REGISTERED NUMBER: 08757996 (England and Wales) |
Group Strategic Report, Report of the Director and |
Consolidated Financial Statements for the Year Ended 31 December 2023 |
for |
CEX.IO LTD |
REGISTERED NUMBER: 08757996 (England and Wales) |
Group Strategic Report, Report of the Director and |
Consolidated Financial Statements for the Year Ended 31 December 2023 |
for |
CEX.IO LTD |
CEX.IO LTD (Registered number: 08757996) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Director | 3 |
Report of the Independent Auditors | 5 |
Consolidated Income Statement | 9 |
Consolidated Other Comprehensive Income | 10 |
Consolidated Balance Sheet | 11 |
Company Balance Sheet | 12 |
Consolidated Statement of Changes in Equity | 13 |
Company Statement of Changes in Equity | 14 |
Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Cash Flow Statement | 16 |
Notes to the Consolidated Financial Statements | 17 |
CEX.IO LTD |
Company Information |
for the Year Ended 31 December 2023 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
First Floor |
18 Devonshire Row |
London |
EC2M 4RH |
CEX.IO LTD (Registered number: 08757996) |
Group Strategic Report |
for the Year Ended 31 December 2023 |
The director presents his strategic report of the company and the group for the year ended 31 December 2023. |
REVIEW OF BUSINESS |
During the year, the company is restructuring its business from an operational standpoint, similar to its approach in 2022. The company is moving away from its original role as a digital assets marketplace to focus on developing software products and managing intellectual property, with a special focus on the fintech sector. It leverages its substantial expertise in compliance, customer support, and financial services to create revenue streams, mainly through licensing its software products and offering a range of IT services. |
As it adapts to its new operational focus, it maintains strict control over its intellectual assets, managing a portfolio that includes patents, trademarks, and copyrights that are utilized by companies within its corporate group. Despite seeing significant potential in the fintech space, the company is wary of various economic risks, including the heightened scrutiny from central banks and the broader economic instability. In response to these challenges, the company has not only ventured into new markets but also emphasized a prudent approach to cost control. |
By the end of 2023, the company incurred a much smaller loss compared to the previous year and experienced a decline in costs. Moving forward, it plans to continue exploiting emerging opportunities in the fintech domain while sustaining its operations through healthy cash reserves, grounded on a billing system that is firmly rooted in contractual agreements and invoicing. This prudent financial management, paired with a visionary approach to fintech solutions, positions the company well for the future. |
The company changed its business strategy, concluding its activities as a marketplace for digital assets and pivoting to the development of software, as well as the creation of intellectual property for its subsequent licensing and sale. Currently, the company owns a software product, which it licences out for a monthly fee. Additionally, the company has amassed considerable expertise and potential in compliance, customer support, and financial services for the fintech sector. These services are the foundation for revenue generation. The company plans to develop software products for the fintech sphere. |
The period to 31.12.2023, showed significant decline in costs in the business with a reported turnover of £10.6 m (£11 m in 2022), as well as loss before taxation of £963k (loss of £12 m in 2022). |
PRINCIPAL RISKS AND UNCERTAINTIES |
The company's management continues to perceive a significant risk in having contractors based in Ukraine and the continuation of the armed conflict on its territory. In 2023, this risk was further reduced by continued relocation. Additionally, management is highly attentive to the risk of economic downturn, tightening actions by central banks, and economic uncertainty. In response to this, the company is expanding into potential new markets to seek fresh opportunities and is also focusing considerably on cost control. |
Our principal risks are those that have been identified as having the most impact on our business. CEX.IO Ltd has a strong process in place to manage the mitigation of these risks through robust business continuity capabilities. |
Principe risks underlined by the management are: |
Cybersecurity risk |
A crucial part of stability for the digital assets marketplace. Being a centralized exchange service, the platform is responsible for security of assets, kept before any trades or conversions. These risks are managed by proactive approach of CISO team, number of penetration tests, internal procedures and policies. |
Regulatory risk |
The group faced exits from several markets necessitated by regulators in many countries limiting crypto service provision to companies that obtain a local licence. Nevertheless, the group is working towards gaining authorization in several key regions to increase its revenue streams and continue its expansion. This will allow to obtain for CEX.IO LTD new customers for the services and increase the revenue stream and developing new IT products. |
ON BEHALF OF THE BOARD: |
CEX.IO LTD (Registered number: 08757996) |
Report of the Director |
for the Year Ended 31 December 2023 |
The director presents his report with the financial statements of the company and the group for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The core focus of the English company, in accordance with the Companies Act 2006, has become "Business and domestic software development". This encompasses overseeing patents, trademarks, and copyrights, which are licensed to affiliated companies within its corporate group. Moreover, the company is involved in software development and offers a spectrum of information technology (IT) services, including IT consultancy, systems integration, and solutions in cybersecurity. |
DIVIDENDS |
No dividends are to be distributed for the current financial year. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
Other changes in directors holding office are as follows: |
GOING CONCERN |
As at 31.12.2023 company had net assets of £6,149,606 (2022: £7,109,723) and loss before tax of £963,638 (2022: £12,316,257 ). |
Assessment of the company's ability to continue as a going concern includes an assessment of the future economic environment as well as the company's future prospects and performance. During the 2023 the company continued to develop the strategy chosen in 2022 of developing software solutions and providing operational services to its affiliates, demonstrating a clear path for future growth and revenue generation. Engaging in contracts with group entities that provide licensed services furnishes the company with the capacity to anticipate the evolution of new services and to position a competitive product in the marketplace. Also, the Company maintains a robust cash reserve (including of digital currencies), ensuring financial sustenance for its operational endeavors over the forthcoming several years. |
In 2023, the company processed with a consistent policy of reducing the expenses, which allowed it to incur a much smaller loss compared to the previous year. In 2024, the Group expects to start operations in several other regions by incorporating other entities, thus increasing the number of customer facing entities and customers of the services. That is why the Company has plans in place to further enhance operational efficiency by shutting down underperforming products and introducing new, promising ones. However, cost control measures are in place to manage these expenses effectively. |
The company does not plan to pay dividends until it covers the losses of the previous two financial years. This approach ensures that retained earnings are reinvested into the business for growth and stability. |
The financial statements have been prepared on a going concern basis. CEX.IO Holding Ltd, Cyprus, the immediate parent company, and Mr O Lutskevych, the ultimate beneficial owner, have provided the company available such funds as are needed by the company to enable it to meet its liabilities as and when they fall due. The ultimate beneficial owner has already provided two loans of £1 million and $1 million respectively, during the year 2022 and further £5.5 million long term loans have been provided by the immediate parent company during 2023. This together with the company's own working capital will, in the opinion of the directors, enable the company to continue in operational existence for the foreseeable future. CEX.IO LTD issued and allotted 4,848,520 new ordinary shares in February 2024, each with a nominal value of one British pound, to CEX.IO Holding LTD, converting debt into equity. |
CEX.IO LTD (Registered number: 08757996) |
Report of the Director |
for the Year Ended 31 December 2023 |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
The auditors, Zenith Audit Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
CEX.IO LTD |
Opinion |
We have audited the financial statements of CEX.IO LTD (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2023 and of the group's loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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. |
Conclusion related to going concern |
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
CEX.IO LTD |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Director. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is 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 director determines 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 director is responsible for assessing the group's and 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 director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
CEX.IO LTD |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
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: |
We performed risk assessment procedures and obtained an understanding of the Company and its environment, the applicable financial reporting framework, the applicable laws and regulations, the Company's system of internal control and the fraud risk factors relevant to the Company that affect the susceptibility of assertions to material misstatement due to fraud. We made enquiries with management regarding actual or suspected fraud, non-compliance with laws and regulations, potential litigation and claims. The engagement partner led a discussion among the audit team with particular emphasis on how and where the Company's financial statements may be susceptible to material misstatement due to fraud, including how fraud might occur. The engagement partner assessed that the engagement team collectively had the appropriate competence and capability to identify or recognise non-compliance with laws and regulations. |
We considered compliance with UK Companies Act 2006, FCA regulations and the applicable tax legislation as the key laws and regulations which non-compliance could directly lead to material misstatement due to fraud at the financial statement level. We evaluated whether the selection and application of accounting policies by the Company may be indicative of fraudulent financial reporting. Our audit procedures responsive to assessed risks of material misstatement due to fraud at the assertion level included but were not limited to: |
- Testing the appropriateness of manual journal entries recorded in the general ledger and other adjustments made in the preparation of the financial statements; |
- Making inquiries of individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries; |
- Selecting and testing journal entries and other adjustments made at the end of a reporting period and throughout the period; |
- Reviewing accounting estimates for biases that could represent a risk of material misstatement due to fraud. |
- Reviewing key correspondence with regulatory authorities such as the Financial Conduct Authority. |
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements due to irregularities, including fraud, may not be detected, even though we have properly planned and performed our audit in accordance with the auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as they may involve collusion, forgery, intentional omissions, override of internal controls, or collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Report of the Independent Auditors to the Members of |
CEX.IO LTD |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditors |
First Floor |
18 Devonshire Row |
London |
EC2M 4RH |
CEX.IO LTD (Registered number: 08757996) |
Consolidated Income Statement |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
TURNOVER | 10,669,977 | 10,922,590 |
Cost of sales | (10,462,014 | ) | (13,153,973 | ) |
GROSS PROFIT/(LOSS) | 207,963 | (2,231,383 | ) |
Administrative expenses | (4,005,821 | ) | (6,889,889 | ) |
(3,797,858 | ) | (9,121,272 | ) |
Other operating income | 3,020,698 | (3,179,933 | ) |
OPERATING LOSS | 5 | (777,160 | ) | (12,301,205 | ) |
Interest receivable and similar income | 1,017 | - |
(776,143 | ) | (12,301,205 | ) |
Interest payable and similar expenses | 6 | (187,495 | ) | (15,052 | ) |
LOSS BEFORE TAXATION | (963,638 | ) | (12,316,257 | ) |
Tax on loss | 7 | - | 797,131 |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
Loss attributable to: |
Owners of the parent | (963,065 | ) | (11,517,879 | ) |
Non-controlling interests | (573 | ) | (1,247 | ) |
(963,638 | ) | (11,519,126 | ) |
CEX.IO LTD (Registered number: 08757996) |
Consolidated Other Comprehensive Income |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
LOSS FOR THE YEAR | (963,638 | ) | (11,519,126 | ) |
OTHER COMPREHENSIVE INCOME |
Currency translation difference | (484 | ) | (11,150 | ) |
Income tax relating to other comprehensive income | - | - |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
(484 |
) |
(11,150 |
) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(964,122 |
) |
(11,530,276 |
) |
Total comprehensive income attributable to: |
Owners of the parent | (967,554 | ) | (11,529,029 | ) |
Non-controlling interests | 3,432 | (1,247 | ) |
(964,122 | ) | (11,530,276 | ) |
CEX.IO LTD (Registered number: 08757996) |
Consolidated Balance Sheet |
31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 10 | 628,264 | 9,992 |
Tangible assets | 11 | 1,037,217 | 970,963 |
Investments | 12 | - | - |
1,665,481 | 980,955 |
CURRENT ASSETS |
Stocks | 13 | - | 861 |
Debtors | 14 | 8,050,716 | 7,965,411 |
Investments | 15 | 89,724 | 4,532,153 |
Cash at bank and in hand | 16 | 6,196,337 | 615,086 |
14,336,777 | 13,113,511 |
CREDITORS |
Amounts falling due within one year | 17 | (4,718,793 | ) | (6,984,743 | ) |
NET CURRENT ASSETS | 9,617,984 | 6,128,768 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
11,283,465 |
7,109,723 |
CREDITORS |
Amounts falling due after more than one year | 18 | (5,133,859 | ) | - |
NET ASSETS | 6,149,606 | 7,109,723 |
CAPITAL AND RESERVES |
Called up share capital | 19 | 500,000 | 500,000 |
Other reserves | 20 | (28,448 | ) | (27,964 | ) |
Retained earnings | 20 | 5,678,054 | 6,641,119 |
SHAREHOLDERS' FUNDS | 6,149,606 | 7,113,155 |
NON-CONTROLLING INTERESTS | - | (3,432 | ) |
TOTAL EQUITY | 6,149,606 | 7,109,723 |
The financial statements were approved by the director and authorised for issue on 15 August 2024 and were signed by: |
O Lutskevych - Director |
CEX.IO LTD (Registered number: 08757996) |
Company Balance Sheet |
31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
Investments | 12 |
CURRENT ASSETS |
Debtors | 14 |
Investments | 15 |
Cash at bank and in hand | 16 |
CREDITORS |
Amounts falling due within one year | 17 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 18 | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Retained earnings | 20 |
SHAREHOLDERS' FUNDS |
Company's loss for the financial year | (943,824 | ) | (11,523,682 | ) |
The financial statements were approved by the director and authorised for issue on |
CEX.IO LTD (Registered number: 08757996) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Other |
capital | earnings | reserves |
£ | £ | £ |
Balance at 1 January 2022 | 500,000 | 18,158,998 | (16,814 | ) |
Changes in equity |
Total comprehensive income | - | (11,517,879 | ) | (11,150 | ) |
Balance at 31 December 2022 | 500,000 | 6,641,119 | (27,964 | ) |
Changes in equity |
Total comprehensive income | - | (963,065 | ) | (484 | ) |
Balance at 31 December 2023 | 500,000 | 5,678,054 | (28,448 | ) |
Non-controlling | Total |
Total | interests | equity |
£ | £ | £ |
Balance at 1 January 2022 | 18,642,184 | (2,185 | ) | 18,639,999 |
Changes in equity |
Total comprehensive income | (11,529,029 | ) | (1,247 | ) | (11,530,276 | ) |
Balance at 31 December 2022 | 7,113,155 | (3,432 | ) | 7,109,723 |
Changes in equity |
Total comprehensive income | (963,549 | ) | 3,432 | (960,117 | ) |
Balance at 31 December 2023 | 6,149,606 | - | 6,149,606 |
CEX.IO LTD (Registered number: 08757996) |
Company Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2022 |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2023 |
CEX.IO LTD (Registered number: 08757996) |
Consolidated Cash Flow Statement |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 718,810 | (2,514,984 | ) |
Finance costs paid | (187,495 | ) | (15,052 | ) |
Tax expense | - | 797,131 |
Net cash from operating activities | 531,315 | (1,732,905 | ) |
Cash flows from investing activities |
Purchase of intangible fixed assets | (691,667 | ) | (4,910 | ) |
Purchase of tangible fixed assets | (376,614 | ) | (733,295 | ) |
Sale of fixed asset investments | 100 | - |
Disposal of current asset investment | 6,119,087 | - |
Net cash from investing activities | 5,050,906 | (738,205 | ) |
Increase/(decrease) in cash and cash equivalents | 5,582,221 | (2,471,110 | ) |
Cash and cash equivalents at beginning of year | 2 | 615,086 | 3,093,699 |
Effect of foreign exchange rate changes | (970 | ) | (7,503 | ) |
Cash and cash equivalents at end of year | 2 | 6,196,337 | 615,086 |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 31 December 2023 |
1. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31.12.23 | 31.12.22 |
£ | £ |
Loss before taxation | (963,638 | ) | (12,316,257 | ) |
Depreciation charges | 348,142 | 222,395 |
Loss on disposal of fixed assets | 12,116 | - |
Finance costs | 187,495 | 15,052 |
Finance income | (1,017 | ) | - |
(416,902 | ) | (12,078,810 | ) |
Decrease in stocks | 861 | 321 |
(Increase)/decrease in trade and other debtors | (1,733,058 | ) | 6,789,357 |
Increase in trade and other creditors | 2,867,909 | 2,774,148 |
Cash generated from operations | 718,810 | (2,514,984 | ) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£ | £ |
Cash and cash equivalents | 6,196,337 | 615,086 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 615,086 | 3,093,699 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.1.23 | Cash flow | At 31.12.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 615,086 | 5,581,251 | 6,196,337 |
615,086 | 5,581,251 | 6,196,337 |
Liquid resources |
Current asset investments | 4,532,153 | (4,442,429 | ) | 89,724 |
4,532,153 | (4,442,429 | ) | 89,724 |
Total | 5,147,239 | 1,138,822 | 6,286,061 |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
CEX.IO LTD is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Basis of consolidation |
The consolidated financial statements present the results of the company and its own subsidiaries ("the group") as if they form a single entity. lntercompany transactions and balances between group companies are therefore eliminated in full. |
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases. |
In the company's own 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 consolidated financial statements incorporate those of CEX.IO LTD and its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). All the financial statements are made up to 31 December 2023. All intra-group transactions, balances and unrealised gains on transaction between groups companies are eliminated on consolidation. |
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. |
Going concern |
As at 31.12.2023 company had net assets of £6,149,606 (2022: £7,109,723) and loss before tax of £963,638 (2022: £12,316,257). Assessment of the company's ability to continue as a going concern includes an assessment of the future economic environment as well as the company's future prospects and performance. During the 2023 the company continued to develop the strategy chosen in 2022 of developing software solutions and providing operational services to its affiliates, demonstrating a clear path for future growth and revenue generation. Engaging in contracts with group entities that provide licensed services furnishes the company with the capacity to anticipate the evolution of new services and to position a competitive product in the marketplace. Also, the Company maintains a robust cash reserve (including of digital currencies), ensuring financial sustenance for its operational endeavors over the forthcoming several years. |
In 2023, the company processed with a consistent policy of reducing the expenses, which allowed it to incur a much smaller loss compared to the previous year. In 2024, the Group expects to start operations in several other regions by incorporating other entities, thus increasing the number of customer facing entities and customers of the services. That is why the Company has plans in place to further enhance operational efficiency by shutting down underperforming products and introducing new, promising ones. However, cost control measures are in place to manage these expenses effectively. |
The company does not plan to pay dividends until it covers the losses of the previous two financial years. This approach ensures that retained earnings are reinvested into the business for growth and stability. |
The financial statements have been prepared on a going concern basis. CEX.IO Holding Ltd, Cyprus, the immediate parent company, and Mr O Lutskevych, the ultimate beneficial owner, have provided the company available such funds as are needed by the company to enable it to meet its liabilities as and when they fall due. The ultimate beneficial owner has already provided two loans of £1 million and $1 million respectively, during the year 2022 and further £5.5 million long term loans have been provided by the immediate parent company during 2023. This together with the company's own working capital will, in the opinion of the directors, enable the company to continue in operational existence for the foreseeable future. CEX.IO LTD issued and allotted 4,848,520 new ordinary shares in February 2024, each with a nominal value of one British pound, to CEX.IO Holding LTD, converting debt into equity. |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
The company generates revenue from granting the use of its intellectual property, including a marketplace for digital assets, as well as providing compliance, finance, accounting, and customer support services. These services are billed in accordance with contracts based on invoices. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Development costs are being amortised evenly over their estimated useful life of nil years. |
Computer Software Programme are being amortised evenly over their estimated useful life of 10 years. |
Tangible fixed assets |
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. |
Depreciation is provided on the following basis: |
Fixtures and fittings and Plant & Machinery - 33% |
Leasehold improvements - over the term of lease |
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income. |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Taxation |
Current tax |
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date. |
Deferred tax |
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. |
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has 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. |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Research and development |
In the research phase of an internal project, it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research is recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised `development costs are subsequently amortised to ‘administrative expenses’ on a straight-line basis over their expected useful economic lives, Amortisation begins when the intangible asset is available for use, i.e. when it is in the location and condition necessary for it to be usable in the manner intended by management. |
The expected useful economic life of development costs are estimated based on business plans which set out the development plan and time to market for the associated project. |
If it is not possible to distinguish between the research phase and the development phase of an internal the expenditure is treated as if it were all incurred in the research phase only. |
Foreign currencies |
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 are included in the profit and loss account for the period. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. |
Cryptocurrency |
Cryptocurrency assets, classified as current asset investments, are measured at fair value. Changes in fair value are recognised in 'other foreign exchange', within profit or loss. This policy was applied until 30 June 2022. |
Cash and cash equivalents |
Cash and cash equivalents comprise cash on hand, call deposits, other short term highly liquid investments that are readily convertible to a known amount of cash. |
Cash and cash equivalents at digital marketplaces |
Cash and cash equivalents at digital markets comprise cash held at digital marketplaces, which is highly liquid and readily convertible to a known amount of cash. |
Capital and reserves |
Company's capital reserves comprises of: |
- Called up share capital reserve representing the nominal value of the shares issued and |
- Profit and loss account representing cumulative profits or losses, net of dividends paid and other adjustments. |
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. |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
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. |
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, 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. |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
In the application of the group's accounting policies, which are described in this note 2, the following judgments and key estimates have been made by the directors; |
Depreciation and amortisation of tangible and intangible fixed assets |
The cost of tangible fixed assets is depreciated over its estimated useful economic life. Management estimates the useful lives of these tangible assets to vary. Changes in the expected level of usage and technological developments could impact on the useful economic lives and the residual values of these assets; therefore, future depreciation charges could be revised. The accounting policy of tangible fixed assets is described in note 2. The carrying amount of the group's tangible fixed assets in the balance sheet is disclosed in note 11 of the financial statements. |
The capitalised costs of intangible assets are amortised over their estimated useful lives. Management expect these useful lives to vary based on advances in technology and future research and development. Where the useful life of an intangible asset cannot be accurately estimated, the asset is amortised over a maximum of 10 years in accordance with FRS102. |
Impairment of trade debtors and loans receivable |
The group reviews trade debtor balances for impairment and this is performed on a regular basis. Those balances which are considered to be recoverable remain in trade debtors and those which are not, are impaired and the impairment loss is recorded in the profit or loss. In making this judgment, the company evaluates, among other factors, the duration and the financial health of and short-term business outlook for the trade debtors, including factors such as industry and sector performance. The accounting policy of trade debtors is described in note 2. At the year end the carrying amount of trade debtors is stated in note 14. |
Impairment of investments in subsidiary undertakings and associated debtor balances |
Management reviews the carrying value of the investment in subsidiary undertakings and joint ventures for impairment every year. Judgement is used in assessing whether there has been a trigger event showing a potential decline in the value of the investment. These may include evidence of financial difficulty or significance in underperformance against expectations, or potential restrictions in its local market. If such a trigger is identified, a review for impairment is conducted, with the recoverable amount of the asset being determined based on value-in-use calculations using approved forecasts/budget at the period end date and discounted using the weighted average cost of capital. Intercompany receivables are also reviewed for impairment. The surplus of the net asset investment over the value-in-use calculation is compared to the outstanding receivable and a provision is made for any shortfall. |
4. | EMPLOYEES AND DIRECTORS |
31.12.23 | 31.12.22 |
£ | £ |
Wages and salaries | 1,105,380 | 1,326,762 |
Social security costs | 138,323 | 174,592 |
Other pension costs | 11,357 | 9,713 |
1,255,060 | 1,511,067 |
The average number of employees during the year was as follows: |
31.12.23 | 31.12.22 |
Sales and support | 4 | 2 |
Administration | 9 | 14 |
The average number of employees by undertakings that were proportionately consolidated during the year was NIL (2022 - NIL). |
31.12.23 | 31.12.22 |
£ | £ |
Directors' remuneration | 15,888 | 160,203 |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
5. | OPERATING LOSS |
The operating loss is stated after charging/(crediting): |
31.12.23 | 31.12.22 |
£ | £ |
Other operating leases | 1,267,327 | 1,256,803 |
Depreciation - owned assets | 301,700 | 212,175 |
Loss on disposal of fixed assets | 12,116 | - |
Patents and licences amortisation | 63,403 | - |
Development costs amortisation | 701 | 10,220 |
Foreign exchange differences | (1,343,497 | ) | 3,234,622 |
Auditor's remuneration | 30,000 | 33,000 |
Gain on sale of digital asset | (1,676,658 | ) | - |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.12.23 | 31.12.22 |
£ | £ |
Interest paid | 187,495 | 15,052 |
7. | TAXATION |
Analysis of the tax credit |
The tax credit on the loss for the year was as follows: |
31.12.23 | 31.12.22 |
£ | £ |
Current tax: |
Adjustment in respect of prior |
years | - | (797,571 | ) |
Foreign tax | - | 440 |
Tax on loss | - | (797,131 | ) |
Reconciliation of total tax credit included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
31.12.23 | 31.12.22 |
£ | £ |
Loss before tax | (963,638 | ) | (12,316,257 | ) |
Loss multiplied by the standard rate of corporation tax in the UK of 23 % (2022 - 19 %) |
(221,637 |
) |
(2,340,089 |
) |
Effects of: |
Expenses not deductible for tax purposes | 43,124 | 2,860 |
Capital allowances in excess of depreciation | (37,453 | ) | (116,112 | ) |
R&D tax credit in respect of prior years | - | (797,571 | ) |
Tax effect of loss on which no deferred tax asset recognised | - | 23,609 |
Losses carried forward | 215,966 | 2,429,732 |
Foreign taxation | - | 440 |
Total tax credit | - | (797,131 | ) |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
7. | TAXATION - continued |
Tax effects relating to effects of other comprehensive income |
31.12.23 |
Gross | Tax | Net |
£ | £ | £ |
Currency translation difference | (484 | ) | - | (484 | ) |
31.12.22 |
Gross | Tax | Net |
£ | £ | £ |
Currency translation difference | (11,150 | ) | - | (11,150 | ) |
The company has unused tax losses for which no deferred tax asset has been recognised of £13,278,433 (2022: £12,657,694). |
8. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
9. | COMMITMENTS UNDER OPERATING LEASES |
At 31 December 2023 the Company had future minimum lease payments under non-cancellable |
operating leases as follows: |
2023 | 2022 |
£ | £ |
Not later than 1 year | 259,889 | 2,594,160 |
Later than 1 year and not later than 5 years | 1,901,911 | 156,899 |
2,161,800 | 2,751,059 |
10. | INTANGIBLE FIXED ASSETS |
Group |
Patents |
and | Development |
licences | costs | Totals |
£ | £ | £ |
COST |
At 1 January 2023 | - | 29,174 | 29,174 |
Additions | 691,667 | - | 691,667 |
Disposals | - | (29,174 | ) | (29,174 | ) |
At 31 December 2023 | 691,667 | - | 691,667 |
AMORTISATION |
At 1 January 2023 | - | 19,182 | 19,182 |
Amortisation for year | 63,403 | 701 | 64,104 |
Eliminated on disposal | - | (19,883 | ) | (19,883 | ) |
At 31 December 2023 | 63,403 | - | 63,403 |
NET BOOK VALUE |
At 31 December 2023 | 628,264 | - | 628,264 |
At 31 December 2022 | - | 9,992 | 9,992 |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
10. | INTANGIBLE FIXED ASSETS - continued |
Group |
Management considers that net book value of the tangible and intangible assets is similar to carrying value and there is no impairment. |
Company |
Patents |
and |
licences |
£ |
COST |
Additions |
At 31 December 2023 |
AMORTISATION |
Amortisation for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
11. | TANGIBLE FIXED ASSETS |
Group |
Improvements | Fixtures |
to | Plant and | and | Computer |
property | machinery | fittings | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2023 | 610,078 | 221,981 | - | 548,959 | 1,381,018 |
Additions | - | - | 362,697 | 13,917 | 376,614 |
Disposals | - | (221,981 | ) | - | (3,431 | ) | (225,412 | ) |
At 31 December 2023 | 610,078 | - | 362,697 | 559,445 | 1,532,220 |
DEPRECIATION |
At 1 January 2023 | - | 196,360 | - | 213,695 | 410,055 |
Charge for year | 58,103 | 16,961 | 43,638 | 182,998 | 301,700 |
Eliminated on disposal | - | (213,321 | ) | - | (3,431 | ) | (216,752 | ) |
Reclassification/transfer | - | - | 961 | (961 | ) | - |
At 31 December 2023 | 58,103 | - | 44,599 | 392,301 | 495,003 |
NET BOOK VALUE |
At 31 December 2023 | 551,975 | - | 318,098 | 167,144 | 1,037,217 |
At 31 December 2022 | 610,078 | 25,621 | - | 335,264 | 970,963 |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
11. | TANGIBLE FIXED ASSETS - continued |
Company |
Improvements | Fixtures |
to | and | Computer |
property | fittings | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
Reclassification/transfer | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
12. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2023 |
Disposals | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
The Company has sold its 99% investment in CEX.IO Labs Ltd, in Ukraine in October 2023. The sale price was £100 and the loss on disposal of £49,645 was recorded in profit and loss. |
13. | STOCKS |
Group |
31.12.23 | 31.12.22 |
£ | £ |
Finished goods | - | 861 |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
14. | DEBTORS |
Group | Company |
31.12.23 | 31.12.22 | 31.12.23 | 31.12.22 |
£ | £ | £ | £ |
Amounts falling due within one year: |
Trade debtors | 23,314 | 262,568 |
Amount owed by related parties | 6,529,874 | 4,669,969 |
Other debtors | 603,439 | 1,247,916 |
Bad debt provision | - | (243,514 | ) | - | (243,514 | ) |
Tax | 92,435 | - |
VAT | 174,737 | 267,460 |
Prepayments and accrued income | 541,880 | 1,761,012 |
7,965,679 | 7,965,411 |
Amounts falling due after more than one year: |
Other debtors | 85,037 | - |
Aggregate amounts | 8,050,716 | 7,965,411 |
Included in Other debtors is the amount of £601,655 (2022: £712,780) relating to security deposits. |
Included in Prepayments and accrued income is the amount of £481,663 (2022: £1,377,185) relating to prepaid rent and other related expenses. |
15. | CURRENT ASSET INVESTMENTS |
Group | Company |
31.12.23 | 31.12.22 | 31.12.23 | 31.12.22 |
£ | £ | £ | £ |
Digital assets | 89,724 | 4,532,153 |
During the year, there were disposals of assets of £4,442,429, resulting in a gain on disposal in the amount of £1,676,658 (2022: disposals of £6,922,318). The digital assets have been fair valued as per the price feed from the Coin Market Cap as at the year end. |
16. | CASH AT BANK AND IN HAND |
Group | Company |
31.12.23 | 31.12.22 | 31.12.23 | 31.12.22 |
£ | £ | £ | £ |
Corporate bank account | 77,250 | 615,086 | 77,250 | 594,223 |
Cash in digital marketplaces | 6,119,087 | - |
6,196,337 | 615,086 | 6,196,337 | 594,223 |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
17. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31.12.23 | 31.12.22 | 31.12.23 | 31.12.22 |
£ | £ | £ | £ |
Trade creditors | 1,461,300 | 1,787,618 |
Tax | - | 640,669 |
Social security and other taxes | 27,912 | 64,199 |
Other creditors | 161,579 | 457,961 |
Amount owed to related parties | 436,383 | 1,528,022 | 436,383 | 1,528,022 |
Interest payable | - | 53,479 | - | 53,479 |
Short term loans | 2,559,594 | 2,186,785 | 2,559,594 | 2,165,740 |
Accrued expenses | 72,025 | 266,010 |
4,718,793 | 6,984,743 |
Included in Short term loans is an amount of £2,559,594 owed to the UBO Oleksandr Lutskevych. Please refer to Note 21 for further details. |
18. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
31.12.23 | 31.12.22 | 31.12.23 | 31.12.22 |
£ | £ | £ | £ |
Amount owed to related parties | 5,133,859 | - |
Please refer to Note 21 for further details. |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.23 | 31.12.22 |
value: | £ | £ |
Ordinary | 1 | 500,000 | 500,000 |
20. | RESERVES |
Group |
Retained | Other |
earnings | reserves | Totals |
£ | £ | £ |
At 1 January 2023 | 6,641,119 | (27,964 | ) | 6,613,155 |
Deficit for the year | (963,065 | ) | (963,065 | ) |
Currency translation reserve | - | (484 | ) | (484 | ) |
At 31 December 2023 | 5,678,054 | (28,448 | ) | 5,649,606 |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
20. | RESERVES - continued |
Company |
Retained |
earnings |
£ |
At 1 January 2023 |
Deficit for the year | ( |
) |
At 31 December 2023 |
21. | RELATED PARTY DISCLOSURES |
During the year, the Group has granted a new loan to Jeter.app Ltd, a company under common control. As at year end, balance payable was £85,037. The loan has interest payable of 4.5% and was repaid in May 2024. |
During the year, the Group has received a new loan from Oleksandr Lutskevych amounting to £320,000. As at year end, balance payable was £2,559,594 (2022: £1,830,696). The loans are interest free and repayable by 31 December 2024. |
During the year, the Group has received new loans from CEX.IO Holding Ltd, the ultimate parent company based in Cyprus, amounting to the principal amount of £4,946,921. As at year end, balance payable was £5,133,859, including interest of £186,937. The loans have interest payable of 3% over the Bank of England base rate and were repayable by 2026. In February 2024, CEX.IO Limited has issued 4,848,520 shares at £1 nominal value per share to CEX.IO Holding Limited. These shares were issued to settle part of this outstanding loan. |
During the year, the Group has recharged service charges to CEX IO Limited (GIb), a company under common management of £899,221 (2022: £689,312) and balance receivable as at year end was £20,921 (2022: £145,998). |
During the year, the Group has recharged service charges to CEX Overseas LTD, based in BVI, a company under common management of £5,236,294 (2022: £5,060,060) and as at year end balance receivable was £NIL (2022: £3,182,688). |
During the year, the Group has recharged service charges to CEX OVRS LLC, based in Nevis, a company under common management of £3,443,418 (2022: £NIL) and and as at year end balance receivable was £6,103,047 (2022: £3,182,688). |
During the year, the Group has recharged service charges to CEX IO Corp. US, a company under common management of £863,401 (2022: £1,175,259) and balance receivable as at year end was £393,610 (2022: £970,836). |
During the year, the Group has purchased a software platform from Decent Finance Ltd, a company under common management for £691,667 (excl. VAT) and balance payable as at year end was £NIL. |
Included in creditors is an amount of £436,383 (2022: £972,727) due to CEX IO Corp, a company under common management. |
Included in debtors is an amount of £10,413 (2022: £NIL) due from CEX.IO Markets UK LTD, a company under common management. |
Included in debtors is an amount of £1,883 (2022: £NIL) due from Jeter.app Ltd, a company under common management. |
Included in cash and cash equivalent at digital market places is an amount of £6,119,086 held at digital wallet that is held with CEX.IO VASP, UAB (2022: £NIL), a company under common management. |
CEX.IO LTD (Registered number: 08757996) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
22. | AUDITOR LIABILITY LIMITATION AGREEMENT |
An auditors' limitation of liability agreement has been approved by the members for the financial period ended 31 December 2023. The principal terms and conditions are as below: |
- The agreement limits the amount of any liability owed to the Company by the auditors in respect of any negligence default, breach of duty or breach of trust, occurring in the course of audit of the Company's accounts and pursuant to this agreement the auditor may be guilty in relation to the Company. |
- The agreement also stipulates the maximum aggregated amount payable in event of any of the circumstances stated above. |
23. | POST BALANCE SHEET EVENTS |
On 29th February 2024, CEX.IO Limited has issued 4,848,520 shares at £1 nominal value per share to existing shareholder CEX.IO Holding Limited. These shares were issued to settle part of the outstanding loan to CEX.IO Holding Limited. |
24. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party is O Lutskevych. |
The immediate parent company is CEX.IO Holding Ltd, domiciled in Cyprus. |