TIDMDISH
RNS Number : 9770U
Amala Foods PLC
31 March 2023
-- Amala Foods Plc
( " Amala " or the " Company")
Annual Financial Report 2022
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 2022 which is below this announcement. The
Annual Report will also shortly be available via the National
Storage Mechanism.
The Directors would like to highlight on page 10 that the
Independent Auditors state "In auditing the financial statements,
we have concluded that the director's 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, assessing the
likelihood of a Reverse Takeover completing within the next 12
months, ascertaining the company's latest financial position and
their committed costs over the next 12 months and considering the
terms of the convertible loan notes in issue at the date of this
report."
The going concern period is the period of twelve months
following the publication of the Annual Financial Report.
In order to conserve cash and to ensure that the proceeds of
GBP405,000 Convertible Loan Notes as announced previously have the
best prospect of 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 achieves a Reverse Takeover. The Directors are actively
seeking to identify new opportunities for the company.
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
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 1st Floor, Woodford House
Peter Street
St Helier JE2 4SP
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
* appointed 17 March 2023
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 14
Statement of Financial Position 15
Statement of Changes in Equity 16
Cash Flow Statement 17
Notes to the Accounts 18
CHAIRMAN'S REPORT
The new financial year opened with new optimism for the Company
despite the global pandemic continuing to have a significant impact
to daily life and business in the Philippines where its new
early-stage plant-based business was located, named Amala Foods Inc
("AFI").
AFI commenced a research and development phase within a
purpose-built facility and was able to create several beta products
during the period that were tested with a select number of
restaurants with a view to further research and product
development. Whilst the early indications were encouraging it was
evident that the Company would require significant further funding
to progress to the stage of full commerciality with the potential
for profitability.
By year end, the Directors had taken the decision to not invest
further in AFI given the potential new path ahead for the Company.
After the period the Company announced the execution of a Share
Purchase Agreement (SPA) with Terra Rara UK Ltd, with one of the
conditions precedent being that the Company dispose of any interest
in AFI. Due to the Company h aving not advanced sufficient funds to
reach the first equity hurdle in AFI, the Company was not entitled
to be reimbursed for the funds advanced. The funds advanced in the
year were written off to the statement of comprehensive income in
the year ended 31 March 2022.
The Company raised GBP 210,000 via a placing in December 2021
for general working capital purposes.
In February 2022, the Company signed a non-binding term sheet
with Terra Rara UK Ltd, a mining company, that could have led to a
transaction that would have been considered a Reverse Takeover.
Whilst the future isn't quite clear at this point for the Company,
the Directors remain committed to seeking paths that will create
value for shareholders. 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 and if it had been
successful the acquisition price paid would have represented 55% of
the enlarged share capital.
After the period, the Company announced the execution of a Share
Purchase Agreement (SPA) with Terra Rara UK Ltd and requested a
suspension of the listing. The listing was suspended on 23 May
2022. The Company announced the termination of the proposed
transaction with Terra Rara UK Ltd after the period 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 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. The
Company announced after the period raising GBP 405,000 of
Convertible Loan Notes to fund a transaction leading to a Reverse
Takeover.
The Directors consider the Company to be a shell company. After
the period, Ms Celia Li was appointed to the Board as a
Non-Executive Director. 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 March 2023
REPORT OF THE DIRECTORS
The Directors present the report together with the audited
accounts of the Company for the year ended 31 March 2022.
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
2022 was a cash shell company. The Company signed a non-binding
term sheet with a mining company towards the end of the year with a
view to a potential transaction that would constitute a Reverse
Takeover that resulted in the execution of a Share Purchase
Agreement after the year. The proposed transaction was also
terminated after the period. 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 2022 show
a loss before taxation of GBP 1,090,841 (2021 loss before taxation
of GBP 2,480,423).
The Directors do not recommend the payment of a dividend for the
period ended 31 March 2022 (2021: GBP Nil).
The Directors note that during the year, the Company's last
subsidiary, BigDish UK Ltd, was struck off and therefore the
Company had no subsidiaries with trading activity in the year ended
31 March 2022. As a result, the Company has prepared single entity
financial statements. The comparatives stated in the primary
statements are that of the single entity and are unaudited since no
single entity financial statements were presented within the 2021
consolidated financial statements.
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 a reduced amount of GBP 690,000 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, after the balance sheet date, 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
.
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. However, 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.
Post year-end, the Directors have agreed to not receiving any
remuneration due to them as at 31 March 2022 and for their services
provided during the period of the suspension of the listing and
until a successful transaction is completed that results in a
Reverse Takeover.
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 after the period, 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 and its subsidiaries.
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 it.
Events after the Reporting Period
Refer note 18 to the audited accounts.
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
Note: Celia Li was appointed as a Non-Executive Director on 17
March 2023 and will join the Remuneration Committee.
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
Director. 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 remuneration paid to, or receivable by, Directors in respect
of 2022 and 2021 in relation to the period of their appointment as
Director is GBP 140,000 (2021 - GBP 150,000). All amounts are short
term in nature. 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 2022 (2021 - 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.
31 Mar 31 Mar
2022 2021
(GBP) (GBP)
------------------------- -------- --------
Executive Directors
Aidan Bishop 120,000 120,000
Non-executive Directors
Jonathan Morley-Kirk 20,000 20,000
Simon Perrée* - 10,000
Total Remuneration 140,000 150,000
------------------------- -------- --------
-- Resigned 24 September 2020. No termination benefits were paid.
M onza Capital Ventures Limited, which is associated with Aidan
Bishop, held 55,018,687 shares in the Company at 31 March 2022 and
31 March 2021 (representing, 12.4% and 14.7% ownership of the
Company at 31 March 2022 and 31 March 2021 respectivley) . Jonathan
Morley-Kirk held no shares in the Company at 31 March 2022 and 31
March 2021. Aidan Bishop held 16,267,462 share options at 31 March
2022 and 2021 and Jonathan Morley-Kirk held 444,444 share options
at 31 March 2022 and 2021.
Share Capital
At 31 March 2022 the issued share capital of the Company stood
at 443,620,823 - with 70,000,000 new shares having been issued
during the period (refer note 15 to the audited accounts).
Substantial Shareholders (unaudited)
At 31 March 2022 the following had notified the Company of
disclosable interests in 5% or more of the nominal value of the
Company's shares.
Number %
------------------------------------------------- -------------- --------
Fiske Nominees Limited* 125,192,082 28.2%
Hargreaves Lansdowne (Nominees) Limited 72,226,646 16.3%
Interactive Investor Services Nominees Limited 40,071,269 9.0%
------------------------------------------------- -------------- --------
* 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.
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
30 March 2023 and is signed on its behalf.
By Order of the Board
Jonathan Morley-Kirk
Chairman
31 March 2023
STRATEGIC REPORT
The Company was mainly focused during the year on AFI, who were
engaged in research and development of plant-based products in the
Philippines.
COVID-19 continued to have a significant impact and AFI had to
make significant adjustments resulting from restrictions imposed by
the pandemic. Substantial progress was made in research and
development and several beta products were tested in selected
restaurants with a view to further research and development. The
Company noted that AFI was able to make speedy progress at low cost
when compared to similar companies at the same stage early of
development. However, it was noted that significant further funding
would be required in order for AFI to advance beyond research and
development to commercialisation.
The Directors made the decision by year-end to not invest
further in AFI after the execution of a term sheet with Terra Rara
UK Ltd (see below) set the Company on a new strategic path. After
the period, the Company entered into a Share Purchase Agreement
with Terra Rara UK Ltd, with one of the conditions precedent being
that the Company have no interest in AFI. The Company did not reach
the required threshold to earn equity in AFI and as such was not
entitled to be reimbursed for funds advanced to date to AFI. The
prepaid consideration was written off in full.
The capital markets remained difficult for new funding and the
Directors considered further strategic changes in order to create
value for shareholders. Towards the end of the year the Company
signed a non-binding term sheet with Terra Rara UK Ltd, a mining
company, with Rare Earth Elements (RRE) exploration projects in
Africa. This progressed to the Company entering into an agreement
to acquire 100% of the share capital of Terra Rara UK Ltd that
would lead to a Reverse Takeover. As a result, the Company's
listing was suspended in order that a regulatory process could
begin. The Company announced after the period that 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 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 March 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 2022 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 ("UK-adopted
IAS").
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 March 2022 and of its loss for the year then
ended; and
-- have been properly prepared in accordance with UK-adopted IAS.
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 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.
Other matter
As at 31 March 2021, the Company had one fully owned subsidiary
and thus was part of a group and prepared consolidated financial
statements for the year ended 31 March 2021 which were audited.
However, as the Company is registered in Jersey, no Company
Statement of Comprehensive Income, Company Statement of Financial
Position, Company Statement of Changes in Equity or Company Cash
Flow Statement were included in the consolidated financial
statements for the year ended 31 March 2021 and no individual
financial statements were prepared and audited. In the year ended
31 March 2022, the company's subsidiary was dissolved and therefore
individual financial statements have been prepared. As a result,
the comparative figures are unaudited.
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 GBP1,090,841
during the year ended 31 March 2022, is in a net current liability
position of GBP598,127 as at 31 March 2022 and should the Company
not complete a reverse takeover by the maturity dates of the
convertible loan notes in issued, which fall on various dates
between April and September 2023, then they could be required to
settle the convertible loan notes in issue in cash and would be
dependent on raising further finance in order to fund such
repayment. As stated in note 2.3, these events or conditions, along
with the other matters as set forth in note 2.3, 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, assessing the likelihood of a Reverse
Takeover completing within the next 12 months, ascertaining the
company's latest financial position and their committed costs over
the next 12 months and considering the terms of the convertible
loan notes in issue at the date of this report.
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. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing
and extent of our audit procedures.
Materiality for the financial statements was set as GBP28,000
based upon 2.5% of loss before tax. Materiality has been based upon
loss before tax given there are a small number of large balances in
the Statement of Financial Position and given the focus of
management on cost-control in order to remain a going concern.
The performance materiality and the triviality thresholds for
the financial statements were set at GBP21,000 and GBP1,400
respectively due to 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 recoverable value
of loan receivables and the fair value assigned to warrants issued
in the year. 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 matters described below to
be the key audit matters to be communicated in our report.
Key Audit Matter How our scope addressed this
matter
Carrying value of loan receivables
========================================================================
During the year the company Our work in respect of this
advanced $125k (GBP95k) to the risk included, but was not limited
acquisition target Terra Rara to:
UK Ltd, a company conducting * Obtaining the loan agreement with Terra Rara UK Ltd
exploration for rare earth metals and reviewing to ascertain the key terms of the
in Africa. agreement;
There is a risk that the amounts
advanced may not have been classified
or correctly accounted for in * Ensuring that that loan receivable has been correctly
accordance with IFRS 9 Financial classified in accordance with IFRS 9;
Instruments and thus given the
significant carrying value,
the financial statements may * Vouching the advance of funds to Terra Rara to bank
be materially misstated. statements;
As the target is an exploration
company there is also risk that
the loan receivable may not * Ensuring that any interest income earned in respect
be fully recoverable and thus of both loans has been correctly accounted for;
materially overstated. Additionally,
significant judgement is required
by the Directors in assessing * Obtain management's IFRS 9 expected credit loss model
whether any expected credit assessment in respect of both loan receivables.
losses are required to be recognised. Review and challenge the key assumptions and
In addition, during the year judgements made and consider the accuracy and
a loan receivable was settled completeness of any such charge recognised; and
via the receipt of shares in
the Company previously held
by the borrower. There is a * In relation to the loan with Poppyflower Investments
risk that the settlement of Ltd, obtaining the settlement agreement, vouching the
this loan and receipt of the receipt of shares and ensuring that the settlement
Company's own shares has not has been treated in accordance with IAS 32 and IFRS
been accounted for in accordance 9.
with IAS 32 and IFRS 9.
See note 9, 10 & 18 for further
details in respect of these
balances and the post-year end The directors assessed at the
termination of the proposed year-end that the loan receivable
transaction and note 3.2 for is recoverable in full owing
the judgements made by the directors to the fact that the directors
when conducting their expected did not identify any events
credit loss model review. or developments that took place
in the month between the advancing
of funds and 31 March 2022 that
reduced their confidence in
the likelihood of full recovery.
In addition, it was noted that
repayment of the loan was not
called upon on or prior to 31
March 2022 as at year-end the
directors were in the process
of negotiating the terms of
the Share Purchase Agreement
signed in May 2022.
Whilst the loan has yet to be
recovered post year-end and
the proposed acquisition of
Terra Rara UK Ltd has been terminated,
which the directors assess as
being a non-adjusting post balance
sheet event, following conversations
with the directors are confident
that the balance will be recovered
in full albeit it should be
noted that if it is not recovered
then the amount will need to
be impaired. It was assessed
that the termination of the
deal was a non-adjusting event
as no such conditions were in
existence at 31 March 2022 since
the terms of the Share Purchase
Agreement were still being negotiated.
The loan due from Poppyflower
was settled in full during the
year via the transfer of shares
in the Company. The loan receivable
was therefore extinguished and
the shares taken into treasury.
========================================================================
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 financial 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 by the
company, 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 Financial
Conduct Authority (FCA) 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:
o Discussions with management regarding compliance with laws and
regulations by the company;
o Reviewing board minutes; and
o Review ing regulatory news 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 there was potential for
management bias in relation to the assessment of the recoverability
of the loan receivables. We addressed this by challenging the
assumptions and judgements made by management. Please refer to 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 1 March 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
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2022 and 31 March 2021
31 Mar 2021
31 Mar 2022 (unaudited)
Note GBP GBP
Administrative expenses (357,656) (603,313)
Impairment 9 (204,656) (1,762,865)
Share based payments expense 17 (332,232) (116,915)
Operating loss (894,544) (2,483,093)
Interest income 9,707 22,083
Loan note interest (206,004) (19,413)
Loss before taxation (1,090,841) (2,480,423)
Income tax expense 8 - -
Loss after taxation (1,090,841) (2,480,423)
Earnings per share:
Basic and diluted loss per share (GBP) 15 (0.0028) (0.0069)
The accompanying accounting policies and notes form an integral
part of these accounts.
STATEMENT OF FINANCIAL POSITION
At 31 March 2022
31 Mar 2021
31 Mar 2022 (unaudited)
Note GBP GBP
Current assets
Trade and other receivables 10 94,675 229,924
Cash and cash equivalents 11 19,867 105,559
114,542 335,483
Current liabilities
Trade and other payables 12 (85,132) (97,602)
Borrowings 12 (627,537) (200,000)
(712,669) (297,602)
Net (liabilities)/assets (598,127) 37,881
Equity
Issued share capital 15 6,488,490 6,455,154
Retained earnings* (8,801,332) (7,723,415)
Other reserves 14 1,714,715 1,306,142
Total equity (598,127) 37,881
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 March 2023
STATEMENT OF CHANGES IN EQUITY
At 31 March 2022
Share Retained Other Total Capital Earnings reserves Equity
Note GBP GBP GBP GBP
At 31 March 2020 (unaudited) 5,972,980 (5,438,785)
1,391,010 1,925,205
Loss for the period - (2,480,243) - (2,480,243)
Total comprehensive income for the period - (2,480,243) -
(2,480,243)
Share options reserves - - 120,818 120,818
Shares to be issued reserve - - (10,073) (10,073)
Issue of new ordinary shares (net) 15 482,174 - - 482,174
Share based payments - 116,915 (116,915) -
Translation reserve - 78,698 (78,698) -
Total transactions with owners 482,174 195,613 (84,868)
592,919
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)
The accompanying accounting policies and notes form an integral
part of these accounts.
CASH FLOW STATEMENT
For the year ended 31 March 2022 and 31 March 2021
31 Mar 2021
31 Mar 2022 (unaudited)
Note GBP GBP
Cash flows from operating activities
Cash paid to suppliers & employees (242,645) (501,945)
Net cash from operating activities (242,645) (501,945)
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 246,284 200,000
Cash received from loan receivable - 50,000
Net proceeds from share capital issue 210,000 -
Net cash from financing activities 456,284 250,000
Net decrease in cash (85,692) (251,945)
Cash and cash equivalents at start of period 105,559 357,504
Cash and cash equivalents at end of the period 14 19,867
105,559
There have been significant non-cash transactions relating to
the settlement of operating and financial liabilities in the
period.
All shares issued in the year to 31 March 2021 were to settle
operating and financial liabilities (refer notes 13 and 15).
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. The Company transferred 7,092,617 shares
held in treasury to creditors to settle liabilities in the year
ended 31 March 2022.
The accompanying accounting policies and notes form an integral
part of these accounts.
NOTES TO THE ACCOUNTS
For the year ended 31 March 2022
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 2022.
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.
During the year, the Company's last subsidiary, BigDish UK Ltd,
was struck off and therefore at the year-end the Company had no
subsidiaries. As a result, the Company has prepared single entity
financial statements. The comparatives stated in the primary
statements are that of the single entity and are unaudited since no
single entity financial statements were presented within the 2021
consolidated financial statements .
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
2021
No new standards, amendments or interpretations, effective for
the first time for the financial year beginning on or after 1 April
2021 have had a material impact on the Company.
Standards in issue but not yet effective
The Directors do not believe that the adoption of those
standards, amendments and interpretations which have been recently
issued or revised but are not yet effective will have a material
impact on the Company.
2.3 Going Concern
The Company has the following loans, which total GBP 627,537 at
31 March 2022 (31 March 2021, GBP 200,000):
31 Mar 2022 31 Mar 2021
GBP GBP
Loan from other parties 627,537 200,000
The Company made a loss in the year of GBP 1,0187,902. At 31
March 2022, the cash held was GBP 19,867 and the Company had
current liabilities of GBP 712,669.
The Company entered into a Deed of Standstill with a creditor to
reprofile outstanding debt to a reduced amount of GBP 690,000 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, after the balance sheet date, 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
and the end of June 2023 should there be no Reverse Takeover or
chose for interest to accrue on the loans.
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. However, 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.
Post year-end, the Directors have agreed to not receiving any
remuneration due to them as at 31 March 2022 and for their services
provided during the period of the suspension of the listing and
until a successful transaction is completed that results in a
Reverse Takeover.
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.
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 accounts) as a number of the inputs are subjective.
Management have determined that Black-Scholes model was the most
appropriate models to be used for the valuation of the warrants
issued in the year.
3.2 Recoverable value of loan receivable
The amounts advanced to Terra Rara UK Ltd during the year 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 between the
advancing of the funds and 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. Though the proposed
acquisition of Terra Rara was terminated post year-end, the
Directors assessed this to be a non-adjusting and therefore no
adjustments were made to the carrying value of the loan
receivable.
3.3 Recoverable value of prepaid consideration
During the year the Company advanced funds to Amala Food Inc
under a joint venture agreement. As the threshold to allow the
Company to convert the funds advanced into shares had not been
reached at the year end, the balance was deemed to be prepaid
consideration and as such, in accordance with IFRS 9, the Directors
were required to assess the recoverability of the loan.
The joint venture agreement stipulated that amounts advanced to
Amala Foods Inc which totalled less than said threshold were not
eligible to be reimbursed. As this threshold was not reached during
the year and since the Directors had made the decision as at 31
March 2022 to not advance any further funds, the Directors assessed
the balance to not be recoverable and thus impaired the full
balance.
3.4 Post year-end settlement of convertible loan notes
The convertible loan notes issued prior to 31 March 2022 and
those issued post year-end 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 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 that 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).
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
Other 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 2022 31 Mar 2021
GBP GBP
Loss for the period has been arrived at after charging:
Auditors remuneration 34,000 31,000
Directors remuneration 140,000 150,000
Share based payments expense 332,232 116,915
Write off of prepaid consideration to AFI 204,656 -
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 2022 31 Mar 2021
GBP GBP
Directors emoluments during the period* 140,000 150,000
* Remuneration of GBP 23,000 was paid in the year ended 31 March
2022. The balances due at 31 March 2022 have been transferred to
Shares to be issued reserve through the Company's salary sacrifice
scheme.
7.2 Average Number of Employees
The average number of Employees during the period was made up as
follows:
31 Mar 2022 31 Mar 2021
----------------------------- ------------ ------------
Directors 2 3
Average during the period 2 3
----------------------------- ------------ ------------
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 2022 31 Mar 2021
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 2022 31 Mar 2021
GBP GBP
------------------------------ ------------ ------------
Loss before taxation 1,090,841 2,480,243
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
BigDish UK Ltd ceased trading due to the COVID-19 pandemic and
was officially dissolved as of 24 August 2021 .
The investment in the subsidiaries were fully impaired at the
year ended 31 March 2021.
In the year ended 31 March 2022 , the Company entered into a
joint venture agreement with Amala Foods Inc, advancing GBP 204,656
(USD 227,488) in the year. This agreement stated that up to 70% of
the share capital of Amala Food Inc 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 Amala Food Inc. 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-end, this threshold had not been met and the
Directors did not intend to advance any further funds to Amala Food
Inc 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 (see note 6) .
The changes in business structure have generated the following
impairment losses:
31 Mar 2022 31 Mar 2021
GBP GBP
----------------------------------------------- ------------ ------------
Write off of Investments in BigDish companies
- UK and the Philippines - 1,762,865
Write off of prepaid consideration - AFI 204,656 -
Total tax charge * 204,656 1,762,865
----------------------------------------------- ------------ ------------
10. TRADE AND OTHER RECEIVABLES
31 Mar 2022 31 Mar 2021
GBP GBP
Loan Receivables 94,675 229,924
Balance at end of period 94,675 229,924
Loan receivables at 31 March 2022 relates to USD 125,000 loaned
to Terra Rara UK Ltd on 22 February 2022 with a 1 year term and
carries a 0.5% interest rate.
Loan receivables at 31 March 2021 relates to a GBP 250,000 loan
due from Poppyflower Investments Ltd, made in December 2019 at an
interest rate of 10% to be utilised for the corporate and marketing
development of BigDish. GBP 50,000 was repaid during the year ended
31 March 2021. The loan balance was settled in the year ended 31
March 2022 in full via the transfer of 3,700,000 shares in the
Company held by the borrower. These shares were taken into
treasury.
11. CASH AND CASH EQUIVALENTS
31 Mar 2022 31 Mar 2021
GBP GBP
Cash at Bank 19,867 105,559
Cash is only held at substantial banks with high credit
ratings.
12. TRADE AND OTHER PAYABLES
Current Liabilities
31 Mar 2022 31 Mar 2021
GBP GBP
Trade payables 27,243 97,602
Accruals 57,889 -
Borrowings 627,537 200,000
Balance at end of period 712,669 297,602
The borrowings are a short-term loan to be used for working
capital purposes w ith 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
accounts. 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
accounts. The repayment terms were further negotiated in the year
ended 31 March 2022. No additional warrants were issued to the
convertible loan note holders as a result of the renegotiated
repayment terms. The note holders may call upon cash repayment
should there be no Reverse Takeover - refer note 18 of the audited
accounts.
13. FINANCIAL INSTRUMENTS
13.1 Financial Assets at amortised cost
31 Mar 2022 31 Mar 2021
GBP GBP
Trade and other receivables 94,675 229,924
Cash and cash equivalents 19,867 105,559
Balance at end of period 114,452 335,483
13.2 Financial Liabilities at amortised cost
31 Mar 2022 31 Mar 2021
GBP GBP
Current liabilities - trade payables and accruals 85,132
97,602
Current liabilities - loans 627,537 200,000
Balance at end of period 712,669 297,602
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 2022 or the period ended
31 March 2021.
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 2022 or period ended 31 March 2021.
The Company's exposure to financial assets and financial
liabilities is as shown in the following tables:
31 Mar 2022 31 Mar 2021
Financial Assets GBP GBP
---------------------------- ------------ ------------
GB Pounds 19,867 335,483
US Dollar 94,675 -
---------------------------- ------------ ------------
Balance at end of period 114,452 335,483
---------------------------- ------------ ------------
31 Mar 2022 31 Mar 2021
Financial Liabilities - Current GBP GBP
----------------------------------- ------------ ------------
GB Pounds 712,669 297,602
Balance at end of period 712,669 297,602
----------------------------------- ------------ ------------
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 2022 31 Mar 2021
GBP GBP
Trade and other receivables 94,675* 229,924
Cash and cash equivalents 19,867 105,559
* 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 2022 and 2021.
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 is:
-- 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 ;
and
-- Retained surplus / accumulated losses - comprise the
Company's cumulative accounting profits and losses since
inception.
14.1 Reserves
31 Mar 2022 31 Mar 2021
GBP GBP
-------------------------------- ------------ ------------
Share options reserve 977,617 949,733
Warrants reserve 381,159 89,733
Shares to be issued reserve* 355,939 266,676
-------------------------------- ------------ ------------
Balance at end of period 1,714,715 1,306,142
-------------------------------- ------------ ------------
The Company will settle outstanding liabilities to directors and
employees under the salary sacrifice scheme. The Directors
Remuneration balances due are reflected in Shares to be issued
reserve through the Company's salary sacrifice scheme.
15. SHARE CAPITAL
15.1 Share Capital
31 Mar 2022 31 Mar 2021
Number* GBP Number* GBP
Opening balance 373,620,823 6,455,154 348,950,355 5,972,980
Ordinary shares - new shares issued during 70,000,000
210,000
24,670,468 482,174
the period
Other adjustment** - (176,664) - -
Balance at end of period 443,620,823 6,488,490 373,620,823
6,455,154
* 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, the Company held
19,607,383 treasury shares.
15.2 Earnings Per Share
31 Mar 2022 31 Mar 2021
GBP GBP
---------------------------------------------- ---------------------- ------------
Basic and diluted earnings per share (GBP) (0.0028) (0.0069)
Loss used to calculate basic and diluted
earnings per share (1,090,841) (2,480,423)
Weighted average number of shares used
in calculating basic and diluted earnings
per share 395,483,837 359,353,945
---------------------------------------------- ---------------------- ------------
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 2022 and 2021, 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 166,000 to Aidan Bishop at 31 March 2022
(2021 - GBP 69,000). The Company owes GBP 35,000 to Jonathan
Morley-Kirk at 31 March 2022 (2021 - GBP 15,000). These debts are
unsecured and interest free. The balances are held in the Shares to
be issued reserve in accordance with the Company's salary sacrifice
scheme. After the period the Directors have agreed to not receive
any remuneration due and will not receive any further remuneration
until a Reverse Takeover is achieved.
During the year ended 31 March 2022, following the entering into
the joint venture agreement between the Company and Amala Foods
Inc, Aidan became a director of Amala Foods Inc. This position
carried no remuneration or other benefits. See note 9 for details
of transactions between the Company and Amala Foods Inc.
During the year ended 31 March 2021 3,720,169 shares were issues
to Monza Capital Ventures Ltd, a party associated with Aidan
Bishop, in lieu of shares due to Aidan Bishop under the salary
sacrifice scheme.
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 2022 the Company recognised Share
Based Payments expenses of GBP 304,348 in respect of warrants (31
March 2021, GBP 105,936).
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 2022
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 2019
01 August
4.50p 2,654,585 - (2,654,585) - 2021
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 55,861,565 - (2,654,585) 53,206,980
--------------- ------------- ---------------- ------------------- ----------------- --------------
The warrants were fair valued using a Black Scholes model, based
on the following parameters - risk free rate 0.9% (2021, 2.1%),
volatility of 110% for 4 years (2021, 50%).
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 Monte-Carlo model was
used to calculate the fair value of the performance share plan awards.
The contractual life of the share options is used as an input into
this model. Expectations of early exercise are incorporated into
the model. The vesting period reflects the terms and conditions
of the contracts.
The Company recognised a GBP 27,884 share based payments charge
on the year ended 31 March 2022 in respect of options issued in
previous periods.
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.
With the individuals still being employed at the two-year anniversary
and thus the share awards being due to be issued in the current
year, the Company recognised a share based payment expense totalling
GBP 26,962 in the year ended 31 March 2021. Although due, the shares
had not been issued to those employees as at 31 March 2022 and thus
the fair value of these share awards is included within other reserves.
18. EVENTS AFTER THE REPORTING PERIOD
The Company entered into a Share Purchase Agreement with Terra
Rara UK Ltd on 23 May 2022 with a view to a transaction that would
constitute a Reverse Takeover with resulted in the Company's
listing being suspended on the same day. The Company announced on
17 March 2023 that the proposed acquisition of Terra Rara UK Ltd
was terminated. The Directors determine this to be a non-adjusting
event due to their being no indication as at 31 March 2022 that the
transaction would be terminated and therefore no adjustments have
been made to the balance due from Terra Rara UK Ltd as at 31 March
2022 as a result of this subsequent event.
The Company entered into a Deed of Standstill with a creditor to
reprofile outstanding debt to a reduced amount of GBP 690,000 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.
The Company announced on 17 March 2023 that GBP 405,000 had been
raised via Convertible Loan Notes to fund a transaction leading to
a Reverse Takeover. The Convertible Loan Notes will automatically
convert to shares upon a successful Reverse Takeover at a 50%
discount to the Readmission should a Reverse Takeover be achieved
by April 2023 and will be repayable in cash if not.
The Directors agreed to receive no remuneration that was due as
at the date of suspension and have agreed not to accrue any
remuneration until a Reverse Takeover has been successfully
completed.
The Company announced on 17 March 2023 the appointment of Celia
Li to the Board as a Non-Executive Director.
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END
FR SDWFFFEDSESD
(END) Dow Jones Newswires
March 31, 2023 07:35 ET (11:35 GMT)
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