange SA
Poland
Ordinary shares
100.00
Aforti Limited
Cyprus
Ordinary shares
100.00
The registered office and trading address for Aforti Exchange SA is 27th Floor, 8 Chalubinskiego Street, 00-613 Warsaw, Poland.
Aforti Exchange SA made a loss for the year under review of £971,925, and had net assets at the year end date of £4,664,877.
The registered office and trading address for Aforti Ltd is Amaranton Court, Floor 3, Arch. Makariou III 74, 4003 Mesa Geitonia, Limassol, Cyprus.
Aforti Ltd was non-trading in the year under review, and had net assets at the year end date of £13,432.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 32 -
15
Financial instruments
Group
Company
2021
2020
2021
2020
£
£
£
£
Carrying amount of financial assets
Debtors and cash
1,067,147
1,906,066
789,524
-
Investments measured at fair value through profit or loss
5,342,233
5,688,109
42,331
13,431
Carrying amount of financial liabilities
Creditors
(1,487,253)
(4,686,189)
(50,354)
(23,430)
16
Debtors
Group
Company
2021
2020
2021
2020
Amounts falling due within one year:
£
£
£
£
Trade debtors
11,520
22,426
Other debtors
384,354
1,587,613
477,400
Prepayments and accrued income
361,638
141,848
312,124
757,512
1,751,887
789,524
-
Deferred tax asset (note 21)
60,480
1,900
60,480
1,900
817,992
1,753,787
850,004
1,900
Amounts falling due after more than one year:
Security deposits
2,015
980
Amount owed by related parties
2,285
2,444
Other debtors
30,741
134,880
35,041
138,304
-
-
Deferred tax asset (note 21)
433,101
326,628
468,142
464,932
-
-
Total debtors
1,286,134
2,218,719
850,004
1,900
Other debtors due after more than one year relates to the long term discount on bills of exchange.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 33 -
17
Current asset investments
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Investments in associates
5,217,476
5,188,722
Loans to associates
397,794
Unlisted investments
-
13,431
-
13,431
Other loans
124,757
88,162
42,331
5,342,233
5,688,109
42,331
13,431
18
Creditors: amounts falling due within one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bills of exchange
20
304,183
627,054
Other borrowings
20
49,456
2,648,783
Trade creditors
71,919
91,181
5,927
Amounts owed to group undertakings
8,427
13,430
8,427
13,430
Other taxation and social security
307,302
244,403
-
-
Other creditors
709,966
93,518
Accruals and deferred income
36,000
10,000
36,000
10,000
1,487,253
3,728,369
50,354
23,430
19
Creditors: amounts falling due after more than one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bills of exchange
20
710,187
Other borrowings
20
230,789
Accruals and deferred income
16,844
-
957,820
-
-
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 34 -
20
Loans and overdrafts
Group
Company
2021
2020
2021
2020
£
£
£
£
Bills of exchange
304,183
1,337,241
Other loans
49,456
2,879,572
353,639
4,216,813
-
-
Payable within one year
353,639
3,275,837
Payable after one year
940,976
The bills of exchange and other borrowings are repayable by instalments and are unsecured.
The interest rate on bills of exchange depends on the length of the loan as follows: 12 months 7%, 24 months 8.2%,and 35 months 9%. For other borrowings the interest rate is 8%.
There are no other agreed
terms and conditions
.
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Assets
Assets
2021
2020
Group
£
£
Tax losses
493,581
328,528
Assets
Assets
2021
2020
Company
£
£
Tax losses
60,480
1,900
Group
Company
2021
2021
Movements in the year:
£
£
Asset at 1 January 2021
(328,528)
(1,900)
Credit to profit or loss
(189,869)
(58,580)
Other
24,816
-
Asset at 31 December 2021
(493,581)
(60,480)
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
21
Deferred taxation
(Continued)
- 35 -
The deferred tax asset
set out above
is expected to reverse
through the
utilisation of tax losses against future expected profits
.
22
Share capital
Group and company
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
41,349,552
36,363,600
413,496
363,636
The shares are all ordinary shares and rank equally for voting purposes: on a show of hands each member shall have one vote, and on a poll each member shall have one vote per share held. Each share ranks equally for any dividend declared, and equally for any distribution made on a winding up. The shares are not redeemable.
During the year 4,986,052 ordinary shares of 1p each were issued in seven tranches with a price range of £0.75 to £1 raising total funds of £4,609,362.
23
Share premium account
Group
Company
2021
2020
2021
2020
£
£
£
£
At the beginning of the year
26,908,990
26,908,990
Issue of new shares
4,559,502
26,908,990
4,559,502
26,908,990
At the end of the year
31,468,492
26,908,990
31,468,492
26,908,990
This reserve represents the amount above the nominal value received for issued share capital, less transaction costs.
24
Revaluation reserve
Group
Company
2021
2020
2021
2020
£
£
£
£
At the beginning of the year
1,556
-
-
Other movements
(174)
1,556
-
-
At the end of the year
1,382
1,556
-
The revaluation reserve of £1,382 (2020: £1,556) relates to the value of the investment of Aforti Exchange AD in Aforti Exchange Bulgaria SA.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 36 -
25
Profit and loss reserves
Group
Company
2021
2020
2021
2020
£
£
£
£
At the beginning of the year
(1,139,586)
-
(8,100)
-
Loss for the year
(3,510,239)
(942,067)
(249,736)
(8,100)
Currency translation differences
(191,171)
(197,519)
At the end of the year
(4,840,996)
(1,139,586)
(257,836)
(8,100)
This reserve represents cumulative profits and losses.
26
Capital commitments
As at 31 December 202
1
the
Group
had no financial or operating leases in place, capital commitments or contracts for capital expenditure
(2020: £nil)
.
27
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2021
2020
£
£
Aggregate compensation
12,000
25,676
Other information
No other transactions were undertaken with related parties as such that are required to be disclosed under FRS102.
28
Controlling party
The company's ultimate controlling party is
Aforti Holdings SA
, a company incorporated in
Poland, whose registered office address is 27th Floor, 8 Chalubinskiego Street, 00-613 Warsaw, Poland.
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 37 -
29
Cash generated from/(absorbed by) group operations
2021
2020
£
£
Loss for the year after tax
(3,510,239)
(942,067)
Adjustments for:
Taxation credited
(189,869)
(1,900)
Finance costs
277,719
38,619
Investment income
(39,896)
(2,264)
Amortisation and impairment of intangible assets
2,308,012
133,460
Depreciation and impairment of tangible fixed assets
14,164
1,224
Revaluation of investment in Aforti Exchange Bulgaria AD
(73)
1,556
Currency translation differences on consolidation
26,386
(197,519)
Movements in working capital:
Decrease/(increase) in debtors
1,229,784
(2,216,819)
Increase in creditors
456,901
469,376
Cash generated from/(absorbed by) operations
572,889
(2,716,334)
30
Cash (absorbed by)/generated from operations - company
2021
2020
£
£
Loss for the year after tax
(249,736)
(8,100)
Adjustments for:
Taxation credited
(58,580)
(1,900)
Finance costs
3,663
Investment income
(8,378)
Movements in working capital:
Increase in debtors
(789,524)
-
Increase in creditors
26,924
23,430
Cash (absorbed by)/generated from operations
(1,075,631)
13,430
31
Analysis of changes in net debt - group
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
15,875
258,719
274,594
Borrowings excluding overdrafts
(4,216,813)
3,863,174
(353,639)
(4,200,938)
4,121,893
(79,045)
AFORTI PLC
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 38 -
32
Analysis of changes in net funds - company
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
-
62,206
62,206
2021-12-31
2021-01-01
false
CCH Software
CCH Accounts Production 2022.100
K Sytek
M Niemczyk
P Krolikowski
P Krolikowski
M Szytko
12821204
2021-01-01
2021-12-31
12821204
bus:Director1
2021-01-01
2021-12-31
12821204
bus:CompanySecretaryDirector1
2021-01-01
2021-12-31
12821204
bus:CompanySecretary1
2021-01-01
2021-12-31
12821204
bus:Director2
2021-01-01
2021-12-31
12821204
bus:Director3
2021-01-01
2021-12-31
12821204
bus:Director4
2021-01-01
2021-12-31
12821204
bus:RegisteredOffice
2021-01-01
2021-12-31
12821204
bus:Consolidated
2021-12-31
12821204
bus:Consolidated
2021-01-01
2021-12-31
12821204
2021-12-31
12821204
bus:Consolidated
2020-08-18
2020-12-31
12821204
2020-08-18
2020-12-31
12821204
core:Goodwill
bus:Consolidated
2021-12-31
12821204
core:Goodwill
bus:Consolidated
2020-12-31
12821204
core:OtherResidualIntangibleAssets
bus:Consolidated
2021-12-31
12821204
core:OtherResidualIntangibleAssets
bus:Consolidated
2020-12-31
12821204
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
bus:Consolidated
2021-12-31
12821204
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
bus:Consolidated
2020-12-31
12821204
bus:Consolidated
2020-12-31
12821204
core:PlantMachinery
bus:Consolidated
2021-12-31
12821204
core:PlantMachinery
bus:Consolidated
2020-12-31
12821204
2020-12-31
12821204
core:ShareCapital
bus:Consolidated
2021-12-31
12821204
core:ShareCapital
bus:Consolidated
2020-12-31
12821204
core:SharePremium
bus:Consolidated
2021-12-31
12821204
core:SharePremium
bus:Consolidated
2020-12-31
12821204
core:RevaluationReserve
bus:Consolidated
2021-12-31
12821204
core:RevaluationReserve
bus:Consolidated
2020-12-31
12821204
core:ShareCapital
2021-12-31
12821204
core:ShareCapital
2020-12-31
12821204
core:SharePremium
2021-12-31
12821204
core:SharePremium
2020-12-31
12821204
core:SharePremium
bus:Consolidated
2020-12-31
12821204
core:SharePremium
bus:Consolidated
2020-08-17
12821204
core:SharePremium
2020-12-31
12821204
core:SharePremium
2020-08-17
12821204
core:RevaluationReserve
bus:Consolidated
2020-12-31
12821204
core:RevaluationReserve
2020-12-31
12821204
core:RevaluationReserve
2021-12-31
12821204
core:ShareCapital
bus:Consolidated
2020-08-18
2020-12-31
12821204
core:SharePremium
bus:Consolidated
2020-08-18
2020-12-31
12821204
core:ShareCapital
bus:Consolidated
2021-01-01
2021-12-31
12821204
core:SharePremium
bus:Consolidated
2021-01-01
2021-12-31
12821204
core:ShareCapital
2020-08-18
2020-12-31
12821204
core:SharePremium
2020-08-18
2020-12-31
12821204
core:ShareCapital
2021-01-01
2021-12-31
12821204
core:SharePremium
2021-01-01
2021-12-31
12821204
bus:Consolidated
2020-08-17
12821204
2020-08-17
12821204
core:Goodwill
2021-01-01
2021-12-31
12821204
core:IntangibleAssetsOtherThanGoodwill
2021-01-01
2021-12-31
12821204
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
2021-01-01
2021-12-31
12821204
core:PlantMachinery
2021-01-01
2021-12-31
12821204
core:Goodwill
bus:Consolidated
2020-12-31
12821204
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
bus:Consolidated
2020-12-31
12821204
bus:Consolidated
2020-12-31
12821204
core:Goodwill
core:ExternallyAcquiredIntangibleAssets
bus:Consolidated
2021-01-01
2021-12-31
12821204
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
core:ExternallyAcquiredIntangibleAssets
bus:Consolidated
2021-01-01
2021-12-31
12821204
core:ExternallyAcquiredIntangibleAssets
bus:Consolidated
2021-01-01
2021-12-31
12821204
core:Goodwill
bus:Consolidated
2021-01-01
2021-12-31
12821204
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
bus:Consolidated
2021-01-01
2021-12-31
12821204
core:PlantMachinery
bus:Consolidated
2020-12-31
12821204
core:PlantMachinery
bus:Consolidated
2021-01-01
2021-12-31
12821204
core:Subsidiary1
2021-01-01
2021-12-31
12821204
core:Subsidiary2
2021-01-01
2021-12-31
12821204
core:Subsidiary1
1
2021-01-01
2021-12-31
12821204
core:Subsidiary2
2
2021-01-01
2021-12-31
12821204
core:CurrentFinancialInstruments
2021-12-31
12821204
core:CurrentFinancialInstruments
2020-12-31
12821204
core:Non-currentFinancialInstruments
bus:Consolidated
2021-12-31
12821204
core:Non-currentFinancialInstruments
bus:Consolidated
2020-12-31
12821204
core:Non-currentFinancialInstruments
2021-12-31
12821204
core:Non-currentFinancialInstruments
2020-12-31
12821204
core:CurrentFinancialInstruments
bus:Consolidated
2021-12-31
12821204
core:CurrentFinancialInstruments
bus:Consolidated
2020-12-31
12821204
core:CurrentFinancialInstruments
core:WithinOneYear
bus:Consolidated
2021-12-31
12821204
core:CurrentFinancialInstruments
core:WithinOneYear
bus:Consolidated
2020-12-31
12821204
core:CurrentFinancialInstruments
core:WithinOneYear
2021-12-31
12821204
core:CurrentFinancialInstruments
core:WithinOneYear
2020-12-31
12821204
core:Non-currentFinancialInstruments
core:AfterOneYear
bus:Consolidated
2021-12-31
12821204
core:Non-currentFinancialInstruments
core:AfterOneYear
bus:Consolidated
2020-12-31
12821204
core:Non-currentFinancialInstruments
core:AfterOneYear
2021-12-31
12821204
core:Non-currentFinancialInstruments
core:AfterOneYear
2020-12-31
12821204
core:WithinOneYear
bus:Consolidated
2021-12-31
12821204
core:WithinOneYear
bus:Consolidated
2020-12-31
12821204
bus:PrivateLimitedCompanyLtd
2021-01-01
2021-12-31
12821204
bus:FRS102
2021-01-01
2021-12-31
12821204
bus:Audited
2021-01-01
2021-12-31
12821204
bus:ConsolidatedGroupCompanyAccounts
2021-01-01
2021-12-31
12821204
bus:FullAccounts
2021-01-01
2021-12-31
xbrli:pure
xbrli:shares
iso4217:GBP