Company registration number 10069565 (England and Wales)
NAGWA LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
NAGWA LIMITED
COMPANY INFORMATION
Directors
Nagwa Abdelmottaleb
Sabah Helal
Ahmed Hindawi
Andrew Kitchin
(Appointed 25 January 2023)
Paul Peters
Company number
10069565
Registered office
York House
41 Sheet Street
Windsor
Berkshire
England
SL4 1DD
Auditor
FLB Audit LLP
1010 Eskdale Road
Winnersh Triangle
Wokingham
Berkshire
RG41 5TS
NAGWA LIMITED
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 5
Group income statement
6
Group statement of comprehensive income
7
Group statement of financial position
8
Company statement of financial position
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 32
NAGWA LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

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

Principal activities

The principal activity of the company and group continued to be that of the provision of online educational services.

Results and dividends

The results for the year are set out on page 6.

Directors

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

Nagwa Abdelmottaleb
Sabah Helal
Ahmed Hindawi
Andrew Kitchin
(Appointed 25 January 2023)
Paul Peters
Statement of directors' responsibilities

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.

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.

Strategic report

In preparing the financial statements, the directors have taken advantage of section 414B of the Companies Act 2006 and have not presented a Strategic Report.

NAGWA LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Material uncertainty regarding going concern

Accounting standards require the Directors to consider the appropriateness of the going concern basis when preparing the financial statements and if necessary to explain how they have reached their conclusion.

The Group has made a net loss in the year ending 31 December 2022 totalling $14,401,852 and has significant net liabilities as the year end date of $54,842,040.

The Group relies on the continued financial support of one of its directors, A Hindawi. The directors have received confirmation that A Hindawi intends to support the company for at least one year after these financial statements were signed.

The directors consider that it is appropriate to adopt the going concern basis in preparing the financial statements on the basis of the continued financial support of the parent company.

Whilst the Directors are of the opinion that they have the full support of A Hindawi, the intention to support the company is not legally binding and therefore represents a material uncertainty that may cast doubt on the Group's ability to continue as a going concern.

Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

On behalf of the board
Ahmed Hindawi
Director
7 February 2024
NAGWA LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NAGWA LIMITED
- 3 -
Opinion

We have audited the financial statements of Nagwa Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, 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.

Material uncertainty related to going concern

We draw attention to Note 1.4 in the financial statements which indicates that the group incurred a net loss of $14,401,852 during the year ended 31 December 2022, and, as of that date, the Group's liabilities exceed its total assets by $54,842,040. As stated in Note 1.4, these events or conditions indicated that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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:

NAGWA LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NAGWA LIMITED
- 4 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We have gained an understating 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. We designed audit procedures at company levels to respond to the risk, recognising that 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, the Companies Act 2006, taxation legislation, data protection, anti-bribery and health and safety legislation.

 

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the recognition of income and the override of controls by management. Our audit procedures to respond to these risks included inquiries of management their own identification and assessment of the risks of irregularities, risk-based sample testing on the posting of journals, reviewing accounting estimates for biases, reviewing regulatory correspondence and reading minutes of meetings of those charged with governance. Our audit procedures to respond to revenue recognition risks included sample testing revenue across the period, agreeing to contracts and confirming assessment of stage of completion to supporting documentation.

NAGWA LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NAGWA LIMITED
- 5 -

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). We are not responsible for preventing non-compliance and cannot be expected to detect noncompliance with all laws and regulations.

 

The potential effects of inherent limitations are particularly significant in the case of misstatement resulting from fraud because fraud may involve sophisticated and carefully organised schemes designed to conceal it, including deliberate failure to record transactions, collusion or intentional misrepresentations being made to us.

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.

Other matters which we are required to address

Comparative information in the financial statements is derived from the company's prior period financial statements which were not audited.

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.

Daniel Faust (Senior Statutory Auditor)
For and on behalf of FLB Audit LLP
7 February 2024
Chartered Accountants
Statutory Auditor
1010 Eskdale Road
Winnersh Triangle
Wokingham
Berkshire
RG41 5TS
NAGWA LIMITED
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
2022
2021
as restated
Notes
$
$
Turnover
4
2,397,660
1,320,445
Cost of sales
(790,825)
(603,202)
Gross profit
1,606,835
717,243
Administrative expenses
(16,222,861)
(15,969,650)
Operating loss
5
(14,616,026)
(15,252,407)
Interest receivable and similar income
8
22
24
Amounts written off investments
9
-
(18,386)
Loss before taxation
(14,616,004)
(15,270,769)
Tax on loss
10
214,152
60,281
Loss for the financial year
(14,401,852)
(15,210,488)
Loss for the financial year is all attributable to the owners of the parent company.
NAGWA LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
2022
2021
as restated
$
$
Loss for the year
(14,401,852)
(15,210,488)
Other comprehensive income
Currency translation loss arising in the year
(54,726)
(6,969)
Total comprehensive income for the year
(14,456,578)
(15,217,457)
Total comprehensive income for the year is all attributable to the owners of the parent company.
NAGWA LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
31 December 2022
- 8 -
2022
2021
as restated
Notes
$
$
$
$
Fixed assets
Intangible assets
12
1,772,082
2,033,903
Tangible assets
13
172,523
218,770
1,944,605
2,252,673
Current assets
Debtors
17
770,137
758,419
Cash at bank and in hand
287,880
877,079
1,058,017
1,635,498
Creditors: amounts falling due within one year
18
(55,427,441)
(41,847,813)
Net current liabilities
(54,369,424)
(40,212,315)
Total assets less current liabilities
(52,424,819)
(37,959,642)
Creditors: amounts falling due after more than one year
19
(2,400,000)
(2,400,000)
Provisions for liabilities
Deferred tax liability
21
17,221
26,623
(17,221)
(26,623)
Net liabilities
(54,842,040)
(40,386,265)
Capital and reserves
Called up share capital
23
13,678
13,678
Other reserves
(60,892)
(6,969)
Profit and loss reserves
(54,794,826)
(40,392,974)
Total equity
(54,842,040)
(40,386,265)
The financial statements were approved by the board of directors and authorised for issue on 7 February 2024 and are signed on its behalf by:
07 February 2024
Ahmed Hindawi
Director
Company registration number 10069565 (England and Wales)
NAGWA LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
31 December 2022
- 9 -
2022
2021
as restated
Notes
$
$
$
$
Fixed assets
Intangible assets
12
1,772,082
2,033,903
Tangible assets
13
111,640
168,124
Investments
14
149,829
149,829
2,033,551
2,351,856
Current assets
Debtors
17
1,125,305
786,672
Cash at bank and in hand
159,403
717,816
1,284,708
1,504,488
Creditors: amounts falling due within one year
18
(55,766,955)
(41,838,270)
Net current liabilities
(54,482,247)
(40,333,782)
Total assets less current liabilities
(52,448,696)
(37,981,926)
Creditors: amounts falling due after more than one year
19
(2,400,000)
(2,400,000)
Provisions for liabilities
Deferred tax liability
21
17,221
26,623
(17,221)
(26,623)
Net liabilities
(54,865,917)
(40,408,549)
Capital and reserves
Called up share capital
23
13,678
13,678
Profit and loss reserves
(54,879,595)
(40,422,227)
Total equity
(54,865,917)
(40,408,549)

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 $14,457,368 (2021 - $15,236,325 loss).

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 7 February 2024 and are signed on its behalf by:
07 February 2024
Ahmed Hindawi
Director
Company registration number 10069565 (England and Wales)
NAGWA LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
Share capital
Other reserves
Currency translation reserve
Profit and loss reserves
Total
$
$
$
$
$
As restated for the period ended 31 December 2021:
Balance at 1 January 2021
13,678
-
-
(11,111,759)
(11,098,081)
Effect of change in accounting policy
-
-
-
(14,070,727)
(14,070,727)
As restated
13,678
-
-
0
(25,182,486)
(25,168,808)
Year ended 31 December 2021:
Loss for the year
-
-
-
(15,210,488)
(15,210,488)
Other comprehensive income:
Currency translation differences
-
-
(6,969)
-
0
(6,969)
Total comprehensive income
-
-
(6,969)
(15,210,488)
(15,217,457)
Balance at 31 December 2021
13,678
-
(6,969)
(40,392,974)
(40,386,265)
Year ended 31 December 2022:
Loss for the year
-
-
-
(14,401,852)
(14,401,852)
Other comprehensive income:
Currency translation differences
-
-
(54,726)
-
0
(54,726)
Total comprehensive income
-
-
(54,726)
(14,401,852)
(14,456,578)
Transfers
-
803
-
-
803
Balance at 31 December 2022
13,678
803
(61,695)
(54,794,826)
(54,842,040)
NAGWA LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Share capital
Profit and loss reserves
Total
$
$
$
As restated for the period ended 31 December 2021:
Balance at 1 January 2021
13,678
(11,115,175)
(11,101,497)
Effect of change in accounting policy
-
(14,070,727)
(14,070,727)
As restated
13,678
(25,185,902)
(25,172,224)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
(15,236,325)
(15,236,325)
Balance at 31 December 2021
13,678
(40,422,227)
(40,408,549)
Year ended 31 December 2022:
Profit and total comprehensive income
-
(14,457,368)
(14,457,368)
Balance at 31 December 2022
13,678
(54,879,595)
(54,865,917)
NAGWA LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
2022
2021
as restated
Notes
$
$
$
$
Cash flows from operating activities
Cash absorbed by operations
26
(13,555,606)
(13,520,609)
Income taxes refunded
215,924
76,782
Net cash outflow from operating activities
(13,339,682)
(13,443,827)
Investing activities
Purchase of intangible assets
(66,342)
(148,654)
Purchase of tangible fixed assets
(48,940)
(157,928)
Proceeds from disposal of tangible fixed assets
6,130
-
Interest received
22
24
Net cash used in investing activities
(109,130)
(306,558)
Financing activities
Repayment of borrowings
12,891,490
14,450,470
Net cash generated from financing activities
12,891,490
14,450,470
Net (decrease)/increase in cash and cash equivalents
(557,322)
700,085
Cash and cash equivalents at beginning of year
877,079
177,514
Effect of foreign exchange rates
(31,877)
(520)
Cash and cash equivalents at end of year
287,880
877,079
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
1
Accounting policies
Company information

Nagwa Limited (“the company”) is a private company, limited by shares, domiciled and incorporated in England and Wales. The company registration number is 10069565. The registered office is York House, 41 Sheet Street, Windsor, Berkshire, England, SL4 1DD.

 

The group consists of Nagwa Limited 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 dollars, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest US $.

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
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Nagwa Limited 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.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

Accounting standards require the Directors to consider the appropriateness of the going concern basis when preparing the financial statements and if necessary to explain how they have reached their conclusion.

 

The Group has made a net loss in the year ending 31 December 2022 totalling $14,401,852 and has significant net liabilities as the year end date of $54,842,040.

 

The Group relies on the continued financial support of one of its directors, Dr Hindawi. The directors have received confirmation that Dr Hindawi intends to support the company for at least one year after these financial statements were signed.

 

The directors consider that it is appropriate to adopt the going concern basis in preparing the financial statements on the basis of the continued financial support of the parent company.

 

Whilst the Directors are of the opinion that they have the full support of Dr Hindawi, the intention to support the company is not legally binding and therefore represents a material uncertainty that may cast doubt on the Group's ability to continue as a going concern.

NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.6
Research and development expenditure

Research and development expenditure is written off against profits in the year in which it is incurred.

1.7
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

 

Identifiable development expenditure is expensed to the extent that the technical, commercial and financial feasibility can be demonstrated.

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

Software
4 years straight line
Digital Education Product
10 years straight line
1.8
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
25% reducing balance
Plant and equipment
4 years straight line / 25% reducing balance
Fixtures and fittings
4 years straight line / 20% reducing balance

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 income statement.

NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.9
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.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.10
Impairment of fixed assets

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

 

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.

1.11
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.

1.12
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 statement of financial position 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.

NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -
Derecognition of financial liabilities

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

1.13
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.

1.14
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 income statement 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 income statement, 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.

1.15
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.

1.16
Retirement benefits

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

1.17
Leases

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.

NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
2
Change in accounting policy

The directors have changed their accounting policy in respect of research and development costs to expense as incurred, rather than capitalise, development costs. The directors consider that the revised policy provides reliable and more relevant information by presenting a fairer reflection of the Group's activities and its period end position.

 

Details of the financial impact on the prior year can be seen in Note 28. The current period impact has been a reduction to intangible assets and an increase to administrative costs of $6,596,998 (2021: $8,351,713).

3
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.

Decision to recognise a provision for trade receivables

Per note 17, the directors have decided to recognise a provision amounting to $1,224,648 (2021 - $0) in relation to accounts receivable from a single customer. This represents 100% of outstanding balances with the client in question. The decision was taken on the basis that it is more likely than not that the company will not receive any settlement at all in respect of these balances.

4
Turnover and other revenue
2022
2021
$
$
Turnover analysed by class of business
Online educational services
2,397,660
1,320,445
2022
2021
$
$
Turnover analysed by geographical market
United Kingdom
216,295
1,133,359
Egypt
2,161,904
186,590
Rest of the world
19,461
496
2,397,660
1,320,445
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
4
Turnover and other revenue
(Continued)
- 20 -
2022
2021
$
$
Other revenue
Interest income
22
24
5
Operating loss
2022
2021
$
$
Operating loss for the year is stated after charging/(crediting):
Exchange losses
588,291
83,925
Research and development costs
9,507,641
10,374,720
Depreciation of owned tangible fixed assets
69,967
59,958
Profit on disposal of tangible fixed assets
(12,183)
-
Amortisation of intangible assets
328,163
309,624
Operating lease charges
291,656
283,030
6
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
22,500
-
For other services
All other non-audit services
9,000
-
7
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
Total
87
65
27
25
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
7
Employees
(Continued)
- 21 -

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
$
$
$
$
Wages and salaries
2,485,521
4,088,110
2,041,643
3,675,328
Social security costs
172,259
126,745
134,599
125,147
Pension costs
34,374
34,089
34,374
34,089
2,692,154
4,248,944
2,210,616
3,834,564
8
Interest receivable and similar income
2022
2021
$
$
Interest income
Interest on bank deposits
22
24
9
Amounts written off investments
2022
2021
$
$
Other gains and losses
-
(18,386)
10
Taxation
2022
2021
$
$
Current tax
UK corporation tax on profits for the current period
(222,208)
(77,093)
Foreign current tax on profits for the current period
17,458
13,141
Total current tax
(204,750)
(63,952)
Deferred tax
Origination and reversal of timing differences
(9,402)
3,671
Total tax credit
(214,152)
(60,281)
NAGWA LIMITED
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
(14,616,004)
(15,270,769)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(2,777,041)
(2,901,446)
Tax effect of expenses that are not deductible in determining taxable profit
10,787
17,316
Unutilised tax losses carried forward
2,774,310
2,913,682
Permanent capital allowances in excess of depreciation
-
0
(16,411)
Research and development tax credit
(222,208)
(73,422)
Taxation credit
(214,152)
(60,281)

In the March 2021 Budget it was announced that legislation will be introduced in Finance Bill 2021 to increase the main rate of UK corporation tax from 19% to 25%, effective 1 April 2023. The expected future impact of this will be an increase in current tax charges for any profits taxed at the main rate.

 

The group has timing differences relating to accelerated capital allowances of $90,635 (2021: $103,968) which has resulted in a net deferred tax liability of $17,221 (2021: $26,623) being recognised in the financial statements.

The Group has tax adjusted losses carried forward of $50,293,879 (2021 as restated: $35,697,179) for which a deferred tax asset of $12,573,470 (2021 as restated: $8,924,295) has not been recognised. The value of the unrecognised deferred tax asset disclosed is calculated at 25%, being the rate of tax expected to apply to the Group's taxable profits, at the point at which the losses are utilised.

 

The unused tax adjusted losses carried forward do not have an expiry date.

11
Impairments

The impairment losses in respect of financial assets are recognised in other gains and losses in the income statement.

Reversals of previous impairment losses have been recognised in profit or loss as follows:

2022
2021
Notes
$
$
In respect of:
Fixed asset investments
14
-
(18,386)
Recognised in:
Amounts written off investments
-
(18,386)
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
12
Intangible fixed assets
Group
Software
Digital Education Product
Total
$
$
$
Cost
At 1 January 2022
325,424
2,714,111
3,039,535
Additions
66,342
-
0
66,342
At 31 December 2022
391,766
2,714,111
3,105,877
Amortisation and impairment
At 1 January 2022
191,399
814,233
1,005,632
Amortisation charged for the year
56,752
271,411
328,163
At 31 December 2022
248,150
1,085,645
1,333,795
Carrying amount
At 31 December 2022
143,616
1,628,466
1,772,082
At 31 December 2021
134,025
1,899,878
2,033,903
Company
Software
Digital Education Product
Total
$
$
$
Cost
At 1 January 2022
325,424
2,714,111
3,039,535
Additions
66,342
-
0
66,342
At 31 December 2022
391,766
2,714,111
3,105,877
Amortisation and impairment
At 1 January 2022
191,399
814,233
1,005,632
Amortisation charged for the year
56,752
271,411
328,163
At 31 December 2022
248,150
1,085,645
1,333,795
Carrying amount
At 31 December 2022
143,616
1,628,466
1,772,082
At 31 December 2021
134,025
1,899,878
2,033,903

Amortisation has been charged to the statement of profit or loss as administrative expenditure.

 

Included within Digital Education Product is an Intellectual Property purchase with a carrying value at the year end of $1,440,000. The remaining amortisation period at the year end is 6 years.

 

The group has recognised $9,507,641 of research and development costs as an expense during the year (2021 as restated: $10,374,720)

NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
13
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total
$
$
$
$
Cost
At 1 January 2022
31,335
351,671
51,201
434,207
Additions
-
0
48,940
-
0
48,940
Disposals
-
0
(20,175)
-
0
(20,175)
Exchange adjustments
-
0
(21,346)
-
0
(21,346)
At 31 December 2022
31,335
359,090
51,201
441,626
Depreciation and impairment
At 1 January 2022
3,330
178,780
33,327
215,437
Depreciation charged in the year
7,001
57,058
5,908
69,967
Eliminated in respect of disposals
-
0
(13,781)
-
0
(13,781)
Exchange adjustments
-
0
(2,520)
-
0
(2,520)
At 31 December 2022
10,331
219,537
39,235
269,103
Carrying amount
At 31 December 2022
21,004
139,553
11,966
172,523
At 31 December 2021
28,005
172,891
17,874
218,770
Company
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total
$
$
$
$
Cost
At 1 January 2022
31,335
294,245
51,201
376,781
Disposals
-
0
(19,768)
-
0
(19,768)
At 31 December 2022
31,335
274,477
51,201
357,013
Depreciation and impairment
At 1 January 2022
3,330
172,000
33,327
208,657
Depreciation charged in the year
7,001
37,522
5,908
50,431
Eliminated in respect of disposals
-
0
(13,715)
-
0
(13,715)
At 31 December 2022
10,331
195,807
39,235
245,373
Carrying amount
At 31 December 2022
21,004
78,670
11,966
111,640
At 31 December 2021
28,005
122,245
17,874
168,124
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
14
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
$
$
$
$
Investments in subsidiaries
15
-
0
-
0
149,829
149,829
Movements in fixed asset investments
Company
Shares in subsidiaries
$
Cost or valuation
At 1 January 2022 and 31 December 2022
149,829
Carrying amount
At 31 December 2022
149,829
At 31 December 2021
149,829
15
Subsidiaries

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

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Nagwa for Educational Services
Egypt
Ordinary
100.00
Nagwa India Private Limited
India
Ordinary
99.99
Nagwa LLC
America
Ordinary
100.00
16
Financial instruments
Group
Company
2022
2021
2022
2021
$
$
$
$
Carrying amount of financial assets
Debt instruments measured at amortised cost
540,961
504,260
898,629
552,604
Carrying amount of financial liabilities
Measured at amortised cost
57,715,300
46,566,875
58,103,564
44,196,963
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
17
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
$
$
$
$
Trade debtors
1,360
-
0
-
0
-
0
Amounts owed by group undertakings
-
-
625,553
82,949
Other debtors
354,518
497,130
323,202
462,525
Prepayments and accrued income
414,259
261,289
176,550
241,198
770,137
758,419
1,125,305
786,672

Trade debtors are stated net of a $1,224,648 provision for doubtful debt (2021 - $0).

18
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
$
$
$
$
Other borrowings
20
50,687,652
37,796,162
50,687,652
37,796,162
Trade creditors
3,750,409
2,699,500
3,746,744
2,825,507
Corporation tax payable
21,464
13,141
-
0
-
0
Other taxation and social security
58,168
67,795
30,884
41,305
Other creditors
89,203
104,176
8,626
10,406
Accruals and deferred income
820,545
1,167,039
1,293,049
1,164,890
55,427,441
41,847,813
55,766,955
41,838,270
19
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
$
$
$
$
Other borrowings
20
2,400,000
2,400,000
2,400,000
2,400,000
20
Loans and overdrafts
Group
Company
2022
2021
2022
2021
$
$
$
$
Loans from related parties
53,087,652
40,196,162
53,087,652
40,196,162
Payable within one year
50,687,652
37,796,162
50,687,652
37,796,162
Payable after one year
2,400,000
2,400,000
2,400,000
2,400,000
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
20
Loans and overdrafts
(Continued)
- 27 -

A loan of $2,400,000 advanced to the company by director, Ahmed Hindawi was outstanding at 31 December 2022 (2021: $2,400,000). This loan is unsecured, interest free and is repayable on 31 August 2026 in line with the terms of agreement.

 

Short term loans of $50,687,652 were advanced to the company by director Ahmed Hindawi in relation to business operations were outstanding as at 31 December 2022 (2021: $37,796,162). The loans are interest free, unsecured and repayable on demand.

21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2022
2021
Group
$
$
Accelerated capital allowances
17,221
26,623
Liabilities
Liabilities
2022
2021
Company
$
$
Accelerated capital allowances
17,221
26,623
Group
Company
2022
2022
Movements in the year:
$
$
Liability at 1 January 2022
26,623
26,623
Credit to profit or loss
(9,402)
(9,402)
Liability at 31 December 2022
17,221
17,221

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

22
Retirement benefit schemes
2022
2021
Defined contribution schemes
$
$
Charge to profit or loss in respect of defined contribution schemes
34,374
34,089

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.

NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
23
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
$
$
Issued and fully paid
Ordinary shares of 1p each (1.3678 cents)
1,000,000
1,000,000
13,678
13,678

The company has one class of ordinary shares which have attached to them the right to vote, receive a dividend and capital distributions upon the liquidation or winding up of the company.

24
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
311,760
313,388
310,677
310,677
Between two and five years
652,158
963,918
652,158
962,835
963,918
1,277,306
962,835
1,273,512
25
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Purchases
Purchases
2022
2021
$
$
Group
Other related parties
9,507,886
9,966,033

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2022
2021
$
$
Group
Key management personnel
53,087,652
40,196,163
Other related parties
3,678,755
2,430,722
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
25
Related party transactions
(Continued)
- 29 -

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2022
2021
Balance
Balance
$
$
Group
Other related parties
3,193
3,302
Other information

Purchases within the period from other related parties consist of purchases from Nagwa Technologies for development expenditure incurred by Nagwa Limited.

 

Amounts due from other related parties is comprised of $3,193 (2021: $3,302) due from Nagwa KSA in relation to business operations. This amount is unsecured, interest-free and repayable on demand.

 

Amounts due to other related parties consist of $3,678,755 due to Nagwa Technologies in relation to business operations. These amounts are unsecured, interest-free and repayable on demand.

 

Amounts due to key management personnel include a loan of $2,400,000 advanced to the company by A Hindawi (2021: $2,400,000). The loan is unsecured, interest-free and is repayable on 31 August 2026 in line with the terms of the loan agreement.

 

Amounts due to key management personnel also include short term loans of $50,687,652 advanced to the company by A Hindawi in relation to business operations (2021: $37,796,163). The loans are unsecured, interest-free and repayable on demand.

26
Cash absorbed by group operations
2022
2021
$
$
Loss for the year after tax
(14,401,850)
(15,210,488)
Adjustments for:
Taxation credited
(214,152)
(60,281)
Investment income
(22)
(24)
Gain on disposal of tangible fixed assets
(12,183)
-
Amortisation and impairment of intangible assets
328,163
310,150
Depreciation and impairment of tangible fixed assets
69,967
59,958
Other gains and losses
-
18,386
Movements in working capital:
(Increase)/decrease in debtors
(11,718)
1,213,804
Increase in creditors
686,189
147,886
Cash absorbed by operations
(13,555,606)
(13,520,609)
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
27
Analysis of changes in net debt - group
1 January 2022
Cash flows
Exchange rate movements
31 December 2022
$
$
$
$
Cash at bank and in hand
877,079
(557,322)
(31,877)
287,880
Borrowings excluding overdrafts
(40,196,162)
(12,891,490)
-
(53,087,652)
(39,319,083)
(13,448,812)
(31,877)
(52,799,772)
28
Prior period adjustment
Changes to the statement of financial position - group
As previously reported
Adjustment at 1 Jan 2021
Adjustment at 31 Dec 2021
As restated at 31 Dec 2021
$
$
$
$
Fixed assets
Other intangibles
24,456,343
(14,070,727)
(8,351,713)
2,033,903
Capital and reserves
Profit and loss reserves
(17,970,534)
(14,070,727)
(8,351,713)
(40,392,974)
Changes to the income statement - group
As previously reported
Adjustment
As restated
Period ended 31 December 2021
$
$
$
Administrative expenses
(7,617,937)
(8,351,713)
(15,969,650)
Reconciliation of changes in equity - group
1 January
31 December
2021
2021
Notes
$
$
Adjustments to prior year
Effect of change in accounting policy
1
(14,070,727)
(22,422,440)
Equity as previously reported
(11,115,465)
(17,963,825)
Equity as adjusted
(25,186,192)
(40,386,265)
Analysis of the effect upon equity
Profit and loss reserves
(14,070,727)
(22,422,440)
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
28
Prior period adjustment
(Continued)
- 31 -
Reconciliation of changes in loss for the previous financial period
2021
Notes
$
Adjustments to prior year
Effect of change in accounting policy
1
(8,351,713)
Loss as previously reported
(6,858,775)
Loss as adjusted
(15,210,488)
Changes to the statement of financial position - company
As previously reported
Adjustment at 1 Jan 2021
Adjustment at 31 Dec 2021
As restated at 31 Dec 2021
$
$
$
$
Fixed assets
Other intangibles
24,456,343
(14,070,727)
(8,351,713)
2,033,903
Capital and reserves
Profit and loss reserves
(17,999,787)
(14,070,727)
(8,351,713)
(40,422,227)
Changes to the income statement - company
As previously reported
Adjustment
As restated
Period ended 31 December 2021
$
$
$
Administrative expenses
(7,590,204)
(8,351,713)
(15,941,917)
Reconciliation of changes in equity - company
1 January
31 December
2021
2021
$
$
Adjustments to prior year
Effect of change in accounting policy
(14,070,727)
(22,422,440)
Equity as previously reported
(11,101,497)
(17,986,109)
Equity as adjusted
(25,172,224)
(40,408,549)
Analysis of the effect upon equity
Profit and loss reserves
(14,070,727)
(22,422,440)
NAGWA LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
28
Prior period adjustment
(Continued)
- 32 -
Reconciliation of changes in loss for the previous financial period
2021
$
Adjustments to prior year
Effect of change in accounting policy
(8,351,713)
Loss as previously reported
(6,884,612)
Loss as adjusted
(15,236,325)
Notes to reconciliation
Change in accounting policy

The prior period restatement has resulted from the change in accounting policy. See Note 2 for further details.

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