(formerly
For the year ended 29 February 2024
Registered Number:
Contents |
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Company information | 3 |
Strategic report for the year ended 29 February 2024 | 4 |
Directors report for the year ended 29 February 2024 | 14 |
Independent auditor's report to the members of Albaco Limited (“formerly Alba |
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Bank Limited”) | 19 |
Profit and Loss Account | 24 |
Balance sheet | 25 |
Statement of changes in equity | 26 |
Statement of cashflows | 27 |
Notes to the financial statements for the year ended 29 February 2024 | 28 |
Company information
Directors
James McColl OBE
Company Secretary
Registered Office
Registered Number
Registered in Scotland number SC586124.
Company Incorporation Date
Bankers
36 St Andrews Square
Edinburgh
EH2 2YB
United Kingdom
Auditor
Statutory Auditor
9 Haymarket Square
Edinburgh
EH3 8RY
United Kingdom
Strategic report for the year ended 29 February 2024
The Directors present the strategic report of Albaco Limited (“the Company”) for the year ended 29 February 2024, in accordance with section 414A of the Companies Act 2006.
1.1 Business review and future developments
The Company is a Scottish entity incorporated in 2018. The Company was given Authorisation With Restrictions (‘AWR') from the regulators in March 2023 when it entered into full mobilisation before voluntarily cancelling its authorisation as a Bank in March 2024. Following receipt of a commitment of capital for the first 12 months of trading the Company resubmitted its application to the Financial Conduct Authority (“FCA”) and Prudential Regulation Authority (“PRA”) in September 2024, which if successful will allow the business to achieve full authorisation as a Bank, with the aim to launch in the Second quarter of 2025.
Albaco Limited's future committed capital is structured into three tranches: £1 million during November 2024, an additional £0.8 million in December 2024, and £22.5 million contingent upon receiving regulatory approval. Furthermore, shareholders have given written confirmation of a further £2.5m of capital in December 2024. Shareholder sentiment remains strong, with shareholders actively supporting the Company's success and expressing a commitment to meet future capital needs as required.
Since the submission to the regulator, management has established consistent and proactive communication to ensure alignment and progress throughout the authorisation process.
In preparation for launch the Company has built the IT infrastructure and employed the relevant key staff to ensure the Company is supported for launch activities. Management is monitoring the capital position along with Board and shareholders in anticipation of any further capital injections being required if authorisation is delayed.
On authorisation the Company seeks to launch a Scottish Headquartered regional SME Bank primarily funded by business and retail deposits (the latter of which is a regulated activity). The Company will provide-commercial term lending tailored to the individual requirements of SME borrowers, all typically secured on real estate or another form of collateral.
1.2 Key performance indicators
| 12 months to 29 | 8 months to 28 |
| February 2024 | February 2023 |
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| £ | £ |
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Loss after tax | (8,963,198) | (1,610,813) |
The results for the company are set out on pages 24 to 47 show a loss after tax of £8.9m which is predominantly made up of staff and consultancy costs totalling £6.6m, property costs of £0.5m, IT costs of £0.5m and professional and regulatory costs of £0.6m and write-down of intangible assets of £0.5m. Income received by the Company is in relation to interest on high quality liquid investments and cash held Bank institution.
This is in line with expectations as the key activities during the period have been to prepare the Company for launch and the Company cannot undertake revenue generating activities until authorisation as a Bank has been granted by the regulators.
Loss before tax is currently the only relevant financial metric used by the Directors in assessing the performance of the Company.
1.3 Alba Governance structure
The Board is the primary governing body and is responsible to the shareholders for delivering the strategy of the Company. It has ultimate responsibility for setting the Company's strategy, corporate objectives, and enterprise risk management framework, taking into consideration the interests of customers and shareholders. The Board has overall responsibility for the Company. All the powers of the Company are vested in and exercised by the Board; but some are delegated to individuals such as CEO and to various committees. The role of the Board is to provide strategic direction for the Company within a framework of prudent and effective controls through the regular assessment of management information which enables risks to be assessed and managed.
The Board is supported by a number of Board Sub Committees:
Committee | Responsibility |
Board Risk Committee (BRC) | Responsible for providing assurance to the Board on risk and compliance matters throughout the Company, maintaining oversight of executive and management decisions, providing challenge to the executive on all risk matters and providing recommendations to the Board on all risk matters. |
Board Audit Committee (BAC) | Responsible, among other matters, for providing assurance to the Board on the integrity of internal and financial controls and of risk management systems throughout the Company. Committee is responsible for appointing and challenging external audit and where appropriate providing challenge to internal audit. |
Board Nomination & Remuneration Committee (NOM/REMCO) | Responsible, among other matters, for ensuring that the Board and Executives have the requisite skills, ensuring that all Board and Executive appointments are well managed, considering succession planning for Directors and Executives, and evaluating the balance of the skill, knowledge, experience and diversity on the Board and all Board committees. The Remuneration Committee is also responsible, among other matters, for providing oversight on matters regarding the remuneration of the Board, Executives and senior management (Material Risk Takers) and the Reward and Recognition |
| Policy of the Company and its alignment with the business strategy, business objectives, risk appetite and longer-term interests of the Company. |
Executive committee | Responsible, among other matters, for ensuring that risks are identified managed and monitored appropriately and that the Company continues to meet applicable regulatory requirements, establishing executive subcommittees as required. |
The Company operates an executive level structure with an Executive Committee (Exco) delivering the strategy approved by the Board and with responsibility for the day-to-day management of the Company. The Company operates four formal executive sub committees:
Committee | Responsibility |
Asset & Liability Committee (ALCO) | The role of the Assets and Liabilities Committee (ALC0) is to monitor the structure of the Company's assets and liabilities, controlling financial, liquidity and treasury risks and reviewing control procedures including limits, reporting lines and mandates. The Committee focuses on liquidity risk, interest rate risk, counterparty credit risk, funding risk, basis risk and refinancing risk. |
Executive Risk Committee (ERC) | The purpose of the Executive Risk Committee (ERC) is to support the CRO in overseeing the risk profile of the Company (within its risk appetite approved by the Board). The Committee reviews and challenges the risks associated with the Company's strategy, plans, and overall management of risks. |
Operations Committee (OPCo) | The purpose of OpCo is to support the CRO and Executive Risk Committee in overseeing the operations reporting and non-financial risk (operational risk, conduct risk, compliance and financial crime) profile of the Company (within its risk appetite approved by the Board and is accountable for the first line of defence (“1LOD”) control of non-financial Risk across the Company. |
Credit Risk Committee (CRC) | The Credit Risk Committee (CRC) is accountable for first and second line of defence (1 and 2LOD) control of credit Risk. |
Regular Exco topics include Strategy Delivery, Credit Lending, Customer, People, Financial Performance, IT, Operations and Outsourcing and Products.
1.3.1 Board Composition
The Board of Directors is composed of 7 members, including 1 executive Director and 6 non-executive Directors. The diversity of the Board in terms of skills, experience, and background ensures robust decision-making and effective governance.
Roles and Responsibilities
Chairperson: The Chairperson leads the Board and ensures its effectiveness in all aspects of its role. The Chairperson sets the agenda for Board meetings and facilitates open and constructive discussions.
Chief Executive Officer (CEO): The CEO is responsible for the day-to-day management of the company and the implementation of the Board's strategies and policies.
Non-Executive Directors: The non-executive Directors bring independent judgment and scrutiny to the Board's deliberations and decisions. They provide valuable insights and contribute to the development of the company's strategy.
Board Meetings
The Board met 15 times during the reporting period. Attendance at these meetings was as follows:
Director | No of meetings attended |
Rod Ashley | 13 |
Catherine Brown | 3 |
Alex Cameron | 11 |
John Fisher | 3 |
Sameer Gehlaut | 0 |
Graeme Jones | 1 |
James A McColl (OBE) | 15 |
Fraser McNeill | 3 |
Michael Morley | 2 |
Jeff Picton | 12 |
Balaji Prassana | 10 |
Robert Sharpe | 6 |
Jonathan Thompson | 1 |
Dominic Wade | 1 |
Anne Weatherston | 13 |
1.3.2 Corporate governance
Albaco Limited is committed to maintaining the highest standards of corporate governance to protect the interests of its shareholders, stakeholders, and ensure the long-term sustainability of the Company. The governance framework focuses on the structure and responsibilities of its governing bodies and senior leadership team.
The Board-approved Corporate Governance Framework formalises the Company's commitment to transparency, accountability, and ethical conduct. This dynamic document is periodically reviewed and updated to reflect regulatory changes, industry standards, and stakeholder needs.
The Corporate Governance Framework governs the conduct of the Company and applies to all employees, directors, and officers of the Company. It is designed to guide in upholding the principles of transparency, accountability, and ethical conduct in its operations.
1.3.3 Risk Management
The Risk Management Function and its relevant policies, processes and frameworks have been designed to ensure effective and appropriate oversight of proposed outsourced functions to third party service providers.
1.4 Section S172(1) Statement
As directors of Albaco Limited we are committed to promoting the success of the Company for the benefit of its members as a whole, in accordance with Section 172(1) of the Companies Act 2006. Although the Company has not yet commenced trading, we have considered the following factors in our decision-making processes:
Long-Term Decision Making
The focus has been on establishing a strong foundation for the Company's future operations. This includes developing a robust business plan, building operational functionality, applying for necessary regulatory approvals, and ensuring that the company is well-positioned to achieve long-term success once trading begins.
Interests of Employees
The Company has 30 employees. There is a commitment to create a positive and supportive work environment. Policies are in place that promote employee well-being, development, and engagement.
Business Relationships
The Directors understand the importance of fostering strong relationships with future suppliers, customers, and other stakeholders. The Business has initiated discussions with partners and are committed to building mutually beneficial relationships that will support the Company's growth and success.
Impact on the Community and Environment
The Company is dedicated to operating in a socially responsible manner. Our future business activities will consider the impact on communities and environment. We aim to implement sustainable practices and contribute positively to the communities in which we operate.
High Standards of Business Conduct
Directors are committed to maintaining high standards of business conduct. This includes adhering to ethical practices, complying with all relevant laws and regulations, and promoting a culture of integrity and transparency within the company.
Fair Treatment of Members
Directors are dedicated to acting fairly between members of the Company. This includes ensuring that all shareholders are treated equitably and that their interests are considered in our decision-making processes.
1.5 Principal risks
The management of the business and execution of the strategy are subject to a number of risks. The Company has an Enterprise Risk Management Framework (“ERMF') comprising three lines of defence.
The ERMF framework which sets out the Company's overarching risk management framework will be reviewed annually to ensure it is fit for purpose.
1.5.1 Current Key risks
Regulatory Authorisation
One of the primary risks facing the Company is the potential failure or extended delay to receive authorisation from the regulator to operate as a Bank. This authorisation is crucial for the company's ability to commence and continue its banking operations. Without it, the company would be unable to trade as a Bank, significantly impacting its business model and financial performance.
Capital Requirements
There is a risk that the Company may require more capital than initially projected to meet regulatory requirements and support its growth plans due to delays in authorisation. Failure to secure the necessary capital could hinder the company's ability to achieve its strategic objectives and maintain financial stability.
1.5.2 Business Risk
Business Risk is the risk that the Company fails to deliver against its Business Plan, or that incorrect assumptions are used about external or internal factors when developing the strategic objectives.
The Board approved the strategic plan ensuring that the strategy was within the credit and risk appetites and will continue to monitor Company performance to plan along with the operating landscape.
1.5.3 Credit risk
On approval of the Banking licence the Company will be exposed to credit risk through its lending activities which will be managed through ensuring each deal is within the mandated limits and risk appetite.
1.5.4 Treasury & capital risk
The Company on authorisation will continue to face a number of treasury related risks, namely Market Risk, Capital Risk, Liquidity Risk & Funding Risk.
In the early years, the Company's main risks will be Funding and Capital risk. The Company will need to ensure that it maintains stable sources of funding and can maintain the regulatory capital requirements in the medium to long term to meet its financial obligations.
The Treasury and Capital Risk policy specifies the management actions for Market, Liquidity, Funding and Capital risk.
1.5.5 Operational risk
Operational risk management is a core component of the ERMF and is embedded in the Company's day-to-day business activities.
1.3.6 Compliance risk
Compliance risk is managed through an integrated set of controls and processes that are responsive to external and internal risks, including a complex and dynamic regulatory environment and the evolving products, services, and strategies of the 1LOD.
1.5.7 Conduct Risk
Conduct risk is managed through having a clear code of conduct for all staff which makes clear the Company's commitments and appetite to good conduct in all we do. The Code of conduct is supported by monitoring and management information to ensure customers are treated properly and in accordance with regulatory duties.
1.5.8 Information & Cyber security
The primary risks to the Company arise from the potential loss through malicious or accidental breakdown in its security control environment. The Company has put in place the appropriate policies, controls, and escalation processes to mitigate this risk.
1.5.9 Environmental matters
The Company acknowledges the importance of building an Environmental, Social and Governance (ESG) strategy, which is proportionate to its size, whilst also laying the foundations for ESG to become an increasing part of its DNA.
In the first instance, the Company is focusing on developing a Climate Change Strategy to set it on a strategic journey to address the risks and leverage the opportunities posed by climate change. The strategy will include the development of a Climate Risk Framework. This will support the Company in assessing the potential business, strategic and financial implications of climate change, enabling the Company to consider further how it identifies, manages, and reports these risks, for example embedding them in the Company's core risk management practises through risk appetite reporting and related stress testing scenarios.
As the Company matures, this will pave the way for the development of the overarching ESG action plan.
Approved by the Board on 18 November 2024 and signed on 18 November 2024 on its behalf by:
Jonathan Thompson
Chief Executive Officer
Directors report for the year ended 29 February 2024
The Directors present their annual report together with the audited financial statements of the Company for the year ended 29 February 2024.
The Company prepared micro accounts in the prior year and as such the comparatives included withing the financial statements are unaudited.
Principal Activity and review of the business
Albaco Limited (formerly Alba Bank Limited) is a private company limited by shares.
Directors of the Company
The Directors, who held office during the year, were as follows:
Jeremy Brettell (appointed 24 May 2024)
William Gray (appointed 24 May 2024)
Neil Holden (appointed 24 May 2024)
Andrei Kozliar (24 May 2024)
James McColl OBE
Jonathan Thompson (appointed 9th February 2024. resigned 20 March 2024, appointed 8th July 2024)
Anne Weatherston
Change of name
On 10 April 2024, the Company's name changed from Alba Bank Limited to Albaco Limited.
Share capital
During the year ended 29 February 2024, the Company issued 9,166,667 shares with a nominal value of £1 each, at a premium of £0.20 per share. The total consideration for the share issue amounted to £11,000,001.
On 16 May 2023, the Company issued 7,500,000 and on 24 November 2023 issued 1,666,667 shares to Hera Holding Limited. These shares were issued pari passu in all respects with existing ordinary shares.
As a result, share capital increase from £9,442,973 to £18,609,640 as at 29 February 2024. Share premium also increased from £642,028 to £2,475,362.
On the 3rd September 2024, the purchase of 10,240,115 from Hera Holdings by existing and new shareholders was completed and Hera Holdings ceased to have significant control of the Company. IN9 Trading DMCC was deemed to have significant control of the Company on 3rd September 2024.
In September 2024 to facilitate bridge capital fundraising the Company sought approval from Board and Shareholders to create a new class of £0.10 B shares with the same rights as the ordinary shares. More details are included in Note 26.
Dividends
The Company paid no dividends during the year or the prior period.
Operating leases
Details of the Company's operating leases are included in Note 22.
Future developments
Information on the future developments of the Company is included in the strategic report.
Going concern
In March 2023, Albaco Limited received Authorisation With Restrictions from the Prudential Regulation Authority (PRA) as it entered full mobilisation. The Company voluntarily cancelled this authorisation in March 2024.
Following a commitment of capital to support its working capital needs, Albaco Limited resubmitted its application to the Regulators on 27 September 2024. If successful, this will enable the Company to achieve full authorisation as a bank, with plans to launch in 2025. Should authorisation not be granted, the Company will initiate a solvent wind-down process.
The Board has prepared these financial statements on a going concern basis. The Directors have conducted a thorough evaluation of the Company's financial projections and key risks. They have identified a material uncertainty regarding the going concern basis due to:
• | Banking Licence Approval: The Company's ability to operate as a going concern is contingent upon obtaining banking authorisation, which is linked to significant capital commitments. |
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• | Shareholder Support: Additional shareholder support is required to fund the Company's working capital needs until authorisation is received or to fund a solvent wind-down if the application is unsuccessful. Shareholders have provided written assurances of sufficient capital resources to meet the Company's needs up to May 2025, with further capital available contingent upon authorisation. If the decision period extends to September 2025, additional funding will be necessary, as there is no formal agreement in place for this extended period at this time. |
The Directors have concluded that these factors represent a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. This uncertainty could affect the Company's ability to realise its assets and discharge its liabilities in the normal course of business.
Despite the material uncertainty, based on correspondence with the PRA, shareholder capital commitments, and assurances provided until May 2025, the Directors believe the Company will continue as a going concern for the foreseeable future. Therefore, the Company continues to adopt the going concern basis in preparing the financial statements.
Details on financial risk management are provided in the strategic report on page 12 of the financial statements.
Further information regarding the going concern basis is included in section 2 of the Notes to the financial statements.
Subsequent events
Details of Subsequent events are detailed in Note 26.
Disclosure of information to the auditor
Each Director has taken steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information they know of and of which they know the auditor is unaware.
The Directors confirm that:
• | so far as they are aware, there is no relevant audit information of which the Company's auditor is unaware, |
• | they have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information. |
Independent Auditor
The independent auditor, Deloitte LLP, were appointed during the year and have indicated their willingness to continue in office.
Statement of Directors responsibilities for the year ended 29 February 2024
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law required the Directors to prepare financial statements for each financial year. Under the law the Directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Standard comprising FRS102 “The financial Reporting Standard applicable in the UK and Republic of Ireland”.
Under company law, 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 the financial statements, the Directors are required to:
• | Select suitable accounting policies and then apply them consistently. |
• | State whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements. |
• | make judgements and accounting estimates that are reasonable and prudent: and |
• | 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 safeguarding the assets of the company and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are also 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 the financial statements comply with the Companies Act 2006.
Approved by the Board on 18 November 2024 and signed on
Jonathan Thompson
Chief Executive Officer
Independent auditor's report to the members of Albaco Limited (“formerly Alba Bank Limited”)
Report on the audit of the financial statements
Opinion
In our opinion the financial statements of Albaco Limited (Formerly Alba Bank Limited) (the ‘company'):
• | give a true and fair view of the state of the company's affairs as at 29 February 2024 and of its loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
We have audited the financial statements which comprise:
• | the profit and loss account; |
• | the balance sheet; |
• | the statement of changes in equity; |
• | the statement of cash flows; |
• | the related notes 1 to 26. |
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).
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 UK, including the Financial Reporting Council's (the ‘FRC's') Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that the company's ability to operate as a going concern is contingent upon obtaining banking authorisation, which is linked to significant capital commitments. Additional shareholder support is also required to fund the company's working capital needs until authorisation is received or to fund a solvent wind-down if the application is unsuccessful.
As stated in note 2, these events or conditions, along with the other matters as set forth in note 2, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
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 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.
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.
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.
A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
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 considered the nature of the company's industry and its control environment, and reviewed the company's documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and the directors about their own identification and assessment of the risks of irregularities, including those that are specific to the company's business sector.
We obtained an understanding of the legal and regulatory frameworks that the company operates in, and identified the key laws and regulations that:
• | had a direct effect on the determination of material amounts and disclosures in the financial statements. These included the UK Companies Act and tax legislation; and |
• | do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. |
We discussed among the audit engagement team, including relevant internal specialists such as Information Technology specialists regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
In addition to the above, our procedures to respond to the risks identified included the following:
• | reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; |
• | performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; |
• | enquiring of management and external legal counsel concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and |
• | reading minutes of meetings of those charged with governance, and reviewing correspondence with the Prudential Regulatory Authority. |
Report on other legal and regulatory requirements
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• | the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• | the strategic report and the directors' report have been prepared in accordance with applicable legal requirements. |
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 any material misstatements in the strategic report or the directors' report.
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report in respect of the following matters 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. |
We have nothing to report in respect of these matters.
Other matter
As the company was exempt from audit under section 477 of the Companies Act 2006 in the prior 8-month period we have not audited the corresponding amounts for that period.
Use of our report
For and on behalf of Deloitte LLP
Statutory Auditor
Profit and Loss Account
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| 12 months to | 8 months to 28 |
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| 29 February | February 2023 |
| Note | 2024 | (unaudited) |
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| £ | £ |
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Administrative expenses | 5 | ( | ( |
Other operating income | 9,10 | - | |
Loss before interest and tax |
| (8,967,177) | (1,619,077) |
Interest receivable |
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Bank interest & charges |
| ( | ( |
Loss before tax |
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Taxation | 11 | - | - |
Total comprehensive loss after tax |
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Balance sheet
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| As at 28 |
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| As at 29 | February 2023 |
| Note | February 2024 | (unaudited) |
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| £ | £ |
Fixed Assets |
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Intangible assets | 12 | ||
Tangible fixed assets | 13 | ||
Total Fixed assets |
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Current assets |
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Debt securities | 14 | - | |
Prepayments and accrued income | 15 | ||
Cash and cash equivalents | 16 | ||
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Current Liabilities |
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Accrued expenditure, deferred income, and |
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other liabilities | 19 | ( | ( |
Net Current assets |
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Total assets less current liabilities |
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Non-current Liabilities |
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Provisions | 20 | ( | - |
Accrued expenditure, deferred income, and |
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other liabilities | 19 | ( | ( |
Total Net assets |
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Equity |
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Share Capital | 21 | ||
Share premium | 21 | ||
Retained earnings |
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Total Equity attributable to shareholders |
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1At the balance sheet date, the company had unutilised tax losses of £14,779,444 available for offset against the future taxable profits. A deferred tax asset has not been recognised in respect of these losses due to the uncertainty over the timing and extent of future taxable profits against which these losses can be utilised.
Approved by
Jonathan Thompson
Chief Executive Officer
Statement of changes in equity
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| Share | Retained |
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| Note | Share capital | premium | earnings | Total |
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| £ | £ | £ | £ |
As at 30 June 2022* | 21 | ( | |||
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Shares issued* | 21 | - | |||
Loss for the year* |
| - | - | ( | ( |
As at |
| ( | 4,268,756 | ||
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As at 28 February 2023 | 21 | ( | |||
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Shares issued | 21 | - | |||
Loss for the year |
| - | - | ( | ( |
As at 29 February 2024 |
| ( |
*Unaudited
Statement of cashflows
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| 12 months to | 8 months to 28 |
|
| 29 February | February 2023 |
| Note | 2024 | (unaudited) |
Loss from ordinary activities |
| ( | ( |
Adjustment for: |
|
|
|
Depreciation | 5 | ||
Write-off intangibles | 12 | ||
Interest received |
| ( | ( |
Bank interest & charges |
| ||
Movements in assets & liabilities | 17 | ||
Operating cash items |
|
|
|
Bank interest & charges |
| ( | ( |
Net cash flows from operating activities |
| ( | ( |
|
|
|
|
Cash flows from investing activities |
|
|
|
Interest received |
| ||
Purchase of fixed assets | 13 | ( | - |
Purchase of debt securities | 14 | ( | - |
Development of Intangible assets | 12 | ( | ( |
Net cashflows from Investing activities |
| ( | |
Proceeds on issue of shares | 21 | ||
Net cash from Financing activities |
| ||
|
|
|
|
Net cash and cash equivalents | 16 | ||
|
|
|
|
Cash and cash equivalents at start of period | 16 | ||
Cash and cash equivalents at end of |
|
|
|
Period | 16 |
Notes to the financial statements for the year ended 29 February 2024
1 Basis of preparation
Albaco Limited (the “Company”) is a Private Limited Company incorporated in
FRS 102 section 11 & 12 provides an option to adopt IAS 39 Financial Instruments: Recognition and measurement (“IAS 39”) or IFRS 9 Financial instruments (“IFRS 9”). The Company has opted to apply IAS 39 in the recognition and measurement of financial instruments.
The functional currency of the Company is considered to be pounds sterling.
The last unaudited financial statements under FRS 101 were for the period ended 28 February 2023 and the date of transition to FRS 102 was therefore 1 March 2023. The transition did not result in material changes to the accounting policies adopted by the Company.
As a financial services business, the Company must comply with numerous laws and regulations, which affect the way it does business. As a result of operating in this environment, the company can occasionally be subject to complaints and threatened or actual legal proceedings brought by or on behalf of third parties, which could relate to a number of issues. Where material, such matters are periodically reassessed, to determine the likelihood of the Company incurring a liability. At this time, the Company does not believe that it is possible for the final outcome of any such case to have a material adverse effect on its financial position, operations, or cash flows.
2 Going Concern
In March 2023, Albaco Limited received Authorisation With Restrictions from the Prudential Regulation Authority (PRA) as it entered full mobilisation. However, the Company voluntarily cancelled this authorisation in March 2024.
Following a commitment of capital to support its working capital needs, Albaco Limited resubmitted its application to the Regulators on 27 September 2024. If successful, this will enable the Company toachieve full authorisation as a bank, with plans to launch in 2025. Should authorisation not be granted, the Company will initiate a solvent wind-down process.
The Financial statements are being prepared on a going concern basis as the Directors are satisfied that the Company has sufficient resources to continue operating for a period of at least 12 months from the date of approval of the financial statements.
In order to satisfy themselves with the appropriateness of the use of going concern assumption the Directors have evaluated the following:
• | The projected 5-year plan, as detailed in the Regulatory Business plan for submission to regulators as part of banking application. |
• | Revised Pre-trading plan considering the additional capital requirements of the company to the revised management expected trading date of May 2025. |
• | Sufficient capital resources to sustain the Company's existing and planned business activities remain sufficient prior to authorisation and subsequently maintain all regulatory capital requirements on full authorisation. |
• | Adequacy of liquidity to fund planned activities prior to authorisation and subsequently remain within regulatory requirements. |
• | Stress testing on the projected 5-year plan to ensure the Company can withstand volatility. |
The key elements that underpin the Directors conclusion include:
• | Capital Adequacy: The Company is well-positioned with committed capital injections that support both the pre-trading and initial trading phases, with projected CET1 capital expected to meet regulatory requirements upon full authorisation. The Board remain vigilant of capital risks but are confident that the committed capital and strong shareholder support provide effective mitigation. Additionally, shareholders have indicated a willingness to provide further capital if the pre-trading phase needs to be extended, reinforcing the Company's financial stability. |
• | Liquidity Management: The Company's robust liquidity foundation is supported by rigorous stress testing undertaken on financial projections and conservative liquidity buffers. With liquidity coverage and net stable funding ratios consistently above regulatory minimums in the projected financials, the Company is well-prepared to sustain operations during unforeseen liquidity stresses. |
• | Risk Resilience: Through the ICAAP and ILAAP analyses, multiple stress scenarios—including interest rate volatility and operational disruptions have been evaluated, confirming the Company's resilience to significant stresses. This demonstrates the Company has capacity to absorb potential impacts on capital and liquidity, thereby supporting sustained operational stability. |
• | Strategic Vision: The Company's focused lending model, competitive pricing strategies, and targeted approach to the SME market support steady growth with manageable risk exposure. Capital allocation aligned with shareholder backing reflects a commitment to long-term value creation and prudent financial management. |
• | Regulatory approval: The Directors acknowledge the regulatory risk associated with authorisation. The shareholders have indicated support for further pre-trading period should the process not be complete per management expectations. Based on verbal and written correspondence with the regulator, the Board remains confident in the Company's progress towards authorisation. |
The Directors have conducted a thorough evaluation of the Company's financial projections and key risks. However, they have identified a material uncertainty regarding the going concern basis due to:
• | Banking Licence Approval: The Company's ability to operate as a going concern is contingent upon obtaining banking authorisation, which is linked to significant capital commitments. |
|
|
• | Shareholder Support: Additional shareholder support is required to fund the Company's working capital needs until authorisation is received or to fund a solvent wind-down if the application is unsuccessful. Shareholders have provided written assurances of sufficient capital resources to meet the Company's needs up to May 2025, with further capital available contingent upon authorisation. If the decision period extends to September 2025, additional funding will be necessary as there is no formal agreement in place for this extended period at this time. |
The Directors have concluded that these factors represent a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. This uncertainty could affect the Company's ability to realise its assets and discharge its liabilities in the normal course of business.
Despite the material uncertainty, based on supportive correspondence with the PRA, shareholder capital commitments, and assurances provided until May 2025, the Directors believe the Company will continue as a going concern for the foreseeable future. Therefore, the Company continues to adopt the going concern basis in preparing the financial statements.
3 Sources of estimation uncertainty and key judgements
4. Accounting Policies
The principal accounting policies are noted below:
4.1 Revenue recognition
Interest income and expense for all interest-bearing financial instruments along with fee income and expenses are recognised on an accruals basis in the income statement using the effective interest rate method(‘EIR'). The EIR is the rate that discounts the estimated future cash payments and receipts through the expected life of the financial asset or financial liability (or, where appropriate, a shorter period) to the net carrying value of the financial asset or financial liability. When calculating the effective interest rate, the Company will estimate future cash flows considering all contractual terms of the financial instrument, but not future credit losses.
The calculation of effective interest rate will include those transaction cost and fees paid or received which are deemed to be an integral part of the EIR. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset of financial liability.
Fees and commission recognised in the income statement arise from transactions or services performed over a period of time and are recognised over the period of the transaction or service.
4.2
4.3 Government grants
Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets.
Grants relating to revenue are recognised in income over the period in which the related costs are recognised. A grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs is recognised in income in the period in which it becomes receivable.
Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.
4.4 Taxation
Tax comprises current tax and deferred tax. Tax is recognised in the Income statement except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case tax is recognised in the same statement as the related item appears.
Current tax
Current tax expense is charged or credited based upon the expected tax payable or receivable on the taxable amounts for the current year or any adjustments made in respect of prior years. It is measured using tax rates enacted or substantially enacted at the reporting date.
Income tax recoverable on tax allowable losses is recognised as a current tax asset where it is regarded the amounts will offset taxable profits in the current or prior periods.
Deferred Tax
Deferred tax will arise from temporary timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements.
Deferred tax will be recognised on all timing differences at the reporting date except for certain exceptions.
Deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits and is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply on the reversal of the timing difference.
4.5 Intangible Fixed Assets
Intangible assets arising from software and website development costs are capitalised when it has been established that there are probable expected future economic benefits, and the costs can be measured reliably. Intangible assets are initially recognised at cost and subsequently amortised over the period the future economic benefits are expected to the consumed or if this cannot be determined on a straight-line basis. Impairment testing is conducted where indicators of impairment exist. Where impairment occurs, the charge is recognised for the difference between the carrying value and the recoverable amount. The recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is calculated as the present value of future expected cash flows from the asset, cash-generating unit, or group of cash-generating units to which it is allocated.
Amortisation and impairment of intangible assets is charged to the income statement in the period incurred. Amortisation will commence when the asset is in a state to be used for its intended purpose.
Cloud computing software is expensed to the Profit and Loss unless the recognition criteria in IAS 38 can be met.
4.6 Tangible Fixed Assets
• | Computer equipment - |
• | Office furniture - |
• | Telephones- |
The residual values, useful lives and methods of depreciation are reviewed at each financial period end and adjusted prospectively, if appropriate.
Where circumstances indicate that the carrying amount of a tangible asset may not be recoverable management will undertake an impairment assessment. Where the carrying value is greater than its estimated recoverable amount, the higher of the assets fair value less costs of disposal and value in use, it is written down immediately to its recoverable amount and an impairment loss is recognised in the income statement.
4.7 Financial Instruments
Financial assets and financial liabilities are recognised in the statement of financial position when the Company becomes a party to the contractual provisions of the instrument.
Classification and Measurement
The financial assets and liabilities are classified into the following categories under FRS 102:
• | Basic |
• | Non- Basic |
Debt instruments are considered basic financial assets or liabilities where contractual terms stipulate that the holder will receive fixed or variable rates of return. The Company's loans and advances anddeposits fall into this category and are initially recognised at transaction price less any transaction costs incurred. They will subsequently be measured at amortised costs using the effective interest method.
For instruments where they are publicly traded, or their fair value can be measured reliability they shall be measured at fair value on the date of the transaction and subsequently remeasured at each reporting date with realised and unrealised changes in fair value recognised in the income statement.
Financial assets and liabilities that are classified as a payable or receivable, have no interest receivable and are expected to be settled within 12 months are measures at an undiscounted consideration expected to be paid or received.
Financial assets and liabilities will only be offset in the statement of financial position where a legally enforceable right exists, and amounts are expected to be settled on a net basis.
Derecognition
Financial assets are only derecognised where the contractual rights to cashflow have expired or settled, and the risk and rewards have been transferred to another party in part or in full thus transferring control.
Financial liabilities are derecognised only when the contractual obligations are discharged, cancelled, or expired.
Impairment
At each reporting date, the Company will assess whether there is objective evidence that financial assets measured at cost or amortised cost are impaired. Where impairment loss is determined it is recognised in the income statement. Triggers for impairment can be observable as individual actions, environmental or social factors.
All equity and significant financial asset are assessed for impairment individually and all other assets will be assessed individually or collectively based on similar credit risk characteristics.
Impairment losses on assets measured at amortised cost are calculated as the difference between the carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate.
Impairment losses on instruments measured at cost are recognised as the difference between carrying value and best estimate of the amount that will be received.
Impairment will only be reversed on individually impaired assets where the recoverable amount does not exceed the carrying value had impairment not been recognised.
4.8 Foreign currency transaction
4.9 Cash and cash equivalents
4.10 Share capital and share premium
Shares are classified as equity instruments when there is no obligation to transfer assets. Equity instruments are any contract that evidences a residual interest in assets of the Company, after deducting all its liabilities. The nominal value of shares issued is recorded in share capital.
Share premium is the difference between the nominal value of shares and the consideration received in respect of issue of shares. Share premium should be recorded net of share issue costs.
4.11 Defined contribution pension scheme
The Company operates a defined contribution pension scheme for its employees. The Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
Contributions to the defined pension scheme are expensed when due.
4.12
4.13 Leases
5 Administrative and other expenses
|
|
| 8 months to 28 |
|
| Year ended 29 | February 2023 |
| Note | February 2024 | (unaudited) |
Expenses |
| £ | £ |
Staff Costs | 6 | ||
Consultancy costs |
| ||
Professional and Regulatory Costs |
| ||
Property Costs |
| 536,733 | - |
IT Costs |
| 505,516 | 243,501 |
Write-off Intangible assets | 12 | 504,486 | 43,217 |
Travel and subsistence costs |
| ||
Marketing Costs |
| ||
Subscriptions |
| 20,600 | 943 |
Business insurances |
| ||
Depreciation | 13 | ||
Entertaining |
| - | |
Other expenses |
| 345,574 | - |
Total Expenditure |
|
6 Staff costs
All staff members during the year and prior period were allocated to the submission of the banking application and have not been disaggregated into categories.
The Average number of staff employed during the year was as follows:
|
| 8 months to 28 |
| Year ended 29 | February 2023 |
| February 2024 | (unaudited) |
Average Headcount |
The following table shows the staff costs and other employee-related costs:
|
| 8 months to 28 |
| Year ended 29 | February 2023 |
| February 2024 | (unaudited) |
Staff Costs | £ | £ |
Salaries | ||
Pension | ||
Social Security | ||
Total Staff costs | 4,522,655 | 1,029,487 |
The table below shows a breakdown of staff and employment costs charged within administrative and other expenses:
|
| 8 months to 28 |
| Year ended 29 | February 2023 |
| February 2024 | (unaudited) |
Staff and employment costs | ||
Recruitment costs | - | |
Other staff expenses | 69,837 | |
Total Staff costs |
7 Directors' remuneration
|
| 8 months to 28 |
| 12 months to 29 | February 2023 |
| February 2024 | (unaudited) |
Directors Remuneration | £ | £ |
Aggregate remuneration | ||
Aggregate pension contributions | ||
Other benefits | ||
|
8 Auditors' fees
The following table shows the auditors remuneration for the year end 29 February 2024. Total fees payable are in relation to fees payable to Deloitte.
|
| 8 months to 28 |
| Year ended 29 | February 2023 |
| February 2024 | (unaudited) |
Auditor Fees | £ | £ |
|
|
|
Fees payable to the auditors for the audit of the Company's financial statements | - | |
|
|
|
Total fees payable to the auditor | - |
9 Investment income
|
| 8 months to 28 |
| Year ended 29 | February 2023 |
| February 2024 | (unaudited) |
| £ | £ |
Unrealised losses on investments designated at FVTPL | 40,775 | - |
Realised gains on investments designated at FVTPL | 245,182 | - |
Investments Income | - |
10 Government Grants
Recognised within Other operating income is:
|
| 8 months to 28 |
| 12 months to 29 | February 2023 |
| February 2024 | (unaudited) |
| £ | £ |
|
|
|
Implementation costs | - | |
| 74,500 | - |
Recognised in accrued expenditure, deferred income, and other liabilities:
|
| 8 months to 28 |
| 12 months to 29 | February 2023 |
| February 2024 | (unaudited) |
| £ | £ |
Intangible assets | 22,934 | 97,434 |
|
11 Taxation
|
| 8 months to 28 |
| 12 months to 29 | February 2023 |
| February 2024 | (unaudited) |
The current tax charge comprises | - | - |
Total current tax | - | - |
|
|
|
Loss before tax | ( | ( |
Tax credit at standard UK smaller profits rate of | ( | ( |
Effects of: |
|
|
Non-deductible expenses | ||
Unrecognised deferred tax asset on losses | ||
Total tax expense recognised in Profit or loss | - | - |
12 Intangible assets
| As at 29 February 2024 | ||
|
|
|
|
| Banking Platform | Website | Total |
Cost | £ | £ | £ |
At 1 July 2022 (unaudited) | |||
Additions | - | ||
At 28 February 2023 (unaudited) | |||
|
|
|
|
At 1 March 2023 (unaudited) | |||
Additions | |||
At 29 February 2024 | |||
|
|
|
|
Accumulated Amortisation |
|
|
|
At 1 July 2022 | - | - | - |
Impairment | ( | - | ( |
At 28 February 2022 | ( | - | ( |
|
|
|
|
At 1 March 2023 | ( | - | ( |
Impairment | ( |
|
|
At 29 February 2024 | ( | - | ( |
|
|
|
|
Net Book Value 28 February 2023 | |||
Net Book Value 29 February 2024 |
Amortisation of the website and banking platform has not commenced as these assets are currently not in use for the purposes for which they were designed. The Company has not yet launched, and until these assets are operational and begin to contribute to the Company's revenue-generating activities, the amortisation will not commence.
Management has reviewed the intangible assets and determined that, following the completion of the build and testing phases, the assets relating to the core banking platform no longer have a useful life or generate future economic benefits. As a result, the carrying value of these assets has been fully impaired, and an impairment loss of £504,486 has been recognised in the Profit and loss account.
13 Fixed assets
| As at 29 February 2024 | ||
| Office IT | Office |
|
| Equipment | Furniture | Total |
Cost | £ | £ | £ |
At 1 July 2022 (unaudited) | |||
At 28 February 2023 (unaudited) | |||
|
|
| - |
At 1 March 2023 (unaudited) | |||
Additions | |||
Disposals | |||
At 29 February 2024 | |||
Accumulated Depreciation |
|
|
|
At 1 July 2022 | |||
Depreciation Charge | |||
At 28 February 2023 | |||
|
|
|
|
At 1 March 2023 | |||
Depreciation Charge | |||
Disposal | |||
At 29 February 2024 | |||
|
|
|
|
Net Book Value 28 February 2023 (unaudited) | |||
Net Book Value 29 February 2024 |
14 Financial instruments
|
| As At 28 February 2023 |
| As at 29 February 2024 | (unaudited) |
|
|
|
Financial Assets at fair value through the profit & Loss | £ | £ |
Debt securities | - | |
Total | - |
Debt securities comprise publicly traded UK treasury bills valued using publicly quoted prices.
15 Prepayments and accrued income
|
| As at 28 February 2023 |
| As at 29 February 2024 | (unaudited) |
Prepayments & Accrued Income | £ | £ |
Prepayments | ||
Accrued Income | - | |
Total |
Accrued income relates to expected refund of recruitment fees as contractual conditions were not met.
Prepayments relate to IT licences, business insurances and rent.
16 Cash and cash equivalents
Cash equivalents consist of short-term, highly liquid investments that are readily convertible into known amounts of cash subject to insignificant risk of changes in value.
|
| As at to 28 February |
|
| 2023 |
| As at 29 February 2024 | (unaudited) |
Cash & Cash Equivalents | £ | £ |
Cash | ||
Cash equivalents | - | |
Total Cash |
17 Net cash flows from operating activities
|
| 8 months to 28 |
| 12 months to 29 | February 2023 |
| February 2024 | (unaudited) |
Loss from ordinary activities | ( | ( |
Adjustment for non-cash items: |
|
|
Depreciation | ||
Write-off intangibles | ||
|
|
|
Operating cash flow before movements in working capital | ( | ( |
|
|
|
Decrease in debtors | ( | ( |
Increase in creditors | ||
| ||
Interest received | ( | ( |
Net cash from operating activities | ( | ( |
18 Net debt reconciliation
|
| 8 months to 28 |
| 12 months to 29 | February 2023 |
| February 2024 | (unaudited) |
| £ | £ |
Cash and cash equivalents |
| |
Liquid investments | - | |
Current accrued expenditure, deferred income, and other liabilities | ( | ( |
Non-Current accrued expenditure, deferred income, and other liabilities | ( | ( |
Net debt |
|
| 8 months to 28 |
| 12 months to 29 | February 2023 |
Reconciliation of net cash flow to movement in net debt | February 2024 | (unaudited) |
Net debt at beginning of year | ||
|
|
|
Increase in cash and cash equivalents | ||
Cash inflow from liquid investments | - | |
Increase in current liabilities | ( | ( |
Other non-cash movements | ||
Movements in net debt | ||
Net debt at end of year |
19 Accrued expenditure, deferred income, and other liabilities
|
| As at to 28 February |
|
| 2023 |
| As at 29 February 2024 | (unaudited) |
Accrued income, deferred income, and other liabilities | £ | £ |
Accounts Payable | ||
Accrued Expenditure | ||
Deferred Income | ||
Payroll Tax Creditors | ||
Apprentice Levy Payable | - | |
Pensions Payable | ||
Other Creditors | - | |
Total accrued income, deferred income, and other liabilities |
20 Provisions
Provisions in the year relate to an onerous contract held for internet services no longer required following exit of London office.
|
| As at February 2023 |
| As at 29 February 2024 | (unaudited) |
| £ | £ |
|
|
|
Opening balance | - | - |
Additional provision | - | |
Closing balance | - |
21 Issued share capital and share premium
| Number of ordinary |
|
|
|
| shares | Share capital | Share premium | Total |
|
| £ | £ | £ |
As at 30 June 2022 (unaudited) | 6,585,001 | |||
Shares issued | 2,916,667 | 3,500,000 | ||
As at 28 February 2023 (unaudited) | 10,085,001 | |||
|
|
|
|
|
As at 28 February 2023 | 10,085,001 | |||
|
|
|
|
|
Shares issued | 9,166,667 | 11,000,001 | ||
As at 29 February 2024 | 21,085,002 |
Amounts recorded in share capital represent the nominal value of shares issued with any differences between proceeds received on issued of shares and nominal value being credited to share premium account.
During the year ended 29 February 2024, the Company issued 9,166.667 shares with a nominal value of £1 each, at a premium of £0.20 per share. The total consideration for the share issue amounted to £11,000,001.
On 16 May 2023, the Company issued 7,500,000 and on 24 November 2023 issued 1.666.667 to Hera holding limited.
Details on the creation of a new share class post the financial reporting period are included in note 26.
22 Operating lease commitments
During the year, the company entered into operating lease agreements for the rental of office premises. These leases do not transfer substantially all of the risks and rewards incidental to ownership to the company and, therefore, are classified as operating leases.
At the reporting date, the company had the following future minimum lease payments under non- cancellable operating leases:
|
| As at 28 February 2023 |
| As at 29 February 2024 | (unaudited) |
| £ | £ |
Payable within 1 year | - | |
| - |
During the year, the company recognised £133,984 as an expense in relation to lease payments.
23 Commitments
The Company had the following contractual commitments that were not provided for in the financial statements:
|
| As at to 28 February |
|
| 2023 |
| As at 29 February 2024 | (unaudited) |
| £ | £ |
IT applications | 2,551,336 | 3,713,810 |
Total Commitments |
24 Contingent Liabilities
25 Related party transactions
The following are details of the Company's significant transactions with related parties excluding Directors' remuneration which is detailed in Note 7.
|
| 8 months to 28 |
| 12 months to 29 | February 2023 |
| February 2024 | (unaudited) |
| £ | £ |
|
|
|
Property costs | 536,733 | - |
Consultancy costs | 284,167 | - |
Total | 820,900 | - |
Property costs
During the year, the Company entered into short term lease agreements with Hera holdings Limited and Clyde Blowers limited. Hera Holdings Limited was the majority shareholder during the year. Clyde Blowers is owned by one of the Directors who is also a shareholder.
Consultancy costs
Consultancy costs related to services provided James McColl OBE during the year in an advisory capacity.
On 16 May 2023, the Company issued 7,500,000 £1 shares to Hera holding limited for a Nominal value of £1.20 and on 24 November 2023 issued 1.666.667 £1 shares to Hera holding limited for a nominal value of £1.20 (8 months to February 2023: 2,916,667).
|
| As at 28 February 2023 |
| As at 29 February 2024 | (unaudited) |
| £ | £ |
|
|
|
Issued shares | 9,166,667 | 2,916,667 |
Share premium | 1,833,334 | 583,333 |
| 11,000,001 | 3,500,000 |
During the year Hera Holdings Limited held significant control of the Company.
The members of the Board and Executive committee are deemed to have the power to influence the direction, planning and control activities of the company, and hence are also considered to be key management personnel.
The summary of compensation of key management personnel is as follows:
|
| 8 months to 28 |
| 12 months to 29 | February 2023 |
| February 2024 | (unaudited) |
| £ | £ |
Salaries | ||
Pension | ||
Social security | ||
|
26 Post balance sheet events
On the 3rd September 2024, the purchase of 10,240,115 from Hera Holdings by existing and new shareholders was completed and Hera Holdings ceased to have significant control of the Company. IN9 Trading DMCC was deemed to have significant control of the Company on 3rd September 2024.
Following Board approval on the 25 September 2024 the Company submitted its banking application to the regulator and anticipates starting trading in the second quarter of 2025.
In September 2024 to facilitate bridge capital fundraising the Company sought approval from Board and Shareholders to create a new class of £0.10 B shares and subsequent issue and allotment of 2,040,816 shares to Alba Cap Limited, 1,661,208 shares to IN9 Trading DMCC and 2000 shares to Jeremy Brettell at £0.49 each. The Company will have an additional £1.8m of capital as a result. On 12 November 2024 £0.5m of the £1.8m had been received.
In October 2024 to facilitate the authorisation capital raise of £22.5m the Company sought Board and shareholder approval to issue and allot 18,750,000 £1.00 ordinary shares. The shares will be allotted equally to JTA Kinetic, Jim McColl and IN9 Trading DMCC for a £1.20 consideration each upon receipt of the banking licence.