Registration number:
Safetonet Limited
for the Year Ended 31 December 2024
Safetonet Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Profit and Loss Account |
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Consolidated Statement of Comprehensive Income |
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Consolidated Balance Sheet |
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Balance Sheet |
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Consolidated Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Notes to the Financial Statements |
Safetonet Limited
Company Information
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Directors |
R M Pursey F E Fox G Werner |
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Registered office |
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Auditors |
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Safetonet Limited
Strategic Report for the Year Ended 31 December 2024
The directors present their strategic report for the year ended 31 December 2024.
Principal Activity
Our principal activity remains keeping children safe online.
We do this in a variety of ways -
• By developing and selling software that protects children and young people against threats such as bullying, abuse, sexual predation and exposure to harmful content. Our software uses a mixture of artificial intelligence, natural language processing and device management technologies,
• Advising Governments, law enforcement agencies and other child protection organisations on how to best to use technology to keep children safe and to promote legislation and policies that reenforce child safety,
• Through the SafeToNet Foundation, a registered UK charity that helps child welfare groups, carers and charities better understand and deal with the wellbeing issues associated with online harms.
Fair review of the business
Our principal solutions during the year were
• SafeToWatch - filtering harmful content in live-stream video, including nudity and violence
• Net Nanny - enabling parental control over a child's use of devices and internet access
In addition , we continue to hold 75% of the shares in Safetonet Family Store GmbH , which operates a large mobile phone retail business across Germany.
We were pleased with our performance during 2024 as we shifted our focus away from developing parental controls software into the high-cost arena of AI recognizing that O/S embedded technology is the best way to safeguard children effectively. This major pivot was always going to flatten our financial growth for at least 18 months as we diverted sales and marketing into a new discipline selling our services predominantly to device manufacturers. As such 2024 shows us holding firm and reporting similar results to 2023 despite a heavier cost base.
Since the year end, we completed the development of our first market-ready version of HarmBlock, filed various patents and signed a multi-year, global contract with HMD, the makers of Nokia phones, to embed our software into their operating system in preparation of a full market launch in late summer of 2025.
Principal risks and uncertainties
We face the same challenges as any rapidly growing technology company :
• Reliance on key personnel
• Under-capitalisation , cash shortages and limited resources
• Improving and expanding our software ahead of existing and new competition
• Changes in market demands and regulatory requirements
We address these risks primarily by having a very experienced Board of Directors and senior management team. Equally importantly , we seek to become EBITDA and cash flow positive as soon as possible, which is the primary defence against many of the risks we face.
Approved and authorised by the
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Safetonet Limited
Directors' Report for the Year Ended 31 December 2024
The directors present their report and the for the year ended 31 December 2024.
Directors of the group
The directors who held office during the year were as follows:
Principal activity
The principal activity of the group is keeping children safe online.
Going concern
The financial statements have been prepared on a going concern basis.
The Directors are optimistic in their assessment about the future of the company given recent government focus on ensuring children are safe online and the potential role the company can play in that. However management's assessment does recognise the fact that the group continue to be reliant on external investors for the time being in order to continue to trade.
The Directors have concluded that they are confident that funding will remain in place and they have a reasonable expecation that the group will have adequate resources to confinut in operational existence for the forseeable future.
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. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
The Board of Safetonet Limited are disappointed that the auditors appointed by Safetonet Family Store GmbH and System-Repair Center GmbH have not started their audit work or provided our own auditors with the information they need to conclude the audit of the group numbers, especially as the audit work has been completed for our UK, US and Canadian companies.
Approved and authorised by the
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Safetonet Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual 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). 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 group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Safetonet Limited
Independent Auditor's Report to the Members of Safetonet Limited
Disclaimer of Opinion
We were engaged to audit the financial statements of Safetonet Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We do not express an opinion on the accompanying financial statements of the group. Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
Basis for disclaimer of opinion on financial statements
We do not express an opinion on the group financial statements because we were unable to obtain sufficient appropriate audit evidence over a substantial proportion of the balances and disclosures within the financial statements.
The limitation on our work is in relation to the audit of Safetonet Deutschland GmbH, Safetonet Family Store GmbH and System-Repair Center GmbH, whose results comprise a significant part of the group accounts. The Directors of Safetonet Family Store GmbH and System-Repair Center GmbH, which are not wholly owned by Safetonet Limited, have appointed component auditors, but those auditors have not allowed communication with us in line with ISA 600 requirements, finalised their audit work nor provided us with access to information pertinent to the audit. Therefore the information within the group accounts in relation to the German subsidiaries is that which has been provided to us from management and no audit work has been able to be carried out over a significant element of the group figures.
The filing deadline for the financial statements for the year ended 31 December 2024 has now passed and, due to this deadline, threatened legal action from regulatory bodies and the lack of response from the German subsidiaries, the Directors have concluded that there is no reasonable prospect of receiving this information and as a result, it is in the best interest of the group and its shareholders to file the financial statements at their earliest convenience, notwithstanding the fact that the audit is incomplete.
As a result of this limitation placed upon the scope of our audit work, we have been unable to obtain sufficient appropriate audit evidence concerning items included in the Consolidated Profit and Loss Account, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Balance Sheet, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows, and notes to the financial statements. In addition, we have been unable to complete our audit procedures in respect of the appropriateness of the going concern basis of the group, in part due to the lack of information received in relation to the German subsidiaries. The possible effects of any undetected misstatements could be both material and pervasive to the financial statements.
Nonetheless, we draw attention to the disclosures in note 2 to the accounts regarding going concern, detailing the group's reliance on external funding to ensure that it can continue to operate. If funds are not raised in the near future there are doubts over the group's ability to continue as a going concern.
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Safetonet Limited
Independent Auditor's Report to the Members of Safetonet Limited
Opinion on other matter prescribed by the Companies Act 2006
Because of the significance of the matters described in the basis for disclaimer of opinion section of our report, we have been unable to form an opinion, whether based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
Notwithstanding our disclaimer of an opinion on the financial statements, in the light of our knowledge and understanding of the company and its environment obtained in the course of the audit performed subject to the pervasive limitation described above, we have not identified material misstatements in the Strategic Report and the Directors' Report.
Arising from the limitation of our work referred to above:
• | we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and |
• | we were unable to determine whether adequate accounting records have been kept. |
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We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• 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.
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 4], 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 Responsibilities for the audit of the financial statements
Our responsibility is to conduct an audit of the group's financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor's report.
However, because of the matter described in the basis for disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Safetonet Limited
Independent Auditor's Report to the Members of Safetonet Limited
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. As such, we have considered:
• the nature of the industry and sector, control environment and business performance including the group's remuneration policies, bonus levels, and performance targets;
• the group's own assessment, including assessments made by key management, of the risks that irregularities may occur either as a result of fraud or error;
• any matters we identified having reviewed the company's policies and procedures relating to:
- identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or
alleged fraud; and
- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
• the matters discussed amongst the audit engagement team.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the areas in which management is required to exercise significant judgement, such as the disclosure of adjusting items. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context were the Companies Act, tax legislation and regulations concerning importing and exporting to and from the UK.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Safetonet Limited
Independent Auditor's Report to the Members of Safetonet Limited
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For and on behalf of
Newbury
Berkshire
RG14 1QL
Safetonet Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2024
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Note |
2024 |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
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Administrative expenses |
( |
( |
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Other operating income |
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Operating loss |
( |
( |
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Other interest receivable and similar income |
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Interest payable and similar expenses |
( |
( |
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(583,338) |
(737,627) |
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Loss before tax |
( |
( |
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Tax on loss |
( |
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Loss for the financial year |
( |
( |
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Profit/(loss) attributable to: |
|||
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Owners of the company |
( |
( |
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Minority interests |
|
( |
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|
( |
( |
Safetonet Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2024
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2024 |
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|
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Loss for the year |
( |
( |
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Foreign currency translation gains/losses |
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Other reserves - other movement |
375,742 |
- |
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392,233 |
51,123 |
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Total comprehensive income for the year |
( |
( |
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Total comprehensive income attributable to: |
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Owners of the company |
( |
( |
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Minority interests |
|
( |
|
( |
( |
Safetonet Limited
(Registration number: 08733316)
Consolidated Balance Sheet as at 31 December 2024
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Note |
2024 |
2023 |
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Fixed assets |
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Intangible assets |
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Tangible assets |
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Current assets |
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Stocks |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current liabilities |
( |
( |
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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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Net assets |
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Capital and reserves |
|||
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Called up share capital |
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Share premium reserve |
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Other reserves |
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Retained earnings |
( |
( |
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Equity attributable to owners of the company |
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Minority interests |
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Shareholders' funds |
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Approved and authorised by the
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Safetonet Limited
(Registration number: 08733316)
Balance Sheet as at 31 December 2024
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Note |
2024 |
2023 |
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Fixed assets |
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Tangible assets |
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Investments |
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Current assets |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current liabilities |
( |
( |
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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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Net liabilities |
( |
( |
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Capital and reserves |
|||
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Called up share capital |
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Share premium reserve |
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Other reserves |
|
|
|
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Retained earnings |
( |
( |
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Shareholders' deficit |
( |
( |
The company made a loss after tax for the financial year of £4,560,747 (2023 - loss of £9,806,630).
Approved and authorised by the
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Safetonet Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2024
Equity attributable to the parent company
|
Share capital |
Share premium |
Other reserves |
Retained earnings |
Total |
Non- controlling interests |
Total equity |
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At 1 January 2023 |
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|
( |
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Loss for the period |
- |
- |
- |
( |
( |
( |
( |
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Other comprehensive income |
- |
- |
- |
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|
- |
|
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Total comprehensive income |
- |
- |
- |
( |
( |
( |
( |
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New share capital subscribed |
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|
- |
- |
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- |
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At 31 December 2023 |
25,960 |
39,641,523 |
10,299,016 |
(40,035,240) |
9,931,259 |
46,196 |
9,977,455 |
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Share capital |
Share premium |
Other reserves |
Retained earnings |
Total |
Non- controlling interests |
Total equity |
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At 1 January 2024 |
|
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|
( |
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(Loss)/profit for the year |
- |
- |
- |
( |
( |
|
( |
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Other comprehensive income |
- |
- |
|
|
|
- |
|
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Total comprehensive income |
- |
- |
|
( |
( |
|
( |
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Other share premium reserve movements |
- |
( |
- |
- |
( |
- |
( |
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At 31 December 2024 |
|
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|
( |
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Safetonet Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2024
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Note |
2024 |
(As restated) |
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Cash flows from operating activities |
|||
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Loss for the year |
( |
( |
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Adjustments to cash flows from non-cash items |
|||
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Depreciation and amortisation |
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Finance costs |
|
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Income tax expense |
|
( |
|
|
( |
( |
||
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Working capital adjustments |
|||
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(Increase)/decrease in stocks |
( |
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Decrease in debtors |
|
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(Decrease)/increase in creditors |
( |
|
|
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(Decrease)/increase in provisions |
( |
|
|
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Cash generated from operations |
( |
|
|
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Income taxes (paid)/received |
( |
|
|
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Net cash flow from operating activities |
( |
|
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Cash flows from investing activities |
|||
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Acquisitions of tangible assets |
( |
( |
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Acquisition of intangible assets |
( |
( |
|
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Proceeds from sale of intangible assets |
|
- |
|
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Net cash flows from investing activities |
( |
( |
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Cash flows from financing activities |
|||
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Interest paid |
( |
( |
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Proceeds from issue of ordinary shares, net of issue costs |
( |
|
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Proceeds from bank borrowing draw downs |
|
|
|
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Repayment of bank borrowing |
( |
( |
|
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Foreign Exchange Movements |
|
|
|
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Net cash flows from financing activities |
|
|
|
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Net increase in cash and cash equivalents |
|
|
|
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Cash and cash equivalents at 1 January |
|
584,304 |
|
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Cash and cash equivalents at 31 December |
901,360 |
612,659 |
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Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
England
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
The financial statements are prepared in sterling (£), which is the functional currency of the company and rounded to the nearest pound.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2024.
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Going concern
The financial statements have been prepared on a going concern basis.
The Directors are optimistic in their assessment about the future of the company given recent government focus on ensuring children are safe online and the potential role the company can play in that. However management's assessment does recognise the fact that the group continue to be reliant on external investors for the time being in order to continue to trade.
The Directors have concluded that they are confident that funding will remain in place and they have a reasonable expecation that the group will have adequate resources to confinut in operational existence for the forseeable future.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts. Monthly sales are recognised in turnover in full on the date of receipt. Subscriptions for a longer period are recognised over the life of the subscription.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Tax
The tax expense for the period comprises current tax payable.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
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Asset class |
Depreciation method and rate |
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Furniture, fittings & equipment |
33% straight line basis |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the parent, translated at the balance sheet date's spot rate as required. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Intangible assets
Separately acquired trademarks and licences are shown at historical cost.
Trademarks, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.
Trademarks, licences and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
|
Asset class |
Amortisation method and rate |
|
Goodwill & all other intangibles |
Straight line over 7-10 years |
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Debtors
Debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.
Creditors
Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Provisions
Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
|
Turnover |
The analysis of the group's Turnover for the year from continuing operations is as follows:
|
2024 |
2023 |
|
|
Rendering of services |
|
|
The analysis of the group's Turnover for the year by market is as follows:
|
2024 |
2023 |
|
|
UK |
|
|
|
Europe |
|
|
|
Rest of world |
|
|
|
|
|
|
Operating loss |
Arrived at after charging/(crediting)
|
2024 |
2023 |
|
|
Depreciation expense |
|
|
|
Amortisation expense |
|
|
|
Accelerated amortisation |
- |
|
|
Operating lease expense - property |
|
|
|
Auditor's remuneration - The audit of the company's annual accounts |
30,550 |
28,000 |
|
Interest payable and similar expenses |
|
2024 |
2023 |
|
|
Interest on bank overdrafts and borrowings |
|
|
|
Other loan interest expense |
|
|
|
Foreign exchange gains/losses |
( |
|
|
|
|
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2024 |
2023 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
Other employee expense |
|
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
|
2024 |
2023 |
|
|
Executive |
|
|
|
Commercial |
|
|
|
Products and Technology |
|
|
|
Marketing and Impact |
|
|
|
Operations |
|
|
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase pension schemes |
|
|
|
653,296 |
744,577 |
|
Auditors' remuneration |
|
2024 |
2023 |
|
|
Audit of these financial statements |
30,550 |
28,000 |
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Taxation |
Tax charged/(credited) in the consolidated profit and loss account
|
2024 |
|
|
|
Current taxation |
||
|
UK corporation tax |
- |
( |
|
Foreign tax |
|
|
|
Tax expense/(receipt) in the income statement |
|
( |
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2023 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2024 |
2023 |
|
|
Loss before tax |
( |
( |
|
Corporation tax at standard rate |
( |
( |
|
Tax increase from effect of capital allowances and depreciation |
|
- |
|
Effect of tax losses |
|
|
|
Tax decrease arising from overseas tax suffered/expensed |
( |
( |
|
Tax increase from effect of adjustment in research and development tax credit |
- |
|
|
Total tax charge/(credit) |
|
( |
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Intangible assets |
Group
|
Goodwill |
Trademarks, patents and licenses |
Other intangible assets |
Total |
|
|
Cost or valuation |
||||
|
At 1 January 2024 |
|
|
|
|
|
Additions |
- |
- |
|
|
|
Disposals |
- |
- |
( |
( |
|
Foreign exchange movements |
- |
- |
( |
( |
|
At 31 December 2024 |
|
|
|
|
|
Amortisation |
||||
|
At 1 January 2024 |
|
|
|
|
|
Amortisation charge |
|
|
|
|
|
At 31 December 2024 |
|
|
|
|
|
Carrying amount |
||||
|
At 31 December 2024 |
|
- |
|
|
|
At 31 December 2023 |
|
|
|
|
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Company
|
Other intangible assets |
Total |
|
|
Cost or valuation |
||
|
At 1 January 2024 |
|
|
|
At 31 December 2024 |
|
|
|
Amortisation |
||
|
At 1 January 2024 |
|
|
|
At 31 December 2024 |
|
|
|
Carrying amount |
||
|
At 31 December 2024 |
- |
- |
|
Tangible assets |
Group
|
Furniture, fittings and equipment |
Total |
|
|
Cost or valuation |
||
|
At 1 January 2024 |
|
|
|
Additions |
|
|
|
Revaluations |
( |
( |
|
At 31 December 2024 |
|
|
|
Depreciation |
||
|
At 1 January 2024 |
|
|
|
Charge for the year |
|
|
|
At 31 December 2024 |
|
|
|
Carrying amount |
||
|
At 31 December 2024 |
|
|
|
At 31 December 2023 |
|
|
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Company
|
Furniture, fittings and equipment |
Total |
|
|
Cost or valuation |
||
|
At 1 January 2024 |
|
|
|
Additions |
|
|
|
At 31 December 2024 |
|
|
|
Depreciation |
||
|
At 1 January 2024 |
|
|
|
Charge for the year |
|
|
|
At 31 December 2024 |
|
|
|
Carrying amount |
||
|
At 31 December 2024 |
|
|
|
At 31 December 2023 |
|
|
|
Investments |
Company
|
2024 |
2023 |
|
|
Investments in subsidiaries |
|
|
|
Subsidiaries |
£ |
|
Cost or valuation |
|
|
At 1 January 2024 |
|
|
Revaluation |
( |
|
At 31 December 2024 |
|
|
Carrying amount |
|
|
At 31 December 2024 |
|
|
At 31 December 2023 |
|
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
|
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
|
2024 |
2023 |
|||
|
Subsidiary undertakings |
||||
|
|
Hohenzollernring 72, 50672 Köln, Germany. |
|
|
|
|
|
2 Old Bath Road, Newbury, Berkshire, England, RG14 1QL |
|
|
|
|
|
2 Old Bath Road, Newbury, Berkshire, England, RG14 1QL |
|
|
|
|
|
Suite 2300, Bentall 5, 550 Burrard Street, Vancouver, BC, V6C 2B5, Canada |
|
|
|
|
|
51 Breithaupt Street, Kitchener, Ontario N2H 5G5 Canada |
|
|
|
|
|
1209 Orange Street, Wilmington, New Castle County, Delaware 19801, USA USA |
|
|
|
|
|
1209 Orange Street, Wilmington, New Castle County, Delaware 19801, USA USA |
|
|
|
|
|
StohrerStrasse 17, 04347 Leipzig , Germany |
|
|
|
|
|
StohrerStrasse 17, 04347 Leipzig , Germany |
|
|
|
|
|
1055 Westlakes Drive, Berwyn, PA 19312, USA |
|
|
|
|
|
1209 Orange Street, Wilmington, New Castle County, Delaware 19801, USA USA |
|
|
|
|
|
2 Old Bath Road, Newbury, Berkshire, England, RG14 1QL |
|
|
|
|
|
1055 Westlakes Drive, Berwyn, PA 19312, USA |
|
|
|
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
The principal activity of all subsidiary undertakings is keeping children safe online other than Safetonet Family Stores GmbH which is the sale of mobile phones and airtime contract and System-RepairCentre GmbH which is the repair of mobile phones and other devices.
|
Stocks |
|
Group |
Company |
|||
|
2024 |
2023 |
2024 |
2023 |
|
|
Other inventories |
|
|
- |
- |
|
Debtors |
|
Group |
Company |
||||
|
Note |
2024 |
2023 |
2024 |
2023 |
|
|
Trade Debtors |
|
|
|
|
|
|
Amounts owed by related parties |
- |
- |
|
|
|
|
Other debtors |
|
|
|
|
|
|
Prepayments |
|
|
|
|
|
|
Accrued income |
- |
|
- |
|
|
|
|
|
|
|
||
The amounts owed by related parties on the company's balance sheet are unsecure, interest-free and repayable on demand. However, the company does not intend to recall the debt owed in the next 18 months.
|
Cash and cash equivalents |
|
Group |
Company |
|||
|
2024 |
2023 |
2024 |
2023 |
|
|
Cash at bank and on hand |
|
|
|
|
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Creditors |
|
Group |
Company |
||||
|
Note |
2024 |
(As restated) |
2024 |
(As restated) |
|
|
Due within one year |
|||||
|
Loans and borrowings |
|
|
|
|
|
|
Trade Creditors |
|
|
|
|
|
|
Amounts due to related parties |
- |
- |
|
|
|
|
Social security and other taxes |
|
|
|
|
|
|
Outstanding defined contribution pension costs |
|
|
- |
- |
|
|
Other payables |
|
|
- |
- |
|
|
Accruals |
|
|
|
|
|
|
Income tax liability |
16,244 |
18,501 |
16,244 |
16,244 |
|
|
Deferred income |
|
|
- |
|
|
|
|
|
|
|
||
|
Due after one year |
|||||
|
Loans and borrowings |
|
|
|
|
|
Within the comparative period, for both company and group, we have reclassified balances to correct the mapping between loans & borrowings, other non-current financial liabilities, social security and other taxes and other payables.
|
Provisions for liabilities |
Group
|
Other provisions |
Total |
|
|
At 1 January 2024 |
|
|
|
Decrease in existing provisions |
( |
( |
|
At 31 December 2024 |
- |
- |
|
|
||
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Contributions totalling £Nil (2023 - £
|
Share capital |
Allotted, called up and fully paid shares
|
2024 |
2023 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
25,960 |
|
25,960 |
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Loans and borrowings |
Non-current loans and borrowings
|
Group |
Company |
|||
|
2024 |
(As restated) |
2024 |
(As restated) |
|
|
Convertible debt |
|
|
|
|
|
Unsecured debentures |
- |
|
- |
- |
|
Other borrowings |
|
|
|
|
|
|
|
|
|
|
Current loans and borrowings
|
Group |
Company |
|||
|
2024 |
(As restated) |
2024 |
2023 |
|
|
Bank borrowings |
|
|
- |
- |
|
Other borrowings |
|
|
|
|
|
|
|
|
|
|
The company holds the following facilities:
• Convertible loan notes issued in 2022. The loan notes are interest bearing at 8.00% and repayable May 2027.
• Convertible loan notes issued in 2024. The loan notes are interest bearing at 12.00% and repayable in May 2029.
• A Bounce Back Loan, interest bearing at 2.50%, repayable on a monthly basis until January 2027.
• 3 loans from a related party, interest free and repayable on demand. See Note 22.
• Other third party loans, interest free and repaybale on demand.
The company has also issued warrants entitling holders to subscribe for ordinary shares. The warrants are classified as financial liabilities because the contractual terms do not meet the conditions for equity classification under FRS 102. The warrants are measured at fair value through profit or loss. At 31 December 2024 the carrying value of the warrant liability was £235,000 (2023: £Nil). During the year a fair value loss/gain of £Nil was recognised in profit or loss.
Other facilities held by the group:
• A CEBA loan in Canada, interest bearing at 5%, repayable in December 2026.
• A bank loan with Striple Bank in US, interest bearing at 20%, repayable in January 2026.
• Loan notes in CAD, interest bearing at 3%, repayable on demand.
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Obligations under leases and hire purchase contracts |
Group
Operating leases
The total of future minimum lease payments is as follows:
|
2024 |
2023 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
Later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £3,030,130 (2023 - £
Safetonet Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Related party transactions |
Group
|
Other transactions with directors |
G Werner had a loan account with the company and a subsidiary. At the balance sheet date, the net amount owed to G Werner was £101,295 (2023 - £44,757). This loan is interest free and repayable on demand.
R Pursey had a loan account with the company. At the balance sheet date, the amount owed to R Pursey was £32,750 (2023 - £Nil). The loan is interest free and repayable on demand.
A person closely related to R Pursey had a loan with the company. At the balance sheet, the amount owed was £234,230 (2023 - £243,856). The interest is interest free and repayable on demand.
M F D Burns has lent money to a subsidiary company. At the balance sheet date, the amount owing to M Burns was £80,357 (2023 - £79,107).
Included within accruals is an amount totalling £2,095,098 (2023 - £1,698,421) related to unpaid remuneration due to directors and persons related closely to them. This amount is interest-free and repayable on demand.
The company has a loan with Portridge Capital Ltd, a company which R Pursey is also a director and shareholder. The amount due to Portridge Capital at the balance sheet date was £78,229 (2023 - £70,229).
A subsidiary company rents office space from and is owed monies by Factum Business Development GmbH, a company which G Werner is also a director and shareholder. The amount of rent paid in the year ended 31 December 2024 was £12,600 (2023 - £14,483). The amount due from Factum Business Developments GmbH at the balance sheet date is £28,701 (2023 - £31,501).
During the year, the parent transacted with Eyeora Limited, a company in which R Pursey has a common interest. During the period, the company spent a total of £482,625 (2023 - £14,500) in respect of research and development works. At the balance sheet date, there was a payment on account due back to the company of £Nil (2023: £2,000). This is currently recognised within prepayments.
Transactions with subsidiaries
The company had a loan with Safetonet Deutschland GmBH. This loan of £4,736,538 has been fully provided against (2023 - £4,736,538 fully provided).
|
Non adjusting events after the financial period |
|
|