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Financial Statements for the Year Ended 30 November 2020 |
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CEX.IO LTD |
REGISTERED NUMBER:
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Financial Statements for the Year Ended 30 November 2020 |
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for |
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CEX.IO LTD |
CEX.IO LTD (Registered number: 08757996) |
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Contents of the Financial Statements |
for the Year Ended 30 November 2020 |
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Company Information | 1 |
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Balance Sheet | 2 |
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Notes to the Financial Statements | 3 |
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CEX.IO LTD |
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Company Information |
for the Year Ended 30 November 2020 |
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DIRECTORS: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Statutory Auditors |
85 Oakways |
London |
SE9 2NZ |
CEX.IO LTD (Registered number: 08757996) |
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Balance Sheet |
30 November 2020 |
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30.11.20 | 30.11.19 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 4 |
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Investments | 5 |
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CURRENT ASSETS |
Debtors | 6 |
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Investments | 7 |
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Cash at bank | 8 |
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CREDITORS |
Amounts falling due within one year | 9 |
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NET CURRENT ASSETS |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CAPITAL AND RESERVES |
Called up share capital |
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Retained earnings | 10 |
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In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered. |
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The financial statements were approved by the Board of Directors and authorised for issue on
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CEX.IO LTD (Registered number: 08757996) |
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Notes to the Financial Statements |
for the Year Ended 30 November 2020 |
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1. | STATUTORY INFORMATION |
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CEX.IO LTD is a
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2. | ACCOUNTING POLICIES |
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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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view. |
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The company uses multiple currencies in its operations. Consequentially there is no one functional currency for the business though the company has selected to prepare its accounts in sterling. Monetary amounts in these financial statements are rounded to the nearest £. |
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The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value where applicable.The principal accounting policies adopted are set out below. |
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Cash and cash equivalents |
Cash and cash equivalents comprise cash on hand, call deposits, other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value and commission and fee income earned but not withdrawn and included in client money accounts. |
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Assets held on behalf of clients |
Company holds client monies and assets in separate bank and custodian accounts on behalf of the clients. It also includes any commission and fee income earned but not withdrawn by the Company. The portion of these balances that do not belong to the Company and are restrictive in use is not included in the Company Statement of Financial Position. |
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Preparation of consolidated financial statements |
The financial statements contain information about CEX.IO LTD as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 399(2A) of the Companies Act 2006 from the requirements to prepare consolidated financial statements. |
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Turnover |
The company derives its turnover as commission and fees for digital asset transactional services, where users can buy and sell digital assets for a service fee. The company recognises turnover when the following criteria have been met: persuasive evidence of an arrangement exists, the fee is fixed or determinable, the service has been rendered and risk of loss has transferred to the customer, and collection is reasonably assured. Service is considered rendered upon purchase and transfer of the digital asset(s) ownership to the customer. |
CEX.IO LTD (Registered number: 08757996) |
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Notes to the Financial Statements - continued |
for the Year Ended 30 November 2020 |
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2. | ACCOUNTING POLICIES - continued |
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Tangible fixed assets |
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Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. |
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Depreciation is provided on the following basis: Fixtures and fittings - 33% |
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
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Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income. |
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Investments in subsidiaries |
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss. |
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. |
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Taxation |
The tax expense represents the sum of the tax currently payable and deferred tax. |
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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. |
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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. |
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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 when the company has 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. |
CEX.IO LTD (Registered number: 08757996) |
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Notes to the Financial Statements - continued |
for the Year Ended 30 November 2020 |
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2. | ACCOUNTING POLICIES - continued |
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Research and development |
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research is recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised `development costs are subsequently amortised to ‘administrative expenses’ on a straight line basis over their expected useful economic lives, Amortisation begins when the intangible asset is available for use, ie when it is in the location and condition necessary for it to be usable in the manner intended by management. |
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The expected useful economic life of development costs are estimated based on business plans which set out the development plan and time to market for the associated project. |
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If it is not possible to distinguish between the research phase and the development phase of an internal the expenditure is treated as if it were all incurred in the research phase only. |
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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 are included in the profit and loss account for the period. |
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Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
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Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
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Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. |
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Cryptocurrency |
Cryptocurrency assets, classified as current asset investments, are measured at fair value. Changes in fair value are recognised in 'other foreign exchange', within profit or loss. |
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Going concern |
The directors consider the going concern basis to be appropriate given the company's net assets of £8,477,284. The shareholder has indicated its willingness to provide working capital to the company where necessary for a period of at least 12 months following the date of approval of these financial statements. |
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Subsequent to year end, the world at large has been significantly impacted by the global COVID-19 pandemic. The pandemic has had monumental impact on economies worldwide. The directors have considered the impact of the pandemic on the company, considering all known financing arrangements and working capital and at the time of signing do not consider it to have substantially impacted the company. |
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Capital and reserves |
Company's capital reserves comprises of: |
- Called up share capital reserve representing the nominal value of the shares issued and |
- Profit and loss account representing cumulative profits or losses, net of dividends paid and other adjustments. |
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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. |
CEX.IO LTD (Registered number: 08757996) |
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Notes to the Financial Statements - continued |
for the Year Ended 30 November 2020 |
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2. | ACCOUNTING POLICIES - continued |
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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. |
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Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. |
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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. |
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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 method 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. |
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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 company after deducting all of its liabilities. |
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Basic financial liabilities |
Basic financial liabilities, including creditors, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. |
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Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
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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. |
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3. | EMPLOYEES AND DIRECTORS |
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The average number of employees during the year was
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CEX.IO LTD (Registered number: 08757996) |
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Notes to the Financial Statements - continued |
for the Year Ended 30 November 2020 |
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4. | TANGIBLE FIXED ASSETS |
Plant and |
machinery |
etc |
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COST |
At 1 December 2019 |
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Disposals | ( |
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At 30 November 2020 |
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DEPRECIATION |
Charge for year |
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At 30 November 2020 |
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NET BOOK VALUE |
At 30 November 2020 |
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At 30 November 2019 |
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5. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
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COST |
At 1 December 2019 |
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Share of profit/(loss) | (143,088 | ) |
At 30 November 2020 |
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NET BOOK VALUE |
At 30 November 2020 |
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At 30 November 2019 |
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6. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
30.11.20 | 30.11.19 |
£ | £ |
Trade debtors |
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Amount owed by related parties |
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Other debtors |
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7. | CURRENT ASSET INVESTMENTS |
30.11.20 | 30.11.19 |
£ | £ |
Digital assets |
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During the year, there were additions (net of disposals) of £5,087,450. The digital assets have been fair valued as per the price feed from the Coin Market Cap as at the year end. |
CEX.IO LTD (Registered number: 08757996) |
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Notes to the Financial Statements - continued |
for the Year Ended 30 November 2020 |
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8. | CASH AT BANK |
30.11.20 | 30.11.19 |
£ | £ |
Own monies held in client |
designated accounts | 1,379,034 | - |
Corporate bank account | 181,289 | 1,517,224 |
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Cash at bank and in hand 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. |
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9. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
30.11.20 | 30.11.19 |
£ | £ |
Trade creditors |
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Taxation and social security |
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Other creditors |
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10. | RESERVES |
Retained |
earnings |
£ |
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At 1 December 2019 |
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Profit for the year |
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At 30 November 2020 |
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11. | DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006 |
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The Report of the Auditors was unqualified. |
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for and on behalf of
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12. | POST BALANCE SHEET EVENTS |
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CEX.IO Ltd is involved in a dispute with an overseas financial institution regarding a previous service agreement. Post year end CEX.IO Ltd has won the case but it is subject to appeal procedure. The directors do not consider it practicable at this stage to make an estimate of the timing or amount of any future outflows in relation to this matter. |
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Post year-end changes in equity |
Post year end 220,000 shares were issued at a nominal value of £1 each increasing the share capital to £500,000. |
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Ultimate Controlling Party |
Post year-end, the immediate parent company is CEX.IO Holding Ltd. |
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The Ultimate Controlling Party is Mr O Lutskevych. |
CEX.IO LTD (Registered number: 08757996) |
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Notes to the Financial Statements - continued |
for the Year Ended 30 November 2020 |
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13. | ASSETS HELD ON BEHALF OF CLIENTS |
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At the year end date, the company held £95,668,097 (2019: £86,056,273) in cryptocurrency and £24,882,994 (2019: £39,533,857) in cash on behalf of its clients. As these balances do not relate to the company's assets, they have been excluded from the financial statements. |
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14. | COMMITMENTS UNDER OPERATING LEASES |
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At 30 November 2020 the Company had future minimum lease payments under non-cancellable |
operating leases as follows: |
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2020 | 2019 |
£ | £ |
Not later than 1 year | 110,150 | 110,150 |
Later than 1 year and not later than 5 years | 65,996 | 176,146 |
176,146 | 286,296 |
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15. | RELATED PARTY TRANSACTIONS |
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Included within other creditors are loans from Oleksandr Lutskevych amounting to £2,006,731 (2019: |
£1,905,544). The loans incur interest at 2% per annum and at year end £57,352 of accrued interest is included within other creditors. |
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During the year the company paid £173,192 to Oleksandr Lutskevych for professional services provided to the company. |
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The company also has the following balances due from other companies under common control: |
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Balance at 30/11/2020 | Turnover for the year |
£ | £ |
CEX. IO Limited (Gibraltar) | 254,272 | 66,440.21 |
CEX.IO PTE. LTD. | 18,610 | 18,610.01 |
Decent Finance LTD | 21,488 | 14,981.38 |
DIGITAL MARKETS LLC | 1,202 | 1,202.10 |
KYC LABS LTD | 2,283 | 22,935.70 |
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16. | AUDITOR LIABILITY LIMITATION AGREEMENT |
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An auditors' limitation of liability agreement has been approved by the members for the financial year ended 30 November 2020. The principal terms and conditions are as below: |
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- The agreement limits the amount of any liability owed to the Company by the auditors in respect of any negligence default, breach of duty or breach of trust, occurring in the course of audit of the Company's accounts and pursuant to this agreement the auditor may be guilty in relation to the Company. |
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- The agreement also stipulates the maximum aggregated amount payable in event of any of the circumstances stated above. |