Registered number: 10360526
NOOLI UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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COMPANY INFORMATION
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CLA Evelyn Partners Limited
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Chartered Accountants & Statutory Auditors
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CONTENTS
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Directors' Responsibilities Statement
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Independent Auditor's Report
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Consolidated Statement of Comprehensive Income
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Consolidated Balance Sheet
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
The Directors present the Group Strategic Report for the year ended 31 May 2024.
The principal activity of Nooli UK Limited and its subsidiaries (the "Group") during the year continued to be the provision of online financial wellbeing services.
The Group offers memberships which include features that help people to:
∙Gain the knowledge and form the habits they need to enjoy a happier, healthier relationship with money.
∙Build up a good financial profile which, in turn, gives them access to more affordable and better-suited financial products and services.
∙Boost their savings to bring security, peace of mind and increased wealth, and help them to achieve their personal and life goals.
The principal economic focus for the year ended 31 May 2024 was on increasing revenue while maintaining and improving profitability.
The key focus of the board of directors was on the following:
∙Understanding the movements in monthly revenue in order to direct management activity and allocate resources;
∙Identifying new sources of revenues;
∙Monitoring monthly profitability and supporting measures to improve it; and
∙Managing the cash flow of the business and ensuring that appropriate funding was in place to facilitate revenue and profitability growth.
Revenue growth of 70% and an improving gross margin with only a 25% increase in headcount has led to a reduction in operating losses. The financial year ended with a trading loss before taxation amounting to £1,354,911 (unaudited 2023 - £2,041,374).
We have maintained a balanced funding mix of debt, equity and cash flows from operations and expired vouchers which gives us a strong financial position as we continue to scale up our operations with maximum optionality in relation to our funding needs for the near future.
Financial key performance indicators
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With the primary objective of transitioning the Group from operating losses to profitability, management has closely monitored the following KPIs:
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Principal risks and uncertainties
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The Directors believe the main risks facing the Company are political, regulatory, liquidity and competition.
Political
The newly elected UK government made changes to the tax regime in November 2024’s budget. Changes in policies that affect support for first-time buyers, childcare, healthcare and employment law, during a period of increased inflation with consequent cost of living pressures impact how people behave with their finances, and therefore could have an impact on our membership base.
Regulatory
The regulatory environment in the UK has been changing rapidly over the last few years with significant new regulation such as the implementation of Consumer Duty in July 2023, regulatory studies such as the Woolard Review - A review of change and innovation in the unsecured credit market in February 2021 as well as legal decisions with far reaching consequences such as the November 2024 court ruling on discretionary commission arrangements (DCAs) on car loans issued between 2007 and 2021. We have a monthly risk committee that monitors regulatory developments and which is empowered to produce robust responses to changes as they arise.
Liquidity
The Group manages its liquidity position through a mixture of debt, equity and cash flows from operations and expired vouchers. Cashflow requirements are managed daily by the Finance function versus a monthly forecast to ensure that revenue and spending remain within agreed parameters. The board reviews the current and forecasted cashflow position monthly to ensure that the Group maintains sufficient headroom to meet its obligations as they fall due.
Competitor landscape
There has been an increase in innovation and new product development in UK financial wellbeing during the last decade. We regularly monitor the market for competing propositions and respond to them as necessary by evolving our product offerings to remain competitive in the market.
This report was approved by the board and signed on its behalf by:
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
The Directors present their report and the financial statements for the year ended 31 May 2024.
The principal activity of Nooli UK Limited and its subsidiaries (the "Group") during the year continued to be the provision of online financial wellbeing services. The Group offers memberships which include features that help people to:
∙Gain the knowledge and form the habits they need to enjoy a happier, healthier relationship with money.
∙Build up a good financial profile which, in turn, gives them access to more affordable and better-suited
financial products and services.
∙Boost their savings to bring security, peace of mind and increased wealth, and help them to achieve
their personal and life goals.
The loss for the year, after taxation, amounted to £992,458 (unaudited 2023 - £1,519,229).
No dividends were paid or proposed during the year (unaudited 2023 - £Nil).
Going Concern
The financial statements have been prepared on a going concern basis.
The Directors are required to assess and report on the prospects of the Company and whether the business is a going concern. The Directors have a reasonable expectation that the Company has adequate resources to remain in operation until at least 12 months after the approval of these Financial Statements. The Board has therefore continued to adopt the going concern basis in preparing the Financial Statements.
The Directors who served during the year were:
The Group will continue to develop their financial wellbeing products and services.
Disclosure of information to auditor
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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 and the Group'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 and the Group's auditor is aware of that information.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Post balance sheet events
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Post balance sheet events are described in note 28 to the financial statements.
The auditor, CLA Evelyn Partners Limited, was appointed during the period and will 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 by:
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DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
The Directors are responsible for preparing the Group Strategic Report, 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NOOLI UK LIMITED
Opinion
We have audited the financial statements of Nooli UK Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 May 2024 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated and Company Statements of Changes in Equity, the Consolidated Statement of Cash Flows and the notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 31 May 2024 and of the Group's loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter – holding of Loqbox Funds
We draw attention to Note 28 of the financial statements which discloses that throughout the year ended 31 May 2024 and as at 31 May 2024, Loqbox Funds were not held in trust on behalf of Loqbox Save users. Our opinion is not modified in respect of this matter.
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 Group and Parent Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NOOLI UK LIMITED (CONTINUED)
Other information
The other information comprises the information included in the Annual report and financial statements, other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the Annual report and financial statements. 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.
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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.
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Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
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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 by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the Parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of Directors’ remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 5, 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 Group's and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NOOLI UK LIMITED (CONTINUED)
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 obtained a general understanding of the Group’s legal and regulatory framework through enquiry of management: their understanding of relevant laws and; the entity’s policies and procedures regarding compliance; and how they identify, evaluate and account for litigation and claims. We also drew on our existing understanding of the Group’s industry and regulation.
We understand that the Group complies with the framework through:
∙Outsourcing accounts preparation and tax compliance to external experts;
∙Subscribing to relevant updates from external experts, and making changes to internal procedures and controls as necessary;
∙Updating operating procedures and internal controls as legal and regulatory requirements change; and
∙The Directors' close involvement in the day-to-day running of the business, meaning that any litigation or claims would come to their attention directly.
In the context of the audit, we considered those laws and regulations: which determine the form and content of the financial statements; which are central to the Group's ability to conduct its business; and where failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the Group:
∙The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements.
We performed the following procedures to gain evidence about compliance with the significant laws and regulations identified above:
∙Enquired of management and those charged with governance as to the risks of non-compliance and any instances thereof;
∙Reviewed minutes of meetings of those charged with governance;
∙Obtained written management representations regarding disclosure of any non-compliance with laws and regulations;
∙Reviewed the legal structure in relation to trust accounts, including review of correspondence with the group's legal advisors; and
∙Reviewed the trust accounts safeguarding procedures.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NOOLI UK LIMITED (CONTINUED)
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur.
The key areas identified in this discussion were: with regard to the manipulation of the financial statements, specifically in relation to the following:
∙Incorrect recognition of revenue under FRS 102, specifically in relation to cut off, and the accuracy (including valuation) of related accrued income balance;
∙Posting manual journal entries;
∙Management bias over the judgment and estimates applied in considering the carrying value of goodwill, investments and group balances for impairment; and
∙Whether there were any compliance risks in relation to Loqbox Funds.
These were communicated to the other members of the engagement team who were not present at the discussion.
The procedures carried out to gain evidence in the above areas included:
∙Testing a sample of journal entries, selected through applying specific risk assessments applied based on Group’s and Company’s processes and controls surrounding journal entries;
∙Substantive testing of revenue transactions around the year end/post year end to underlying documentation to corroborate recognition in the correct period as well as testing using proof in totals and that revenue has been recognised in compliance with FRS 102;
∙Challenging management regarding the assumptions used in the estimates identified above; comparison of the forecasts to post-period end data as appropriate; and review of sensitised scenarios.
∙Reviewed the legal structure in relation to trust accounts, including review of correspondence with the group's legal advisors; and
∙Reviewed the trust accounts safeguarding procedures.
Overall, the senior statutory auditor was satisfied that the engagement team collectively had the appropriate competence and capabilities to identify or recognise irregularities.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matter
The financial statements of Nooli UK Limited for the year ended 31 May 2023 were unaudited.
Use of our report
This report is made solely to the Parent Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NOOLI UK LIMITED (CONTINUED)
Avinash Heeralall (Senior Statutory Auditor)
for and on behalf of
CLA Evelyn Partners Limited
Chartered Accountants
Statutory Auditors
45 Gresham Street
London
EC2V 7BG
25 February 2025
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
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Interest receivable and similar income
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Interest payable and similar expenses
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Loss for the financial year
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Other comprehensive income for the year
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Currency translation differences
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Other comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 19 to 43 form part of these financial statements.
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NOOLI UK LIMITED
REGISTERED NUMBER:10360526
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CONSOLIDATED BALANCE SHEET
AS AT 31 MAY 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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NOOLI UK LIMITED
REGISTERED NUMBER:10360526
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CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 43 form part of these financial statements.
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NOOLI UK LIMITED
REGISTERED NUMBER:10360526
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COMPANY BALANCE SHEET
AS AT 31 MAY 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Capital redemption reserve
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Profit and loss account brought forward
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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NOOLI UK LIMITED
REGISTERED NUMBER:10360526
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COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2024
The notes on pages 19 to 43 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
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Capital redemption reserve
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At 1 June 2022 (unaudited)
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Comprehensive income for the year
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Loss for the year (unaudited)
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Currency translation differences (unaudited)
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At 1 June 2023 (unaudited)
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Comprehensive income for the year
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Currency translation differences
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
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Capital redemption reserve
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At 1 June 2022 (unaudited)
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Comprehensive income for the year
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Loss for the year (unaudited)
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At 1 June 2023 (unaudited)
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Comprehensive income for the year
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
Cash flows from operating activities
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Loss for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Loss/(profit) on disposal of tangible assets
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Net cash from financing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of the year
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
Nooli UK Limited is a private Company, limited by shares, domiciled and incorporated in England and Wales (registered number: 10360526). The registered office address is Henleaze Business Centre, Henleaze, Bristol, BS9 4PN.
Principal activity
The principal activity of Nooli UK Limited and its subsidiaries (the "Group") during the year continued to be the provision of online financial wellbeing services.
The Group offers memberships which include features that help people to:
∙Gain the knowledge and form the habits they need to enjoy a happier, healthier relationship with money.
∙Build up a good financial profile which, in turn, gives them access to more affordable and better-suited financial products and services.
∙Boost their savings to bring security, peace of mind and increased wealth, and help them to achieve their personal and life goals.
2.Accounting policies
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Basis of preparation of financial statements
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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 Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
Parent Company disclosure exemptions
In preparing the separate financial statements of the Parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:
∙Only one reconciliation of the number of shares outstanding at the beginning and end of the year has been presented as the reconciliation for the Company and the Parent Company would be identical;
∙No Statement of Cash Flows has been presented for the Parent Company;
∙Disclosures in respect of the Parent Company's financial instruments have not been presented as equivalent disclosures have been provided in respect of the Group as a whole; and
∙No disclosures have been given for the aggregate remuneration of the key management personnel of the Parent Company as their remuneration is included in the totals for the Company as a whole.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
The consolidated financial statements present the results of the Company and its own subsidiaries as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The financial statements have been prepared on a going concern basis.
The Directors are required to assess and report on the prospects of the Company and whether the business is a going concern. The Directors have a reasonable expectation that the Company has adequate resources to remain in operation until at least 12 months after the approval of these Financial Statements. The Board has therefore continued to adopt the going concern basis in preparing the Financial Statements.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
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.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
The Group earns revenue from the provision of financial wellbeing services. All revenue is earned from members through the payment of membership subscriptions or from feature-generated revenue.
Membership revenue is earned by charging full members a subscription. The revenue is recognised over the period that the membership benefits are available to the member.
The principal feature revenue relates to the Loqbox Save feature. Loqbox Save revenue is recognised by estimating the average revenue earned over the life of the feature and measuring the stage that each user is at in their Loqbox Save journey at the end of the accounting period.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. It is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
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|
Gross presentation of loans receivable and unredeemed voucher obligations
|
Each Loqbox Save user purchases a Loqbox Save voucher which they buy with a loan provided by a Group company. In accordance with FRS 102, loans receivable and unredeemed voucher obligations are presented gross on the balance sheet.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which is assessed as 5 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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|
Operating leases: the Group as lessee
|
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Interest income is recognised in profit or loss using the effective interest method.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
Intangible assets are initially recognised at cost. In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
After recognition, under the revaluation model, intangible assets shall be carried at a revalued amount, being its fair value at the date of revaluation less any subsequent accumulated amortisation and subsequent impairment losses - provided that the fair value can be determined by reference to an active market.
Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the balance sheet date.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is provided on the following bases:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
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.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Deferred tax liabilities are also presented within provisions but are measured in accordance with the accounting policy on taxation.
Increases in provisions are generally charged as an expense to profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
Judgements in applying accounting policies and key sources of estimation uncertainty
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Intangible fixed assets
Intangible fixed assets represent the cost of producing the digital assets at the core of the Loqbox offering. Management makes judgements when considering the attribution of costs to the digital assets. Factors taken into consideration in reaching such a decision include the expected level of effort employees engage in development and the relevance of invoices to the overall product.
Directors loan classification
The loans made to directors in the year have no fixed term and are instead repayable by specific conditions or voluntarily. They were also made at 0% interest. When judging the treatment of these, management has considered the appropriate accounting standards and relevant guidance and, given the substance of the arrangement, has classified them as basic financial instruments, in accordance with FRS 102. As a result, the loans are presented at cost with no discount in current assets. In making this determination, management considered the likelihood of the directors repaying the loans voluntarily as well as the likelihood of each loan agreement’s repayment triggers being met, automatically requiring the loans to be repaid.
Accrued income
Loqbox Save revenue is recognised by estimating the average revenue earned over the life of the feature and measuring the stage that each user is at in their Loqbox Save journey at the end of the accounting period. This estimation is made by analysing historical revenues for member groups. It is subsequently validated by reviewing the member population base and the distribution of members through the Loqbox Save journey to determine, at the balance sheet date, total revenue earned to date and that due to be recognised in future.
Gross presentation of loans receivable and unredeemed voucher obligations
Each Loqbox Save user purchases a Loqbox Save voucher which they buy with a loan provided by a Group company. In accordance with FRS 102, loans receivable and unredeemed voucher obligations are presented gross on the balance sheet.
Loans to members, Loqbox Funds and unredeemed voucher obligations related to Loqbox Save
The Group's Loqbox Save feature generates loans receivable from members and unredeemed voucher obligations and the Group receives and holds Loqbox Funds. The Group recognises these financial assets and liabilities on its balance sheet. At the point that a Loqbox Save user activates the Loqbox Save feature, the group becomes party to a contract in respect of these financial assets and liabilities. In respect of Loqbox Funds, the Group has the right and ability to control the economic benefit from the cash flow. Therefore management has concluded that the recognition of these financial assets and liabilities on the balance sheet is appropriate.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
3.Judgements in applying accounting policies (continued)
Valuation of loan notes
Included in other loans are convertible loan notes. In assessing the convertible loan notes' fair value, management considered factors such as the option's value, the holder's control over conversion, and the overall likelihood of conversion. It was determined that conversion would only occur under specific, unlikely circumstances. Due to the remoteness of these events and the resulting low conversion probability, management concluded that the fair value of the conversion option was negligible. Consequently, the loan notes are accounted for based on their intrinsic value, focusing on the liability component and potential equity conversion features. This assessment requires significant judgment, and changes in market conditions or company performance could impact the likelihood of conversion, necessitating a reassessment of the valuation approach.
Share based payments
In accordance with FRS 102, share-based payment arrangements are typically recognised at fair value in the financial statements. Management evaluated the likelihood of vesting by assessing potential scenarios, the probability of those scenarios occurring, and projected future growth. Based on this assessment, management determined that the likelihood of vesting is low or remote. Therefore, as permitted by FRS 102, no expense has been recognised in the financial statements.
Impairment of intangible assets, intercompany receivables and investments
Management conducted an impairment review of intangible assets, intergroup balances, and investments during the period. This assessment considered factors such as valuation, potential economic return, current performance, and associated liabilities. While the intangible assets were determined not to be impaired, certain intergroup receivables and investments, particularly those in the US, were impaired to more accurately reflect their economic reality.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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An analysis of turnover by class of business is as follows:
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Financial wellbeing services
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Analysis of turnover by country of destination:
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The operating loss is stated after charging/(crediting):
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Research and development charged as an expense
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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During the year, the Group obtained the following services from the Company's auditor and other members of the same international network:
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Fees payable to the Company's auditor for the audit of the consolidated and parent Company's financial statements
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Fees payable to CLA Global member firms in respect of tax compliance services
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Fees payable to the Company's auditor in respect of:
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Accounts preparation services
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Research and Development tax services
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Other tax advisory services
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Staff costs, including Directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the Directors, during the year was as follows:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
The highest paid Director received remuneration of £289,605 (2023 - £214,765).
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The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £110 (2023 -£Nil).
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Interest payable and similar expenses
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Other loan interest payable
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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Current tax on profits for the year
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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Factors affecting tax charge for the year
|
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The tax assessed for the year is higher than (2023 -lower than) the standard rate of corporation tax in the UK of 25% (2023 -19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 -19%)
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Expenses not deductible for tax purposes
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Income not taxable for tax purposes
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Other permanent differences
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Remeasurement of deferred tax for changes in rates
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Additional deduction research and development
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Adjustments in respect of prior periods
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Adjustments in respect of prior periods - deferred tax
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Movement in deferred tax not recognised
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Total tax receivable for the year
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
11.Taxation (continued)
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Factors that may affect future tax charges
|
The current year rate of 25% arises from changes to legislation enacted during 2021. The main rate of corporation tax in the UK increased from 19% to 25% with effect from 1 April 2023.
In June 2023 Finance Act (No.2) 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of 15% in line with the OECD Pillar Two model rules. The legislation implements a domestic top-up tax and a multinational top-up tax, effective for periods starting on or after 31 December 2023. The directors believe that the new rules are not expected to have a material impact on the Company’s operations or results.
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At 1 June 2023 (unaudited)
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At 1 June 2023 (unaudited)
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At 31 May 2023 (unaudited)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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At 1 June 2023 (unaudited)
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At 1 June 2023 (unaudited)
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Charge for the year on owned assets
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At 31 May 2023 (unaudited)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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Investments in subsidiary companies
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At 1 June 2023 (unaudited)
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At 31 May 2023 (unaudited)
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During the year the Company provided a capital contribution of £1,000,839 to its subsidiary Loqbox US Inc.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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The following were subsidiary undertakings of the Company:
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Loqbox Technology UK Limited*
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DDC Financial Solutions Limited*
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Loqbox Trustee UK Limited*
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Nooli Technology UK Limited*
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* The registered office of the above subsidiaries is Henleaze Business Centre, Henleaze, Bristol, BS9 4PN.
** The registered office of the above subsidiaries is 108 West Thirteenth Street, Wilmington, Delaware, 19801, USA.
The Directors consider that the below subsidiary undertakings are entitled to exemption from the requirement to have an audit under the provision of section 479A of the Companies Act 2006 ("the Act") and the members have not required these companies to have an audit for the period in question in accordance with Section 476 of the Act.
Nooli UK Limited has guaranteed the liabilities of the below subsidiary undertakings in order that they qualify for the exemption from audit under section 479A of the Companies Act 2006 in respect of the year ended 31 May 2024.
The Directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
Company name Registered number Country of incorporation
Loqbox Savings Limited 10583182 England and Wales
Loqbox Technology UK Limited 07916178 England and Wales
DDC Financial Solutions Limited 07586243 England and Wales
Loqbox Trustee UK Limited 13063076 England and Wales
Nooli Technology UK Limited 15078140 England and Wales
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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Amounts owed by group undertakings
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Loans receivable from directors
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Prepayments and accrued income
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Loans receivable from members
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Corporation tax repayable
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Loans receivable from directors amounting to £1,900,000 (unaudited 2023 - £Nil) are interest-free, unsecured and repayable in the event of an equity fund raise.
Amounts owed by group undertakings are interest free, unsecured and repayable on demand.
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Cash and cash equivalents
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Included within cash at bank and in hand are Loqbox Funds (as definited in Note 3) amounting to £16,627,339 (unaudited 2023 - £16,323,399) and £2,138,215 (unaudited 2023 - £823,937) of other available funds.
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|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
Creditors: Amounts falling due within one year
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Unredeemed voucher obligations
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Amounts owed to group undertakings
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Other taxation and social security
|
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Accruals and deferred income
|
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Amounts owed to group undertakings are interest free, unsecured and repayable on demand.
|
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Creditors: Amounts falling due after more than one year
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Directors' loans amounting to £643,785 (unaudited 2023 - £643,785) attract interest at a rate of 15% per annum and are unsecured.
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
|
|
Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Bank loans
The Group has a bank loan which is unsecured, repayable over a period of 6 years and incurs interest at a rate of 2.5% per annum. The lending facility is supported by the Bounce Back Loan Scheme (BBLS) managed by the British Business Bank.
Cash flow finance facility
The Group's financing facility covers working capital and liquidity commitments. £1,545,947 (unaudited 2023 - £956,987) was included in other loans, amounts falling due within one year at the year-end. The facility allows the Group to draw down on demand with each draw-down repayable within one year from the date drawn. Fees applicable vary by tranche and have been charged at rates of between 7.55% and 16.13% on the drawn amount.
Convertible loan notes
Convertible loan notes were issued during the year and, as at the year-end, £100,000 (unaudited 2023 - £1,130,636) was included in other loans, amounts falling due within one year and £.1,966,250 (unaudited 2023 - £906,959) was included in other loans amounts falling due 1-2 years. Interest accrues on the principal amount at 15.0% per annum, payable quarterly in arrears. The loan notes are repayable on the date of maturity and are unsecured.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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Credited to profit or loss
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The deferred taxation balance is made up as follows:
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Fixed asset timing differences
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Short term timing differences
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Losses and other deductions
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Fixed asset timing differences are expected to reverse in line with each corresponding fixed asset class and the classes' depreciation rates, as noted in the accounting policies.
Short-term timing differences are expected to reverse over the next 12 months.
Losses and other deductions will continue to be utilised as future profits arise from the Company's ordinary course of business.
Tax losses will be utilised as future profits arise from the Group's ordinary course of business.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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Allotted, called up and fully paid
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2,745,000 (Unaudited 2023 - 2,745,000) Ordinary shares of £0.001 each
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The ordinary shares have full voting, dividend and capital distribution rights.
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Share premium account
This reserve records the amount above the nominal value received for shares sold, less transaction costs.
Capital redemption reserve
This reserve relates to the nominal value of shares that the Company has bought back.
Foreign exchange reserve
The foreign exchange reserve represents the cumulative movements in foreign exchange.
Other reserves
Other reserves were created following the acquisition of the non-controlling interest in subsidiary undertakings through a share-for-share exchange.
Profit and loss account
This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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Management share option scheme
There is a share incentive scheme for key personnel in the group.
The exercise price of the options is set at the valuation of the company at the grant date.
The options vest on an exit event occurring.
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Weighted average exercise price (pence)
2024
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Weighted average exercise price
(pence)
2023
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Outstanding at the end of the year
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The total charge for the year ended 31 May 2024 was £Nil (unaudited 2023 - £Nil).
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The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £83,828 (unaudited 2023 - £55,424). Contributions totalling £27,577 (unaudited 2023 -£12,083) were payable to the fund at the balance sheet date and are included in other creditors.
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Commitments under operating leases
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At 31 May 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
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Consolidated analysis of net debt
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Related party transactions
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The Company has taken advantage of the exemption available under Section 33.1A of FRS102 whereby it had not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the Group.
As at year end, loan notes due to Directors amounted to £643,785 (unaudited 2023 - £643,785). The loans attract interest at a rate of 15% per annum and are unsecured. During the year the Group paid interest on loan notes owed to the Directors of £96,742 (unaudited 2023 - £Nil).
As at year end, amounts due from Directors amounted to £1,900,000 (unaudited 2023 - £Nil). The loans are interest free, and unsecured and repayable subject to equity fundraising agreements.
During the year, £94,000 was paid to the Director’s family members in line with their arms length employment contracts.
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Post balance sheet events
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As part of providing the Loqbox Save feature, the value of Loqbox Save vouchers which is due to be paid to Loqbox Save users less an amount necessary to provide the Loqbox Save feature and less any amounts related to expired vouchers (“Loqbox Funds”) is held in client accounts with banks authorised by the Prudential Regulation Authority or the Jersey Financial Services Commission. Throughout the year to 31 May 2024 and as at 31 May 2024, the Loqbox Funds were not held in trust. On 30 January 2025, the Group transferred the Loqbox Funds into trust proportionately on behalf of each Loqbox Save user. The trust has been set up in order to ensure that in the case of the insolvency of a Group entity, the funds should not form part of the liquidation assets or be available to the Group's general creditors.
The Directors do not consider there to be a controlling party.
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