1.1. Corporate Information
Adino Capital Limited, UK was incorporated as a private company limited by shares under the provisions of the UK Companies Act (or any of its subsequent amendment). It commenced operations on 1 October 2023.
The principal activity of the Company is financial intermediation and investments in financial instruments.
The Company’s registered address is 24 Dorset Crescent, Kingnorth, Ashord, Kend, United Kingdom, TN25 7FA
1.2. Going Concern
The financial statements of Adino Capital Limited, UK have been prepared on a going concern basis. The Directors of the entity have a reasonable expectation that the Company has adequate resources to continue in
2.1. Basis of Preparation
A. Statement of compliance
The financial report of Adino Capital Limited, UK is a general purpose financial report which has been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), Financial Reporting Council of Nigeria Act 2011, and the Companies Act 2006 applicable to companies reporting under IFRSs.
B. Presentation of financial statements
The Company presents its statement of financial position broadly in order of liquidity.
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position only when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liability simultaneously. Income and expenses are not offset in the income statement unless required or permitted by any accounting standard or interpretation, and as specifically disclosed in the accounting policies of the Company.
C. Functional and presentation currency
These financial statements are presented in US Dollars ($), which is the Company's functional currency. All amounts have been rounded in their actual figures in US $, except where otherwise indicated.
D. Basis of measurement
These financial statements are prepared on the historical cost basis except for the following:
- Financial instruments held for trading are measured at fair value through profit or loss.
Financial instruments available for sale are measured at fair value through other comprehensive
- income.
- Financial instruments held to maturity are measured at amortized cost.
2.2. Use of Estimates and Judgments
The preparation of the financial statements in conformity with IFRS requires Management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.
3 Application of new and revised International Financial Reporting Standards (IFRSs) New and amended IFRS Standards that are effective for the current year
In the current period, the Company has adopted new standards issued and applied a number of amendments to IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2023. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
IFRS 17 Insurance Contracts and Amendments to IFRS 17
The Company has adopted IFRS 17 and the amendments to IFRS 17 Insurance Contracts for the first time in the current period. IFRS 17 Insurance Contracts applies to insurance contracts, including reinsurance contracts, issued by an entity with specified exceptions; reinsurance contracts held by an entity; and investment contracts with discretionary participation features issued by an entity that issues insurance contracts. An insurance contract is defined as ‘a contract under which one party (the issuer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder’.
In the statement of financial position, an entity is required to measure profitable insurance contracts at the risk-adjusted present value of the future cash flows plus unearned profit for services to be provided under the contract.
IFRS 17 requires an entity to recognise profit from a group of insurance contracts over the period the entity provides services, and as the entity is released from risk. If a group of contracts is or becomes loss- making, the entity is required to recognise the loss immediately. The Accounting Standard also requires insurance revenue, insurance service expenses, and insurance finance income or expenses to be presented separately.
Amendments to IAS 8 - Definition of Accounting Estimates
The Company has adopted the amendments to IAS 8 (Definition of Accounting Estimates) for the first time in the current period. Definition of Accounting Estimates amends IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. The amendments introduced the definition of accounting estimates and included other amendments to help entities distinguish changes in accounting estimates from changes in accounting policies. The amended standard clarifies that the effects on an accounting estimate of a change in an input or a change in a measurement technique are changes in accounting estimates if they do not result from the correction of prior period errors. The previous definition of a change in accounting estimate specified that changes in accounting estimates may result from new information or new developments. Therefore, such changes are not corrections of errors.
Amendments to IAS 1 - Disclosure of Accounting Policies
The Company has adopted the amendments to IAS 1 (Disclosure of Accounting Policies) for the first time in the current period. The amendments replace the requirement for entities to disclose their significant accounting policies with the requirement to disclose their material accounting policy information. The amendments also include guidance to help entities apply the definition of material in making decisions about accounting policy disclosures.
IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The Company has adopted the amendments to IAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction) for the first time in the current period. The amendments clarify that where payments that settle a liability are deductible for tax purposes, it is a matter of judgement (having considered the applicable tax law) whether such deductions are attributable for tax purposes to the liability recognized in the financial statements (and interest expense) or to the related asset component (and interest expense). This judgement is important in determining whether any temporary differences exist on initial recognition of the asset and liability. Under the amendments, the initial recognition exception does not apply to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. It only applies if the recognition of a lease asset and lease liability (or decommissioning liability and decommissioning asset component) give rise to taxable and deductible temporary differences that are not equal. Nevertheless, it is possible that the resulting deferred tax assets and liabilities are not equal (e.g., if the entity is unable to benefit from the tax deductions or if different tax rates apply to the taxable and deductible temporary differences). In such cases, which is expected to occur infrequently, an entity would need to account for the difference between the deferred tax asset and liability in profit or loss.
New and revised IFRS Standards in issue but not yet effective
At the date of authorization of these financial statements, the Company has not applied the following new and revised IFRS Standards that have been issued but are not yet effective:
Standard Content Effective Date
IFRS 16 Amendments to IFRS 16 – Leases on Sale and Leaseback 1-Jan-24
IAS 1 Amendments to IAS 1 – Non-Current Liabilities with Covenants 1-Jan-24
IAS 7 and IFRS 9 Amendments to IAS 7 and IFRS 7 - Supplier Finance 1-Jan-24
IAS 12 Amendments to IAS 21 - Lack of Exchangeability 1-Jan-25
The directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Company in future periods; however, a brief summary of the amendments is
Amendments to IFRS 16 – Leases on Sale and Leaseback
These amendments include requirements for sale and leaseback transactions in IFRS 16 to explain how an entity accounts for a sale and leaseback after the date of the transaction. Sale and leaseback transactions where some or all the lease payments are variable lease payments that do not depend on an index or rate are most likely to be impacted. This amendment is effective for accounting periods beginning on or after 1 January 2024. The Company does not engage in sale and leaseback transactions; as such, this amendment is unlikely to significantly impact its financial statements in subsequent accounting periods.
Amendments to IAS 1 – Non-Current Liabilities with Covenants
These amendments clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments also aim to improve information an entity provides related to liabilities subject to these conditions. This amendment is effective for accounting periods beginning on or after 1 January 2024. This amendment may impact the Company's financial statements for subsequent accounting periods.
Amendments to IAS 7 and IFRS 7 - Supplier Finance
These amendments require disclosures to enhance the transparency of supplier finance arrangements and their effects on an entity’s liabilities, cash flows and exposure to liquidity risk. The disclosure requirements are the International Accounting Standards Board’s response to investors’ concerns that some companies’ supplier finance arrangements are not sufficiently visible, hindering investors’ analysis. This amendment is effective for accounting periods beginning on or after 1 January 2024. The Company is a financial services company and does not require supplier financing; as such, this amendment is unlikely to significantly impact its financial statements in subsequent accounting periods.
Amendments to IAS 21 - Lack of Exchangeability
An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency that is not exchangeable into another currency at a measurement date for a specified purpose. A currency is exchangeable when there is an ability to obtain the other currency (with a normal administrative delay), and the transaction would take place through a market or exchange mechanism that creates enforceable rights and obligations. This amendment is effective for accounting periods beginning on or after 1 January 2025.
4.0. Material Accounting Policies
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied by all entities within the Group and to the twelve months’ period
i. Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Monetary assets and liabilities resulting from foreign currency transactions are subsequently translated at the spot rate at the reporting date.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different to those at which they were initially recognized or included in a previous financial report, are recognized in the statement of profit or loss in the period in which they arise.
Translation differences on non-monetary items measured at fair value through equity, such as equities classified as available-for-sale financial assets, are included in the revaluation reserve in equity.
ii. Interest
Interest income and expense are recognized in the statement of profit or loss using the effective interest method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or where appropriate, a shorter period) to the carrying amount of the financial asset or liability. When calculating the effective interest rate, Adino Capital estimates future cash flows considering all contractual terms of the financial instrument, but not future credit losses.
The calculation of the effective interest rate includes all fees paid or received that are an integral part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or liability.
Interest income and expense as presented in the statement of profit or loss include:
interest on financial assets and financial liabilities measured at amortized cost calculated on an
* effective interest basis.
* interest on available-for-sale investment securities calculated on an effective interest rate basis.
Interest income and expense on all trading assets and liabilities are considered to be incidental to Adino Capital’s normal operations and presented in the statement of profit or loss.
iii. Fair value changes
Fair value changes on real estate investments and financial assets and liabilities carried at fair value through profit or loss are presented in the statement of profit or loss while fair value changes on other financial instruments at fair value through other comprehensive income are presented in the statement of other comprehensive income.
iv. . Income tax expense
The tax expense for the period comprises current and deferred income tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity respectively.
The current tax liability / asset directly relates to the actual tax payable / receivable on the Company’s profits and is determined based on tax laws and regulations in effect at the year-end date. Assumptions and judgments are made in applying these laws to the taxable profits in any given period in order to calculate the tax charge for that period. Where
the eventual tax paid or reclaimed is different to the amounts originally estimated, the difference will be charged or credited to the profit and loss account in the period in which it is determined.
Where the Company has tax losses that can be relieved against a tax liability for a previous year, it recognizes those losses as recoverable, because the tax relief is recoverable by refund of tax previously paid. This asset is offset against an existing current tax balance. Where tax losses can be relieved only by carry-forward against taxable profits of future periods, a deductible temporary difference arises.
v. Deferred tax
Deferred income tax is recognized, using the liability method (balance sheet method), on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same entity or different taxable entities where there is an intention to settle the balances on a net basis.
Those losses carried forward are set off against deferred tax liabilities carried in the statement of financial position. The Company does not offset income tax liabilities and current income tax assets.
Additional income taxes that arise from the distribution of dividends by Adino Capital are recognized at the time the dividend is proposed