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Registered number: |
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Balance Sheet | |||||||
as at |
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Notes | 2022 | 2021 | |||||
£ | £ | ||||||
Fixed assets | |||||||
Intangible assets | 6 |
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Tangible assets | 7 |
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Current assets | |||||||
Stocks | 8 | - |
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Debtors | 9 |
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Cash at bank and in hand |
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Creditors: amounts falling due within one year | 10 | ( |
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Net current liabilities | ( |
( |
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Total assets less current liabilities | ( |
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Net liabilities | ( |
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Capital and reserves | |||||||
Called up share capital |
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Revaluation reserve |
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Profit and loss account | ( |
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Shareholders' funds | ( |
( |
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D Hoggard | |||||||
Director | |||||||
Approved by the board on |
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Notes to the Accounts | ||||||||
for the year ended |
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1 | Accounting policies | |||||||
Basis of preparation | ||||||||
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Going concern | ||||||||
At 30 June 2022 the company had net liabilities of £20,545,836, including £37,587,077 owed to Monolith Limited, a fellow group undertaking. The company was also owed £2,654,124 by its parent company, Token Group Limited. The directors have received written assurances that Monolith Limited will not seek repayment of the amount owed to them, that they will guarantee the amount owed by Token Group Limited, and maintain the ability and willingness to continue to provide financial support for the company for at least one year from the date of the approving of the financial statements. As such the financial statements have been prepared on a going concern basis. | ||||||||
The directors have considered all available information, including the volatility in cryptocurrency markets, when assessing going concern. While the company is still in its development phase, disruptive technology and alternative finance have shown strong performance with digital adoption in the UK high. The company and group also carefully monitors its cryptocurrency balances to ensure market forces are taken into account when dealing with the treasury function. The directors have considered a number of forecasted outcomes, including a worst case scenario, where expected revenues are not achieved and are confident that the company and group will have sufficient funds to meet its liabilities as they fall due. | ||||||||
Turnover | ||||||||
Turnover is derived from cryptocurrency transactional services where a user of the company's services can buy and sell cryptocurrencies and exchange fiat currencies. The company charges fixed transaction fees to provide this service. Turnover is recognised at the point of trade and settlement is instantly transferred into the company bank account from the client account. | ||||||||
Intangible fixed assets | ||||||||
Digital assets (cryptocurrencies) are now held by the company for funding purposes after the company’s principal activity changed as set out in the directors’ report As a result of this change cryptocurrencies were reclassified to intangible assets from stock at cost, and are revalued to fair value at the balance sheet date. The company has access to appropriate liquid markets and has the ability to trade in its own cryptocurrency both to convert to fiat currency and to settle obligations as they fall due. The company uses an open market source to carry out its year end valuations. 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: Domain names 3 years straight line The estimated useful life of digital assets held for funding within intangible assets is indefinite and therefore no amortisation is charged in the year. |
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Tangible fixed assets | ||||||||
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Plant and machinery | over 3 years straight line | |||||||
Impairment of fixed assets | ||||||||
At each reporting period end date, the company 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. | ||||||||
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. | ||||||||
Stocks | ||||||||
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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. | ||||||||
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. | ||||||||
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. | ||||||||
Basic financial instruments | ||||||||
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. | ||||||||
Financial instruments are recognised in the Balance Sheet when the company becomes party to the contractual provisions of the instrument. Financial instruments are initially measured at transaction price unless the arrangement constitutes a financing transaction which includes transactions costs for financial instruments not subsequently measured at fair value. Subsequent to initial recognition, they are measured as set out below. | ||||||||
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. | ||||||||
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 payments 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. | ||||||||
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. | ||||||||
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. | ||||||||
Taxation | ||||||||
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Employment 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. |
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Foreign currency translation | ||||||||
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Leased assets | ||||||||
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed. | ||||||||
Pensions | ||||||||
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2 | Judgements and key sources of estimation uncertainty | |||||||
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. | ||||||||
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. | ||||||||
Critical judgements | ||||||||
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. | ||||||||
Revenue recognition - principal versus agent |
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Until March 2022 the company provided a Visa debit card and Ethereum smart wallet via its platform to allow users to conveniently secure and spend tokens anywhere. The company charged users fees to top-up cards, to make purchases on their cards, to withdraw fiat currency, and for certain other account fees. The directors are of the opinion the revenue generated relates solely to these transactional services which occur at the point of trade. The gross amount of currency that users choose to exchange on the platform is not recognised as revenue. | ||||||||
3 | Employees | 2022 | 2021 | |||||
Number | Number | |||||||
Average number of persons (including directors) employed by the company |
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4 | Directors' remuneration | 2022 | 2021 | |||||
£ | £ | |||||||
Remuneration paid to directors | 262,641 | 262,726 | ||||||
5 | Impairments | |||||||
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in administrative expenses in profit or loss: | ||||||||
2022 | 2021 | |||||||
£ | £ | |||||||
In respect of | Note | |||||||
Stock | 8 | - | 100,574 | |||||
6 | Intangible fixed assets | |||||||
Domain names | Digital assets | Total | ||||||
£ | £ | £ | ||||||
Cost/ revalued amount | ||||||||
At 1 July 2021 - cost | 42,241 | - |
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Additions | 8,349,083 |
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Disposals | - | (7,514,813) | ( |
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Revaluation | - | 16,135 | 16,135 | |||||
At 30 June 2022 - cost /revalued amount | 42,241 | 850,405 |
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Amortisation and impairment | ||||||||
At 1 July 2021 | 42,241 | - |
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At 30 June 2022 | 42,241 | - |
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Net book value | ||||||||
At 30 June 2022 | - | 850,405 |
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At 30 June 2021 | - | - | - | |||||
During the year the company’s principal activity changed as set out in the directors’ report. Cryptocurrencies held after this change have been reclassified from stock to intangible assets. | ||||||||
7 | Tangible fixed assets | |||||||
Plant and machinery etc | ||||||||
£ | ||||||||
Cost | ||||||||
At 1 July 2021 |
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Additions |
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Disposals | ( |
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At 30 June 2022 |
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Depreciation | ||||||||
At 1 July 2021 |
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Charge for the year |
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On disposals | ( |
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At 30 June 2022 |
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Net book value | ||||||||
At 30 June 2022 |
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At 30 June 2021 |
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8 | Stocks | 2022 | 2021 | |||||
£ | £ | |||||||
Stock of digital assets | - | 635,801 | ||||||
9 | Debtors | 2022 | 2021 | |||||
£ | £ | |||||||
Corporation tax recoverable | 1,174,272 | 1,176,614 | ||||||
Amounts owed by group undertakings and undertakings in which the company has a participating interest |
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Other debtors |
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10 | Creditors: amounts falling due within one year | 2022 | 2021 | |||||
£ | £ | |||||||
Trade creditors |
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Amounts owed to group undertakings and undertakings in which the company has a participating interest |
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Taxation and social security costs |
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Other creditors |
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11 | Related party transactions | |||||||
Included within other debtors at the year end is a balance of £7,208 (2021: £7,208) due from the directors. This loan is interest free and repayable on demand. | ||||||||
Included in amounts owed by group undertakings and undertakings in which the company has a participating interest at the year end is a balance of £1,395,455 (2021:£10,857) due from Token.com Servicos Digitais Ltda a company in which the parent company Token Group has a participating interest. | ||||||||
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12 | Controlling party | |||||||
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13 | Other information | |||||||
Tokencard Limited is a private company limited by shares and incorporated in England. Its registered office is: | ||||||||
One St Peter's Square | ||||||||
Manchester | ||||||||
M2 3DE |