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Registered number: 14392888












NODE MERCI LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

 

NODE MERCI LTD
 
COMPANY INFORMATION


Directors
S Barnby 
G Rodford 




Company secretary
N Fernandes



Registered number
14392888



Registered office
10 Queen Street Place

London

EC4R 1BE





 

NODE MERCI LTD

CONTENTS



Page
Directors' report
 
1 - 2
Independent auditor's report
 
3 - 5
Statement of comprehensive income
 
6
Balance sheet
 
7
Statement of changes in equity
 
8
Notes to the financial statements
 
9 - 13


 

NODE MERCI LTD

DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the period ended 31 December 2023.

Directors

The directors who served during the period were:

S Barnby (appointed 4 December 2023)
G Rodford (appointed 3 October 2022)

Directors' responsibilities statement

The directors are responsible for preparing the directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK 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 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Page 1

 

NODE MERCI LTD

DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Engagement with suppliers, customers and others

The Directors of Node Merci recognise the importance of building strong relationships with suppliers, investors, and other key stakeholders.
Suppliers:
At this early stage, the Company works closely with a limited number of service providers, including cryptocurrency exchanges, wallet providers, and technology partners. These relationships are essential for the secure and efficient management of the fund’s operations. The Company is committed to maintaining clear and open communication with these providers to ensure smooth collaboration and address any issues as they arise.
Investors:
While the Company does not yet have customers, it remains focused on building relationships with current and prospective investors. Regular updates are shared with investors on the progress of the fund, market developments, and potential investment opportunities in the cryptocurrency space. The Company aims to keep investors informed and engaged as the fund grows.
Other Stakeholders:
In these early days, the Company is also engaging with various industry participants to stay informed about best practices, technological advancements, and trends in the cryptocurrency sector. 

Disclosure of information to auditor

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditor

The auditor, Blick Rothenberg Audit LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





G Rodford
Director

Date: 18 September 2024

Page 2

 

NODE MERCI LTD

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NODE MERCI LTD
 FOR THE PERIOD ENDED 31 DECEMBER 2023

Opinion

We have audited the financial statements of Node Merci Ltd (the 'Company') for the period ended 31 December 2023, which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and the notes to the financial statements, including a summary of significant accounting policiesThe 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 31 December 2023 and of its profit for the period 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 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.

Opinion 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 directors' report for the financial period 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.

Page 3

 

NODE MERCI LTD

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NODE MERCI LTD (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

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 directors' 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 take advantage of the small companies' exemption from the requirement to prepare a strategic report.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 1, 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.

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:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, and non-compliance with laws and regulations, our procedures included the following: enquiring of management concerning the Company’s policies with regards to identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; enquiring of management concerning the Company’s policies for detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; enquiring of management concerning the Company’s policies in relation to the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; discussing among the engagement team where fraud might occur in the financial statements and any potential indicators of fraud; and obtaining an understanding of the legal and regulatory framework that the Company operate in and focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the Company. The key laws and regulations we considered in this context included the UK Companies Act 2006 and applicable tax legislation.
One particular focus area was the risk of fraud through management override of controls. Our procedures to
Page 4

 

NODE MERCI LTD

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NODE MERCI LTD (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

respond to risks identified included the following: performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; reviewing the bank statements of the Company for evidence of any large or unusual activity which may be indicative of fraud; enquiring of management in relation to any potential litigation and claims; and testing the appropriateness of journal entries and other adjustments.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment 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 auditor's report.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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.




Richard Hinton (senior statutory auditor)
  
for and on behalf of
Blick Rothenberg Audit LLP
 
Chartered Accountants, Statutory Auditor
  
16 Great Queen Street
Covent Garden
London
WC2B 5AH

18 September 2024
Page 5

 

NODE MERCI LTD
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023

Period ended 31 December 2023
Note
$

  

Turnover
 4 
9,768

Administrative expenses
  
(68)

Operating profit
  
9,700

Profit for the financial period
  
9,700

Unrealised surplus on revaluation of fixed asset investments
 8 
108,548

Other comprehensive income for the period
  
108,548

Total comprehensive income for the period
  
118,248

The notes on pages 9 to 13 form part of these financial statements.

Page 6


 
REGISTERED NUMBER:14392888
NODE MERCI LTD

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
Note
$

Fixed assets
  

Investments
 8 
357,917

  
357,917

Current assets
  

Debtors: amounts falling due within one year
 9 
14,391

  
14,391

Total assets less current liabilities
  
 
 
372,308

  

Net assets
  
372,308


Capital and reserves
  

Called up share capital 
 10 
254,060

Revaluation reserve
  
108,548

Profit and loss account
  
9,700

  
372,308


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




G Rodford
Director

Date: 18 September 2024

The notes on pages 9 to 13 form part of these financial statements.

Page 7

 

NODE MERCI LTD

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

$
$
$
$

On incorporation
-
-
-
-



Profit for the period
-
-
9,700
9,700

Surplus on revaluation of fixed asset investments
-
108,548
-
108,548
Total comprehensive income for the period
-
108,548
9,700
118,248

Shares issued during the period
254,060
-
-
254,060


At 31 December 2023
254,060
108,548
9,700
372,308

The notes on pages 9 to 13 form part of these financial statements.

Page 8

 

NODE MERCI LTD

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

1.


General information

Node Merci Ltd is a private company, limited by shares, incorporated in the United Kingdom and registered in England and Wales. 
The Company's registered address is 14th Floor, 1 Old Jewry, London, EC2R 8DN.
Node Merci's primary activity involves pledging assets to Proof of Stake ('POS') networks by converting fiat currencies from raised funds into cryptocurrency. The cryptocurrency is then staked in relevant networks to generate yields, which are accumulated and recognised as income on the company's balance sheet.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
the requirements of Section 33 Related Party Disclosures paragraph 33.7;
the requirement of paragraph 24(b) of IFRS 6 Exploration for and Evaluation of Mineral Resources to disclose the operating and investing cash flows arising from the exploration for and evaluation of mineral resources (when applying this standard in accordance with paragraph 34.11 of FRS 102).

This information is included in the consolidated financial statements of Archax Group Limited as at 31 December 2023 and these financial statements may be obtained from the Company's registered office.

Page 9

 

NODE MERCI LTD

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

After making enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is USD.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

 
2.5

Revenue

Revenue from staking rewards is recognised on a monthly basis. The rewards generated from staking activities are measured by applying the average market price of the relevant cryptocurrency for the month in which the rewards are earned. The monthly staking rewards are recognized as income at this value in the company’s financial statements.

 
2.6

Valuation of investments

The Company has invested in cryptocurrencies. These cryptocurrencies are accounted for as intangible assets. Given the directors intend to hold the assets for long-term value appreciation, they have been presented in the financial statements as Fixed asset investments. As permitted by section 18 of FRS102, the Company has made an accounting policy choice to apply the revaluation model to its cryptocurrencies.
Accordingly, the assets are remeasured to fair value at each balance sheet date. Losses on revaluation are recognised in profit and loss. Gains on revaluation are recognised in the statement of comprehensive income, except to the extent they reverse a revaluation decrease of the same asset that was previously recognised in profit and loss. 

 
2.7

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 10

 

NODE MERCI LTD

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In preparing the financial statements, management has made significant judgements regarding the recognition and measurement of the company’s cryptocurrency investments. Cryptocurrencies present unique challenges, particularly in valuation and market volatility, which require the application of judgements and estimates.
Cryptocurrency Investments
The company holds cryptocurrency investments that are revalued at fair value at each reporting date. Determining the fair value of these investments requires management to make judgements regarding the appropriate valuation methods and data sources. The company primarily relies on observable market data from active cryptocurrency exchanges. However, due to the inherent volatility of cryptocurrency markets, prices can experience significant fluctuations within short periods. Factors such as market liquidity, regulatory developments, and investor sentiment can materially affect cryptocurrency valuations.
Key sources of estimation uncertainty include the volatility of cryptocurrency prices and the liquidity of specific cryptocurrency assets. The dynamic nature of cryptocurrency markets means that market conditions can change rapidly, potentially leading to material adjustments to the carrying value of the company’s cryptocurrency holdings. Management regularly reviews market conditions and the assumptions used in determining fair value to ensure that these estimates remain reasonable.


4.


Turnover

The whole of the turnover is attributable to the Company's principal activity. 

All turnover arose within the United Kingdom.


5.


Auditor's remuneration

The Company's audit fees for the period were £8,000. This cost has been included in the financial statements of its ultimate parent undertaking.



The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.


6.


Employees




The average monthly number of employees, including the directors, during the period was as follows:


        2023
            No.






Employees
2

Page 11

 

NODE MERCI LTD

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

7.


Taxation


2023
$



Current tax on profits for the year
-


Total current tax
-

Factors affecting tax charge for the period

The tax assessed for the period differs from the standard rate of corporation tax in the UK of 23.5%. The differences are explained below:

2023
$


Profit on ordinary activities before tax
9,700


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5%
2,280

Effects of:


Group relief
(2,280)

Total tax charge for the period
-


8.


Fixed asset investments





Other fixed asset investments

$



Valuation


Additions
249,369


Revaluations
108,548



At 31 December 2023
357,917




Page 12

 

NODE MERCI LTD

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

9.


Debtors

2023
$


Other debtors
4,623

Prepayments and accrued income
9,768

14,391



10.


Share capital

2023
$
Allotted, called up and fully paid


251,519 A Ordinary shares of $1.00 each
251,519
2,541 B Ordinary shares of $1.00 each
2,541

254,060

During the period the following allotments of shares were made at par:
 
30,000 Ordinary shares of £0.001 each were issued on incorporation. On 26 January 2023 these shares were redenominated as shares of $0.001127 each.
225,400,195 Ordinary shares of $0.001127 each were issued on 27 January 2023
1 Deferred share of $0.17 was issued on 9 August 2023.

On 9 August 2023 all of the shares in issue were consolidated into 254,060 Ordinary shares of $1 each.
Also on 9 August 2023 the 254,060 Ordinary shares were redesignated as 251,519 A Ordinary shares and 2,541 B Ordinary shares.


11.


Related party transactions

The Company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.


12.


Controlling party

The Company's immediate parent undertaking is Archax Ventures Limited. 
The parent undertaking of the smallest group of undertakings for which group financial statements are drawn up and of which the Company is a member is Archax Group Limited (formerly known as Archax Holdings Limited), whose registered office is at 10 Queen Street Place, London, England, EC4R 1BE. Copies of these group financial statements are available to the public from its registered office.

Page 13