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Registered number: 11114339









ENIGMA SECURITIES LTD









DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

 
ENIGMA SECURITIES LTD
 
 
COMPANY INFORMATION


Directors
A Bouhadana 
E Wolpert (resigned 9 November 2023)
M Halimi (appointed 21 November 2022)




Registered number
11114339



Registered office
30 Panton Street

London

SW1Y 4AJ




Independent auditors
BKL Audit LLP
Chartered Accountants & Statutory Auditor

35 Ballards Lane

London

N3 1XW





 
ENIGMA SECURITIES LTD
 

CONTENTS



Page
Directors' Report
 
 
1 - 2
Independent Auditors' Report
 
 
3 - 6
Statement of Comprehensive Income
 
 
7
Statement of Financial Position
 
 
8
Statement of Changes in Equity
 
 
9 - 10
Notes to the Financial Statements
 
 
11 - 27


 
ENIGMA SECURITIES LTD
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The Directors present their report and the audited financial statements for the year ended 31 December 2022.

Directors' responsibilities statement

The Directors are responsible for preparing the Directors' Report and the audited financial statements in accordance with applicable law and regulations.
 
Company law requires the Directors to prepare audited financial statements for each financial year. Under that law the Directors have elected to prepare the audited financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the audited financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these audited financial statements, the Directors are required to:


select suitable accounting policies for the Company's financial statements 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 financial statements;

prepare the audited financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the audited financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Principal activity

The principal activity of the company is that of broking cryptocurrency. 

Results and dividends

The loss for the year, after taxation, amounted to $9,604,206 (2021 - profit $1,711,732).

There were no dividends declared in the year.

Directors

The Directors who served during the year were:

A Bouhadana 
E Wolpert (resigned 9 November 2023)
M Halimi (appointed 21 November 2022)

Page 1

 
ENIGMA SECURITIES LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Disclosure of information to auditors

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

Under section 487 (2) of the Companies Act 2006, BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.
 







A Bouhadana
Director

Date: 30 November 2023

Page 2

 
ENIGMA SECURITIES LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ENIGMA SECURITIES LTD
 

Opinion


We have audited the financial statements of Enigma Securities Ltd (the 'Company') for the year ended 31 December 2022, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2022 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 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.


Page 3

 
ENIGMA SECURITIES LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ENIGMA SECURITIES LTD (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Directors' Report has been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' Report.


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


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the Directors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Strategic Report.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 1, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


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


Page 4

 
ENIGMA SECURITIES LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ENIGMA SECURITIES LTD (CONTINUED)


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


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Enquiring of management, those charged with governance and the entity’s in house counsel around actual and potential litigation and claims;
Enquiring of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations;
Reviewing minutes of meetings of those charged with governance;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and
Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:


Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report.
Page 5

 
ENIGMA SECURITIES LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ENIGMA SECURITIES LTD (CONTINUED)


However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.


We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


Use of our 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 2006Our 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 Auditors' 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.







David Landau FCA (Senior Statutory Auditor)
  
for and on behalf of
BKL Audit LLP
 
Chartered Accountants
Statutory Auditor
  
London

30 November 2023
Page 6

 
ENIGMA SECURITIES LTD
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

As restated
2022
2021
Note
$
$

  

Turnover
 4 
6,226,741
10,868,837

Cost of sales
  
(3,430,618)
(1,089,951)

Gross profit
  
2,796,123
9,778,886

Administrative expenses
  
(11,375,273)
(7,073,449)

Operating (loss)/profit
 5 
(8,579,150)
2,705,437

Impairment of investments
  
(1,318,370)
-

Interest receivable and similar income
 9 
507,577
1,062,563

Interest payable and similar expenses
 10 
(268,563)
(2,144,346)

(Loss)/profit before tax
  
(9,658,506)
1,623,654

Tax on (loss)/profit
 11 
54,300
88,078

(Loss)/profit for the financial year
  
(9,604,206)
1,711,732

There was no other comprehensive income for 2022 (2021:$NIL).

The notes on pages 11 to 27 form part of these financial statements.

Page 7

 
ENIGMA SECURITIES LTD
REGISTERED NUMBER: 11114339

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

As restated
2022
2021
Note
$
$

Fixed assets
  

Tangible assets
 12 
28,076
4,927

Investments
 13 
590,995
642,959

  
619,071
647,886

Current assets
  

Stocks
 14 
3,718,229
12,118,128

Debtors: amounts falling due within one year
 15 
2,772,284
6,412,807

Cash at bank and in hand
 16 
1,552,741
9,428,472

  
8,043,254
27,959,407

Creditors: amounts falling due within one year
 17 
(7,160,346)
(25,546,415)

Net current assets
  
 
 
882,908
 
 
2,412,992

Total assets less current liabilities
  
1,501,979
3,060,878

  

Net assets
  
1,501,979
3,060,878


Capital and reserves
  

Called up share capital 
 19 
9,045,307
1,000,000

Profit and loss account
 20 
(7,543,328)
2,060,878

  
1,501,979
3,060,878


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 






A Bouhadana
Director

Date: 30 November 2023

The notes on pages 11 to 27 form part of these financial statements.

Page 8

 
ENIGMA SECURITIES LTD
 

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


Called up share capital
Profit and loss account
Total equity

$
$
$

At 1 January 2022 (as previously stated)
1,000,000
2,267,409
3,267,409

Prior year adjustment
-
(206,531)
(206,531)

At 1 January 2022 (as restated)
1,000,000
2,060,878
3,060,878


Comprehensive income for the year

Loss for the year
-
(9,604,206)
(9,604,206)
Total comprehensive income for the year
-
(9,604,206)
(9,604,206)


Contributions by and distributions to owners

Shares issued during the year
8,045,307
-
8,045,307


Total transactions with owners
8,045,307
-
8,045,307


At 31 December 2022
9,045,307
(7,543,328)
1,501,979


The notes on pages 11 to 27 form part of these financial statements.

Page 9

 
ENIGMA SECURITIES LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021


Called up share capital
Profit and loss account
Total equity

$
$
$

At 1 January 2021
1,000,000
349,146
1,349,146


Comprehensive income for the year

Profit for the year (as restated)
-
1,711,732
1,711,732
Total comprehensive income for the year
-
1,711,732
1,711,732


At 31 December 2021 (as restated)
1,000,000
2,060,878
3,060,878


The notes on pages 11 to 27 form part of these financial statements.

Page 10

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

The principal activity of Enigma Securities Ltd ("the Company") is that of broking cryptocurrency. 
The Company is a private limited company incorporated in England and Wales. 
The principal place of business is 30 Panton Street, London, SW1Y 4AJ.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland ("FRS 102") and the Companies Act 2006.

The following principal accounting policies have been applied:

  
2.2

Exemptions for qualifying entities under FRS 102

The Company has taken advantage of the exemption, under FRS 102 paragraph 1.12(b), from preparing a statement of cash flows, on the basis that it is a qualifying entity and its parent company, Makor Partners Limited, includes the company's cash flows in its own consolidated financial statements publicly available at the Registered Office.

 
2.3

Going concern

The financial statements have been prepared on the going concern basis which assumes that the Company will continue to trade for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements.
This is on the basis of the ongoing support of the immediate parent undertaking which will allow the Company to continue to meet its financial obligations as they fall due. The directors are confident that this support will continue for at least twelve months from the date of approval of these financial statements.

Page 11

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Turnover comprises revenue recognised by the company in respect of brokerage commissions earned for services provided. Commissions are recognised at the time the relevant trade is executed.

 
2.5

Tangible fixed assets

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.

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.

Depreciation is provided on the following basis:

Fixtures and fittings
-
25%
Computer equipment
-
25%

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.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.

 
2.6

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

Page 12

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.7

Financial instruments

The Company only enters into basic financial instruments and transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to and from related parties.
(i) Financial assets
Basic financial assets, including other debtors and are initially recognised at transaction price, 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.
Such assets are subsequently carried at amortised cost using the effective interest method. At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Statement of Comprehensive Income.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors, amounts due to group unertakings and accruals, 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 receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iii) Offsetting
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.

  
2.8

Crypto-denominated assets and liabilities

Assets and liabilities that are denominated in Cryptocurrencies that have prices quoted on active markets are valued at the year end at the quoted price of the underlying Cryptocurrency. The profit or loss on this revaluation is recognised in the Statement of Comprehensive Income.

Page 13

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.9

Interest income

Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.

 
2.10

Finance costs

Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.11

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is US Dollars.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

 
2.12

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Page 14

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.13

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the Statement of Comprehensive Income over the remaining vesting period.

 
2.14

Taxation

Tax is recognised in the Statement of Comprensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.15

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 15

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

  
2.16

Cryptocurrencies held as stock

The stock held in the Company consists of various cryptocurrencies and digital assets held at the Statement of Financial Position date. 
Cryptocurrencies are held for use as part of the Company's ordinary activities and are measured at fair value through profit or loss, which provides a more relevant measure of the Company's performance. The Company operates in an active market where sales can be achieved at published prices from a number of active sources, resulting in a store of readily realisable value at the Statement of Financial Position date and fair value is, therefore, a more relevant measure. 


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial  statements.
Impairment of debtors
Determination of whether there are indicators of impairment of the Company's debtors. Factors taken into consider in reaching such a decision include the expected recoverability of debtors, considering the debtor's payment history and the Company's knowledge of the financial position of each debtor.


4.


Turnover

The whole of the turnover is attributable to brokerage services.

All turnover arose within the United Kingdom.


5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2022
2021
$
$

Exchange differences
(46,805)
9,091

Page 16

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2022
2021
$
$

Fees payable to the Company's auditors for the audit of the Company's financial statements
34,969
35,933

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.


7.


Employees

Staff costs were as follows:


2022
2021
$
$

Wages and salaries
2,042,288
2,490,570

Social security costs
213,145
147,799

Cost of defined contribution scheme
6,935
9,484

2,262,368
2,647,853


The average monthly number of employees, including the Directors, during the year was as follows:


        2022
        2021
            No.
            No.







Number of employees
11
8


8.


Directors' remuneration

Directors were not paid any amounts as remuneration for their services in the year (2021: $nil). 





9.


Interest receivable

2022
2021
$
$


Other interest receivable
507,577
1,062,563

507,577
1,062,563

Page 17

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Interest payable and similar expenses

2022
2021
$
$


Other loan interest payable
263,548
2,144,346

Other interest payable
5,015
-

268,563
2,144,346


11.


Taxation


As restated
2022
2021
$
$

Corporation tax


Current tax on profits for the year
-
48,000

Adjustments in respect of previous periods
(54,300)
(136,078)


Total current tax
(54,300)
(88,078)
Page 18

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

As restated
2022
2021
$
$


(Loss)/profit on ordinary activities before tax
(9,658,506)
1,623,654


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
(1,835,117)
308,494

Effects of:


Non-tax deductible amortisation of goodwill and impairment
250,491
-

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
5,872
5,243

Capital allowances for year in excess of depreciation
(2,257)
(331)

Adjustments to tax charge in respect of prior periods
(54,300)
(136,078)

Short term timing difference leading to an increase (decrease) in taxation
(1,997)
707

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
-
(251,771)

Unrelieved tax losses carried forward
1,525,972
-

Other differences leading to an increase (decrease) in the tax charge
57,036
(14,342)

Total tax charge for the year
(54,300)
(88,078)


Factors that may affect future tax charges

The UK Government announced its intention to increase the rate of UK corporation tax from 19% to 25% with effect from 1 April 2023. The increase in the rate of UK corporation tax was enacted in the Finance Act 2021, which received Royal Assent on 10 June 2021.
There are tax losses available of approximately $8,000,000 to carry forward against future taxable profits.

Page 19

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

12.


Tangible fixed assets





Fixtures and fittings
Computer equipment
Total

$
$
$



Cost 


At 1 January 2022
12,484
-
12,484


Additions
1,672
33,355
35,027



At 31 December 2022

14,156
33,355
47,511



Depreciation


At 1 January 2022
7,557
-
7,557


Charge for the year on owned assets
3,539
8,339
11,878



At 31 December 2022

11,096
8,339
19,435



Net book value



At 31 December 2022
3,060
25,016
28,076



At 31 December 2021
4,927
-
4,927

Page 20

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

13.


Fixed asset investments





Investments in subsidiary companies

$



Cost 


At 1 January 2022
642,959


Additions
1,266,406



At 31 December 2022

1,909,365



Impairment


Charge for the period
1,318,370



At 31 December 2022

1,318,370



Net book value



At 31 December 2022
590,995



At 31 December 2021
642,959


Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

Enigma Markets Inc
257 Old Churchmans Rd, New Castle, New Castle County, DE 19720, USA
Broking Cryptocurrency
Ordinary
100%
Enigma Securities Inc
257 Old Churchmans Rd, New Castle, New Castle County, DE 19720, USA
Dormant
Ordinary
100%
Enigma Labs SASU
336 Rue Saint-Honore Paris 75001 France
Publishing, distribution and marketing of software.
Ordinary
100%
Enigma Securities Research and Development Ltd
11 Derech Menachem Begin, Ramat Gan, 5268104 Israel
Software development
Ordinary
100%

Page 21

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Subsidiary undertakings (continued)

The aggregate of the share capital and reserves as at 31 December 2022 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
$
$

Enigma Markets Inc
(139,594)
(9,734)

Enigma Securities Inc
397,279
(919,187)

Enigma Labs SASU
366,243
51,691

Enigma Securities Research and Development Ltd
167
167


14.


Stocks

2022
2021
$
$

Cryptocurrencies
3,718,229
12,118,128

3,718,229
12,118,128




Page 22

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

15.


Debtors

As restated
2022
2021
$
$


Trade debtors
2,004,002
3,018,197

Amounts owed by group undertakings
305,235
542,149

Other debtors
102,472
2,791,838

Prepayments and accrued income
95,941
49,046

Crypto-denominated assets held at fair value
264,634
11,577

2,772,284
6,412,807


Amounts owed by group undertakings are unsecured, have no fixed date of repayment and are repayable on demand. 
Crypto-denominated assets held at fair value represent cryptocurrency-denominated loans and other assets which have been stated at the quoted price of the underlying cryptocurrency.


16.


Cash and cash equivalents

2022
2021
$
$

Cash at bank and in hand
1,552,741
9,428,472

1,552,741
9,428,472


Page 23

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

17.


Creditors: Amounts falling due within one year

As restated
2022
2021
$
$

Trade creditors
1,171,599
8,968,136

Amounts owed to group undertakings
5,633,747
6,990,176

Other taxation and social security
26,673
78,902

Other creditors
138,153
54,473

Accruals and deferred income
190,174
910,964

Crypto-denominated liabilities held at fair value
-
8,543,764

7,160,346
25,546,415


Amounts owed to group undertakings are unsecured, have no fixed date of repayment and are repayable on demand.
Crypto-denominated liabilities held at fair value represent cryptocurrency-denominated loans and other liabilities which have been stated at the quoted price of the underlying cryptocurrency.


18.


Financial instruments

2022
2021
$
$

Financial assets


Financial assets measured at fair value through profit or loss
3,982,863
12,129,705


Financial liabilities


Financial liabilities measured at fair value through profit or loss
-
8,543,764


Financial assets measured at fair value through profit or loss comprise stock and crypto-denominated assets held at fair value in debtors


Financial liabilities measured at fair value through profit or loss comprise crypto-denominated liabilities held at fair value in creditors.

Page 24

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

19.


Share capital

2022
2021
$
$
Allotted, called up and fully paid



9,005,307 (2021 - 960,000) Ordinary Parent shares of $1.000000 each
9,045,307
1,000,000
20,284 (2021 - 33,355) Ordinary Employee shares of $0.000001 each
-
-

9,045,307

1,000,000

On 25 May 2022, the A Ordinary shares were redesignated as Ordinary Parent shares and the B Ordinary shares were redesignated as Ordinary Employee shares.
During the year, 8,045,307 Ordinary Parent shares of $1 each were issued at par.
During the year, 13,071 Ordinary Employee shares of $0.000001 were cancelled. 
The Ordinary Parent Shares hold voting rights on the basis of one vote per share, the right to appoint any person to be a director, and are entitled to dividend payments and distributions in the event of a winding up. 
The Ordinary Employee Shares are subject to restrictions on transfer and repurchase rights by the Company. They hold voting rights on the basis of one vote per share, and are entitled to dividends after the payment of any dividend to holders of Ordinary Parent Shares and at the discretion of the directors. They are entitled to a distribution on a winding up after the entitlement of the Ordinary Parent Shares have been satisfied. 





20.


Reserves

Profit and loss account

Includes all current period retained profits and losses.

Page 25

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

21.


Share-based payments

Certain employees were granted share options over Ordinary Employee shares of the Company, and FRS 102 Section 26 (share-based payments) is applicable. The charge is treated as an expense in this Company's financial statement as the relevant options holders are employees of this Company. 

Weighted average exercise price (Dollars)
2022
Number
2022

Granted during the year

0.000001

11,466

Outstanding at the end of the year
0.000001

11,466


Neither the charge this year, nor the cumulative charge since the share options were granted, are material to the Company so are not recognised in these financial statements. 





22.


Prior year adjustment

The comparative information has been changed from the figures previously shown in the financial statements for the year ended 31 December 2021.
 
This has resulted in an increase in accrued expenses as previously reported of $254,531 with a corresponding increase in cost of sales and administrative expenses.  In addition, there has also been a consequent change in the tax charge and corporation tax recoverable of $48,000.
 
The overall impact has been to increase liabilities by $254,531, decrease debtors by $48,000 and decrease profits by $206,531 from the results previously reported as a result of this prior year adjustment.


23.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to $6,935 (2021: $9,484). Contributions totalling $8,574 (2021: $13,359) were payable to the fund at the Statement of Financial Position date.

Page 26

 
ENIGMA SECURITIES LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

24.


Related party transactions

Included in debtors are amounts owed by group undertakings totalling $305,235 (2021: $542,149). 
Included in creditors are amounts owed to group undertakings totalling $5,633,747 (2021: $6,990,176).
These balances are unsecured with no fixed repayment terms. 
In addition other group undertakings recharged costs totalling $5,901,615 (2021: $2,700,396) and computer equipment additions totalling $33,355 (2021: $nil) were acquiried for other group undertakings.
Key management personnel were paid remuneration of $nil (2021: $nil) during the year ended 31 December 2022.


25.


Controlling party

The immediate parent undertaking is Makor Partners Limited, a company incorporated in England and Wales.
Makor Partners Limited prepare group financial statements and copies can be obtained from the Registered Office at 30 Panton Street, London, SW1Y 4AJ.
The ultimate parent undertaking is Makor Holdings Pte Ltd, a company incorporated in Singapore.
There is no ultimate controlling party. 

 
Page 27