REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements |
for the Year Ended 31st March 2023 |
for |
Connectum Limited |
REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements |
for the Year Ended 31st March 2023 |
for |
Connectum Limited |
Connectum Limited (Registered number: 08941525) |
Contents of the Financial Statements |
for the Year Ended 31st March 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Income Statement | 9 |
Other Comprehensive Income | 10 |
Balance Sheet | 11 |
Statement of Changes in Equity | 12 |
Cash Flow Statement | 13 |
Notes to the Cash Flow Statement | 14 |
Notes to the Financial Statements | 15 |
Connectum Limited |
Company Information |
for the Year Ended 31st March 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Certified Accountants and |
Statutory Auditors |
38 Station Road |
Harrow |
HA2 7SE |
Connectum Limited (Registered number: 08941525) |
Strategic Report |
for the Year Ended 31st March 2023 |
The directors present their strategic report for the year ended 31st March 2023. |
REVIEW OF BUSINESS |
Both the level of business and the year-end financial position were as expected in light of the current trading conditions. Besides this, the company had a change of control in 2021 after approval by the FCA with the new and sole shareholder being Mrs S. Heng. The directors expect first a phase of transition and re-organisation within the company followed by improving growth and profitability over the coming years. |
During the period the company's turnover was £33,704,271 compared to £35,711,828 for the preceding year. In the previous year a pre-tax profit of £4,483,582 was recorded while in this period a pre-tax profit of £7,522,540 was recorded. |
At 31 March 2023, the company had net assets of £12,598,971 (2022: net assets of £7,076,431). |
PRINCIPAL RISKS AND UNCERTAINTIES |
The directors recognise that within the business there are a number of risks which may affect the performance of the company. These risks are subject to regular review and where appropriate policies, processes and controls are established to minimise the level of exposure. The company undertakes the following measures to mitigate risks: |
Operational risk - The company carries out regular stress testing and monitoring of portfolio, annual review on safety of IT systems, adopting and executing Data Security policies and controls and employing an effective Business Continuity Plan. |
Security risk - To mitigate this risk the company adopts Data Security policies that include limited rights of system usage for employees, the implementation of anti-malware, firewall and IDS solutions. In addition staff are provided mandatory compliance training and on general awareness. Periodic compliance reviews are carried out by the chief risk officer. The company also employs data privacy and protection procedures. |
Counterparty risk - This is the risk of potential processing of fraudulent cards transactions. To mitigate this from happening the company adopt fraud management policies and procedures as well as using fraud monitoring and detection controls. |
Financial risk - The company has a very limited exposure to financial risk as it has no interest-bearing liabilities and/or bank debts and is operated on a positive cash balance. |
Credit risk - where the company settles card payments prior to mutual set-off date. The company performs an analysis of the counterparty or payment services user (the merchant) and settlement limits are put in place in terms of amount and the periodicity of payments. |
Liquidity risk - This risk is mitigated by holding majority of funds with the central Bank of Lithuania and through carrying out ongoing reviews of the other credit institutions, where payment services users' funds are being held. In addition, the liquidity risk is managed by routine daily monitoring of cash flows. |
Compliance risk - Strict anti-money laundering policies and procedures are adopted and adhered to ensuring the risk non-compliance is mitigated. Regular reviews and updating of the parameters, rules and criteria used to generate monitoring reports or issue alerts are carried out, taking into account the changes in business operations and new fraud typologies. The transactions/card used in transaction are not processed until the all checks are completed. If funds used in a transaction could be related to money laundering or financing of terrorism, the transaction/card will not be processed until reviewed by the money laundering reporting officer. |
Connectum Limited (Registered number: 08941525) |
Strategic Report |
for the Year Ended 31st March 2023 |
KEY PERFORMANCE INDICATORS |
In the opinion of the directors the following are Key Performance Indicators whose disclosure is necessary for an understanding of the development, performance or position of the business: |
Key Performance Indicator | 2023 | 2022 |
Turnover | £33,704,271 | £35,711,828 |
Gross profit | £8,106,597 | £5,042,516 |
Net profit before tax | £7,522,540 | £4,483,582 |
ON BEHALF OF THE BOARD: |
Connectum Limited (Registered number: 08941525) |
Report of the Directors |
for the Year Ended 31st March 2023 |
The directors present their report with the financial statements of the company for the year ended 31st March 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of an authorised payment institution, specialising in acquiring and payments functions and holding principal memberships with VISA and MasterCard. |
The company has established an administrative office based in Latvia. |
DIVIDENDS |
An interim dividend of £ |
The total distribution of dividends for the year ended 31st March 2023 will be £ |
FUTURE DEVELOPMENTS |
The company is regulated under the FCA and received approval for the change of control during the 2021 financial year. After a phase of transition, and in the aftermath of the UK exiting the EU, the company intends to apply for an EU authorised payment institution in EU member states. An EU authorized payment institution shall be the basis of the company´s future expansion and growth. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1st April 2022 to the date of this report. |
FINANCIAL INSTRUMENTS |
The company has adopted risk management policies that seek to protect the company from events that would hinder the achievement of the company's performance objectives. The objectives aim to limit undue counterparty exposure, ensure sufficient working capital exists and monitor the management risk at a business unit level. |
The company only enters into basic financial instruments 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, loans to related parties and investments in non-puttable ordinary shares. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They 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. |
Connectum Limited (Registered number: 08941525) |
Report of the Directors |
for the Year Ended 31st March 2023 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Smartax Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Connectum Limited |
Opinion |
We have audited the financial statements of Connectum Limited (the 'company') for the year ended 31st March 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of 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: |
- | give a true and fair view of the state of the company's affairs as at 31st March 2023 and of its profit 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 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. |
The impact of uncertainties due to COVID-19 and Britain exiting the EU |
Uncertainties related to the effects of COVID-19 and Brexit are relevant to understanding our audit of the accounts. All audits assess and challenge the reasonableness of estimates made by the directors, such as recoverability of investments, intangible assets and related disclosures and the appropriateness of the going concern basis of preparation of the accounts. All of these depend on assessments of the future economic environment and the company's future prospects and performance. |
The COVID-19 pandemic has had an unprecedented impact upon the worldwide economy. At the date of this report, the full range of possible effects upon companies cannot be estimated or assessed due to the current levels of uncertainty around government and consumer responses to what might happen. |
Brexit is one of the most significant economic events of the UK, and at the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. |
We applied a standard firm-wide approach in response to these uncertainties when assessing the company's future prospects and performance. No audit should be expected to predict the unknown factors or all possible future implications for a company and this is particularly the case in relation to COVID-19 and Brexit. |
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. |
Report of the Independent Auditors to the Members of |
Connectum Limited |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 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 the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have 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 Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where 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. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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. |
Report of the Independent Auditors to the Members of |
Connectum Limited |
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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. Our audit procedures were designed to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. |
We focused on laws and regulations that could give rise to a material misstatement in the financial statements, including, but not limited to, financial reporting legislation, the Companies Act 2006, distributable profits legislation and UK pensions and tax legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management regarding correspondence with regulators and tax authorities. |
There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it and therefore we have communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indication of fraud or non-compliance with laws and regulations throughout the audit. |
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates. We addressed the risk of management override of internal controls through testing journals. We evaluated whether there was evidence of bias by the directors in accounting estimates that represented a risk of material misstatement due to fraud. We challenged assumptions and judgements made by management in any significant accounting estimates. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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 a Report of the Auditors 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. |
for and on behalf of |
Chartered Certified Accountants and |
Statutory Auditors |
38 Station Road |
Harrow |
HA2 7SE |
Connectum Limited (Registered number: 08941525) |
Income Statement |
for the Year Ended 31st March 2023 |
31.3.23 | 31.3.22 |
Notes | £ | £ |
TURNOVER |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
OPERATING PROFIT | 4 |
Interest receivable and similar income | 5 |
7,522,686 | 4,483,582 |
Interest payable and similar expenses | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
Connectum Limited (Registered number: 08941525) |
Other Comprehensive Income |
for the Year Ended 31st March 2023 |
31.3.23 | 31.3.22 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Connectum Limited (Registered number: 08941525) |
Balance Sheet |
31st March 2023 |
31.3.23 | 31.3.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 9 |
Investments | 10 |
CURRENT ASSETS |
Debtors | 11 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 13 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 14 |
Retained earnings | 15 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
Connectum Limited (Registered number: 08941525) |
Statement of Changes in Equity |
for the Year Ended 31st March 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1st April 2021 |
Changes in equity |
Total comprehensive income | - |
Balance at 31st March 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31st March 2023 |
Connectum Limited (Registered number: 08941525) |
Cash Flow Statement |
for the Year Ended 31st March 2023 |
31.3.23 | 31.3.22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Purchase of fixed asset investments | (176,134 | ) | - |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Equity dividends paid | ( |
) |
Net cash from financing activities | ( |
) |
Increase in cash and cash equivalents |
Cash and cash equivalents at beginning of year |
2 |
1,857,124 |
Cash and cash equivalents at end of year | 2 | 12,074,618 | 4,366,802 |
Connectum Limited (Registered number: 08941525) |
Notes to the Cash Flow Statement |
for the Year Ended 31st March 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31.3.23 | 31.3.22 |
£ | £ |
Profit before taxation |
Depreciation charges |
Finance costs | 146 | - |
Finance income | (55,331 | ) | (3,166 | ) |
7,483,859 | 4,498,507 |
Decrease in trade and other debtors |
Increase/(decrease) in trade and other creditors | ( |
) |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31st March 2023 |
31.3.23 | 1.4.22 |
£ | £ |
Cash and cash equivalents | 12,074,618 | 4,366,802 |
Year ended 31st March 2022 |
31.3.22 | 1.4.21 |
£ | £ |
Cash and cash equivalents | 4,366,802 | 1,857,124 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.4.22 | Cash flow | At 31.3.23 |
£ | £ | £ |
Net cash |
Cash at bank | 4,366,802 | 7,707,816 | 12,074,618 |
4,366,802 | 12,074,618 |
Total | 4,366,802 | 7,707,816 | 12,074,618 |
Connectum Limited (Registered number: 08941525) |
Notes to the Financial Statements |
for the Year Ended 31st March 2023 |
1. | STATUTORY INFORMATION |
Connectum Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements are prepared in sterling, which is the presentational and functional currency of the entity. |
Significant judgements and estimates |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual outcome may differ. |
Turnover |
Turnover is measured at fair value of the consideration received or receivable, excluding value added tax and net of discounts. Turnover 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. The specifics surrounding the Company revenue recognition policy are as follows: |
Turnover relating to commission income derived from payment processing is recognised on receipt of remittances on behalf of clients in the client account, and upon client authorisations to undertake currency transactions for immediate or forward delivery. |
Turnover generated from account maintenance is recognised when the service is provided and the amount received or receivable can be measured reliably. |
Turnover from foreign currency exchange relates to the forex margin earned by the company from execution of foreign currency transactions, commission and charges from such transactions and revaluation of foreign currency balances. Revenue from foreign exchange gain or loss is recognised at the point of execution of such transactions upon authorisations received from the client. |
Operating leases: the Company as lessee |
Rentals paid under operating leases are charged to the income statement on a straight line basis over the lease term. |
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset. |
Interest income |
Interest income is recognised in the income statement using the effective interest method. |
Tangible fixed assets |
Computer equipment | - |
Connectum Limited (Registered number: 08941525) |
Notes to the Financial Statements - continued |
for the Year Ended 31st March 2023 |
2. | ACCOUNTING POLICIES - continued |
Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost less impairment. |
Subsidiary undertakings, taken together, that are not material for the purpose of giving a true and fair view of the company's assets, liabilities, financial position and profit or loss are excluded from consolidation. |
Financial instruments |
The company only enters into basic financial instruments 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, loans to related parties and investments in non-puttable ordinary shares. |
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement. |
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. |
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the reporting date. |
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Connectum Limited (Registered number: 08941525) |
Notes to the Financial Statements - continued |
for the Year Ended 31st March 2023 |
2. | ACCOUNTING POLICIES - continued |
Research and development |
In the research phase of an internal project, it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. |
Intangible assets are recognised from the development phase of a project if and only if all of the following criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured: |
- It is technically feasible to complete the intangible asset so that it will be available for use or sale; |
- There is the intention to complete the intangible asset and use or sell it; |
- There is the ability to use or sell the intangible asset; |
- The use or sale of the intangible asset will generate probable future economic benefits; |
- There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and |
- The expenditure attributable to the intangible asset during its development can be measured reliably. |
The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives. Expenditure that does not meet the above criteria is expensed as incurred. |
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Debtors |
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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. |
Creditors |
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
Finance costs |
Finance costs are charged to the income statement 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. |
Borrowing costs |
All borrowing costs are recognised in the income statement in the year in which they are incurred. |
Connectum Limited (Registered number: 08941525) |
Notes to the Financial Statements - continued |
for the Year Ended 31st March 2023 |
2. | ACCOUNTING POLICIES - continued |
Provisions for liabilities |
Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation. |
Provisions are charged as an expense to the income statement in the year that the company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. |
When payments are eventually made, they are charged to the provision carried in the balance sheet. |
Dividends |
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. |
3. | EMPLOYEES AND DIRECTORS |
31.3.23 | 31.3.22 |
£ | £ |
Wages and salaries |
Social security costs |
The average number of employees during the year was as follows: |
31.3.23 | 31.3.22 |
Risk, Administration & AML | 17 | 15 |
Sales and operations | 6 | 6 |
IT | 2 | 2 |
Management | 3 | 3 |
31.3.23 | 31.3.22 |
£ | £ |
Directors' remuneration |
4. | OPERATING PROFIT |
The operating profit is stated after charging: |
31.3.23 | 31.3.22 |
£ | £ |
Depreciation - owned assets |
Auditors' remuneration |
Foreign exchange gain/loss |
Connectum Limited (Registered number: 08941525) |
Notes to the Financial Statements - continued |
for the Year Ended 31st March 2023 |
5. | INTEREST RECEIVABLE AND SIMILAR INCOME |
31.3.23 | 31.3.22 |
£ | £ |
Other interest receivable |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.3.23 | 31.3.22 |
£ | £ |
Other interest payable |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
31.3.23 | 31.3.22 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax | ( |
) |
Tax on profit |
UK corporation tax was charged at 19%) in 2022. |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
31.3.23 | 31.3.22 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2022 - |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) |
Deferred tax | (685 | ) | 1,050 |
Total tax charge | 1,153,037 | 850,634 |
Factors that may affect future tax charges |
The main rate of corporation tax will increase to 25% for the financial year beginning 1 April 2023. |
8. | DIVIDENDS |
31.3.23 | 31.3.22 |
£ | £ |
A Ordinary shares of £1 each |
Interim |
Connectum Limited (Registered number: 08941525) |
Notes to the Financial Statements - continued |
for the Year Ended 31st March 2023 |
9. | TANGIBLE FIXED ASSETS |
Computer |
equipment |
£ |
COST |
At 1st April 2022 |
Additions |
At 31st March 2023 |
DEPRECIATION |
At 1st April 2022 |
Charge for year |
At 31st March 2023 |
NET BOOK VALUE |
At 31st March 2023 |
At 31st March 2022 |
10. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
£ |
COST |
Additions |
At 31st March 2023 |
NET BOOK VALUE |
At 31st March 2023 |
Fixed asset investments represents 100% investment in the issued share capital of Connectum GMBH, a German based subsidiary. The subsidiary has not traded during the year. |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.3.23 | 31.3.22 |
£ | £ |
Other debtors |
Prepayments and accrued income |
Connectum Limited (Registered number: 08941525) |
Notes to the Financial Statements - continued |
for the Year Ended 31st March 2023 |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.3.23 | 31.3.22 |
£ | £ |
Trade creditors |
Tax |
Social security and other taxes |
VAT | 202,177 | 35,580 |
Other creditors |
Accrued expenses |
13. | PROVISIONS FOR LIABILITIES |
31.3.23 | 31.3.22 |
£ | £ |
Deferred tax | 5,387 | 6,072 |
Deferred | Other |
tax | provisions |
£ | £ |
Balance at 1st April 2022 |
Credit to Income Statement during year | ( |
) | ( |
) |
Balance at 31st March 2023 |
14. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.3.23 | 31.3.22 |
value: | £ | £ |
A Ordinary | £1 | 300,000 | 300,000 |
15. | RESERVES |
Retained |
earnings |
£ |
At 1st April 2022 |
Profit for the year |
Dividends | ( |
) |
At 31st March 2023 |
The company's capital and reserves are as follows: |
Called up share capital - This represents the nominal value of shares that have been issued. |
Profit and loss account - This reserve records retained earnings and accumulated profits, net of dividends paid and other adjustments.. |
Connectum Limited (Registered number: 08941525) |
Notes to the Financial Statements - continued |
for the Year Ended 31st March 2023 |
16. | RELATED PARTY DISCLOSURES |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
17. | ULTIMATE CONTROLLING PARTY |
The company is controlled by Mrs S Heng by virtue of her holding in the entire share capital of the company. |
18. | CLIENT FUNDS |
At the reporting date the Company held client funds amounting to £13,961,706 (2022: £45,232,988) which equals the cash and other accounting balances held on behalf of these clients. These amounts are segregated and since they are not beneficially owned by the Company, they have not been recognised in the financial statements. |