Company registration number 08528880 (England and Wales)
FLAGSTONE GROUP LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
FLAGSTONE GROUP LTD
COMPANY INFORMATION
Directors
A Thatcher
S P Merchant
M J A Williams
(Appointed 1 April 2022)
A L Glypti
(Appointed 1 April 2022)
Company number
08528880
Registered office
1st Floor
Clareville House
26-27 Oxendon Street
London
SW1Y 4EL
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
FLAGSTONE GROUP LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 29
FLAGSTONE GROUP LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

The directors present the strategic report for the period ended 31 December 2022.

Fair review of the business

The group operates an online cash deposit platform providing individuals, their wealth managers, corporates and charities with access to a wide range of savings and deposit accounts from a panel of banks and building societies.

The group is authorised by the Financial Conduct Authority (reference number 605504) under the Payment Services Regulations 2017 for the provision of payment services.

Results and Performance

The results of the group for the year ended 31 December 2022, as set out on pages 8 and 9, show an operating loss of £6.6m (7 mths to 31 Dec 2021: Loss of £5.9m). The shareholders' funds of the group were £7.1m (31 Dec 2021: £7.2m).

The group experienced significant growth in the second half of the period which led to profitability. The profitable growth has continued post year end in 2023. Our shareholders remain supportive of our business model and we remain confident in our ability to continue as a going concern.

 

Business environment

Cash deposit platforms are relatively new globally and in the UK, but despite that, the market is highly competitive with several companies in the sector. The addressable market presents a large opportunity. We expect competition to remain high as the existing participants seek growth whether organically or through industry consolidation.

Strategy

The group's success is dependent on offering market-leading cash deposit products via cutting edge technology through an extensive distribution network. We continue to invest heavily in our systems to improve the customer experience, platform resilience and scalability. Our commercial team has assembled an industry leading panel of banking partners and an extensive distribution network in the UK. Continued focus on these key elements will ensure we maintain our competitive advantage.

The group’s subsidiary, Flagstone International Limited, received regulatory approval from the Jersey Financial Services Commission in December 2022 to spearhead its expansion into the international market.

Our people are fundamental to achieving our strategic objectives and as such we devote considerable resources to building the best working environment.

Principal Risks and Uncertainties

Risk management forms a core part of our activities as set out in the Risk Management Fr􀆨mework which is approved by the Risk Committee on an annual basis. Compliance with regulation, legal and ethical standards is a high priority for the group and the compliance and risk teams take on an important oversight role in this regard. The Risk Committee is responsible for satisfying itself that a proper internal control framework exists to manage financial risks and that controls operate effectively.

One of the principal risks for our group is access to funding. As a loss-making group building its presence in the market we require sufficient resources to fund our operations until we reach profitability. Our Board of Directors continually monitors that risk and seeks additional capital and arranges debt funding when necessary. Our existing shareholders remain supportive and we continue to see healthy interest from other potential investors. Post reporting period in 2023, the group has reduced its dependence on external funding when it started trading profitably.

Additionally, cash reconciliations and customer payments are a key operational risk faced by the business. As such, the group has developed a robust set of operational procedures and controls to mitigate that risk. Adherence to those procedures is consistently monitored and regularly reviewed by senior management.

The group is also potentially exposed to financial, reputational and regulatory risk arising from breaches of data security. The security of customer data is paramount to our business and as such management has put in place robust defences to protect it. Those measures are regularly reviewed and monitored to ensure they continue to provide sufficient levels of protection. The business also maintains insurance specifically covering that risk which is reviewed annually.

Interest rates are one of the largest uncertainties the group faces. The demand for our services is closely linked to the interest rates available in the market. Management is aware of that and regularly reviews the interest rate market and factors that into business planning decisions.

 

FLAGSTONE GROUP LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Key performance indicators

We have made significant progress throughout the year in relation to key elements of our strategy. The Board monitors the progress of the group by reference to the following KPIs:

 

Year ended

7m Period ended

 

31 Dec 2022

31 Dec 2021

Gross profit

£12.2m

£3.05m

Operating income/(loss)

(£6.6m)

(£5.9m)

Cash at bank and in hand

£10.1m

£6.4m

Total equity

£7.1m

£7.2m

On behalf of the board

S P Merchant
Director
1 December 2023
FLAGSTONE GROUP LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The company operates an online savings platform providing individuals, wealth managers, corporates and charities access to a wide range of savings and deposit accounts from UK banks.

 

The company is authorised by the Financial Conduct Authority (reference number 605504) under the Payment Services Regulations 2017 for the provision of payment services.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

No preference dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

A Thatcher
S P Merchant
T Boldt
(Resigned 4 August 2022)
M J A Williams
(Appointed 1 April 2022)
A L Glypti
(Appointed 1 April 2022)
Auditor

The auditor, HW Fisher LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

On behalf of the board
S P Merchant
Director
1 December 2023
FLAGSTONE GROUP LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -

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:

 

 

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.

FLAGSTONE GROUP LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FLAGSTONE GROUP LTD
- 5 -
Opinion

We have audited the financial statements of Flagstone Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 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:

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 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.

Other information

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:

FLAGSTONE GROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FLAGSTONE GROUP LTD
- 6 -
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 identified material misstatements in the strategic report or 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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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.

 

Our responsibilities as auditor of the financial statements do not extend to confirming that the company has complied with the requirements of the Financial Conduct Authority and the provisions of the Payment Services Regulations 2017 with regards to the safeguarding of the client funds.

 

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:

 

As part of our planning process:

 

FLAGSTONE GROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FLAGSTONE GROUP LTD
- 7 -

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.

 

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

 

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.

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 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.

Gilles Siow (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
1 December 2023
FLAGSTONE GROUP LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
Year
Period
ended
ended
31 December
31 December
2022
2021
as restated
Notes
£
£
Turnover
3
13,516,204
3,619,988
Cost of sales
(1,320,629)
(573,428)
Gross profit
12,195,575
3,046,560
Administrative expenses
(18,814,854)
(8,917,841)
Other operating income
-
36
Operating loss
4
(6,619,279)
(5,871,245)
Interest receivable and similar income
8
122,426
108,942
Interest payable and similar expenses
9
(80,155)
(16,147)
Loss before taxation
(6,577,008)
(5,778,450)
Tax on loss
10
844,252
1,471,946
Loss for the financial year
(5,732,756)
(4,306,504)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
FLAGSTONE GROUP LTD
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 9 -
2022
2021
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
11
353,242
255,075
Current assets
Debtors
14
3,079,654
2,822,875
Cash at bank and in hand
10,127,845
6,444,074
13,207,499
9,266,949
Creditors: amounts falling due within one year
15
(4,094,381)
(2,230,413)
Net current assets
9,113,118
7,036,536
Total assets less current liabilities
9,466,360
7,291,611
Creditors: amounts falling due after more than one year
16
(2,387,453)
(61,430)
Net assets
7,078,907
7,230,181
Capital and reserves
Called up share capital
21
2,475
2,319
Share premium account
40,072,712
34,491,386
Profit and loss reserves
(32,996,280)
(27,263,524)
Total equity
7,078,907
7,230,181
The financial statements were approved by the board of directors and authorised for issue on
1 December 2023
01 December 2023
and are signed on its behalf by:
S P Merchant
Director
Company registration number 08528880 (England and Wales)
FLAGSTONE GROUP LTD
COMPANY BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
11
353,242
255,075
Investments
12
679,000
100
1,032,242
255,175
Current assets
Debtors
14
3,412,212
2,822,875
Cash at bank and in hand
9,536,577
6,444,074
12,948,789
9,266,949
Creditors: amounts falling due within one year
15
(4,066,815)
(2,230,513)
Net current assets
8,881,974
7,036,436
Total assets less current liabilities
9,914,216
7,291,611
Creditors: amounts falling due after more than one year
16
(2,387,453)
(61,430)
Net assets
7,526,763
7,230,181
Capital and reserves
Called up share capital
21
2,475
2,319
Share premium account
40,072,712
34,491,386
Profit and loss reserves
(32,548,424)
(27,263,524)
Total equity
7,526,763
7,230,181

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £5,284,900 (2021 - £4,306,504 loss).

The financial statements were approved by the board of directors and authorised for issue on
1 December 2023
01 December 2023
and are signed on its behalf by:
S P Merchant
Director
Company registration number 08528880 (England and Wales)
FLAGSTONE GROUP LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 December 2021:
Balance at 1 June 2021
2,196
34,491,386
(22,367,425)
12,126,157
Prior year adjustment
25
-
-
(643,140)
(643,140)
As restated
2,196
34,491,386
(23,010,565)
11,483,017
Period ended 31 December 2021:
Loss and total comprehensive income
-
-
(4,306,504)
(4,306,504)
Issue of share capital
21
123
-
-
123
Credit to equity for equity settled share-based payments
20
-
-
53,545
53,545
Balance at 31 December 2021
2,319
34,491,386
(27,263,524)
7,230,181
Period ended 31 December 2022:
Loss and total comprehensive income
-
-
(5,732,756)
(5,732,756)
Issue of share capital
21
156
5,581,326
-
5,581,482
Balance at 31 December 2022
2,475
40,072,712
(32,996,280)
7,078,907
FLAGSTONE GROUP LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 December 2021:
Balance at 1 June 2021
2,196
34,491,386
(22,367,425)
12,126,157
Prior year adjustment
25
-
-
(643,140)
(643,140)
As restated
2,196
34,491,386
(23,010,565)
11,483,017
Period ended 31 December 2021:
Loss and total comprehensive income for the period
-
-
(4,306,504)
(4,306,504)
Issue of share capital
21
123
-
-
123
Credit to equity for equity settled share-based payments
20
-
-
53,545
53,545
Balance at 31 December 2021
2,319
34,491,386
(27,263,524)
7,230,181
Period ended 31 December 2022:
Profit and total comprehensive income
-
-
(5,284,900)
(5,284,900)
Issue of share capital
21
156
5,581,326
-
5,581,482
Balance at 31 December 2022
2,475
40,072,712
(32,548,424)
7,526,763
FLAGSTONE GROUP LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
2022
2021
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(7,050,503)
(6,050,305)
Interest paid
(80,155)
(16,147)
Income taxes refunded
2,316,198
-
Net cash outflow from operating activities
(4,814,460)
(6,066,452)
Investing activities
Purchase of tangible fixed assets
(21,007)
(114,638)
Interest received
122,426
108,942
Net cash generated from/(used in) investing activities
101,419
(5,696)
Financing activities
Proceeds from issue of shares
5,581,482
123
Proceeds from borrowings
3,000,000
-
Repayment of borrowings
(95,344)
-
Payment of finance leases obligations
(89,326)
(2,818)
Net cash generated from/(used in) financing activities
8,396,812
(2,695)
Net increase/(decrease) in cash and cash equivalents
3,683,771
(6,074,843)
Cash and cash equivalents at beginning of year
6,444,074
12,518,917
Cash and cash equivalents at end of year
10,127,845
6,444,074
FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
1
Accounting policies
Company information

Flagstone Group Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 1st Floor, Clareville House, 26-27 Oxendon Street, London, SW1Y 4EL.

 

The group consists of Flagstone Group Ltd and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Flagstone Group Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2022. 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 group.

 

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.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

 

FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.3
Going concern

The group made losses in the year to 31 December 2022 of £5.7m as it continues to expand its technology offering but maintains a strong net asset position of £7.1m at the year end. Post year-end the company and group have seen significant continuing growth in revenues and based on current results, the group is on track to report both operating profitability and positive liquidity in the next financial year.

 

The directors are confident with the company’s and group's strong cash position and the positive outlook for continued growth, the company and group will continue to as a going concern for a period of at least twelve months from the date of approval of these financial statements. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Turnover comprises fees receivable from the operation of the company's savings platform. It 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 sales related taxes.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
Over the length of the lease
Computers
33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.6
Fixed asset investments

Equity investments 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.

 

In 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.

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.

1.7
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

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.

FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments

The 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 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.

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.

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.

FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.10
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.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

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.

1.12
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.

FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -
1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date is expensed over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.15
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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 leased asset are consumed.

1.16
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.17

Client funds

Client funds are held in segregated bank accounts, separate from the company’s own monies. They are held under trust on behalf of the company’s depositors and accordingly these client funds are not reported on the company’s balance sheet.

FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
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 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.

Subsidiary

Management uses judgement to determine if the investment in and loans to the company’s subsidiary are impaired. Having taken into account factors such as their growth plans for the subsidiary, timing of expected net cash inflows, regulatory environment and availability of parent company support, management do not believe that there are indicators of impairment at the reporting date.

Key sources of estimation uncertainty
Share-based payments

The company has two share based payment plans; share options and growth shares. The company measures the cost of the share-based payment plans on the basis of the fair value of the share options and growth shares at grant date. In determining the fair value, the company chooses the most suitable valuation pricing model for the equity instruments, including relevant judgements about certain inputs into the model such as the fair value of the company at grant date and the historical volatility of the company’s share price. The fair value of the share options and growth shares is recognised over the vesting period of the share options and growth shares. Both share based payment plans fully vest upon an exit event and in accordance with the vesting table. Accordingly, the directors make an estimate of the date when it is considered more probable than not that an exit event will occur.

3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Rendering of services
13,516,204
3,619,988
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
13,513,854
3,619,988
Jersey
2,350
-
13,516,204
3,619,988
2022
2021
£
£
Other revenue
Interest income
122,426
108,942
FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
4
Operating loss
2022
2021
£
£
Operating loss for the period is stated after charging:
Exchange losses
2,646
1,322
Depreciation of owned tangible fixed assets
203,643
165,904
Share-based payments
-
53,545
Operating lease charges
894,720
522,187
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
50,800
43,605
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
122
100
122
100

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
9,657,798
4,198,738
9,432,790
4,198,738
Social security costs
1,001,566
474,687
998,392
474,687
Pension costs
345,474
154,356
345,474
154,356
11,004,838
4,827,781
10,776,656
4,827,781
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
439,547
233,333
Company pension contributions to defined contribution schemes
18,000
10,333
457,547
243,666
FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
7
Directors' remuneration
(Continued)
- 21 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
200,000
116,667
Company pension contributions to defined contribution schemes
10,000
4,667
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
122,426
108,942
9
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
71,468
-
Interest on finance leases and hire purchase contracts
-
5,952
Other interest
8,687
10,195
Total finance costs
80,155
16,147
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(844,252)
(1,471,946)
FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Taxation
(Continued)
- 22 -

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:

2022
2021
£
£
Loss before taxation
(6,577,008)
(5,778,450)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(1,249,632)
(1,097,906)
Tax effect of expenses that are not deductible in determining taxable profit
1,813
16,201
Adjustments in respect of prior years
(849,290)
(1,471,947)
Permanent capital allowances in excess of depreciation
(19,217)
5,138
Movement in unrecognised deferred tax asset
1,272,074
1,076,568
Taxation credit
(844,252)
(1,471,946)

The company has estimated net unused tax losses of £22,667,000 (2021: £17,117,000) available to carry forward against future taxable profits, resulting in a deferred tax asset (at 25%) of £5,666,750 (2021: £4,279,250 at 25%).

 

The deferred tax asset has not been recognised in the financial statements as there is uncertainty in connection with their recoverability against future profits.

11
Tangible fixed assets
Group
Leasehold improvements
Computers
Total
£
£
£
Cost
At 1 January 2022
402,196
620,263
1,022,459
Additions
-
301,810
301,810
At 31 December 2022
402,196
922,073
1,324,269
Depreciation and impairment
At 1 January 2022
339,499
427,885
767,384
Depreciation charged in the year
17,615
186,028
203,643
At 31 December 2022
357,114
613,913
971,027
Carrying amount
At 31 December 2022
45,082
308,160
353,242
At 31 December 2021
62,697
192,378
255,075
FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
11
Tangible fixed assets
(Continued)
- 23 -
Company
Leasehold improvements
Computers
Total
£
£
£
Cost
At 1 January 2022
402,196
620,263
1,022,459
Additions
-
301,810
301,810
At 31 December 2022
402,196
922,073
1,324,269
Depreciation and impairment
At 1 January 2022
339,499
427,885
767,384
Depreciation charged in the year
17,615
186,028
203,643
At 31 December 2022
357,114
613,913
971,027
Carrying amount
At 31 December 2022
45,082
308,160
353,242
At 31 December 2021
62,697
192,378
255,075
12
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
13
-
-
679,000
100
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022
100
Additions
678,900
At 31 December 2022
679,000
Carrying amount
At 31 December 2022
679,000
At 31 December 2021
100
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
13
Subsidiaries
(Continued)
- 24 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Flagstone International Limited
44 Esplanade, st. Helier, Jersey JE49WG
Ordinary
100.00
Flagstone International Limited was incorporated on 10 September 2021.
14
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
176,638
139,222
176,638
139,222
Corporation tax recoverable
-
1,471,946
-
1,471,946
Amounts owed by group undertakings
-
-
341,418
-
Other debtors
156,438
142,472
147,578
142,472
Prepayments and accrued income
2,746,578
1,069,235
2,746,578
1,069,235
3,079,654
2,822,875
3,412,212
2,822,875
15
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Obligations under finance leases
18
134,040
54,359
134,040
54,359
Other borrowings
17
690,429
-
690,429
-
Trade creditors
475,986
348,616
465,962
348,616
Other taxation and social security
1,424,977
973,477
1,424,977
973,477
Other creditors
75,411
34,860
77,719
34,960
Accruals and deferred income
1,293,538
819,101
1,273,688
819,101
4,094,381
2,230,413
4,066,815
2,230,513
16
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Obligations under finance leases
18
173,226
61,430
173,226
61,430
Other borrowings
17
2,214,227
-
2,214,227
-
2,387,453
61,430
2,387,453
61,430
FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
17
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Other loans
2,904,656
-
2,904,656
-
Payable within one year
690,429
-
690,429
-
Payable after one year
2,214,227
-
2,214,227
-

The long-term loans are secured by fixed and floating charges over the assets of the company.

The loans attract interest at a rate of 9.5% per annum. Interest only payments will be made until March 2023, whereupon capital and interest payments will be made for a further 36 months.

18
Finance lease obligations
Group
Company
2022
2021
2022
2021
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
134,534
54,359
134,534
54,359
In two to five years
173,415
62,050
173,415
62,050
307,949
116,409
307,949
116,409
Less: future finance charges
(683)
(620)
(683)
(620)
307,266
115,789
307,266
115,789

Finance lease payments represent rentals payable by the company for certain items of equipment and all leasehold improvements. The average lease term is 30 to 36 months. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

19
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
345,474
154,356

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
20
Share-based payment transactions
Group and company
Number of share options
Weighted average exercise price
2022
2021
2022
2021
Number
Number
£
£
Outstanding at 1 January 2022
13,033
12,091
404.06
394.71
Granted
-
1,010
-
522.42
Forfeited
(1,656)
(68)
270.55
498.67
Outstanding at 31 December 2022
11,377
13,033
353.76
404.06
Exercisable at 31 December 2022
5,014
5,014
-
-

The company issues EMI and unapproved share options to eligible employees. The options fully vest upon an exit event estimated to be 9 years from grant date of the first tranche of options issued, and in accordance with the following vesting table: 40% upon the second anniversary of the grant date, and an additional 20% on the third, fourth and fifth anniversary. The options have a contractual life of 10 years.

 

The options outstanding at 31 December 2022 had an exercise price ranging from 139.85 to 580.45, and a remaining contractual life of between 6 and 9 years. A share-based payment charge of £nil (FY21: £53,545) was recognised in the period.

 

During the year to 31 December 2022, 7,463 B Ordinary shares of 1p each were issued for an aggregate consideration of £74.63. These B Ordinary shares are growth shares and are classified as a share based payment. The shares fully vest upon an exit event estimated to be 6.2 years from grant date of the first tranche of shares issued. Refer to note 21 for further details.

21
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A Shares of 1p each
204,829
198,900
2,048
1,989
Ordinary B Shares of 1p each
18,358
12,209
184
122
Deferred Shares of 0.1p each
1,399
85
14
1
224,586
211,194
2,246
2,112
2022
2021
2022
2021
Preference share capital
Number
Number
£
£
Issued and fully paid
Preference shares of 1p each
22,959
20,675
229
207
Preference shares classified as equity
229
207
Total equity share capital
2,475
2,319
FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
21
Share capital
(Continued)
- 27 -

The Ordinary A shares have full voting, dividend and capital distribution (including winding up) rights. They do not confer any rights of redemption.

 

The Preferred A shares have the right to vote at all general meetings and vote on any written resolutions of the company.

 

Upon a distribution of assets/liquidation/return of capital (other than conversion/redemption), the surplus assets of the company after liabilities are paid, will be distributed first to each of the Preferred A Shareholders, in priority to any other classes of shares, up to an amount per share held equal to the Preference Amount.

 

The Preference Amount means a price per Preferred A Share equal to the higher of (i) the amount paid up or credited as paid up (including premium) for such Preferred A Share and (ii) such Preferred A Share’s pro-rata share of all amounts available for distribution as though such amount were to be shared between all Shareholders pro-rata to the number of Shares held by them.

 

The balance of the surplus assets shall be distributed among the holders of Ordinary A Shares pro rata to the number of Ordinary A Shares held.

 

On 4 March 2022, 5,881 A Ordinary shares of 1p each were issued for an aggregate consideration of £4,021,436.

 

On 4 March 2022, 2,284 Preferred A shares of 1p each were issued for an aggregate consideration of £1,559,972.

 

Between 22 February and 3 March 2022, 6,804 B Ordinary shares of 1p each were issued for an aggregate consideration of £68.04.

 

On 22 March 2022, 11 B Ordinary shares of 1p each were issued for an aggregate consideration of £0.11.

 

On 22 April 2022, 244 B Ordinary shares of 1p each were issued for an aggregate consideration of £2.44.

 

On 29 April 2022, 244 B Ordinary shares of 1p each were issued for an aggregate consideration of £2.44.

 

On 26 May 2022, 160 B Ordinary shares of 1p each were issued for an aggregate consideration of £1.60.

 

These B Ordinary shares are growth shares issued to employees, where shareholders are entitled to proceeds upon an exit event. These are classified as a share based payment.

 

Proceeds to B Ordinary shareholders arising from the sale of the company are dependent on one price threshold. The B Ordinary shares issued in the period were valued using the Black Scholes valuation model in accordance with FRS102. No charge in respect of the options has been recognised in the accounts, as the potential charge is not material.

 

During the year, the company changed the class of 1,314 Ordinary B shares to 1,314 deferred shares at 1p each.

 

These deferred shares hold no rights to dividends, no rights to assets more than £1 as a class and no voting rights.

 

FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
22
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
578,304
338,203
578,304
338,203
Between two and five years
337,344
-
337,344
-
915,648
338,203
915,648
338,203
23
Cash absorbed by group operations
2022
2021
£
£
Loss for the year after tax
(5,732,756)
(4,306,504)
Adjustments for:
Taxation credited
(844,252)
(1,471,946)
Finance costs
80,155
16,147
Investment income
(122,426)
(108,942)
Depreciation and impairment of tangible fixed assets
203,643
165,904
Equity settled share based payment expense
-
53,545
Movements in working capital:
Increase in debtors
(1,728,725)
(69,445)
Increase/(decrease) in creditors
1,093,858
(329,064)
Cash absorbed by operations
(7,050,503)
(6,050,305)
24
Analysis of changes in net funds - group
1 January 2022
Cash flows
New finance leases
31 December 2022
£
£
£
£
Cash at bank and in hand
6,444,074
3,683,771
-
10,127,845
Borrowings excluding overdrafts
-
(2,904,656)
-
(2,904,656)
Obligations under finance leases
(115,789)
89,326
(280,803)
(307,266)
6,328,285
868,441
(280,803)
6,915,923
FLAGSTONE GROUP LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 29 -
25
Prior period adjustment

The prior year adjustment relates to irrecoverable VAT arising on the reverse charge basis, which the company had not accounted for in error.

Changes to the balance sheet - group
As previously reported
Adjustment at 1 Jun 2021
Adjustment at 31 Dec 2021
As restated at 31 Dec 2021
£
£
£
£
Creditors due within one year
Other taxation and social security
-
(643,140)
(330,337)
(973,477)
Capital and reserves
Profit and loss reserves
(26,290,047)
(643,140)
(330,337)
(27,263,524)
Changes to the profit and loss account - group
As previously reported
Adjustment
As restated
Period ended 31 December 2021
£
£
£
Administrative expenses
(8,597,699)
(320,142)
(8,917,841)
Interest payable and similar expenses
(5,952)
(10,195)
(16,147)
Loss after taxation
(3,976,167)
(330,337)
(4,306,504)
Changes to the balance sheet - company
As previously reported
Adjustment at 1 Jun 2021
Adjustment at 31 Dec 2021
As restated at 31 Dec 2021
£
£
£
£
Creditors due within one year
Taxation
-
(643,140)
(330,337)
(973,477)
Capital and reserves
Profit and loss reserves
(26,290,047)
(643,140)
(330,337)
(27,263,524)
Changes to the profit and loss account - company
As previously reported
Adjustment
As restated
Period ended 31 December 2021
£
£
£
Administrative expenses
(8,597,699)
(320,142)
(8,917,841)
Interest payable and similar expenses
(5,952)
(10,195)
(16,147)
Loss after taxation
(3,976,167)
(330,337)
(4,306,504)
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