TIDMDISH
RNS Number : 7833H
Amala Foods PLC
31 July 2023
Amala Foods Plc
( " Amala " or the " Company")
Annual Financial Report 2023
Amala Foods Plc (LON: DISH), a cash shell company, is pleased to
announce the publication of the Annual Financial Report for the
Year Ended 31 March 2023 which is below this announcement. The
Annual Report will also shortly be available via the National
Storage Mechanism.
--
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION EU 596/2014
("MAR").
Enquiries:
Jonathan Morley-Kirk, Non-Executive Chairman
jmk@bluebirdmv.com
Amala Foods PLC
Annual Financial Report
2023
COMPANY INFORMATION
Directors Aidan Bishop Executive Director
Jonathan Morley-Kirk Non-executive Chairman
Celia Li Non-executive Director
Company Secretary Roger Matthews
Registered office of the Company Pigneaux Farmhouse
Pigneaux Farm
Princes Tower Road
St Saviour JE2 7UD
Jersey
Independent Auditor PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London E14 4HD
Bankers eWealthGlobal Group Limited
1 7 Broad St
St Helier
Jersey JE2 3RR
CONTENTS
Directors and Governance
Chairman's R eport 3
Report of the Directors 4
Strategic Report 9
Accounts
Independent Auditor's Report to the Members of Amala Foods PLC
10
Statement of Comprehensive Income 13
Statement of Financial Position 14
Statement of Changes in Equity 15
Cash Flow Statement 16
Notes to the Accounts 17
CHAIRMAN'S REPORT
The Company is a cash shell and as such is seeking to identify a
transaction that will lead to a reverse takeover.
During the year the Company entered into a Share Purchase
Agreement (SPA) with Terra Rara UK Ltd, a mining company, that
could have led to a transaction that would have been considered a
Reverse Takeover. Terra Rara UK Ltd held Rare Earth Elements (REE)
exploration assets via two subsidiaries in Angola and Uganda. These
exploration assets are located in close proximity to advanced stage
REE exploration assets held by other mining companies. The Company
intended to acquire 100% of the share capital of Terra Rara UK Ltd
subject to regulatory approvals. The listing was suspended on 23
May 2022. The Company announced the termination of the proposed
transaction with Terra Rara UK Ltd on 17 March 2023. This decision
was taken due to identified administrative issues relating to some
of the mining assets of Terra Rara following further due diligence.
Terra Rara are seeking to develop mining exploration assets in two
countries in Africa, where due diligence is lengthy and complex.
The Company has introduced interested parties who are having
discussions with Terra Rara.
The Directors are actively seeking to identify new opportunities
for the Company with a view to identifying and completing a
successful transaction resulting in a Reverse Takeover.
The Directors have agreed to not receiving any remuneration for
the period prior to and during the period of suspension and until a
successful transaction reaches the stage of a Reverse Takeover,
upon which GBP 125,000 will be issued to the Directors in equity at
the readmission price.
The Company raised GBP 405,000 in convertible loan notes during
the year ended 31 March 2023 (refer note 12 of the audited
financial statements).
Ms Celia Li was appointed to the Board as a Non-Executive
Director on 17 March 2023.
It is my sincere hope that after a challenging couple of the
years, that a path to generate value for shareholders will be
realised.
Jonathan Morley-Kirk
Chairman
31 July 2023
REPORT OF THE DIRECTORS
The Directors present the report together with the audited
accounts of the Company for the year ended 31 March 2023.
The Company
Amala Foods Plc is registered (registered number 121041) and
domiciled in Jersey. It was incorporated on 11 April 2016.
Principal Activity and Business Review
The Company's principal activity during the year ended 31 March
2023 was a cash shell company. The Directors are actively seeking
new opportunities that will lead to a Reverse Takeover.
Results and Dividends
The results of the Company for the year ended 31 March 2023 show
a loss before taxation of GBP 440,076 (2022 loss before taxation of
GBP 1,090,841).
The Directors do not recommend the payment of a dividend for the
period ended 31 March 2023 (2022: GBP Nil).
Carbon Dioxide Emissions
At the current stage of development, carbon dioxide emissions
are negligible and it is not practical to be able to accurately
measure the entity's emissions and energy usage . At the
appropriate time, the Company intends to actively monitor carbon
dioxide emissions and will devise strategies to reduce emissions
where possible and ensure applicable reporting thereon.
Future Developments
The Company's future developments are outlined in the Strategic
Report section and in the Post Balance Sheet events (refer note 18
of the audited accounts ).
Going Concern
The Company entered into a Deed of Standstill with a creditor to
reprofile outstanding debt to an amount of GBP 787,719 (amended
further after year-end with the conversion of shares to the value
of GBP 80,150 - refer note 18 of the audited financial statements)
that would convert to shares at the re-admission price upon a
Reverse Takeover and that no interest will accrue and for all
existing warrants to be cancelled upon a Reverse Takeover. Should a
Reverse Takeover not take place by 22 September 2023 then the
creditor may call upon cash repayment.
Furthermore, the Company announced that it raised GBP 405,000 in
Convertible Loan Notes that would be largely utilised to fund a
transaction leading to a Reverse Takeover. These Convertible Loan
Notes are automatically converted into shares upon a Reverse
Takeover. However, the holders of the convertible loan notes may
call upon cash repayment between April 2023 and the end of June
2023 should there be no Reverse Takeover. Given the passage of
time, agreements have been made with certain of these parties that
the cash repayments will not be called upon despite the due dates
passing.
Having prepared and reviewed cashflow forecasts, the Directors
have ascertained that further finance will need to be raised should
the convertible loans be required to be repaid in cash in the next
12 months. The Directors are confident that should the convertible
loan notes, in part or in full, require repayment then they would
be able to raise sufficient funds to be able to make such
repayments whilst still funding the Company's forecasted
expenditure. They are also confident of a transaction occurring and
therefore the share conversion option of the convertibles
presenting the best value opportunity to holders. The Company has
been reviewing several potential transactions and has prepared a
shortlist of reverse takeover opportunities in various sectors
including healthcare, natural resources, and technology, but as
completion of a reverse takeover by the required dates and thus
avoiding cash repayment of the convertible loan notes is not
guaranteed and given the requirement to raise further funds in such
an event, next 12 months, they acknowledge that a material
uncertainty relating to going concern exists.
The accounts have therefore been prepared on a going concern
basis. The auditors make reference to going concern by way of a
material uncertainty within their audit report.
Principal Risks and Uncertainties
The principal business risks that have been identified are as
below.
Transaction Risk
There is no guarantee that a suitable transaction will be
identified and will be successfully completed, resulting in a
Reverse Takeover. Even if a transaction is successful, there is no
guarantee that the Directors will be successful in managing the new
business and derive the value that is hoped. Should a transaction
not complete, once identified, then the Directors will need to
invest further time and resources in identifying another suitable
target company.
Funding Risk
The Company has not yet achieved profitability and is therefore
reliant on periodically raising finance to fund its expenditure.
There can be no guarantees that additional capital will be
available when required . Whilst the Company raised GBP 405,000 in
Convertible Loan Notes during the year ended 31 March 2023, GBP
20,000 of which was due after the year end. There is no guarantee
that further capital will be available if and when required to
complete a transaction that will result in a Reverse Takeover or
that further capital will be available to fund an enlarged group
after the completion of a transaction. The Directors have taken
steps to conserve cash including not receiving any remuneration
until there is a successful Reverse Takeover.
Key Personnel Risk
The Company is dependent on the experience and abilities of its
Directors. Whilst the Company does not expect any of the Directors
to leave the Company, if such individuals were to leave the
Company, and the Company was unable to attract suitable experienced
personnel, it could have a negative impact on the future prospects
of the Company .
Corporate Governance
The Company is registered in Jersey. There is no applicable
regime of corporate governance to which the directors of a Jersey
company must adhere over and above the general fiduciary duties and
duties of care, skill and diligence imposed on such directors under
Jersey law. As a Jersey company and a company with a Standard
Listing, the Company is not required to comply with the provisions
of the UK Corporate Governance Code. The Directors have
responsibility for the overall corporate governance of the Company
and recognise the need for appropriate standards of behaviour and
accountability.
The Directors are committed to the principles underlying best
practice in corporate governance and have regard to certain
principles outlined in the UK Corporate Governance Code to the
extent they are considered appropriate for the Company given its
size, early stage of operations and complexities.
Internal Control
The Directors acknowledge they are responsible for the Company's
system of internal control and for reviewing the effectiveness of
these systems. The risk management process and systems of internal
control are designed to manage rather than eliminate the risk of
the Company failing to achieve its strategic objectives. It should
be recognised that such systems can only provide reasonable and not
absolute assurance against material misstatement or loss. The
Company has well established procedures which are considered
adequate given the size of the business. The Company is at an early
stage in its development and directors and senior management are
directly involved in approving all significant investment and
expenditure decisions of the Company.
Audit Committee
The Company has established an Audit Committee with delegated
duties and responsibilities. The Audit Committee is responsible,
amongst other things, for making recommendations to the Board on
the appointment of auditors and the audit fee, monitoring and
reviewing the integrity of the Company's accounts and any formal
announcements on the Company's financial performance as well as
reports from the Company's auditors on those accounts. The Audit
Committee includes only Jonathan Morley-Kirk, which the Board has
deemed is reasonable for the time being but will be expanded once
growth allows.
Events after the Reporting Period
Refer note 18 to the audited financial statements .
Company Directors (served during the year)
Audit Remuneration
Position Appointment Committee Committee
Date
--------------------- ------------------- -------------- ----------- -------------
Jonathan Morley-Kirk Non-Executive 16 April
Chairman 2016
Aidan Bishop Executive Director 16 April - -
2016
Celia Li Non-Executive 17 March - ü
Director 2023
--------------------- ------------------- -------------- ----------- -------------
Role of the Board
The Board sets the Company's strategy, ensuring that the
necessary resources are in place to achieve the agreed strategic
priorities, and reviews management and financial performance. It is
accountable to shareholders for the creation and delivery of
strong, sustainable financial performance and monitoring the
Company's affairs within a framework of controls which enable risk
to be assessed and managed effectively. The Board also has
responsibility for setting the Company's core values and standards
of business conduct and for ensuring that these, together with the
Company's obligations to its stakeholders, are widely understood
throughout the Company.
Directors Remuneration
The remuneration of the Executive Director is fixed by the
Remuneration Committee, which comprises of the Non-Executive
Directors. The Remuneration Committee is responsible for reviewing
and determining the Company policy on executive remuneration and
the allocation of long-term incentives to executives and employees.
The remuneration of Non-Executive Directors is determined by the
Board. In setting remuneration levels, the Company seeks to provide
appropriate reward for the skill and time commitment required in
order to retain the right caliber of Director at an appropriate
cost to the Company.
The directors did not receive any remuneration in the form of
share based payments, post-employment benefits, termination
benefits or other long-term benefits in the year ended 31 March
2023 (2022 - none). The Directors have agreed to not receive any
remuneration due for the period prior to and during the suspension
of the listing and until a transaction is completed that leads to a
Reverse Takeover - the GBP 125,000 shown as due to Directors at 31
March 2023 is to be issued in equity at the readmission price ,
which is contingent on the successful Reverse Takeover.
31 Mar 31 Mar
2023 2022
(GBP) (GBP)
------------------------- -------- --------
Executive Directors
Aidan Bishop 100,000 120,000
Non-executive Directors
Jonathan Morley-Kirk 25,000 20,000
Celia Li - -
Total Remuneration 125,000 140,000
------------------------- -------- --------
M onza Capital Ventures Limited, which is associated with Aidan
Bishop, held 55,018,687 shares in the Company at 31 March 2023 and
31 March 2022 (representing, 12.4% ownership of the Company at 31
March 2023 and 31 March 2022) . Jonathan Morley-Kirk held no shares
in the Company at 31 March 2023 and 31 March 2022.
Aidan Bishop held no share options at 31 March 2023 (16,267,462
at 31 March 2022) and Jonathan Morley-Kirk held no share options at
31 March 2023 (444,444 at 31 March 2022). The Directors agreed in
the period ended 31 March 2023 to cancel their outstanding
options.
Share Capital
At 31 March 2023 the issued share capital of the Company stood
at 443,620,823 - with no new shares having been issued during the
period (refer note 15 of the audited financial statements ).
Substantial Shareholders (unaudited)
At 31 March 2023 the following had notified the Company of
disclosable interests in 3% or more of the nominal value of the
Company's shares.
Number %
------------------------------------------------- -------------- --------
Fiske Nominees Limited* 123,592,082 27.9%
Hargreaves Lansdowne (Nominees) Limited 70,827,183 16.0%
Interactive Investor Services Nominees Limited 43,276,588 9.8%
Vidacos Nominees Ltd 22,598,253 5.1%
HSDL Nominees Limited 17,471,107 3.9%
Barclays Direct Investing Nominees Limited 16,126,123 3.6%
Hanover Nominees Limited 13,953,323 3.1%
Peel Hunt Holdings Limited 13,713,018 3.1%
------------------------------------------------- -------------- --------
* Includes 55,018,687 shares held by Monza Capital Ventures
Limited, which is associated with Aidan Bishop. Monza Capital
Ventures Limited continued to hold 55,018,687 shares at the date of
this Annual Report.
Employees
The Company has a policy of equal opportunities throughout the
organisation and is proud of its culture of diversity and
tolerance.
Disclosure of Information to Auditor
So far as the Directors are aware, there is no relevant audit
information of which the company's auditor is unaware; and each
Director has taken all the steps that he ought to have taken as a
Director in order to make himself aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information.
The Directors con rm to the best of their knowledge that:
-- t he nancial statements, prepared in accordance with the
relevant nancial reporting framework, give a true and fair view of
the assets, liabilities, nancial position and pro t or loss of the
Company;
-- t he strategic report includes a fair review of the
development and performance of the business and the position of the
Company, together with a description of the principal risks and
uncertainties that they face; and
-- t he annual report and accounts , taken as a whole, are fair,
balanced and understandable and provide the information necessary
for shareholders to assess the Company's position and performance,
business model and strategy.
Auditor Appointment
The Company's auditor, PKF Littlejohn LLP, was initially
appointed on 23 March 2020. It is proposed by the Board that they
be reappointed as auditors at the forthcoming AGM. The auditors
have expressed their willingness to continue in o ce.
Statement of Directors Responsibilities
The Directors are responsible for preparing the Annual Report
and the accounts in accordance with applicable laws and
regulations. The Directors have prepared the accounts for each
financial period which present fairly the state of affairs of the
Company and the profit or loss of the Company for that period.
The Directors have chosen to use the UK-adopted International
Accounting Standards ("UK-adopted IAS") in preparing the Company's
accounts.
International Accounting Standard 1 requires that accounts
present fairly for each financial period the Company's financial
position, financial performance and cash flows. This requires the
faithful representation of the effects of transactions, other
events and conditions in accordance with the definitions and
recognition criteria for assets, liabilities, income and expenses
set out in the International Accounting Standards Board's
'Framework for the preparation and presentation of accounts. In
virtually all circumstances, a fair presentation will be achieved
by compliance with all applicable International Financial Reporting
Standards.
A fair presentation also requires the Directors to:
-- consistently select and apply appropriate accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- make judgements and accounting estimates that are reasonable and prudent;
-- provide additional disclosures when compliance with the
specific requirements in UK-adopted IAS is insufficient to enable
users to understand the impact of particular transactions, other
events and conditions on the entity's financial position and
financial performance;
-- state that the Company has complied with UK-adopted IAS ,
subject to any material departures disclosed and explained in the
accounts; and
-- prepare the accounts on the going concern basis unless it is
inappropriate to presume that the C ompany will continue in
business.
The Directors are also required to prepare accounts in
accordance with the rules of the London Stock Exchange for
companies trading securities on the Stock Exchange.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company, for safeguarding the assets, for
taking reasonable steps for the prevention and detection of fraud
and other irregularities and for the preparation of accounts. The
Directors are committed to ensure effective anti-corruption and
anti-bribery policies are observed.
Financial information is published on the Company's website. The
maintenance and integrity of this website is the responsibility of
the Directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the
auditors accept no responsibility for any changes that may occur to
the accounts after they are initially presented on the website.
Legislation in Jersey governing the preparation and
dissemination of accounts may differ from legislation in other
jurisdictions.
Directors' Responsibility Statement
The Directors confirm to the best of their knowledge:
-- The Company's accounts have been prepared in accordance with
UK-adopted IAS and give a true and fair view of the assets,
liabilities, financial position and profit and loss of the
Company.
-- The annual report includes a fair review of the development
and performance of the business and the financial position of the
Company, together with a description of the principal risks and
uncertainties that they face.
This Directors' Report was approved by the Board of Directors on
31 July 2023 and is signed on its behalf.
By Order of the Board
Jonathan Morley-Kirk
Chairman
31 July 2023
STRATEGIC REPORT
The Company was mainly focused on identifying a transaction that
would lead to a reverse takeover. During the year, the Company
entered into a Share Purchase Agreement with Terra Rara UK Ltd to
acquire 100% of the share capital that if it had been successful
would have led to a Reverse Takeover. As a result, the Company's
listing was suspended in order that a regulatory process could
begin. The proposed transaction with Terra Rara UK Ltd was
terminated due to identified administrative issues relating to some
of the mining assets following further due diligence. The Company
has introduced other interested parties to Terra Rara where
discussions are taking place.
The Company now intends to seek new opportunities and identify a
potential transaction that will result in a Reverse Takeover.
The Directors consider the Company to be a cash shell company
under the Listing Rules 5.6.5A R.
Key Performance Indicators
The Company intends to identify a suitable target company with
the aim of entering into a transaction, resulting in a Reverse
Takeover. Whilst the Directors had expected that the proposed
transaction with Terra Rara UK Ltd would have achieved this
objective the potential transaction was terminated. The Directors
will seek to identify other suitable target companies that could be
in any sector and once identified will undertake a due diligence
process.
Aidan Bishop
Executive Director
31 July 2023
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF AMALA FOODS PLC
Opinion
We have audited the financial statements of Amala Foods Plc (the
'company') for the year ended 31 March 2023 which comprise the
Statement of Comprehensive Income, the Statement of Financial
Position, the Statement of Changes in Equity, the Cash Flow
Statement and notes to the financial statements, including
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
UK-adopted international accounting standards.
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 March 2023 and of its loss for the year then
ended;
-- have been properly prepared in accordance with UK-adopted IAS; and
-- have been properly prepared in accordance with the
requirements of the Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2.3 in the financial statements, which
indicates that the company incurred a net loss of GBP440,076 and is
in a net current liability position of GBP896,762 at 31 March 2023
and should the company not complete a reverse takeover by the
maturity dates of the Convertible Loan Notes (CLNs) issued, further
funding will be required to facilitate repayment of the CLNs. As
stated in note 2.3, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the
company's ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the company's ability to
continue to adopt the going concern basis of accounting
included:
-- challenging the directors' going concern assessment and the
key underlying assumptions and inputs;
-- assessing the likelihood of a Reverse Takeover completing within the next 12 months;
-- ascertaining the company's latest financial position by
reviewing relevant financial documents and its committed costs over
the next 12 months from the date of signing financial statements;
and
-- agreeing the terms of the convertible loan notes in issue at
the date of this report to the going concern assessment.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures.
Materiality for the financial statements was set as GBP45,000
(2022: GBP28,000) based upon 5% of net liabilities (2022: based
upon 2.5% of loss before tax). The change in the current year's
basis, in comparison to the prior year, is on account of a
substantial fluctuation in the loss before tax. Materiality was set
based on the net liabilities given the limited value of assets and
the focus of the key stakeholders on the company's ability to
remain a going concern.
The performance materiality and the triviality thresholds for
the financial statements were set at GBP33,750 (2022: GBP21,000),
which represents 75% of the materiality, and GBP2,250 (2022:
GBP1,400) respectively. These thresholds have been determined based
on our accumulated knowledge of the company and the assessed
risk.
We also agreed to report to the Audit Committee any other
differences below that threshold that we believe warranted
reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements. In
particular we looked at areas involving significant accounting
estimates and judgements by the directors and considered future
events that are inherently uncertain, such as the carrying value of
loan receivables. We also addressed the risk of management override
of internal controls, including among other matters consideration
of whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. In addition to
the matter described in the Material uncertainty related to going
concern section we have determined the matter described below to be
the key audit matter to be communicated in our report.
Key Audit Matter How our scope addressed this matter
Carrying value of loan receivables
==============================================================
In the prior year , the Our work in respect of this risk included,
company advanced US$125,000 but was not limited to:
(GBP101,189) to Terra Rara
UK Limited, a potential acquisition * Reviewing the loan agreement with Terra Rara UK
target. Limited and agreeing the key terms of the agreement
to management's impairment assessment;
As the balance is overdue
for repayment, there is a
risk that the loan receivable * Evaluating and challenging management's impairment
may not be fully recoverable assessment, including the key assumptions and inputs;
and thus materially overstated.
Additionally, significant
judgement is required by * Ensuring that the loan has been appropriately
the directors in assessing measured as at 31 March 2023 in line with IFRS 9
whether an impairment loss expected credit loss model assessment; and
is required to be recognised.
Note 10 in the financial * Reviewing the disclosures in the financial statements,
statements sets out further including those relating to estimates and judgements
details in respect of these used in the impairment assessment.
balances and note 3.2 explains
the judgements made by the
directors in their assessment Based on the audit work performed, the
of the expected credit losses loan is recoverable at 31 March 2023
in line with IFRS 9 Financial due to the funding options available
Instruments . to Terra Rara UK Limited. However should
the expected funding not arise within
the expected timeframe then the loan
value will need to be impaired accordingly.
==============================================================
Other information
The other information comprises the information included in the
annual financial report, other than the financial statements and
our auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the financial statements does not cover the other information
and 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in
relation to which the Companies (Jersey) Law 1991 requires us to
report to you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been
received from branches not visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors'
responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the company and the sector in
which it operates to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through
discussion with management, independent research of the Companies
(Jersey) Law 1991 and our accumulated knowledge and experience of
the industry.
-- We determined the principal laws and regulations relevant to
the company in this regard to be those arising from the Listing
Rules and Disclosure and Transparency Rules, and the Companies
(Jersey) Law 1991.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the company with those laws and regulations. These procedures
included, but were not limited to:
- Discussions with management regarding compliance with laws and regulations by the company;
- Reviewing board minutes; and
- Reviewing Regulatory News Services announcements made.
-- We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the potential for management
bias was identified in relation to the assessment of the carrying
value of the loan receivables. We addressed this by challenging the
assumptions and judgements made by management (see the Key audit
matters section of our report for further detail).
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with our engagement letter dated 25 January 2023. 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.
Joseph Archer (Engagement Partner) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
31 July 2023
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2023 and 31 March 2022
31 Mar 2023 31 Mar 2022
Note GBP GBP
Administrative expenses (269,967) (357,656)
Impairment expense 9 - (204,656)
Share based payments expense 17 (16,441) (332,232)
Operating loss (286,408) (894,544)
Interest and other income 6,514 9,707
Loan note interest (160,182) (206,004)
Loss before taxation (440,076) (1,090,841)
Income tax expense 8 - -
Loss after taxation (440,076) (1,090,841)
Earnings per share:
Basic and diluted loss per share (GBP) 15 (0.0010) (0.0028)
The accompanying accounting policies and notes form an integral
part of these accounts.
STATEMENT OF FINANCIAL POSITION
At 31 March 2023
31 Mar 2023 31 Mar 2022
Note GBP GBP
Current assets
Trade and other receivables 10 101,189 94,675
Cash and cash equivalents 11 318,217 19,867
419,406 114,542
Current liabilities
Trade and other payables 12 (143,449) (85,132)
Borrowings 12 (1,172,719) (627,537)
(1,316,168) (712,669)
Net liabilities (896,762) (598,127)
Equity
Issued share capital 15 6,488,490 6,488,490
Accumulated losses (8,046,350) (8,801,332)
Other reserves 14 661,098 1,714,715
Total equity (896,762) (598,127)
The accompanying accounting policies and notes form an integral
part of these accounts.
These accounts were approved and signed by the Chairman.
Jonathan Morley-Kirk
Chairman
31 July 2023
STATEMENT OF CHANGES IN EQUITY
At 31 March 2023
Share Retained Other Total Capital Earnings reserves Equity
Note GBP GBP GBP GBP
At 31 March 2021 (unaudited) 6,455,154 (7,723,415) 1,306,142
37,881
Loss for the period - (1,090,841) - (1,090,841)
Total comprehensive income for the period - (1,090,841) -
(1,090,841)
Share based payments - options - - 27,884 27,884
Shares to be issued reserve - - 89,265 89,265
Share based payments - warrants - - 304,348 304,348
Expired warrants - 12,924 (12,924) -
Issue of new ordinary shares (net) 15 33,336 - - 33,336
Total transactions with owners 33,336 12,924 408,573 454,833
At 31 March 2022 6,488,490 (8,801,332) 1,714,715 (598,127)
Loss for the period - (440,076) - (440,076)
Total comprehensive income for the period - (440,076) -
(440,076)
Shares to be issued waived - 201,000 (201,000) -
Contingent shares to be issued to Directors - - 125,000
125,000
Expired and cancelled options - 994,058 (994,058) -
Options reserve - - 16,441 16,441
Share based payments - options - - - -
Total transactions with owners - 1,195,058 (1,053,617)
141,441
At 31 March 2023 6,488,490 (8,046,350) 661,098 (896,762)
The accompanying accounting policies and notes form an integral
part of these accounts.
CASH FLOW STATEMENT
For the year ended 31 March 2023 and 31 March 2022
31 Mar 2023 31 Mar 2022
Note GBP GBP
Cash flows from operating activities
Loss before tax for the year (440,076) (1,090,841)
Adjustments for:
Unrealised foreign exchange gain (6,514) -
Contingent shares to be issued to directors 125,000 -
Share based payment expenses 16,441 332,232
Impairment expenses - 204,656
Finance cost 160,182 206,004
Fair value gain - (21,191)
Movement in trade and other receivables - 135,249
Movement in trade and other payables 58,317 (12,470)
Net cash used in operating activities (86,650) (246,361)
Cash flows from investing activities
Investments in Amala Foods Inc - (204,656)
Loan issued - (94,675)
Net cash used in investing activities - (299,331)
Cash flows from financing activities
Loan received 385,000 250,000
Net proceeds from share capital issue - 210,000
Net cash from financing activities 385,000 460,000
Net increase/(decrease) in cash 298,350 (85,692)
Cash and cash equivalents at start of period 19,867 105,559
Cash and cash equivalents at end of the period 14 318,217
19,867
There were no non-cash transaction in the year ended 31 March
2023. There have been significant non-cash transactions relating to
the settlement of operating and financial liabilities in the year
ended 31 March 2022 - the Company received 3,700,00 shares into
treasury in full and final settlement of a loan receivable of GBP
239,961 and the Company transferred 7,092,617 shares held in
treasury to creditors to settle liabilities.
The accompanying accounting policies and notes form an integral
part of these accounts.
NOTES TO THE ACCOUNTS
For the year ended 31 March 2023
1. GENERAL INFORMATION
Amala Foods Plc ('Company') is a public company limited by
shares. It was incorporated on 11 April 2016 and is registered
(registered number 121041) and domiciled in Jersey. The Company's
ordinary shares are on the Official List of the UK Listing
Authority in the standard listing section of the London Stock
Exchange (reference DISH).
2. BASIS OF PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL
REPORTING STANDARDS (IFRS)
The Company's accounts have been prepared in accordance with
UK-adopted International Accounting Standards at 31 March 2023.
The accounts are prepared under the historical cost convention
unless otherwise stated in the accounting policies.
The accounts are presented in GB Pounds ('GBP'), which is the
functional currency of the Company and are rounded to the nearest
pound.
Certain amounts included in the accounts involve the use of
judgement and/or estimation. Judgements, estimations and sources of
estimation uncertainty are discussed in note 3.
2.1 In issue and effective for periods commencing on 01 April
2022
The International Accounting Standards Board (IASB) issued
various amendments and revisions to International Financial
Reporting Standards and IFRIC interpretations. The amendments and
revisions were applicable for the period ended 31 March 2023 but
did not result in any material changes to the financial statements
of the Company.
Of the other IFRS and IFRIC amendments, none are expected to
have a material effect on the future Company Financial
Statements.
2.2 Standards in issue but not yet effective
At the date of approval of these financial statements, the
following standards and interpretations which have not been applied
in these financial statements were in issue but not effective:
Standard Impact on initial application Effective
date
-------------------- ------------------------------ -----------
Annual improvements 2018-2020 Cycle 01 January
2023
IAS 1 Classification of current 01 January
liabilities 2023
IAS8 Accounting estimates 01 January
2023
IASA12 Deferred tax arising form 01 January
a single transaction 2023
The Directors do not believe that the implementation of new
standards, amended standards and interpretations issued but not yet
effective and have not been early adopted early will have a
material impact once implemented in future periods.
2.3 Going Concern
The Company has the following loans, which total GBP 1,172,719
at 31 March 2023 (31 March 2022, GBP 627,537):
31 Mar 2023 31 Mar 2022
GBP GBP
Loan from other parties 1,172,719 627,537
The Company made a loss before in the year of GBP 440,076. At 31
March 2023, the cash held was GBP 318,217 and the Company had
current liabilities of GBP 1,316,168.
The Company entered into a Deed of Standstill with a creditor to
reprofile outstanding debt to a reduced amount of GBP 787,719
(amended further after year-end with the conversion of shares to
the value of GBP 80,150 - refer note 18 of the audited financial
statements) that would convert to shares at the re-admission price
upon a Reverse Takeover and that no interest will accrue and for
all existing warrants to be cancelled upon a Reverse Takeover.
Should a Reverse Takeover not take place by 22 September 2023 then
the creditor may call upon cash repayment. Given the passage of
time, agreements have been made with certain of these parties that
the cash repayments will not be called upon despite the due dates
passing.
Furthermore, the Company raised GBP 405,000 in Convertible Loan
Notes, of which GBP 20,000 is due after the year-end, that would be
largely utilised to fund a transaction leading to a Reverse
Takeover. These Convertible Loan Notes are automatically converted
into shares upon a Reverse Takeover. However, the holders of the
convertible loan notes may call upon cash repayment should there be
no Reverse Takeover.
Having prepared and reviewed cashflow forecasts, the Directors
have ascertained that further finance will need to be raised should
the convertible loans be required to be repaid in cash in the next
12 months. The Directors are confident that should the convertible
loan notes, in part or in full, require repayment then they would
be able to raise sufficient funds to be able to make such
repayments whilst still funding the Company's forecasted
expenditure. They are also confident of a transaction occurring and
therefore the share conversion option of the convertibles
presenting the best value opportunity to holders. The Company has
been reviewing several potential transactions and has prepared a
shortlist of reverse takeover opportunities in various sectors
including healthcare, natural resources, and technology , but as
completion of a reverse takeover by the required dates and thus
avoiding cash repayment of the convertible loan notes is not
guaranteed and given the requirement to raise further funds in such
an event within the next 12 months, they acknowledge that a
material uncertainty relating to going concern exists.
The accounts have therefore been prepared on a going concern
basis.
3. JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND SOURCES OF
ESTIMATION UNCERTAINTY
Certain amounts included in the accounts involve the use of
judgement and/or estimation. These are based on management's best
knowledge of the relevant facts and circumstances, having regard to
prior experience. However, judgements and estimations regarding the
future are a key source of uncertainty and actual results may
differ from the amounts included in the accounts. Information about
judgements and estimation is contained in the accounting policies
and/or other notes to the accounts. The key areas are summarised
below.
3.1 Share based payments
Judgement is required when determining the fair value of options
and warrants issued under the scope of IFRS 2 (refer note 17 of the
audited financial statements) as a number of the inputs are
subjective.
3.2 Recoverable value of loan receivable
The amounts advanced to Terra Rara UK Ltd have been classified
as a loan receivable under IFRS 9 and therefore the Directors have
had to consider the recoverable value of this balance by applying
the expect credit loss approach. When applying this approach, the
Directors have been required to make judgements regarding the
likelihood of the recovery of the balance. The Directors have
assessed that in the short time period since the year-end, no
events or developments have been noted to suggest that the
likelihood of recovery decreased in this period and therefore the
Directors have assessed the balance to be fully recoverable. The
Directors of the Company are in contact with the management of
Terra Rara UK Ltd and are aware of the efforts being made to repay
the loan and financing options being discussed, thus they are
confident that the loan advanced to Terra Rara UK Ltd will be
recovered during the next financial year. The Directors will
continue to monitor the situation closely and reassess the
recoverability of the loan as new information becomes available
.
3.3 Post year-end settlement of convertible loan notes
The convertible loan notes issued prior to 31 March 2023 are due
for repayment in cash within 12 months of the approval date of
these financial statements should a Reverse Takeover not take place
by the dates noted within the underlying agreements.
Should the Reverse Takeover not take place by the specified
dates, the Directors have made the judgement that the Company would
be able to settle the convertible loan notes in cash by deferring
payment until such a point that they were able to raise the
requisite funds.
4. ACCOUNTING POLICIES
The principal accounting policies are as determined below.
4.1 Financial assets
Financial assets are classified as either financial assets at
amortised cost, at fair value through other comprehensive income or
at fair value through profit or loss depending upon the business
model for managing the financial assets and the nature of the
contractual cash flow characteristics of the financial asset.
A loss allowance for expected credit losses is determined for
all financial assets, other than those at fair value through profit
or loss (FVPL), at the end of each reporting period. The Company
applies a simplified approach to measure the credit loss allowance
for trade receivables using the lifetime expected credit loss
provision.
The lifetime expected credit loss is evaluated for each trade
receivable taking into account payment history, payments made
subsequent to year end and prior to reporting, past default
experience and the impact of any other relevant and current
observable data. The Company applies a general approach on all
other receivables classified as financial assets. The general
approach recognises lifetime expected credit losses when there has
been a significant increase in credit risk since initial
recognition.
The Company derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and
rewards of ownership of the asset to another party.
4.2 Foreign currency translation
Functional and presentational currency
The functional currency of the Company is GBP in the reporting
period as it is the currency which most affects each company's
revenue, costs and financing. The Company's presentation currency
is the GBP.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions, and from the translation at
reporting period end exchange rates of monetary assets and
liabilities denominated in foreign currencies, are recognised in
the income statement.
4.3 Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand, demand
deposits and short term highly liquid investments and are measured
at cost which is deemed to be fair value as they have short-term
maturities.
4.4 Financial liabilities
Financial liabilities include convertible loans and trade and
other payables. In the statement of financial position these items
are included within Current liabilities. Financial liabilities are
recognised when the Company becomes a party to the contractual
agreements giving rise to the liability. Interest related charges
are recognised as an expense in Finance costs in the income
statement unless they meet the criteria of being attributable to
the funding of construction of a qualifying asset, in which case
the finance costs are capitalised.
Trade and other payables and convertible loans are recognised
initially at their fair value and subsequently measured at
amortised costs using the effective interest rate, less settlement
payments. Convertible loans issued in the year are classified as a
financial liability as there is a contractual obligation to pay
cash that the issuer cannot avoid, the exceptions in IAS 32.16A-D
are not met and it is not a derivative.
The Company derecognises financial liabilities when the
Company's obligations are discharged, cancelled or have
expired.
4.5 Income taxes
Current income tax liabilities comprise those obligations to
fiscal authorities in the countries in which the Company carries
out operations and where it generates its profits. They are
calculated according to the tax rates and tax laws applicable to
the financial period and the country to which they relate. All
changes to current tax assets and liabilities are recognised as a
component of the tax charge in the income statement.
Deferred income taxes are calculated using the liability method
on temporary differences. This involves the comparison of the
carrying amount of assets and liabilities in the consolidated
accounts with their respective tax bases. However, deferred tax is
not provided on the initial recognition of goodwill, nor on the
initial recognition of an asset or liability unless the related
transaction is a business combination or affects taxes or
accounting profit.
Deferred tax liabilities are provided for in full. Deferred tax
assets are recognised when there is sufficient probability of
utilisation. Deferred tax assets and liabilities are calculated at
tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the balance sheet date.
4.6 Segmental Reporting
An operating segment is a component of the Company engaged in
revenue generation activity that is regularly reviewed by the Chief
Operating Decision Maker (CODM) for the purposes of allocating
resources and assessing financial performance. The CODM is
considered to be the Board of Directors.
The Company's operating segments are based on geographical
location and determined solely as Jersey (refer note 5 of the
audited financial statements ).
4.7 Share capital and unissued share capital
Financial instruments issued by the Company are treated as
equity only to the extent that they do not meet the definition of a
financial liability. The Company's ordinary shares are classified
as equity and have no par value. Costs directly associated with the
issue of shares are charged to share capital.
Where the Company has a contractual right to issue a fixed
number of shares to settle a fixed liability it recognises unissued
share capital pending the issue of shares.
Treasury shares are held by the Company at no par value and are
adjusted through share capital for receipts and disbursements.
4.8 Provisions, contingent liabilities and contingent assets
Provisions are recognised when the present obligations arising
from legal or constructive commitment, resulting from past events,
will probably lead to an outflow of economic resources from the
Company which can be estimated reliably.
Provisions are measured at the present value of the estimated
expenditure required to settle the present obligation, based on the
most reliable evidence available at the balance sheet date. All
provisions are reviewed at each balance sheet date and adjusted to
reflect the current best estimates.
4.9 Share-based payments and valuation of share options and
warrants
The calculation of the fair value of equity-settled share-based
awards requires assumptions to be made regarding future events and
market conditions. These assumptions include the future volatility
of the Company's share price. These assumptions are then applied to
a recognised valuation model in order to calculate the fair value
of the awards.
Where employees, directors or advisers are rewarded using
share-based payments, the fair value of the employees', directors'
or advisers' services are determined by reference to the fair value
of the share options/warrants awarded. Their value is appraised at
the date of grant and excludes the impact of any non-market vesting
conditions (for example, profitability and sales growth targets).
In some instances, warrants issued in association with the issue of
Convertible Loan Notes also represent share-based payments and a
share-based payment charge is calculated for these instruments.
In accordance with IFRS 2, a charge is made to the statement of
comprehensive income for all share-based payments including share
options based upon the fair value of the instrument used. A
corresponding credit is made to other reserves, in the case of
options/warrants awarded to employees, directors, advisers and
other consultants.
If service conditions or other vesting conditions apply, the
expense is allocated over the vesting period, based on the best
available estimate of the number of share options/warrants expected
to vest. Non-market vesting conditions are included in assumptions
of the number of options / warrants that are expected to become
exercisable, and hence reflected in the share-based payment
charge.
Estimates are subsequently revised, if there is any indication
that the number of share options/warrants expected to vest differs
from previous estimates. No adjustment is made to the expense or
share issue cost recognised in prior periods if the number of share
options ultimately vest differs from previous estimates.
Upon exercise of share options, the proceeds received, net of
any directly attributable transaction costs, up to the nominal
value of the shares issued, are allocated to share capital.
Where share options are cancelled, this is treated as an
acceleration of the vesting period of the options. The amount that
otherwise would have been recognised for services received over the
remainder of the vesting period is recognised immediately within
the Statement of Comprehensive Income.
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair value.
5. SEGMENTAL REPORTING
The Company's operating segments are based on geographical
location and determined solely as Jersey.
6. LOSS FOR THE PERIOD BEFORE TAX
31 Mar 2023 31 Mar 2022
GBP GBP
Loss for the period has been arrived at after charging:
Auditors remuneration 37,400 34,000
Directors remuneration 125,000* 140,000
Share based payments expense ` 16,441 332,232
Write off of prepaid consideration to AFI - 204,656
* Stock award contingent on a successful Reverse takeover, upon
which this will be issued in equity
7. REMUNERATION
7.1 Remuneration of Management Personnel and Employees
In accordance with IAS 24 - Related party transactions, all
Executive and Non-executive Directors, who are the Company's key
management personnel, are those persons having authority and
responsibility for planning, directing and controlling the
activities of the Company. Details of Directors Remuneration is
outlined in the Report of the Directors.
31 Mar 2023 31 Mar 2022
GBP GBP
Directors emoluments during the period 125,000 140,000
Remuneration of GBP 23,000 was paid in the year ended 31 March
2022. The balances due at 31 March 2022 were transferred to Shares
to be issued reserve through the Company's salary sacrifice
scheme.
The Directors have agreed to waive the right to receive or
accrue any and all outstanding remuneration or any unissued equity
prior to the completion of a successful reverse takeover. The GBP
125,000 shown in the year ended 31 March 2023 is a stock award
contingent on a successful Reverse takeover, upon which this will
be issued in equity at the readmission price.
7.2 Average Number of Employees
The average number of Employees during the period was made up as
follows:
31 Mar 2023 31 Mar 2022
----------------------------- ------------ ------------
Directors 2 2
Average during the period 2 2
----------------------------- ------------ ------------
8. TAXATION
The Company is taxed at the standard rate of income tax for
Jersey companies which is 0%. Taxation for other jurisdictions is
calculated at the rates prevailing in the respective
jurisdictions.
31 Mar 2023 31 Mar 2022
GBP GBP
-------------------- ------------ ------------
Current tax charge - -
Deferred tax charge - -
Total tax charge - -
-------------------- ------------ ------------
The tax charge for the period can be reconciled to the loss per
the income statement as follows:
31 Mar 2023 31 Mar 2022
GBP GBP
------------------------------ ------------ ------------
Loss before taxation (440,076) (1,090,841)
Jersey Corporation Tax at 0% - -
Total tax charge * - -
------------------------------ ------------ ------------
* No deferred tax asset has been recognised as jersey having a
0% corporation tax, which means the there are no unutilised tax
losses
9. INVESTMENTS & IMPAIRMENTS
In the year ended 31 March 2022 , the Company entered into a
joint venture agreement with Amala Foods Inc ('AFI'), advancing GBP
204,656 (USD 227,488) This agreement stated that up to 70% of the
share capital of AFI could be purchased by the Company for
consideration of USD 1,000,000 but USD 333,333 was required to be
advanced by the Company before they would be entitled to receive
any shares in AFI. It also stated that if the Company decided not
to advance funds equal to or exceeding that threshold then those
funds advanced would not be reimbursed to the Company.
As at the year ended 31 March 2022, this threshold had not been
met and the Directors did not intend to advance any further funds
to AFI post year-end due to signing a term sheet with Terra Rara UK
Ltd. This set the Company on a path to a new strategic direction
that resulted in the signing of a Share Purchase Agreement. That
led to the suspension of the Company's listing in order for a
regulatory process to commence that if successful would have
resulted in a Reverse Takeover. One of the conditions precedent to
the Share Purchase Agreement was that the Company should have no
interest in AFI. The Directors assessed therefore that this prepaid
consideration was not recoverable and therefore impaired the
balance in full .
The changes in business structure have generated the following
impairment losses:
31 Mar 2023 31 Mar 2022
GBP GBP
-------------------------------------------- ------------- ------------
Write off of prepaid consideration - AFI - 204,656
Total impairment - 204,656
-------------------------------------------- ------------- ------------
10. TRADE AND OTHER RECEIVABLES
31 Mar 2023 31 Mar 2022
GBP GBP
Loan Receivables * 101,189 94,675
Balance at end of period 114,675 94,675
* Relates to USD 125,000 loaned to Terra Rara UK Ltd, which the
Directors believe is fully recoverable at 31 March 2023.
11. CASH AND CASH EQUIVALENTS
31 Mar 2023 31 Mar 2022
GBP GBP
Cash at Bank 318,217 19,867
Cash is only held at substantial banks with high credit
ratings.
12. TRADE AND OTHER PAYABLES
Current Liabilities
31 Mar 2023 31 Mar 2022
GBP GBP
Trade payables 83,109 27,243
Accruals 60,340 57,889
Borrowings* 1,172,719 627,537
Balance at end of period 1,316,168 712,669
* The borrowings of GBP 787,719 are a short-term loan to be used
for working capital purposes with an interest rate of 7.5%. The
repayment terms were negotiated and extended to Q1 2022. The
Company drew down GBP 250,000 against the loan in the year ended 31
March 2022 and recognised GBP 177,537 of loan re-negotiation and
interest chargers in the year. 9,728,720 warrants were issued
during the year ended 31 March 2021 in relation to the loan and
re-negotiated in the year ended 31 March 2022 (refer note 17 of the
audited financial statements ). The share based payment of GBP
304,438 related to the loan and the issue of 43,478,260 warrants at
1.15p with an expiry date of 16 July 2015 are detailed in note 17
of the audited financial statements . The repayment terms were
further negotiated in the year ended 31 March 2023 to reprofile
outstanding debt on the basis that no interest will be accrued
until a successful reverse takeover at which time the debt will be
reduced to GBP 690,000 . No additional warrants were issued to the
convertible loan note holders as a result of the renegotiated
repayment terms .
Convertible Loan Notes have a 6 month maturity from the date of
signing, after which 2% per month interest will be added, and will
be converted at 50% of the subscription price at a successful
reverse takeover.
13. FINANCIAL INSTRUMENTS
13.1 Financial Assets at amortised cost
31 Mar 2023 31 Mar 2022
GBP GBP
Trade and other receivables 101,189 94,675
Cash and cash equivalents 318,217 19,867
Balance at end of period 419,406 114,542
13.2 Financial Liabilities at amortised cost
31 Mar 2023 31 Mar 2022
GBP GBP
Current liabilities - trade payables and accruals 143,449
85,132
Current liabilities - loans 1,172,719 627,537
Balance at end of period 1,316,168 712,669
13.3 Liquidity Risk
The Company monitors constantly the cash outflows from day to
day business and monitors long term liabilities to ensure that
liquidity is maintained.
13.4 Interest Rate Risk
At the balance date the Company does not have any long-term
variable rate borrowings. The Directors do not consider the impact
of possible interest rate changes based on current market
conditions to be material to the net result for the year or the
equity position at the year ended 31 March 2023 or the period ended
31 March 2022.
13.5 Foreign Currency Risk
The Company is infrequently exposed to transaction foreign
exchange risk due to transactions not being matched in the same
currency. This is managed, where possible and material, by the
Company retaining monies received in base currencies in order to
pay for expected liabilities in that base currency. The Company
currently has no currency hedging in place.
The Directors do not consider the impact of possible foreign
exchange fluctuations to be material to the net result for the year
or the equity position at the year-end for either the year ended 31
March 2023 or period ended 31 March 2022.
13.6 Credit Risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in a financial loss to the
Company. In order to minimise this risk, the Company endeavours
only to deal with companies which are demonstrably creditworthy and
this, together with the aggregate financial exposure, is
continuously monitored. The maximum exposure to credit risk is the
value of the outstanding amounts as follows:
31 Mar 2023 31 Mar 2022
GBP GBP
Trade and other receivables 101,189* 94,675*
Cash and cash equivalents 318,217 19,867
* Equates to USD 125,000
Credit risk on cash and cash equivalents is considered to be
acceptable as the counterparties are substantial banks with high
credit ratings. All receivables are current assets and due within
12 months. The Company has assessed the expected credit losses as
GBP Nil for the years ended 31 March 2023 and 2022.
14. CAPITAL MANAGEMENT
For the purposes of the Company's capital management, capital
includes called up share capital, share-based payments for options,
share-based payments for warrants and equity reserves attributable
to the equity holders of the Company as reflected in the Statement
of Financial Position.
The Company's capital management objectives are to ensure that
the Company's ability to continue as a going concern, and to
provide an adequate return to shareholders.
The Company manages the capital structure through a process of
constant review and makes adjustments to it in the light of changes
in economic conditions and the risk characteristics of the
underlying assets. In order to maintain or adjust the capital
structure, the Company may issue new shares, adjust dividends paid
to shareholders, return capital to shareholders, or seek additional
debt finance.
The nature of the Company's equity reserves are:
-- Reserves - including warrants , options and shares to be
issued reserve s related to the value of equity that investors have
secured as part of their funding provided to the Company and that
management has agreed to issue for settlement of remuneration ;
-- Share Capital - represents the nominal value of shares issued ;
-- Unissued Share Capital - reflects the value of equity that
management has agreed to issue for settlement of remuneration,
liabilities and funding provided ; and
-- Ac cumulated losses - comprise the Company's cumulative
accounting profits and losses since inception.
14.1 Reserves
31 Mar 2023 31 Mar 2022
GBP GBP
------------------------------- ------------ ------------
Share options reserve - 977,617
Warrants reserve 381,159 381,159
Shares to be issued reserve 279,939 355,939
------------------------------- ------------ ------------
Balance at end of period 661,098 1,714,715
------------------------------- ------------ ------------
15. SHARE CAPITAL
15.1 Share Capital
31 Mar 2023 31 Mar 2022
Number* GBP Number* GBP
Opening balance 443,620,823 6,488,490 373,620,823 6,455,154
Ordinary shares - new shares issued during - - 70,000,000
210,000
the period
Other adjustment** - - - (176,664)
Balance at end of period 443,620,823 6,488,490 443,620,823
6,488,490
* Number of shares issued and fully paid
** Reflects changes to treasury shares in the year ended 31
March 2022 - including the receipt of 3,700,000 shares in
settlement of the outstanding loan, the issuance of 2,332,617 to
settle unissued shares at 31 March 2021 and the issuance of
4,760,000 shares to settle liabilities incurred in the year ended
31 March 2022.
The shares have no par value. At 31 March 2022 and 31 March 2023
the Company held 19,607,383 treasury shares.
15.2 Earnings Per Share
31 Mar 2023 31 Mar 2022
GBP GBP
---------------------------------------------- ----------------------- ------------
Basic and diluted earnings per share (GBP) (0.00010) (0.0028)
Loss used to calculate basic and diluted
earnings per share (440,076) (1,090,841)
Weighted average number of shares used
in calculating basic and diluted earnings
per share 443,620,823 395,483,837
---------------------------------------------- ----------------------- ------------
Basic earnings per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding and shares to be issued
during the period.
In 2023 and 2022, the potential ordinary shares were
anti-dilutive as the Company was in a loss making position and
therefore the conversion of potential ordinary shares would serve
to decrease the loss per share from continuing operations. Where
potential ordinary shares are anti-dilutive a diluted earnings per
share is not calculated and is deemed to be equal to the basic
earnings per share. The warrants and options noted in note 17 could
potentially dilute EPS in the future.
16. RELATED PARTY TRANSACTIONS
The Company owes GBP Nil to Aidan Bishop at 31 March 2023 (2022
- GBP 166,000). The Company owes GBP Nil to Jonathan Morley-Kirk at
31 March 2023 (2022 - GBP 35,000). The Directors have agreed to not
receive any remuneration due and will not receive any further
remuneration until a Reverse Takeover is achieved - in lieu o f GBP
125,000 stock award contingent on completion of the transaction
.
Aidan Bishop agreed to a GBP 40,000 Convertible Loan Note in the
year ended 31 March 2023 as part of the GBP 405,000 of Convertible
Loan Notes, of which GBP 20,000 was received by the Company at 31
March 2023 as agreed, to fund a transaction leading to a Reverse
Takeover .
17. SHARE OPTIONS AND WARRANTS
17.1 Share Warrants
Warrants are denominated in Sterling and are issued for services
provided to the Company or as part of the acquisition of a
subsidiary.
In the year ended 31 March 2023 the Company recognised no Share
Based Payments expenses in respect of warrants (31 March 2021, GBP
304,348).
In the year ended 31 March 2022, the Company issued 43,478,260
warrants at an exercise price of 1.15p in relation to the
short-term funding.
The warrants outstanding and exercisable at 31 March 2023
are:
No. outstanding
Exercise No. issued No. exercised No. lapsed and exercisable Expiry date
price or re-negotiated
--------------- ------------- ---------------- ------------------- ----------------- --------------
Issued in the year
ended 31 Mar 2021
19 October
1.35p 4,324,320 - - 4,324,320 2023
19 November
1.10p 5,404,400 - - 5,404,400 2023
Issued in
the year
ended 31 Mar
2022
1.15p 43,478,260 - - 43,478,260 16 July 2025
--------------- ------------- ---------------- ------------------- ----------------- --------------
Balance at
end of period 53,206,980 - - 53,206,980
--------------- ------------- ---------------- ------------------- ----------------- --------------
17.2 Share Options
On 31 July 2018 and 19 February 2019 share options were granted
by the Company to an employee, non-executive directors, executive
directors and senior managers within the Company. The details of
the Options are outlined in detail in the Company's Annual Financial
Report to 31 March 2021.
Under the provisions of IFRS 2 a charge is recognised for those
share options and awards under the share plan issued. The estimate
of the fair value of the services received is measured based on
the Black-Scholes model for share options granted under the executive
and discretionary share option schemes.
The Company recognised a GBP 16,441 share based payments charge
on the year ended 31 March 2023 in respect of options issued in
previous periods (2022, GBP 27,884).
Each of the Options noted above have been cancelled or lapsed during
the year ended 31 March 2023.
17.3 Share Awards
In the period ended 31 March 2019, the Company entered into an agreement
with a number of employees to issue a total of 599,156 shares at
a price equal to the admission price in two years' time should the
employees in questions still be employed by the Company.
Although due, the shares had not been issued to those employees
as at 31 March 2023 and 31 March 2022 and thus the fair value of
these share awards is included within other reserves.
In the year ended 31 March 2023 former employees and current directors
waived their rights to awards and options as a facilitator to the
planned reverse takeover.
18. EVENTS AFTER THE REPORTING PERIOD
On 18 April 2023, the Company announced the restoration of its
listing on the Standard Segment to the Main Market .
On 19 April 2023, the Company issued 23,299,314 shares at a
price of GBP 0.00344 per share to a creditor to reduce outstanding
liabilities by GBP 80,150 .
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END
FR EALXFDDADEFA
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July 31, 2023 11:30 ET (15:30 GMT)
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