Company registration number 06302237 (England and Wales)
MIDPOINT & TRANSFER LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Richard Anthony
Chartered Accountants and Registered Auditors
MIDPOINT & TRANSFER LTD
COMPANY INFORMATION
Directors
Mr H Zhang
Mr DS H Wong
Secretary
Mr H Zhang
Company number
06302237
Registered office
22-25 Portman Close
London
W1H 6BS
Auditor
Richard Anthony
Ground Floor Cooper House
316 Regents Park Road
London
N3 2JX
MIDPOINT & TRANSFER LTD
CONTENTS
Page
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
13 - 21
MIDPOINT & TRANSFER LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -
The directors present the strategic report for the year ended 30 June 2023.
Fair review of the business
The Company's turnover has decreased by 20% this year giving a decline to an actual income of £206,009 (2022 - £258,823).
The Company's business objective is to strive to build sales across multiple markets and jurisdictions while continuing to offer exceptional customer service and improving the platform for customers. The online and largely virtual nature of the Company allows the business to be driven through multiple channels, thereby amortising its operational costs as it scales.
This level of income resulted in a loss before tax of £583,607 (2022 - £224,373). In the Directors' opinion, the lack of complexity of the business does not warrant an analysis of KPIs to fully understand the Company's development, performance, and position.
Principal risks and uncertaintles
Transaction Volumes.
The Company's ability to generate sales revenue to offset the expenses and maintain profitability is uncertain.
Development and performance
Objectives and policies.
The Company's principal financial instruments comprise of bank balances, trade debtors, trade creditors, and loan facilities from the ultimate parent company. The main purpose of these instruments is to finance the Company's day-to-day operations.
Price risk, credit risk, liquidity risk, and cash flow risk.
With respect to the bank balances, the Company manages the liquidity risk by maintaining a balance between the continuity of funding and flexibility through the facilities that the parent company provides. At present, the parent company provides these facilities to the Company free of interest.
The Company manages trade debtors by requiring payment at the point when the Company delivers the services that the Company provides.
The Company manages the creditor' liquidity risk by ensuring that the Company has sufficient funds to meet the amount due.
Mr DS H Wong
Director
12 August 2024
MIDPOINT & TRANSFER LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 June 2023.
Principal activities
The principal activity of the company continued being a foreign exchange market-maker.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr CP M Comishin
(Resigned 31 March 2024)
Mr H Zhang
Mr DS H Wong
Auditor
The Auditor, Richard Anthony is deemed to be reappointed under section 487(2) of the company Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor 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 company’s auditor is aware of that information.
The Company prepared these statements on a going concern basis.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue operations for the foreseeable future that covers at least 12 months period. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the annual report and the financial statements.
On behalf of the board
Mr DS H Wong
Director
12 August 2024
MIDPOINT & TRANSFER LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
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 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.
MIDPOINT & TRANSFER LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MIDPOINT & TRANSFER LTD
- 4 -
Opinion
We have audited the financial statements of Midpoint & Transfer Ltd (the 'company') for the year ended 30 June 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 30 June 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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.
Emphasis of Matter - Material Uncertainty Relating to Going Concern
We draw your attention to the losses incurred by the company in the current and prior years of £516,107 and £224,373, respectively and the accumulated losses of £2,299,218 at the balance sheet date. The financials show net current liabilities of £735,138 which includes amounts owed to the parent company of £762,349.
Conclusions relating to going concern
These losses indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern as is more fully explained in Note 1.2.
Post balance sheet, on 31 March 2024, the company’s ownership changed such that the director Mr D Wong owns 100% shareholding of the company. Blockmate Ventures Inc, the previous parent entity signed an SPA whereby all intercompany balances were waived, and the balance sheet show net current assets.
Based on this sequence of events the net liability position will change to a net asset, and therefore our opinion is not modified in respect of this matter.
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.
MIDPOINT & TRANSFER LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MIDPOINT & TRANSFER LTD (CONTINUED)
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
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 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.
MIDPOINT & TRANSFER LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MIDPOINT & TRANSFER LTD (CONTINUED)
- 6 -
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Risks identified:
The following risks were identified during the course of audit:
Directors and related party transactions.
We assessed the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur.
Audit response:
High value bank transactions were reviewed to identify instances of fraud.
Identifying and assessing the measures management has in place to prevent and detect fraud,
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process,
Challenging assumptions and judgements made by management in its significant estimates, and
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential existed within the recording and recognition of revenue.
Our procedures in this respect were focused on the origination of revenue and directed towards ensuring the accuracy and completeness of revenue by carrying out tests on a sample basis to ensure that revenue had been recorded correctly and in the appropriate accounting period. We consider that the work we undertook in this regard was capable of detecting irregularities and fraud within the sales cycle.
Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulations. This risk increases the more that compliance with law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. The risk is also greater regarding irregularities occurring due to fraud other than error, as fraud involves intentional concealment, forgery, collusion, omission, or misrepresentation.
No issues were found as a result of the above testing.
The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant:
MIDPOINT & TRANSFER LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MIDPOINT & TRANSFER LTD (CONTINUED)
- 7 -
Financial Conduct Authority (FCA) Regulations
The Companies Act 2006
Financial Reporting Standard 102
UK tax legislation
UK health and safety legislation
General Data Protection Regulations
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
We understood how the company is complying with those legal and regulatory frameworks by making inquiries of management and those responsible for legal and compliance procedures.
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with these laws and regulations. The assessment did not identify any issues in this area.
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.
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.
Michael Barnett BA FCA
Senior Statutory Auditor
For and on behalf of Richard Anthony
12 August 2024
Chartered Accountants
Statutory Auditor
Ground Floor Cooper House
316 Regents Park Road
London
N3 2JX
MIDPOINT & TRANSFER LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
206,009
258,823
Cost of sales
(316,289)
(197,475)
Gross (loss)/profit
(110,280)
61,348
Administrative expenses
(477,839)
(303,514)
Other operating income
72,000
17,788
Operating loss
5
(516,119)
(224,378)
Interest receivable and similar income
8
12
5
Loss before taxation
(516,107)
(224,373)
Tax on loss
9
Loss for the financial year
(516,107)
(224,373)
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
MIDPOINT & TRANSFER LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 9 -
2023
2022
£
£
Loss for the year
(516,107)
(224,373)
Other comprehensive income
-
-
Total comprehensive income for the year
(516,107)
(224,373)
MIDPOINT & TRANSFER LTD
BALANCE SHEET
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
25,920
31,731
Current assets
Debtors
11
76,402
56,099
Cash at bank and in hand
184,111
217,369
260,513
273,468
Creditors: amounts falling due within one year
12
(995,651)
(498,310)
Net current liabilities
(735,138)
(224,842)
Net liabilities
(709,218)
(193,111)
Capital and reserves
Called up share capital
15
1,590,000
1,590,000
Profit and loss reserves
(2,299,218)
(1,783,111)
Total equity
(709,218)
(193,111)
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 12 August 2024 and are signed on its behalf by:
Mr DS H Wong
Director
Company registration number 06302237 (England and Wales)
MIDPOINT & TRANSFER LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 July 2021
1,590,000
(1,558,738)
31,262
Year ended 30 June 2022:
Loss and total comprehensive income
-
(224,373)
(224,373)
Balance at 30 June 2022
1,590,000
(1,783,111)
(193,111)
Year ended 30 June 2023:
Loss and total comprehensive income
-
(516,107)
(516,107)
Balance at 30 June 2023
1,590,000
(2,299,218)
(709,218)
MIDPOINT & TRANSFER LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
(22,552)
(150,902)
Investing activities
Purchase of tangible fixed assets
(10,718)
(37,328)
Interest received
12
5
Net cash used in investing activities
(10,706)
(37,323)
Net decrease in cash and cash equivalents
(33,258)
(188,225)
Cash and cash equivalents at beginning of year
217,369
405,594
Cash and cash equivalents at end of year
184,111
217,369
MIDPOINT & TRANSFER LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 13 -
1
Accounting policies
Company information
Midpoint & Transfer Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 22-25 Portman Close, London, W1H 6BS.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis of accounting in preparing these financial statements.true
After change of ownership from Blockmate Venture Inc ('BVI') on 31 March 2024, post year-end, Midpoint & Transfer Ltd ('MTL') began trading independently. The company is therefore considered to be in its early phases of expansion without financial assistance from BVI. To draw in new customers, boost sales and profitability, the directors have launched new initiatives in the form of collaborations with various counterparties.
There is no assurance that the Company will result in future profitable operation. The business is subject to risk through market conditions, competition, supply and demand of their services. In the event that the business is unable to expand its clientele and generate profit, it might not be able to continue in operational existence.
However, the financial statements have been prepared on a going concern basis, which contemplates that the Company will continue in operation for the foreseeable future and will be able to realise its assets and discharge its liabilities in the normal course of business.
1.3
Turnover
Turnover represents fees receivable for services and are shown net of VAT applicable discounts.
Revenue from contracts for the provision of financial services is recognised when each individual trade is fully completed. This is at the point at which either the final beneficiary payment enters the banking system or when the client instructs the funds to be held in their personal wallet for later transmission.
1.4
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:
Computer equipment
33% straight line
MIDPOINT & TRANSFER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
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 credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
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.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial 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.
MIDPOINT & TRANSFER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
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 company 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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
MIDPOINT & TRANSFER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 16 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
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.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.12
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
MIDPOINT & TRANSFER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Transaction fees and charges
206,009
258,823
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
82,748
98,979
European Economic area
27,941
15,091
Rest of the world
95,320
144,753
206,009
258,823
2023
2022
£
£
Other revenue
Interest income
12
5
Grants received
2,000
17,788
4
Exceptional item
2023
2022
£
£
Income
Exceptional item - Other operating income
70,000
-
These are non-refundable advances on a new partnership which were aborted during the year.
5
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange gains
(24,983)
(5,033)
Government grants
(2,000)
(17,788)
Depreciation of owned tangible fixed assets
16,529
10,610
MIDPOINT & TRANSFER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
3
4
Administration
3
2
Marketing
1
1
Total
7
7
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
269,678
151,211
Social security costs
11,872
9,787
Pension costs
822
995
282,372
161,993
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
168,000
69,500
Company pension contributions to defined contribution schemes
446
745
168,446
70,245
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
12
5
9
Taxation
MIDPOINT & TRANSFER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
9
Taxation
(Continued)
- 19 -
The actual charge 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:
2023
2022
£
£
Loss before taxation
(516,107)
(224,373)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(98,060)
(42,631)
Tax effect of expenses that are not deductible in determining taxable profit
4,504
1,533
Unutilised tax losses carried forward
95,592
46,174
Permanent capital allowances in excess of depreciation
(2,036)
(5,076)
Taxation charge for the year
-
-
10
Tangible fixed assets
Computer equipment
£
Cost
At 1 July 2022
96,572
Additions
10,718
At 30 June 2023
107,290
Depreciation and impairment
At 1 July 2022
64,841
Depreciation charged in the year
16,529
At 30 June 2023
81,370
Carrying amount
At 30 June 2023
25,920
At 30 June 2022
31,731
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
37,361
34,727
Other debtors
12,514
12,844
Prepayments and accrued income
26,527
8,528
76,402
56,099
MIDPOINT & TRANSFER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
161,233
57,413
Amounts owed to group undertakings
762,349
411,771
Taxation and social security
3,080
2,653
Other creditors
49,848
4,873
Accruals and deferred income
19,141
21,600
995,651
498,310
13
Government grants
A total of £Nil (2022 - £17,788) was received under the "Coronavirus Job Retention Scheme".
The company received £2,000 (2022 - £Nil) grant for hiring an apprentice in the business.
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
822
995
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,590,000
1,590,000
1,590,000
1,590,000
16
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
9,540
8,208
17
Events after the reporting date
Post balance sheet, on 31 March 2024, the company’s ownership changed such that the director Mr D Wong owns 100% shareholding of the company. Blockmate Ventures Inc, the previous parent entity signed an SPA whereby all intercompany balances were waived.
MIDPOINT & TRANSFER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
18
Related party transactions
Transactions with related parties
During the year the company entered into transactions with its parent company, Blockmate Ventures Inc. ('BVI') both in the course of its business and also by way of further financing by the parent.
At the balance sheet date the company owed BVI, £762,349 (2022 - £411,771) on interest-free basis with no fixed repayments.
At the balance sheet date, the company was owed the sum of £37,361 (2022 - £34,727) by a fellow subsidiary company Midpoint Hong Kong Limited, on interest-free basis with no fixed repayments.
19
Directors' transactions
During the accounting period, Mr D Wong, a director of the company, provided consultancy services to the company amounting to £112,500 through Expadis Limited, a company registered in England and Wales, The transactions took place in the normal course of business.
At the balance sheet date Mr D Wong owed £1,236 to the company (2022 - £36).
20
Ultimate controlling party
At the reporting date, the ultimate controlling party is Blockmate Ventures Inc. ('BVI'), a company registered in Canada, by virtue of shareholding.
Copies of the group consolidated financial statements can be obtained from:
Blockmate Ventures Inc.
505 Kootenay Street
Nelson
British Columbia V1L1K9
Canada
At the date of signing of these financial statement, as a result of transfer of shares from BVI, the ultimate controlling party is Mr Shee Hau David Wong.
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