TIDMINSP
RNS Number : 9850W
Inspirit Energy Holdings PLC
29 December 2021
29 December 2021
Inspirit Energy Holdings Plc
("Inspirit" or "the Company")
ANNUAL REPORT AND ACCOUNTS FOR THE YEARED 30 JUNE 2021
NOTICE OF ANNUAL GENERAL MEETING
Inspirit Energy Holdings Plc today announces its audited results
for the year ended 30 June 2021 (the "Accounts").
Copies of the Company's Annual Report and Accounts will be sent
to shareholders along with a Notice of AGM and will be available on
the Company's website www.inspirit-energy.com today.
The AGM will be held at 200 Aldersgate Street, London EC1A 4HD
at 11 am on 9(th) February 2022.
Further copies may be obtained directly from the Company's
Registered Office at Inspirit Energy Holdings plc, 200 Aldersgate
Street, London EC1A 4HD. Extracts of the Accounts are set out
below.
Chairman's Statement
Inspirit Energy Holdings plc (Inspirit) has maintained its focus
on the application of the Stirling engine in various sectors during
the year, and during the last few months of the financial year
ended 30 June 2021, COVID 19 restrictions eased and Inspirit had
been working with its engineering partners on the fine details of
the new Waste Heat Recovery (WHR) system for the application on the
Volvo marine engine. Details on the electrical and the main
mechanical systems are near completion, and it is hoped that by the
end of 2021 all major items of the WHR system will be complete,
with a view to having the designs for a full working prototype that
can be put into testing and manufacture.
Despite the global slowdown and access to materials, the
operating Board believe that the company has maintained a positive
progress over the last year in the alternative applications of the
Stirling engine and there is strong evidence of the need to refocus
our strategic objectives towards these areas that include marine
and waste heat recovery. We wait to assess the impact on
government's ban on oil and gas boilers on new build property from
2025, but there is no clear outcome with existing households gas
boiler heating. It should be noted that this is by no means an
abandonment of our MicroCHP boiler technology as over 65% of the
technology for the Inspirit charger is applicable to the marine and
waste heat recovery applications. The Company is in discussion with
an organisation that can modify and re-engineer the heater head
that is potentially applicable in the rapidly emerging hydrogen
market.
As per prior years, the board are continuing to assess funding
options for the development and commercialisation of our products
and will continue to demonstrate prudence in our approach to
managing our current resources whilst pushing forward with our
product development.
I would like to personally thank my colleagues for their hard
work and commitment to driving the business forward during these
challenging times.
J Gunn
Chairman and Chief Executive Officer
29 December 2021
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as
it forms part of UK Domestic Law by virtue of the European Union
(Withdrawal) Act 2018. Upon the publication of this announcement,
this inside information is now considered to be in the public
domain.
More information on Inspirit Energy can be seen at:
www.inspirit-energy.com
For further information please contact:
Inspirit Energy Holdings plc
John Gunn, Chairman and CEO +44 (0) 207 048 9400
Beaumont Cornish Limited
www.beaumontcornish.com
(Nominated Advisor)
Roland Cornish / James Biddle +44 (0) 207 628 3396
Global Investment Strategy UK
Ltd
(Broker)
Samantha Esqulant +44 (0) 207 048 9045
STRATEGIC REPORT FOR THE YEARED 30 JUNE 2021
The Directors present their Strategic Report on Inspirit Energy
Holdings plc (the "Company") and its subsidiary undertakings
(together the "Group") for the year ended 30 June 2021.
REVIEW OF THE BUSINESS
Inspirit Energy Limited (IEL) is currently in the process of
refocusing its expertise in the application of the Stirling engine
technology in different sectors including Marine and Waste Heat
Recovery.
The Company is also currently pursuing the development and
commercialisation of a world-leading micro-Combined Heat and Power
("mCHP") boiler for use in commercial and residential markets. The
mCHP boiler is powered by natural gas or hydrogen and designed to
produce hot water (for domestic hot water or central heating) and a
simultaneous electrical output that can be used locally or fed back
into the National Grid.
DEVELOPMENTS DURING THE YEAR
Despite COVID 19 impacting the year with lockdowns, supply line
issues and general movement in Europe, IEL had been working with
its engineering partners on the fine details of the new WHR for the
application on the Volvo marine engine.
In addition, IEL developed and applied a new innovative
technology that will become an integral part of the of WHR System.
Whilst still in the early stages of development, the Inspirit Helix
Accelerator system (IHA), works alongside the WHR system taking the
heat from the original source and increasing it via an exothermic
reaction demonstrated to be at least 26%. Essentially, the heat
source that passes though the IHA is amplified to provide a greater
heat source for the Stirling engine, resulting in greater power
output and efficiency. The Company believes that this technology,
along with the Stirling technology that Inspirit Energy has also
developed, makes this system more innovative than anything
currently on the market. IHA has other applications where the
current heat source is in a lower threshold and the traditional use
of Stirling technology would not seem a benefit to recover lost
energy.
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A
WHOLE
The Director's believe they have acted in the way most likely to
promote the success of the Company for the benefit of its members
as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
-- Consider the likely consequences of any decision in the long term;
-- Act fairly between the members of the Company;
-- Maintain a reputation for high standards of business conduct;
-- Consider the interests of the Company's employees;
-- Foster the Company's relationships with suppliers, customers and others; and
-- Consider the impact of the Company's operations on the community and the environment.
The Company is quoted on AIM and its members will be fully
aware, through detailed announcements, shareholder meetings and
financial communications, of the Board's broad and specific
intentions and the rationale for its decisions.
When selecting suppliers and materials, issues such as the
impact on the community and the environment have actively been
taken into consideration.
The Company pays its employees and creditors promptly and keeps
its costs to a minimum to protect shareholders funds.
Other developments during the year:
On 3rd November 2020, the Company announced that it had entered
into a letter of support for the development of a Waste Heat
Recovery ("WHR") system following a successful model design
and application demonstration with Volvo Penta, a world-leading
supplier of power solutions for marine and industrial applications.
On 3rd November 2020, the Company announced that it had received
Warrant Conversion notices for GBP150,000 at 0.07 per share
on the Warrants attached to Convertible Loan Notes (CLN's)
issued on the 4th May 2018.
On 4th November 2020, the Company announced that it is in
discussions regarding a possible collaboration with an engineering
company with expertise in advanced gasification.
On 16th November 2020, the Company announced that it had received
warrant conversion notices for GBP107,500 at 0.07 p per share
on the Warrants attached to Convertible Loan Notes (CLN's)
issued on the 4 May 2018 to the Directors of the Company and
accordingly issued 153,571,427 Ordinary Shares. The ordinary
shares in relation to the converted warrants consisted of
the Chairman and CEO, John Gunn was issued 71,428,571 new
Ordinary Shares of 0.001p each; Global Investment Strategy
UK Ltd (A company with direct control by John Gunn) was issued
67,857,142 new Ordinary shares and Nilesh Jagatia, Finance
Director, was issued 14,285,714 Ordinary Shares
On 27th May 2021, the Company announced that it had raised
a gross amount of GBP500,000 through the placing of 1,000,000,000
ordinary shares of 0.001 pence each in the share capital of
the Company at 0.05 pence per Ordinary Share. For every two
Placing Shares they subscribed to, placees will also receive
one warrant over Ordinary Shares valid for 24 months from
the date of issue exercisable at 0.075 pence per Ordinary
Share.
BOARD CHANGES
None.
RESULTS AND DIVIDS
The Group made a loss after taxation of GBP253,000 (2020: loss
of GBP199,000) and net assets were GBP2,891,000 (2020:
GBP2,416,000).
The Directors do not propose a dividend for the year to 30 June
2021 (2020: GBPnil).
KEY PERFORMANCE INDICATORS
The key performance indicators (KPI) used by the Board to
monitor the performance of the Group, are set out below:
PLC S 30 June 30 June
2021 2020
------------------------------------ ------------ ------------
Net asset value GBP2,891,000 GBP2,416,000
Net asset value - fully diluted per
share 0.074p 0.10p
Closing share price 0.05p 0.05p
Market capitalisation GBP2,135,820 GBP1,451,891
------------------------------------ ------------ ------------
The Net asset value and Market capitalisation have increased
during the period due to the placing and warrant
conversions during the reporting period. The closing share price
has maintained the same price during these
unprecedent times and provides a positive reflection on the
company.
COVID 19 ASSESMENT
During the reporting period, the Group continued to develop its
microCHP boiler, Marine engine and Waste Hear Recovery (WHR)
application with its European partners. Specifically, the Company
has spent time working to refine Inspirit's Stirling technology,
reviewing the potential supply chain and detailing the product
specifics for potential commercial partners. This progress was
achieved despite the significant issues resulting from the COVID-19
pandemic in Europe, which was instrumental in causing some of these
European partners to cease trading and therefore necessitated their
replacement with other competent manufacturers.
The Board recognises that these are still unprecedented times
and that the necessary actions Global and European Governments are
taking to control COVID-19 are inevitably causing disruption to the
economy and supply chain for components. As with all businesses, we
are not immune to this and experienced movement and lock down
restrictions in the UK and Europe. As a result, our European
partners and Marine counterparts are constantly reviewing the
timeline in resuming development and testing of our technology.
Despite supply and manufacturing issues I identified above, the
Company developed and applied a new innovative technology that will
become an integral part of the of WHR System. Whilst still in the
early stages of development, the Inspirit Helix Accelerator system
(IHA), works alongside the WHR system taking the heat from the
original source and increasing it via an exothermic reaction
demonstrated to be at least 26%. Essentially, the heat source that
passes though the IHA is amplified to provide a greater heat source
for the Stirling engine, resulting in greater power output and
efficiency. The Company believes that this technology, along with
the Stirling technology that Inspirit Energy has also developed,
makes this system more innovative than anything currently on the
market.
To mitigate the impact of COVID 19, the Company has diversified
their supplier base with multiple suppliers in different countries.
In the event that any country has further lock downs or
restrictions we would be able to swap supplier with minimal impact
on our project plan .
KEY RISKS AND UNCERTAINTIES
Early stage product development carries a high level of risk and
uncertainty, although the rewards can be outstanding. At this
stage, there is a common risk associated with all pioneering
technologically advanced companies in their requirement to
continually invest in research and development. The Group has
already made significant investments in addressing opportunities in
the renewable energy sector.
Other risks and uncertainties within the Group are detailed in
principle 4 of the Corporate Governance Report.
GOING CONCERN RISK
The Group requires financing to fund its operations through to
revenue generation. There is the risk that the Group will not have
access to sufficient funds to achieve this. The Group seek to
mitigate through forecast preparation and monitoring. Further
details are on page 9.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The principal financial risk faced by the Group is liquidity
risk. The Group's financial instruments included borrowings and
cash which it used to finance its operations. At the year end,
borrowings did not include any borrowings supplied from the Group's
principal bank, Barclays Bank Plc. More information is given in
Note 3 to the Financial Statements. The Group has no significant
concentrations of credit risk.
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are to safeguard
the Group's and Company's ability to continue its activities and
bring its products to market. Capital is defined based on the total
equity of the Company. The Company monitors its level of cash
resources available against future planned activities and may issue
new shares in order to raise further funds from time to time.
MANAGEMENT AND KEY PERSONNEL
The risk of high turnover of staff and other specialist staff
recruitment issues would have an impact on operation and
reputation. The Board provides recognition and support for well
performing existing employees and has implemented and monitors
robust health and safety measures at the workplace.
TECHNOLOGY RISK
The Group's success is dependent on its technology and
management's ability to market it successfully. There is the risk
that the technology could become obsolete or a rival could develop
an improved alternative. Management seek to mitigate this by
constantly seeking to improve the product, closing watching its
competitors and employing skilled personnel.
ASSESSMENT OF BUSINESS RISK
The Board regularly reviews operating and strategic risks. The
Group's operating procedures include a system for reporting
financial and non-financial information to the Board including:
-- reports from management with a review of the business at each
Board meeting, focusing on any new decisions/risks arising;
-- reports on the performance of investments;
-- reports on selection criteria of new investments;
-- discussion with senior personnel; and
-- consideration of reports prepared by third parties.
Details of other financial risks and their management are given
in Note 3 to the financial statements.
ON BEHALF OF THE BOARD
N Jagatia
Director
29 December 2021
REPORT OF THE DIRECTORSFOR THE YEARED 30 JUNE 2021
The Directors present their annual report on the affairs of the
Group and Company, together with the audited financial statements
for the year ended 30 June 2021.
PRINCIPAL ACTIVITIES
The principal activity of the Group and Company is that of
development and commercialisation of the mCHP boiler and
application of the stirling technology in other sectors.
Details of the Group's principal activity can be found in the
Strategic Report.
DIRECTORS
The Directors who held office in the period up to the date of
approval of the Financial Statements and their beneficial interests
in the Company's issued share capital at the beginning and end of
the accounting year were:
Number of Number of
ordinary shares share options and warrants
---------- ------------------------ -----------------------------
30 June 30 June 30 June 30 June
2021 2020 2021 2020
---------- ----------- ----------- ----------- ----------------
J Gunn ** 861,403,363 507,983,664 0 71,428,571*
N Jagatia 44,857,142 30,571,428 0 14,285,714*
A Samaha - - - -
*Warrant conversion price of 0.07p per share and issued on 22
November 2019
**861,403,363 Ordinary Shares (direct 657,981,981 Ordinary
Shares and indirect via GIS 203,421,382 Ordinary Shares)
INDEMNITY OF OFFICERS
The Company maintains appropriate insurance cover against legal
action brought against its Directors and officers.
RESEARCH AND DEVELOPMENT
For details of the development activities undertaken in the
year, please refer to principle 1 of the Corporate Governance
Report.
BOARD OF DIRECTORS
The Board is responsible for strategy and performance, approval
of major capital projects and the framework of internal controls.
To enable the Board to discharge its duties, all Directors receive
appropriate and timely information. All Directors have access to
the advice and services of the Company Secretary, who is
responsible for ensuring the Board procedures are followed and that
applicable rules and regulations are complied with.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority. In
addition to the publication of an annual report and an interim
report, there is regular dialogue with shareholders and analysts.
The Annual General Meeting is viewed as a forum for communicating
with shareholders, particularly private investors. Shareholders may
question the Executive Chairman and other members of the Board at
the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group'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 Group 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 Group
has well established procedures which are considered adequate given
the size of the business.
MATTERS COVERED IN THE STRATEGIC REPORT
The business review, results, review of KPI's and future
developments are included in the Strategic Report and Chairman's
Statement.
GOING CONCERN
As at 30 June 2021 the Group had a cash balance of GBP561,000
(2020: GBP128,000), net current assets of GBP88,000 (2020: net
current liabilities of GBP285,000) and net assets of GBP2,891,000
(2020: GBP2,416,000). The Group has maintained its core spend
during the year whilst still managing to move its projects forward
and is in negotiations to renew its expired drawdown facility.
There can be no assurance that the Group's projects will become
fully developed and reach commercialisation nor that there will be
sufficient cash resources available to the Group to do so.
Whilst further funds will likely be raised next year in order to
fund the product development activities, the key justification for
the Group be a going concern is that the committed cost base is
very low compared to the current cash reserves and thus
discretionary costs can be reduced, deferred and/or eliminated as
and when needed during the going concern period. The directors
believe the group to have sufficient cash reserves at present to
meet the group's obligations over the following 12 months, however,
the Directors have committed to providing support of up to
GBP150,000 over this period should working capital shortfalls
arise. Therefore the directors consider it appropriate to prepare
the financial statements on the going concern basis.
The Directors acknowledge that COVID-19 has had and is likely to
continue to have an adverse impact on the global economy and
capital markets. The Directors are however confident that the Group
remains a going concern in spite of these expected impacts due to
its current cash reserves, its low committed cost base and the
aforementioned support from Directors' should working capital
shortfalls arise.
EVENTS AFTER THE REPORTING DATE
On 2nd November 2021, the company announced that it was in
early-stage discussions with a view to entering into an agreement
with a British certification company Enertek International Ltd.
Enertek International have won several development contracts from
the government (BEIS) and have gained a vast knowledge in
developing backward compatible Hydrogen products such as: domestic
and commercial cookers, domestic and commercial heating systems
etc. They have now gained the knowledge which could be very
beneficial to Inspirit in developing a Hydrogen product, with a
view of also looking at our existing products to make them hydrogen
powered backwards compatible.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the directors
have prepared the group and parent company financial statements in
accordance with international accounting standards in conformity
with the Companies Act 2006. Under company law the directors must
not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the group
and the parent company and of the profit or loss of the group and
the parent company for that period. In preparing these financial
statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable international accounting standards
in conformity with the requirements of the Companies Act 2006 have
been followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and the parent
company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the group's and
company's transactions and disclose with reasonable accuracy at any
time the financial position of the group and the parent company and
enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the group and the parent company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions. The Company is compliant
with AIM Rule 26 regarding the Company's website. See
www.inspirit-energy.com .
DISCLOSURE OF INFORMATION TO AUDITOR
In the case of each person who was a Director at the time this
report was approved:
-- so far as that director is aware there is no relevant audit
information of which the Company's auditor is unaware; and
-- that director has taken all steps that the director ought to
have taken as a director to make himself aware of any relevant
audit information and to establish that the Company's auditor is
aware of that information.
INDEPENT AUDITOR
A resolution that PKF Littlejohn LLP be re-appointed will be
proposed at the annual general meeting. PKF Littlejohn LLP have
indicated their willingness to continue in office.
ON BEHALF OF THE BOARD
N Jagatia
Director
29 December 2021
CORPORATE GOVERNANCE REPORT
Inspirit Energy Holdings plc Quoted Companies Alliance Code ("QCA Code")
Principles: Application:
------------------------------------------------------------------------------------------
1) Strategy This section complies with the requirements
and business of the QCA Code.
model to promote
long-term values Inspirit Energy Holdings plc has maintained
for shareholders its focus on the application of the Stirling
engine in various sectors as well as progressing
the commercialisation efforts of the Group's
micro combined heat and power ("mCHP") boilers
amidst the backdrop of the challenges posed
by the COVID-19-pandemic. Despite these market
headwinds, Inspirit achieved a number of significant
milestones including the signing of a letter
of support with world-leading marine engine
manufacturer Volvo Penta for the development
of a Waste Heat Recovery system as well as entering
discussions with a leading gasification technology
company regarding a possible collaboration.
These milestones demonstrate how the previous
year has been a pivotal one for the business
and its strategic direction as an R&D company.
The operating Board has worked throughout to
identify differing potential applications for
the technology where there is significant potential
for growth, as well as considering the future
strategy and funding of its operating subsidiary.
As recently announced by the UK Government and
set out in its Energy White Paper entitled 'Powering
our net zero future', new measures will be introduced
to advance the decarbonisation of heat and transport
including the switching of home heating, at
scale, to low-carbon alternatives with the Government
outlining a 'decisive shift' away from new gas
boiler installations which are expected to be
phased out by mid-2030s.
The Directors believe that the positive progress
over the last year in the alternative applications
of the Stirling technology in the Marine and
Waste Heat Recovery (WHR) sectors is strong
evidence of the need to refocus our strategic
objectives towards these areas. It should be
noted that this is by no means an abandonment
of our MicroCHP boiler technology - on the contrary,
we are actively looking into the application
of the technology in the rapidly emerging hydrogen
market. Additionally, with the continued growth
demand for electric cars, the Board will be
looking at the automotive sector to utilise
the Stirling engine to provide a source of power
to charge electric motor cars.
The Group will also potentially make investments
in complementary areas and technologies that
will utilise the Group's existing technical
expertise.
------------------------------------------------------------------------------------------
This section complies with the requirements
2) Meeting and of the QCA Code.
understanding
shareholders
needs and The Company has a close and ongoing relationship
expectations with its shareholders. The Company also places
great importance on effective and timely communication
with its shareholders. Shareholders are encouraged
to attend the Company's meetings (including
the Annual General Meeting) to provide feedback
and to actively engage with the management on
a regular basis. Furthermore, the INSP's shareholders
and investors can keep themselves updated about
the current Company's position by visiting the
INSP's website http://www.inspirit-energy.com
.
------------------------------------------------------------------------------------------
This section complies with the requirements
3) Considering of the QCA Code.
stakeholders
and social The Board recognises that the long-term success
responsibilities of the Group is reliant on efforts of its employees,
and their consultants, suppliers, regulators and stakeholders.
implications
for long term Employees: In order to support employees' growth
success and enforce social responsibilities the Board
has implemented systems to monitor and evaluate
employees' performance and to encourage well
performing employees to progress further by
supporting them to attend courses. Employees'
performance is monitored through a process designed
to encourage open and confidential communication
between the management and the employees on
a regular basis.
Consultants: The Board recognises that consultants
play a vital part for INSP as they bring knowledge
and expertise for specific areas, and in some
instances, they also provide training for existing
staff.
Suppliers: INSP maintains a good working relationship
with its suppliers to provide for its growing
business and to support its existing needs.
Regulators: The Board monitors and implements
any legal or regulatory changes where possible
both domestically and overseas and is fully
committed to compliance.
Stakeholders: INSP encourages its shareholders
to actively participate in meetings and shareholders
are provided with the opportunity to give feedback
on a regular basis.
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This section complies with the requirements
4) Risk of the QCA Code.
Management
The risks in the Group are managed by the audit
committee which is responsible to the Board
to work closely with the executive directors
to identify, implement and manage risks faced
by the Group.
INSP has robust controls and procedures in place
to manage internal controls of the Company and
these are considered to be appropriate to the
size and complexity of the organisation. The
audit committee has been set up to evaluate
and manage significant risks faced by the Group.
Control is established mainly through the Group's
directors who monitor and support the day to
day running of the Group and where possible
comply with the Board's and shareholders concerns
and requirements.
INSP has identified and implemented the following
risks and controls to mitigate risks:
Activity: Risk Impact Control(s)
Management High turnover of Operational Recognition
staff and other and reputational and support
recruitment issues. impact. for well performing
existing employees.
Implementing
and monitoring
of robust health
and safety measures
at workplace.
-------------------- ------------------ -----------------------
Regulatory / legal Non-compliance. Loss of Robust policies
adherence licences and procedures
resulting to be followed.
in inability
to comply Maintaining
with the effective
regulatory communication
/ legal with the Company's
requirements. Auditors and
NOMAD on a regular
basis.
-------------------- ------------------ -----------------------
Strategic Failure of systems Loss of Disaster recovery
and controls. key data policy to be
and inability followed in
to operate case of crisis.
effectively.
Maintaining
strong IT systems
and controls
in place.
-------------------- ------------------ -----------------------
Financial Internal: Loss of The Board to
Inadequate systems business. regularly review
and controls of operating and
accounting in place Inability strategic risks.
and to continue
liquidity risk. trading The audit committee
as a going to provide adequate
External: concern. and sufficient
Market and credit information
crisis; to the Company's
Short term external auditors.
liquidity freezes;
Commercialisation Robust capital
Brexit. and liquidity
levels in place
Covid 19 alongside effective
accounting systems
and controls.
Delays
in activity
internally Large proportion
and externally of the development
would lead work is successfully
to consumption complete.
of working
capital Diversification
of suppliers
and partners
to meet delivery
of activity.
-------------------- ------------------ ---------------------
Regulatory External: Potential Understanding
environment in Changes in to undermine regulatory environment
domestic power legislation microchip and adapting
market regarding domestic boiler system accordingly.
power market. product.
-------------------- ------------------ -----------------------
Product Risk Internal: Potential Testing of product
Failure to develop for significant Certification.
commercial product. financial Understanding
loss. of market place
and competition.
-------------------- ------------------ -----------------------
The above matrix is kept up to date and regularly
reviewed as changes arise in order to mitigate
risks.
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5) Maintain This section does not comply with the requirements
the board as of the QCA Code as the board composition does
a not include a Non-Executive Chairman and two
well-functioning Non-Executive Directors.
and balanced
team led by
the chair At the date of this publication the Board comprises
of the Chairman (John Gunn), the Chief Financial
Officer (Nilesh Jagatia) and the independent
Non-Executive Director (Anthony Samaha). Further
detail about the skills and capabilities of
these directors are set out in principle six
below.
The letter of appointment of the Company's Directors
and Secretary are available for inspection at
the Company's registered office and all directors
are subject to re-election at intervals of no
more than three years.
The Board is responsible for strategy and performance
of major capital projects and the framework
of internal controls. All directors have access
to seek independent advice should they feel
that their knowledge of the given task is insufficient.
There is a clear balance between the executive
director and the non-executive director.
Furthermore, the directors liaise with the Company
Secretary (Nilesh Jagatia), who is responsible
for compliance with the Board procedures and
that applicable rules and regulations are complied
with.
The Board meets quarterly. The Board established
the following committees; Audit Committee and
Remuneration Committee. All Directors are encouraged
to participate and attend meetings on a regular
basis and the attendance is closely monitored.
Despite the QCA recommendation of having two
independent directors INSP has opted to have
only one non-executive director and a joint
role of Chief Executive Director and the Chairman
as they feel that this is appropriate to the
current size and complexity of the organisation.
INSP is still in the R&D phase of its business
cycle and therefore relies on a team of consultants
in developing the product. Following conclusion
of this process, certification is managed externally,
and then commercial trials would commence. As
such the role of the Board, at this stage, is
to oversee this process, review strategy, hold
high level discussions regarding possible commercial
trials and ensure adequate funding. As such,
the current Board is deemed sufficient. As and
when the business develops beyond this stage
the Board will review its requirements at this
stage. The Group is actively looking to appoint
an additional non-executive director to provide
a balance of the non-executive directors and
executives as per the QCA.
------------------------------------------------------------------------------------------
6) Directors This section complies with the requirements
experience, of the QCA Code.
skills and
capabilities The Chairman: John Gunn
Mr Gunn is the founder of INSP and a 20.2% (
Direct and indirect) shareholder of the Company.
Mr Gunn is also the managing director and majority
shareholder of Global Investment Strategy UK
Limited and a majority shareholder of Octagonal
Plc. With a career spanning over 30 years in
the financial services industry, Mr Gunn began
his career in 1987 at Hoare Govett and has since
worked at Carr Sheppards Limited, Assicurazioni
Generali S.p.A. and Williams de Broe, where
he was a senior investment manager until 2002.
Chief Financial Officer: Nilesh Jagatia
Mr Jagatia currently serves as Finance Director
at INSP and also currently holds the Finance
Director position with a Financial Services
G group Octagonal Ltd and AIM quoted and Limitless
Earth Plc (LME). Nilesh has been involved with
several IPO's and was previously Group Finance
Director of an AIM quoted Online Media and Publishing
Company for a period of five years until July
2012. Nilesh has over 20 years' experience,
including senior financial roles in divisions
of both Universal Music Group and Sanctuary
Group plc. He served as a Finance Director for
an independent record label that expanded into
the US. Nilesh is a qualified accountant and
holds a degree in finance.
Non-Executive Director: Anthony Samaha
Mr Samaha is a Chartered Accountant (Australia)
who has over 20 years' experience in accounting
and corporate finance. Mr Samaha has worked
for over 10 years with international accounting
firms, including Ernst & Young, principally
in corporate finance, and mergers and acquisitions.
He has extensive experience in the listing and
management of AIM quoted companies and is currently
Executive Director of AIM traded Reabold Resources
Plc.
In addition to the Board directors above INSP
uses Beaumont Cornish Limited as their nominated
adviser (NOMAD), Hill Dickinson LLP to assist
with legal and regulatory matters and FTB ITC
Services Ltd to support the IT systems.
------------------------------------------------------------------------------------------
7) Evaluation This section complies with the requirements
of the Board's of the QCA Code.
performance
INSP is fully committed to uphold Directors'
independence and to regularly evaluate their
performance.
Where appropriate, INSP sets targets which the
Directors have to adhere to. Each Director is
assigned with an individual target which is
linked to the corporate and financial targets
of the Group. Career support, development and
training may also be provided to the Directors
where necessary.
------------------------------------------------------------------------------------------
8) Promoting This section complies with the requirements
corporate of the QCA Code.
culture,
ethical values INSP is committed to ethical conduct and to
and behaviours the governance structures that ensure that the
Group delivers long term value and earns the
trust of its shareholders. The shareholders
are encouraged at General Meetings to express
their views and expectations in an open and
respectful dialogue.
The Board is fully aware that their conduct
impacts the corporate culture of the Group as
a whole and that this will impact the future
performance of the Group. The Directors are
invited to provide an open comprehensive dialogue
and constructive feedback to the employees,
and to promote ethical values and behaviours
within the Group.
INSP also believes that doing business honestly,
ethically and with integrity helps to build
long-term, trusting relationship with our employees,
customers, suppliers and stakeholders. Our Code
of business Conduct means that our employees
understand that we provide ourselves in high
ethical standards. INSP has zero tolerance for
bribery and corruption among our employees.
------------------------------------------------------------------------------------------
This section complies with the requirements
9) Maintenance of the QCA Code.
of governance
structures and The Board is responsible for the ultimate decision
processes to making, the structures and processes adopted
support good by INSP. The Board is headed by the Chairman.
decision making In order to comply with the Companies Act 2006
by the board or QCA code the Board recognises that it must
comply with the following principles set out
by the Act:
* duty to exercise independent judgement;
* duty to exercise reasonable care, skill and due
diligence;
* duty to avoid conflicts of interest;
* duty not to accept benefits from third parties; and
* duty to declare interest in a proposed transaction or
arrangement.
The Chairman is responsible for leading the
Board, sets the agenda and ensures it is an
effecting working group at the head of the Company.
The Chairman is also responsible for promoting
a culture of openness and effective communication
with shareholders and to ensure that all board
members receive accurate, timely and clear information.
The Executive Directors are responsible for
day to day running of the Company and effective
communications with the Board and the Shareholders.
They represent the Company to ensure quality
of information provision, they challenge and
monitor performance of the teams, and they set
business plans and targets for the Company.
Non-Executive Director: INSP has one Non-Executive
Director who is an independent director. This
is to reinforce the Group's commitment to a
transparent and effective governance structure
which encourages and provides ample opportunity
for challenge and deliberation. The Non-Executive
Director's objective is to scrutinise the performance
of the Board and senior management as well as
to monitor performance, agree goals and objectives.
They will satisfy themselves on the integrity
of financial information and that financial
controls and systems of risk management are
robust and fit for purpose. The Non-Executive
Director is also closely working with the Remuneration
Committee as they are responsible for determining
appropriate levels of remuneration of Executive
Directors and have a prime role in appointing
/ removing senior management.
The Company established the following committees
to help with processes, structures and support
good decision making by the Board.
Audit Committee - The Audit Committee is currently
chaired by Anthony Samaha and its other member
is Nilesh Jagatia. The Committee provides a
forum for reporting by the Group's external
auditors. The committee is also responsible
for reviewing a wider range of matters, including
half-year and annual results before their submission
to the board, as well as monitoring the controls
that are in force to ensure the integrity of
information reported to shareholders. The Audit
Committee will advise the Board on the appointment
of external auditors and on their remuneration
for both audit and non-audit work, and it will
also discuss the nature, scope and results of
the audit with the external auditors. The committee
will keep under review the cost effectiveness,
the independence and objectivity of the external
auditors.
Remuneration Committee - The Remuneration Committee
is currently chaired by Anthony Samaha and its
other member is John Gunn. The Committee is
responsible for making recommendations to the
Board, within agreed terms of reference, on
the Company's framework of executive remuneration
and costs. The Remuneration Committee determines
the contract terms, remuneration and other benefits
for the Executive Directors, including performance
related bonus schemes and compensation payments.
The Board itself determines the remuneration
of the non-executive directors.
It is recognised that if the Group grows, it
may be necessary to review the current structure
in order to provide better segregation of the
responsibilities and clear lines of reporting,
that are consistent with industry standards.
------------------------------------------------------------------------------------------
This section complies with the requirements
10) Shareholders of the QCA Code.
communication
The Company recognises that its shareholders
are imperative for future growth and prosperity
of the Company. The Shareholders are treated
equally both in relation to participation at
meetings and in the exercising of voting rights.
INSP's shareholders are encouraged to attend
the annual general meetings and the Company
provides regulatory news updates and any other
matters the Board feels fit. The Company maintains
the following website https://www.inspirit-energy.com/investors
for investor relations.
------------------------------------------------------------------------------------------
INDEPENT AUDITOR'S REPORT
TO THE MEMBERS OF INSPIRIT ENERGY HOLDINGS PLC
FOR THE YEARED 30 JUNE 2021
Opinion
We have audited the financial statements of Inspirit Energy
Holdings Plc (the 'parent company') and its subsidiaries (the
'group') for the year ended 30 June 2021 which comprise the Group
Statement of Comprehensive Income, the Group and Company Statement
of Financial Position, the Group Statement of Changes in Equity,
the Company Statement of Changes in Equity and the Group and
Company Statement of Cash Flows 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 international accounting
standards in conformity with the requirements of the Companies Act
2006 and as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act
2006.
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and of the parent company affairs as at 30
June 2021 and of the group's loss for the year then ended;
-- the group financial statements have been properly prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006;
-- the parent company financial statements have been properly
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 and as
applied in accordance with the provisions of the Companies Act
2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the group's and parent
company's ability to continue to adopt the going concern basis of
accounting included reviewing cashflow forecasts covering the next
12 months and challenging the key inputs and assumptions
underpinning said forecasts, ascertaining the group's current cash
position, understanding the level of support to be provided by the
directors and obtaining proof of the directors' commitments to
provide said support.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group's or parent company's ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
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. We also determine a level of
performance materiality which we use to assess the extent of
testing needed to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a
whole. In determining our overall audit strategy, we assessed the
level of uncorrected misstatements that would be material for the
financial statements as a whole.
Materiality for the consolidated financial statements was set as
GBP87,000 (2020: GBP73,000) based upon net assets. Materiality has
been based upon net assets which we determined, in our professional
judgement, to be the key principal benchmark relative to members of
the parent company in assessing the financial performance of the
group.. Performance materiality and the triviality threshold for
the consolidated financial statements was set at GBP69,600 (2020:
GBP58,400) and GBP4,350 (2020: GBP3,650) respectively.
Materiality for the parent company was set as GBP86,000 (2020:
GBP68,000) based upon net assets, though capped so as to be below
group materiality. Net assets was considered to be an appropriate
basis due to the fact that the parent company is non-revenue
earning and holds significant material balances through investments
in its subsidiaries and other assets and cash held. Performance
materiality and the triviality threshold for the Company was set at
GBP68,800 (2020: GBP54,400) and GBP4,300 (2020: GBP3,400)
respectively.
We also agreed to report 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 the capitalised development costs. 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.
A full scope audit was performed on the complete financial
information of both components of the group.
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.
Key Audit Matter How the scope of our audit responded
to the key audit matter
Recoverability of Intangible
Assets
==============================================================
Carrying value of intangible Our work in this area included:
assets of GBP2.8m (2020: GBP2.7m). * Obtaining management's assessment of impairment and
Refer to Note 4: Critical Accounting reviewing and challenging the key estimates and
Estimates. judgements used therein;
Intangible Assets is the largest
amount within the financial * Performing sensitivity analysis on the key areas of
statements and represents the estimation/judgement and verifying to supporting
asset (development of its Stirling documentation where possible including benchmarking
technology) from which, if successful, against companies in the same industry;
the group will generate revenue.
There is a risk that the development * Substantive testing of the additions to intangible
costs capitalised during the assets to ensure they are eligible to be capitalised
year do not meet the recognition under IAS 38; and
criteria of IAS 38 "Intangible
Assets".
* Reviewing disclosures in the financial statements to
There is also the risk that ensure compliance with IFRS.
the carrying value of the intangible
asset is impaired.
Upon discussing developments
in the year with Management and
testing the additions in the
year, the costs capitalised in
the year were found to be capitalised
in accordance with IAS 38.
The positive developments in
the year with respect to the
application of the Stirling technology
to the Marine and Waste Heat
Recovery industries demonstrated
the commercial potential of Inspirit's
technology and thus indicate
that the capitalised development
costs as at 30 June 2021 are
materially recoverable.
Successful commercialisation
of the group's Stirling technology
is reliant both on project completion,
sufficient funds and the required
regulatory approvals being obtained.
It is drawn to the users' attention
that none of these matters is
certain. Failure to achieve the
above may result in an impairment
to the assets capitalised.
Furthermore, the successful commercialisation
of the application of the Stirling
engine technology is reliant
on further testing and, should
results be positive, further
discussions with the interested
parties.
==============================================================
Going concern
==============================================================
As at 30 June 2021 the Group Our work in this area included:
had cash reserves totalling * A detailed review of budgets and cash flow forecasts
GBP561k. As the Group is non-revenue including challenging key assumptions used;
generating, there is a reliance
on raising funds through issuing
debt and/or equity. Additional * Comparing actual performance to budget;
funds may need to be raised
during the going concern assessment
period to fund future operations * Challenging management as to when the Group's core
and meet working capital requirements. product is likely to achieve commercial sales;
In addition, the Group has not
historically performed in accordance
with budget. As such there is * Evaluating the track record of assumptions used
the risk that the Group is not versus actual results in order to assess the
a going concern. historical accuracy of the Group's forecasting;
* Discussions with management and obtaining evidence
that support can be given where required;
* Reviewing the Group's cash position as at the date of
approval of the financial statements, and
understanding the available headroom under the loan
facility agreement; and
* Considering the impact of COVID-19 on the Group's
ability to remain a going concern.
Based on support being available
from Directors ,if required,
to cover any potential shortfall
it is considered reasonable to
prepare the financial statements
on the going concern basis.
==============================================================
Other information
The other information comprises the information included in the
annual 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 group and parent company financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the
other information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors'
responsibilities, the directors are responsible for the preparation
of the group and parent company 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 group and parent company financial statements,
the directors are responsible for assessing the group and the
parent company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do
so.
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 group and parent company
and the sector in which they operate 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 discussions with management, industry
research and experience of the sector.
-- We determined the principal laws and regulations currently
relevant to the group and parent company in this regard to be those
arising from UK Company Law, rules applicable to issuers on the AIM
Market and international accounting standards.
-- We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements from our sector experience and through discussion with
the Directors. We considered the event of compliance with those
laws and regulations as part of our procedures on the related
financial statement items. We communicated laws and regulations
throughout our audit team and remained alert to any indications of
non-compliance throughout the audit of the group.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the group 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 parent company and all components;
o Reviewing board minutes; and
o Review of regulatory news announcements made.
-- 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 Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Joseph Archer (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
29 December 2021
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2021
2021 2020
Note GBP'000 GBP'000
-------------------------------------- -------- ---------- ------------
CONTINUING OPERATIONS:
Administrative expenses 7 (277) (240)
OPERATING LOSS (277) (240)
LOSS BEFORE INCOME TAX (277) (240)
Income tax credit 8 24 41
-------------------------------------- -------- ---------- ------------
NET LOSS AND TOTAL COMPREHENSIVE
INCOME LOSS FOR THE YEAR
ATTRIBUTABLE TO THE OWNERS
OF THE PARENT (253) (199)
-------------------------------------- -------- ---------- ------------
EARNINGS PER SHARE
- Basic and diluted earnings
per share 9 (0.007p) (0.009p)
(attributable to owners
of the parent)
STATEMENT OF FINANCIALPOSITION
FOR THE YEARED 30 June
2021
GROUP COMPANY
Company Number:
05075088
-------- ---------- ----------- ---------
2021 2020 2021 2020
Note GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- ---------- --- ----------- ---------
NON-CURRENT ASSETS
Intangible assets 10 2,773 2,666 - -
Property, plant
and equipment 11 30 35 1 -
Investment in subsidiaries 12 - - 2,440 2,440
2,803 2,701 2,441 2,440
---------------------------- -------- -------- ---------- --- ----------- ---------
CURRENT ASSETS
Trade and other
receivables 13 37 49 7 4
Cash and cash equivalents 14 561 128 554 126
---------------------------- -------- -------- ---------- --- ----------- ---------
598 177 561 130
---------------------------- -------- -------- ---------- --- ----------- ---------
TOTAL ASSETS 3,401 2,878 3,002 2,570
---------------------------- -------- -------- ---------- --- ----------- ---------
EQUITY ATTRIBUTABLE
TO OWNERS OF THE
PARENT
Share capital 15 2,103 1,967 2,103 1,967
Share premium 15 9,783 9,192 9,783 9,192
Merger reserve 3,150 3,150 3,150 3,150
Other reserves 3 3 3 3
Reverse acquisition
reserve (7,361) (7,361) - -
Retained losses (4,788) (4,535) (12,463) (12,132)
---------------------------- -------- -------- ---------- --- ----------- ---------
TOTAL EQUITY 2,890 2,416 2,576 2,180
---------------------------- -------- -------- ---------- --- ----------- ---------
NON-CURRENT LIABILITIES
- - - -
---------------------------- -------- -------- ---------- --- ----------- ---------
CURRENT LIABILITIES
Trade and other
payables 17 411 362 326 290
Borrowings 18 100 100 100 100
---------------------------- -------- -------- ---------- --- ----------- ---------
511 462 425 390
TOTAL LIABILITIES 511 462 425 390
---------------------------- -------- -------- ---------- --- ----------- ---------
TOTAL EQUITY AND
LIABILITIES 3,401 2,878 3,002 2,570
---------------------------- -------- -------- ---------- --- ----------- ---------
The Company has elected to take the exemption under section 408
of the Companies Act 2006 not to present the Parent Company
Statement of Comprehensive Income.
The loss for the Parent Company for the year was GBP331,000
(2020: loss of GBP280,000).
These Financial Statements were approved by the Board of
Directors on 29 December 2021 and were signed on its behalf by
N Jagatia
Director
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 June 2021
Attributable to the owners of the parent
-------------------------------------------------------------------------------
Share Share Other Merger Reverse Retained Total
capital premium reserves reserve acquisition losses Equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- --------- ---------- --------- ------------- --------- --------
BALANCE AT 30 June
2019 1,818 8,185 3 3,150 (7,361) (4,336) 1,459
---------------------- --------- --------- ---------- --------- ------------- --------- --------
Loss for the year - - - - - (199) (199)
--------
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR - - - - - (199) (199)
---------------------- --------- --------- ---------- --------- ------------- --------- --------
Share issues 149 1,028 - - - - 1,177
Share issue costs - (21) - - - - (21)
TRANSACTIONS WITH
OWNERS RECOGNISED
DIRECTLY IN EQUITY 149 1,007 - - - - 1,156
---------------------- --------- --------- ---------- --------- ------------- --------- --------
BALANCE AT 30 June
2020 1,967 9,192 3 3,150 (7,361) (4,535) 2,416
---------------------- --------- --------- ---------- --------- ------------- --------- --------
Loss for the year - - - - - (253) (253)
--------
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR - - - - - (253) (253)
---------------------- --------- --------- ---------- --------- ------------- --------- --------
Share issues 136 621 - - - - 757
Share issue costs - (30) - - - (30)
TRANSACTIONS WITH
OWNERS RECOGNISED
DIRECTLY IN EQUITY 136 591 - - - - 727
---------------------- --------- --------- ---------- --------- ------------- --------- --------
BALANCE AT 30 June
2021 2,103 9,783 3 3,150 (7,361) (4,788) 2,890
---------------------- --------- --------- ---------- --------- ------------- --------- --------
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2021
Attributable to equity shareholders
-------------------------------------------------------------------------
Share Share Merger Other Retained Total
capital premium Reserve reserves losses Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- --------- --------- ------------ ------------ ------------
BALANCE AT 30 June
2019 1,818 8,185 3,150 3 (11,852) 1,304
---------------------------- --------- --------- --------- ------------ ------------ ------------
Loss for the year - - - - (280) (280)
---------
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR - - - - (280) (280)
---------------------------- --------- --------- --------- ------------ ------------ ------------
Share issues 149 1,028 - - - 1,177
Share issue costs - (21) - - - (21)
TRANSACTIONS WITH
OWNERS RECOGNISED
DIRECTLY IN EQUITY 149 1,007 - - - 1,156
---------------------------- --------- --------- --------- ------------ ------------ ------------
BALANCE AT 30 June
2020 1,967 9,192 3,150 3 (12,132) 2,180
---------------------------- --------- --------- --------- ------------ ------------ ------------
Loss for the year - - - - (331) (331)
---------
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR - - - - (331) (331)
---------------------------- --------- --------- --------- ------------ ------------ ------------
Share issues 136 622 - - 757
Share issue costs - (30) - - (30)
TRANSACTIONS WITH
OWNERS RECOGNISED
DIRECTLY IN EQUITY 136 592 - - - 727
---------------------------- --------- --------- --------- ------------ ------------ ------------
BALANCE AT 30 June
2021 2,103 9,784 3,150 3 (12,463) 2,576
---------------------------- --------- --------- --------- ------------ ------------ ------------
GROUP GROUP COMPANY COMPANY
STATEMENT OF CASH FLOWS
FOR THE YEARED 30
JUNE 2021
2021 2020 2021 2020
Note GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------------- ------------ ----------- -------------
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss after tax (253) (199) (331) (280)
Depreciation 7 6 1 -
Interco loan provision - - 85 75
Tax credit (24) (41) - -
Decrease/(increase)
in trade and other receivables (6) 9 (2) 5
Increase/(decrease)
in trade and other payables 50 87 35 84
Tax received 42 46 - -
NET CASH USED IN OPERATING
ACTIVITIES (184) (92) (212) (116)
CASH FLOWS FROM INVESTING
ACTIVITIES
Development costs (108) (96) - -
Purchase of tangible
fixed assets (2) (3) (2) -
Increase in loan to
subsidiary - - (85) (75)
NET CASH USED IN INVESTING
ACTIVITIES (110) (99) (87) (75)
--------------------------------------- -------- -------------- ------------ ----------- -------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Gross proceeds from
issue of shares 757 300 757 300
Share issue costs (30) (21) (30) (21)
--------------------------------------- -------- -------------- ------------ ----------- -------------
NET CASH GENERATED FROM
FINANCING ACTIVITIES 727 279 727 279
--------------------------------------- -------- -------------- ------------ ----------- -------------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 433 88 428 88
Cash and cash equivalents
at the beginning of
the year 128 40 126 38
CASH AND CASH EQUIVALENTS
AT THE OF THE YEAR 15 561 128 554 126
--------------------------------------- -------- -------------- ------------ ----------- -------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2021
1 GENERAL INFORMATION
The principal activity of Inspirit Energy Holdings plc during
the period was that of developing and commercialising the
mCHP boiler and is currently in the process of refocusing
its expertise in the application of the Stirling engine technology
in different sectors including Marine and Waste Heat Recovery.
These financial statements show the consolidated results
of the Group for the year ended 30 June 2021 together with
the comparative results for the year ended 30 June 2020.
Inspirit Energy Holdings plc is a company incorporated and
domiciled in England and Wales and quoted on the Alternative
Investment Market of the London Stock Exchange. The address
of its registered office is 200 Aldersgate Street, London,
EC1A 4HD.
2 SUMMARY OF SIGNIFICANT A CCOUNTING POLICIES
The principal accounting policies adopted in the preparation
of these financial statements are set out below. These policies
have been consistently applied to all the periods presented,
unless otherwise stated.
BASIS OF PREPARATION
The financial statements have been prepared in accordance
with applicable International Financial Reporting Standards
("IFRS") and IFRS Interpretations Committee (IFRS IC) and
with the Companies Act 2006 applicable to companies reporting
under IFRS.
The financial statements have been prepared under the historical
cost convention and are presented in GBP Pound Sterling,
rounded to the nearest GBP1,000.
The preparation of financial statements in conformity with
IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in
the process of applying the Group's and Company's accounting
policies. The areas involving a higher degree of judgement
or complexity, or areas where assumptions and estimates are
significant to the financial statements are disclosed in
Note 4.
GOING CONCERN
The financial statements have been prepared on the going
concern basis. The mCHP boiler development project has not
yet reached commercialisation and as such the Group and Company
are not generating revenues. However, the Group is refocusing
its strategy towards alternate applications of its existing
technology in other lucrative sectors. These sectors include
marine, waste heat recovery and automotive industries. An
operating loss and cash outflows are expected in the 12 months
subsequent to the date of these financial statements and
therefore the Group will need to manage its cash resources
appropriately.
Whilst further funds will likely be raised next year in order
to fund the product development activities, the key justification
for the Group be a going concern is that the committed cost
base is very low compared to the current cash reserves and
thus discretionary costs can be reduced, deferred and/or
eliminated as and when needed during the going concern period.
The directors believe the group to have sufficient cash reserves
at present to meet the group's obligations over the following
12 months, however, the Directors have committed to providing
support of up to GBP150,000 over this period should working
capital shortfalls arise. Therefore the directors consider
it appropriate to prepare the financial statements on the
going concern basis.
The Directors acknowledge that COVID-19 has had and is likely
to continue to have an adverse impact on the global economy
and capital markets. The Directors are however confident
that the Group remains a going concern in spite of these
expected impacts due to its current cash reserves, its low
committed cost base and the aforementioned support from Directors'
should working capital shortfalls arise.
BASIS OF CONSOLIDATION
Inspirit Energy Holdings plc, the legal parent, is domiciled
and incorporated in the United Kingdom.
The Group Financial Statements consolidate the Financial
Statements of Inspirit Energy Holdings plc and its subsidiary,
Inspirit Energy Limited, made up to 30 June 2021.
Subsidiaries are entities over which the Group has control.
The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through
its power over the entity. The Group obtains and exercises
control through voting rights. The existence and effect of
potential voting rights that are currently exercisable or
convertible are considered when assessing whether the company
controls another entity.
The cost of acquisition is measured as the fair value of
the assets acquired, equity instruments issued and liabilities
incurred or assumed at the date of exchange. Acquisition
related costs are expensed as incurred. Intercompany transactions,
balances and unrealised gains on transactions between Group
companies are eliminated. Profits and losses resulting from
inter-company transactions that are recognised in assets
are also eliminated. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with
the policies adopted by the Group.
Where necessary, adjustments are made to the financial statements
of subsidiaries to bring the accounting policies used into
line with those used by the Group.
STATEMENT OF COMPLIANCE
The Group and Company have applied the following new and
amended standards for the first time for its annual reporting
period commencing 1 July 2020:
Standard Impact on initial application Effective date
----------------------------- ------------------------------- -----------------
IFRS 3 (amendments) Definition of a Business 01 January 2020
IFRS standards (amendments) References to the Conceptual 01 January 2020
Framework
IAS 1 (amendments) Definition of Material 01 January 2020
IAS 8 (amendments) Definition of Material 01 January 2020
IFRS 9, IAS 39 and Interest Rate Benchmark Reform 01 January 2020
IFRS 7 (amendments)
These new and amended standards have not had a material effect
on the Group and Company financial
statements.
NEW STANDARDS, AMMENTS AND INTERPRETATIONS NOT YET ADOPTED
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
yet effective (and in some cases had not been adopted by
the UK):
Standard Impact on initial application Effective date
---------------------------- -------------------------------- ----------------
IFRS standards (amendments) Interest rate benchmark reform 01 January 2021
IFRS 3 (amendments) Business combinations 01 January 2022
IAS 37 (amendments) Onerous contracts 01 January 2022
IFRS standards (amendments) 2018-2020 annual improvement 01 January 2022
cycle
IAS 16 (amendments) Proceeds before intended 01 January 2022
use
IFRS 17 Insurance Contracts 01 January 2023
IFRS 17 (amendments) Insurance contracts 01 January 2023
IAS 1 (amendments) Reclassification of liabilities 01 January 2023
as current or non-current
---------------------------- -------------------------------- ----------------
The new and amended Standards and Interpretations which are
in issue but not yet mandatorily effective is not expected
to be material.
SEGMENTAL REPORTING
Developing and commercialising the mCHP boiler and its related
technology is the only activity in which the Group is engaged
and is therefore considered as the only operating / reportable
segment. The Group currently only operates in the UK. The
financial information therefore of the single segment is
the same as that set out in the Group Statement of Comprehensive
Income and Group Statement of Financial Position.
CURRENT AND DEFERRED INCOME TAX
The tax credit for the period comprises Research and Development
taxation credit received during the year. Tax is recognised
in the Statement of Comprehensive Income, except to the extent
that it relates to items recognised directly in equity. In
this case the tax is also recognised directly in other comprehensive
income or directly in equity, respectively.
The current income tax credit is calculated on the basis
of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the Company's
subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to
or recoverable from the tax authorities.
FOREIGN CURRENCY TRANSLATION
a) FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the Financial Statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ("functional
currency").
The consolidated Financial Statements are presented in Pounds
Sterling (GBP), which is the Group's presentation and Company's
functional currency.
b) TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates
of the transactions, or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement
of such transactions, and from the translation at year-end
exchange rates of monetary assets and liabilities denominated
in foreign currencies, are recognised the Statement of Comprehensive
Income.
Foreign exchange gains and losses relating to borrowings
and cash and cash equivalents are presented in the Statement
of Comprehensive Income within "Finance Income" or "Finance
Costs".
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost
less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item
can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are
charged to the Statement of Comprehensive Income during the
financial period in which they are incurred.
Depreciation is calculated to allocate the cost of each class
of asset to their residual values over their estimated useful
lives, as follows:
* Plant and Equipment - 15% reducing balance
* Fixtures and Fittings - 20% reducing balance
* Motor Vehicles - 5 years, straight line
The assets' residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period.
An asset's carrying amount is written down immediately to
its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount, and are recognised
within "Other (Losses)/Gains - Net" in the Statement of Comprehensive
Income.
INTANGIBLE ASSETS - DEVELOPMENT COSTS
Development costs relate to expenditure on the development
of the mCHP boiler technology and applications of the underlying
engine technology.
Development costs incurred on the project are capitalised
when all the following conditions are satisfied:
* completion of the intangible asset is technically
feasible so that it will be available for use or
sale;
* the Group intends to complete the intangible asset
and use or sell it;
* the Group has the ability to use or sell the
intangible asset;
* the intangible asset will generate probable future
economic benefits;
* there are adequate technical, financial and other
resources to complete the development and to use or
sell the intangible asset; and
* the expenditure attributable to the intangible asset
during its development can be measured reliably.
Directly attributable costs that are capitalised as part
of the product include any employee costs directly related
to the development of the asset and appropriate expenditure
which directly furthers the development of the project.
Other development expenditure that does not meet these criteria
is recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as
an asset in a subsequent period.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite useful life, are not subject
to amortisation and are tested annually for impairment. An
impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value
less costs to sell and value in use. For
the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable
cash flows (cash-generating units). Non-financial assets
other than goodwill that suffered an impairment are reviewed
for possible reversal of the impairment at each reporting
date. See note 4 for more information on the impairment assessment
performed by management.
FINANCIAL ASSETS
a) CLASSIFICATION
The Group classifies its financial assets as loans and receivables.
The classification depends on the purpose for which the financial
assets were acquired. Management determines the classification
of its financial assets at initial recognition.
LOANS AND RECEIVABLES
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market. They are included in current assets, except
for maturities greater than 12 months after the Statement
of Financial Position date. These are classified as non-current
assets. The Group's loans and receivables comprise trade
and other receivables and cash and cash equivalents in the
Statement of Financial Position.
b) RECOGNITION AND MEASUREMENT
Financial assets are initially measured at fair value plus
transactions costs.
Loans and receivables are subsequently carried at amortised
cost using the effective interest method, except for short
term receivables.
c) IMPAIRMENT OF FINANCIAL ASSETS
The Group assesses at the end of each reporting period whether
there is objective evidence that a financial asset, or a
group of financial assets, is impaired. A financial asset,
or a group of financial assets, is impaired, and impairment
losses are incurred, only if there is objective evidence
of impairment as a result of one or more events that occurred
after the initial recognition of the asset (a "loss event"),
and that loss event (or events) has an impact on the estimated
future cash flows of the financial asset, or group of financial
assets, that can be reliably estimated.
The criteria that the Group uses to determine that there
is objective evidence of an impairment loss include:
* significant financial difficulty of the issuer or
obligor;
* a breach of contract, such as a default or
delinquency in interest or principal repayments;
* the disappearance of an active market for that
financial asset because of financial difficulties;
* observable data indicating that there is a measurable
decrease in the estimated future cash flows from a
portfolio of financial assets since the initial
recognition of those assets, although the decrease
cannot yet be identified with the individual
financial assets in the portfolio; or
* for assets classified as available-for-sale, a
significant or prolonged decline in the fair value of
the security below its cost.
ASSETS CARRIED AT AMORTISED COST
The amount of impairment is measured as the difference between
the asset's carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have
not been incurred), discounted at the financial asset's original
effective interest rate. The asset's carrying amount is reduced,
and the loss is recognised in the Statement of Comprehensive
Income. As a practical expedient, the Group may measure impairment
on the basis of an instrument's fair value using an observable
market price.
If, in a subsequent period, the amount of the impairment
loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised
(such as an improvement in the debtor's
credit rating), the reversal of the previously recognised
impairment loss is recognised in the Statement of Comprehensive
Income.
CASH AND CASH EQUIVALENTS
In the consolidated Statement of Cash Flows, cash and cash
equivalents comprise cash in hand and deposits held at call
with bank.
FINANCIAL LIABILITIES
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Group becomes
a party to the contractual provisions of the instruments.
Financial liabilities are initially measured at fair value,
net of transactions costs. They are subsequently measured
at amortised cost using the effective interest method.
Financial liabilities are derecognised when the Group or
Company's contractual obligations expire, are cancelled or
are discharged.
SHAREHOLDERS' EQUITY
Equity comprises the following:
-- "Share capital" represents the nominal value of equity
shares.
-- "Share premium" represents the excess over nominal value
of the fair value of consideration received
for equity shares, net of expenses of the share issue.
-- "Share option reserve" represents the cumulative cost
of share based payments.
-- "Merger reserve" and "Reverse Acquisition reserve" represents
historical reserves formed upon
previous Business Combinations entered into by the Company
that fall outside the scope of IFRS 3.
-- "Retained losses" represents retained losses.
BORROWINGS
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried
at amortised cost; any difference between the proceeds (net
of transaction costs) and the redemption value is recognised
in the Statement of Comprehensive Income over the period
of the borrowings, using the effective interest method.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the end of the reporting
period.
BORROWINGS COSTS
Borrowing costs are recognised in profit or loss in the period
in which they are incurred.
SHARE BASED PAYMENTS
The Group operates equity-settled, share-based schemes, under
which it receives services from employees or third-party
suppliers as consideration for equity instruments (options
and warrants) of the Group. The Group may also issue warrants
to share subscribers as part of a share placing. The fair
value of the equity-settled share based payments is recognised
as an expense in the Statement of Comprehensive Income or
charged to equity depending on the nature of the service
provided or instrument issued. The total amount to be expensed
or charged is determined by reference to the fair value of
the options granted:
* including any market performance conditions;
* excluding the impact of any service and non-market
performance vesting conditions (for example,
profitability or sales growth targets, or remaining
an employee of the entity over a specified time
period); and
* including the impact of any non-vesting conditions
(for example, the requirement for employees to save).
In the case of warrants the amount charged to equity is determined
by reference to the fair value of the services received if
available. If the fair value of the services received is
not determinable, the warrants are valued by reference to
the fair value of the warrants granted as described previously.
Non-market vesting conditions are included in assumptions
about the number of options or warrants that are expected
to vest. The total expense or charge is recognised over the
vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the
end of each reporting period, the entity revises its estimates
of the number of options that are expected to vest based
on the non-market vesting conditions. It recognises the impact
of the revision to original estimates, if any, in the Statement
of
Comprehensive Income or equity as appropriate, with a corresponding
adjustment to a separate reserve in equity.
When the options are exercised, the Company issues new shares.
The proceeds received, net of any directly attributable transaction
costs, are credited to share capital (nominal value) and
share premium.
3 FINANCIAL RISK MANAGEMENT
The Group is exposed to a variety of financial risks which
result from both its operating and investing activities. The
Group's risk management is coordinated by the Board of Directors
and focuses on actively securing the Group's short to medium
term cash flows by minimising the exposure to financial markets.
The main risks the Group is exposed to through its financial
instruments are market risk (including market price risk),
credit risk and liquidity risk.
MARKET PRICE RISK
The Group's exposure to market price risk mainly arises from
potential movements in the pricing of its products. The Group
manages this price risk within its long-term strategy to grow
the business and maximise shareholder return.
CREDIT RISK
The Group's financial instruments that are subject to credit
risk are cash and cash equivalents and loans and receivables.
The credit risk for cash and cash equivalents is considered
negligible since the counterparties are reputable financial
institutions.
The Group's maximum exposure to credit risk is GBP599,000
(2020: GBP176,000 comprising cash and cash equivalents and
loans and receivables.
LIQUIDITY RISK
Liquidity risk arises from the possibility that the Group
might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities.
The Group manages this risk through maintaining a positive
cash balance and controlling expenses and commitments. The
Directors are confident that adequate resources exist to finance
current operations.
The following table summarises the maturity profile of the
Group's non-derivative financial liabilities with agreed repayment
periods. The table has been drawn up based on contractual
undiscounted cash flows based on the earliest repayment date
on which the Group can be required to pay. The table includes
both interest and principal cash flows. To the extent that
the interest flows are floating rate, the undiscounted amount
is derived from the interest rate curves at the balance sheet
date:
Less Between Between
than 1 and 2 2 and Over Carrying
Group 1 year years 5 years 5 years Total value
At 30 June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- --------- --------- --------- --------- ---------
Trade and other payables 411 - - - 411 411
Borrowings 100 - - - 100 100
--------------------------------------------- --------- --------- --------- --------- --------- ---------
At 30 June 2020
-------------------------- --------- --------- --------- --------- --------- ---------
Trade and other payables 326 - - - 326 326
Borrowings 100 - - - 100 100
--------------------------------------------- --------- --------- --------- --------- --------- ---------
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going
concern, so that it continues to provide returns and benefits for
shareholders;
-- to support the Group's growth; and
-- to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure and equity holder
returns, taking into consideration the future capital requirements
of the Group and capital efficiency, prevailing and projected
profitability, projected operating cash flows, projected capital
expenditures and projected strategic investment opportunities.
Management regards total equity as capital and reserves, for
capital management purposes.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of Financial Statements in conformity with
IFRSs requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. Estimates
and judgements are continually evaluated and are based on
historical experience and other factors including expectations
of future events that are believed to be reasonable under
the circumstances.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
IMPAIRMENT OF DEVELOPMENT COSTS AND INVESTMENT IN SUBSIDIARIES
The Group tests annually whether development costs and investments
in the subsidiaries, which have a carrying value of GBP2,773,000
and GBP2,440,000 respectively (2020: GBP2,666,000 and GBP2,440,000
respectively) have suffered any impairment in accordance with
the accounting policy as stated in Note 2.
The core development to date on the mCHP and Stirling technology
is the base technology that will be applied the Marine, Waste
Heat Recovery, Hydrogen and automotive sectors that the company
will be focusing on in the future.
When a review for impairment is conducted, the recoverable
amount is determined based on value in use calculations prepared
on the basis of management's assumptions and estimates. As
a result of their 2021 review management has concluded that
no impairment is required.
The value-in-use calculations require management to estimate
future cash flows expected to arise from the cash generating
unit, once commercial production is achieved, and apply a
suitable discount rate in order to calculate present value.
These calculations require the use of estimates. See Note
10 for further details.
Following other sources of products interest during the year,
management have focussed the value-in-use calculations on licensing
sales rather than product sales. This has been done as management
consider that the revenues are more near term in nature and note
that it uses the same core developed technology. Given the
product's nature, the core estimates have remained broadly
consistent with an increase in gross margin given the shift in
focus to licensing which is consider will provide a higher margin
than product sales.
CASH AND CASH EQUIVALENTS CLASSIFICATION
During the year-ended 30 June 2020, Management made a change in
judgment regarding the liquidity of cash balances held on their
behalf by another entity. This change in judgment led to these
balances in 2021 and 2020 to be classified as cash and cash
equivalents rather than other debtors.
5 DIRECTOR'S AND KEY MANAGEMENT PERSONNEL EMOLUMENTS
2021 2021
GBP'000 GBP'000
----------------------------------------------------- --------- -------
Aggregate emoluments 144 144
Social security costs 6 6
------------------------------------------------------------------------ --------- -------
150 150
------------------------------------------------------------------------ --------- -------
Short Term Other Total Total
Name of director Benefits Benefits 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------------ ----------- --------- -------
J Gunn 80 - 80 80
N Jagatia 40 - 40 40
A Samaha 12 - 12 12
S Gunn* 12 - 12 12
--------------------------------------------- ------------ ----------- --------- -------
144 - 144 144
--------------------------------------------- ------------ ----------- --------- -------
*Key Management Personnel
The number of Directors who contributed to pension schemes
during the year was nil (2020: nil).
6 EMPLOYEE INFORMATION
2021 2020
GBP'000 GBP'000
---------------------------------------- ----------------------- ----------------------
Wages and salaries 144 144
Social security costs 6 6
150 150
----------------------------------------------------------- ----------------------- ----------------------
In addition to the above a total of GBP96,331 (2020: GBP93,000)
wages and salaries for employees has been included in Development
costs.
Average number of persons employed (including executive directors):
2021 2020
Number Number
---------------------------------------- ----------------------- ----------------------
Office and management 4 4
----------------------------------------------------------- ----------------------- ----------------------
COMPENSATION OF KEY MANAGEMENT PERSONNEL
There are no key management personnel other than those disclosed
in Note 5.
7 LOSS FOR THE YEAR
Loss for the year is arrived at after charging:
2021 2020
GBP'000 GBP'000
------------------------------------------------ -------- --------
S Salaries and wages (Note 6) 150 150
A Audit and other fees 20 20
Depreciation 7 6
------------------------------------------------------------------- -------- --------
AUDITOR'S REMUNERATION
During the year the Group obtained the following services
from the Company's auditor:
2021 2020
GBP'000 GBP'000
------------------------------------------------ -------- --------
Fees payable to the Company's auditor for
the audit of the parent company and the Group
financial statements 20 18
8 Taxation
GROUP 2021 2020
GBP'000 GBP'000
Deferred tax - -
Current tax (24) (41)
---------------------------------------- ------- -------
Total current tax charge / (credit) (24) (41)
---------------------------------------- ------- -------
The tax on the Group's loss before tax differs from the theoretical
amount that would arise using the average rate applicable
to losses of the consolidated entities as follows:
2021 2020
GBP'000 GBP'000
------------------------------------------------------ -------- -------
Loss before tax from continuing operations (277) (240)
------------------------------------------------------ -------- -------
Loss before tax multiplied by rate of corporation
tax in the UK of 19% (2020: 19%) (53) (46)
Tax effects of:
Expenses not deductible for tax purposes - -
Unrelieved tax losses carried forward 53 46
Research and development tax credit (24) (41)
------------------------------------------------------ -------- -------
Total tax (24) (41)
------------------------------------------------------ -------- -------
The Group has excess management expenses of approximately
GBP5,450,000 (2020: GBP5,200,000), capital losses of GBP150,000
(2020: GBP150,000) and non-trade financial losses of approximately
GBP119,000 (2020: GBP119,000) to carry forward against future
suitable taxable profits. No deferred tax asset has been provided
on any of these losses due to uncertainty over the timing of their
recovery.
9 EARNINGS PER SHARE
Earnings per ordinary share has been calculated by dividing
the loss attributable to equity holders of the Company
by the weighted average number of shares in issue during
the year. The calculations of both basic and diluted earnings
per share for the year are based upon the loss for the
year of GBP253,000 (2020: GBP199,000). The weighted number
of equity shares in issue during the year was 3,399,326,136
(2020: 2,305,913,967).
In accordance with IAS 33, basic and diluted earnings
per share are identical as the effect of the exercise
of share options and warrants would be to decrease the
loss per share and therefore deemed anti-dilutive. Details
of share options and warrants that could potentially dilute
earnings per share in future periods are set out in Note
16.
10 INTANGIBLE ASSETS
GROUP Development Total
Costs
GBP'000 GBP'000
At 30 June 2019 2,570 2,570
Additions 96 96
At 30 June 2020 2,666 2,666
Additions 107 107
At 30 June 2021 2,773 2,773
------------------ --- ------------- --------
No amortisation has been recognised on development costs to date
as the assets are still in the development stage and the related
products are not yet ready for sale. As such, the value-in-use
calculations to support the carrying value of development costs is
directly reliant on the availability of future capital funding in
order to achieve product accreditation and enter into commercial
production.
The recoverable amount of the above cash generating unit has
been determined based on value-in-use calculations and includes
revenue from stirling application in marine, Inspirit Charger
(boiler technology), waste recycling and Hydrogen application
activities. The value-in-use calculations use cash flow projections
based on financial budgets approved by Management covering a five
year period. They key estimates in the value-in-use calculation
are:
Growth rate - Nonlinear year on year increases based on
directors' estimations following discussion with a number of
potential partners.
Discount rate - 30%
11 PROPERTY, PLANT
AND EQUIPMENT
GROUP Plant and Fixtures Motor Total
Equipment and fittings Vehicles
COST GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ----------- -------------- ---------- --------
As at 30 June 2019 81 15 1 97
Additions 3 - - 3
------------------------- ----------- -------------- ---------- --------
As at 30 June 2020 84 15 1 100
Additions 2 - - 2
--------
As at 30 June 2021 86 15 1 102
DEPRECIATION
-------------------- ----------- -------------- ---------- --------
As at 30 June 2019 47 11 1 59
Charge for year 6 - - 6
------------------------- ----------- -------------- ---------- --------
As at 30 June 2020 53 11 1 65
Charge for year 6 1 - 7
--------
As at 30 June 2021 59 12 1 72
NET BOOK VALUE
-------------------- ----------- -------------- ---------- --------
As at 30 June 2021 27 3 - 30
As at 30 June 2020 31 4 - 35
------------------------- ----------- -------------- ---------- --------
12 INVESTMENT IN SUBSIDIARIES
COMPANY 2021 2020
SHARES IN GROUP UNDERTAKINGS: GBP'000 GBP'000
----------------------------------------------- ------- -------
At 1 July 2,440 2,440
Increase in loan to subsidiary 75 207
Provision against the loan balance outstanding (75) (207)
------------------------------------------------------------------- ------- -------
A 2,440 2,440
------- -------
Included in the above is an amount of GBP3,046,513 (2020:
GBP2,961,446) relating to the amount due to the Company by its
subsidiary Inspirit Energy Limited. A provision of GBP3,046,513
(2020: GBP2,961,446) has been set against this loan balance
outstanding.
Investments in Group undertakings are recorded at cost, which is
the fair value of the consideration paid.
Details of Subsidiary Undertakings are as follows:
Proportion
Registered of share capital Nature of
Name of subsidiary Registered address capital held business
------------------------- ------------------- --------------- ----------------- -------------------
Inspirit Energy Limited** c/o Niren Blake Ordinary shares 100% Product development
Company No.07160673 LLP 2nd Floor, GBP 15,230
Solar House,
915 High Road,
London, England,
N12 8QJ
Somemore Limited Global Investment Ordinary shares 100% Dormant
Company No.07152291 Strategy Uk GBP 1
Dissolved 12 January Ltd, 2(nd) Floor,
2021 London Wall
Buildings, London,
EC2M 5PP
*** Inspirit Energy Limited (Co No 07160673) is entitled and has
taken exemption under section 479a of the Companies Act 2006. No
members of Inspirit Energy Limited have required the company to
obtain an audit of its accounts for the year in question in
accordance with section 476 of the Companies Act 2006
13 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------- ------- ------- -------
Corporation tax* 24 41 - -
VAT recoverable 13 8 7 3
Other receivables - - - 1
37 49 7 4
-------------------------------------- ------- ------- ------- -------
*The Corporation tax repayable relates to the R&D tax claim
receivable from HMRC.
The Directors consider that the carrying amount of receivables
is approximately equal to their fair value and under IFRS 9 that
they are held at amortised cost
14 CASH AND CASH EQUIVALENTS
GROUP COMPANY
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------- ------- ------- -------
Cash and cash equivalents 561 128 554 126
---------------------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of cash and cash
equivalents approximates to their fair value.
All of the Group and Company's cash and cash equivalents are
held with institutions with an AA credit rating.
15 SHARE CAPITAL AND SHARE PREMIUM
Number Number Ordinary Deferred New Deferred Share Total
of ordinary of deferred shares shares B shares premium
shares shares
GBP GBP GBP GBP GBP
------------- -------------- ------------ --------- --------- ------------- ----------- -----------------
At 30 June
2019 1,420,806,859 400,932 14,208 396,923 1,406,599 11,335,656 13,153,386
------------------ -------------- ------------ --------- --------- ------------- ----------- -----------------
Issue of
New Shares 1,482,976,188 - 148,298 - - 1,027,702 1,176,000
Issue costs - - - - - (20,625) (20,625)
------------------ -------------- ------------ --------- --------- ------------- ----------- -----------------
At 30 June
2020 2,903,783,047 400,932 162,506 396,923 1,406,599 12,342,733 14,308,761
------------------ -------------- ------------ --------- --------- ------------- ----------- -----------------
Issue of
New Shares 1,367,857,139 - 136,786 - - 620,714 757,500
Issue costs - - - - - (30,000) (30,000)
------------------ -------------- ------------ --------- --------- ------------- ----------- -----------------
At 30 June
2021 4,271,640,186 400,932 299,292 396,923 1,406,599 12,933,447 15,036,261
------------------ -------------- ------------ --------- --------- ------------- ----------- -----------------
Both the Deferred shares and the New Deferred B shares have no
voting rights.
On 6 June 2018, the Company announced that members, at a General
meeting on the same day, had approved the completion of a Capital
Reorganisation which comprised the sub-division of shares whereby
each existing Ordinary Share of 0.1 pence each in the capital of
the Company was sub-divided into 1 New Ordinary Shares of 0.001
pence each and 1 Deferred B Share of 0.099 pence each. This
resulted in 1,420,806,859 New Ordinary Shares and 1,420,806,859
Deferred B Shares in issue.
16 SHARE BASED
PAYMENTS
Share options and warrants can be granted to selected Directors
and third-party service providers.
Share options and warrants outstanding at the end of the year have
the following expiry dates and exercisable prices:
Weighted Options and Weighted Options and
Average warrants Average warrants
Exercise Exercise
Price Price
2021 2020
At 1 July 605,044,429 0.0488 1,500,000
Granted 0.00075 500,000,000 0.0007 603,544,429
Exercised 0.0007 (367,857,139) - -
Lapsed 0.0007 (237,187,290) - -
--------- ----------
At 30 June 0.00075 500,000,000 0.0488 605,044,429
----------------------- --------- ---------- ---------------------- --------------- -------------------------------
Grant date Expiry Exercise Number of Number of
date price in options and options and
GBP per share warrants warrants
2021 2020
26-Apr-11 25-Apr-21 0.0488- - 1,500,000
20-Nov-19 19-Nov-20 0.0007 - 574,258,711
02-Dec-19 01-Dec-20 0.0007 - 27,000,001
24-Dec-19 23-Dec-20 0.0007 - 2,285,717
03-Jun-21* 02-Jun-23 0.00075 500,000,000
---------
0.00075 500,000,000 605,044,429
----------------------- --------- ---------- ---------------------- --------------- -------------------------------
On 27th May 2021, the Company announced that it had raised a
gross amount of GBP500,000 through the placing of 1,000,000,000
ordinary shares of 0.001 pence each in the share capital of the
Company at 0.05 pence per Ordinary Share. For every two Placing
Shares they subscribed to, placees will also receive one warrant
over Ordinary Shares valid for 24 months from the date of issue
exercisable at 0.075 pence per Ordinary Share. The warrants awarded
did not fall under the scope of IFRS 2 therefore no share-based
payment expense has been recognised in the year ended 30 June
2021.
TRADE AND OTHER PAYABLES
17
GROUP COMPANY
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------------------- --------------------- -------- --------
Trade payables 54 56 17 16
Other payables 56 - 55 55
Social security and other
taxes 46 33 - -
Accrued expenses 255 224 253 219
------------------------------------------------ -------------------- --------------------- -------- --------
411 362 325 290
------------------------------------------------ -------------------- --------------------- -------- --------
The Directors consider that the carrying amount of trade and
other payables approximates to their fair value.
18 BORROWINGS
GROUP COMPANY
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- --------- -------- ----------
Current
Drawdown facility (see Note
1 below) 100 100 100 100
Total current borrowings 100 100 100 100
-------------------------------------------------- --------- -------- -------- -------------
Non-current
Convertible loan notes - - - -
------------------------------ --------- -------- -------- -------------
Total non-current borrowings - - - -
------------------------------ --------- -------- -------- -------------
Total borrowings 100 100 100 100
-------------------------------------------------- --------- -------- -------- -------------
Note 1
The Drawdown facility relates to the facility entered into
during 2017 with YA Global Master SPV Limited. The facility is
unsecured and carries an implied interest rate of 10 per cent per
annum, repayable in 12 equal monthly instalments and has now
lapsed. The directors are seeking to renew.
On 30 April 2015, the Company issued warrants to subscribe for
9,283,364 new ordinary shares as part of the unsecured $3,000,000
Debt facility arrangement with YA Global Master SPV Limited ("YA
Global"). The issue of the warrants was triggered following the
drawdown of the initial Tranche 1, being $400,000, under the terms
of the agreement. The terms of the issue of warrants are governed
by the Debt Facility agreement, which specify that for every
tranche drawn down, the Company is required to issue 25% of the
value of the drawdown based on the interbank rate at the nearest
possible date and using the average Volume Weighted Average Price
("VWAP") of the Company for the five trading days immediately prior
the date of the agreement. Based on those terms, were the Company
to drawdown the remaining $2,600,000 they would be required to
issue further warrants to subscribe for an estimated total of
99,622,448 new ordinary shares. The Directors do not expect to use
the remaining facility in the foreseeable future.
19 FINANCIAL INSTRUMENTS BY CATEGORY
2021 2020
GBP'000 GBP'000
------------------------------------------------------ -------- ----------
FINANCIAL ASSETS AT AMORTISED COST :
------------------------------------------------------ -------- ----------
Trade and other receivables (excluding prepayments, - -
VAT and corporation tax)
Cash and cash equivalents 561 128
-------------------------------------------------------------------------- -------- ----------
FINANCIAL LIABILITIES AT AMORTISED COST:
------------------------------------------------------ -------- ----------
Trade and other payables 54 89
Borrowings 100 100
-------------------------------------------------------------------------- -------- ----------
The table providing an analysis of the maturity of the non-derivative
financial liabilities has been included in Note 3.
20 ULTIMATE CONTROLLING PARTY
At the date of signing this report the Directors do not
consider there to be one single ultimate controlling party.
21 RELATED PARTY TRANSACTIONS
See note 6 for details of director's remuneration in the
year.
During the year, NKJ Associates Ltd, a company in which N
Jagatia is a Director, charged consultancy fees of GBP40,000
(2020: GBP40,000). The amount owed to NKJ Associates Ltd
at year end is GBP72,000 (2020: GBP62,000).
Amount of fees due to John Gunn at 30 June 2021 was GBP160,000
(2020: GBP150,000) and the amount of fees due to Anthony
Samaha at 30 June 2021 was GBP18,000 (2020: GBP6,000).
Both John Gunn and Nilesh Jagatia are Directors of Global
Investment Strategy UK Limited (GIS) and GIS held cash in
its Inspirit Energy Holdings Plc's client account at 30 June
2021 totalling GBP183,000 (2020: GBP125,000) and this balance
is included in cash and cash equivalents.
22 EVENTS AFTER THE REPORTING DATE
On 2 November 2021, the company announced that it was in early-stage
discussions with a view to entering into an agreement with
a British certification company Enertek International Ltd.
Enertek International have won several development contracts
from the government (BEIS) and have gained a vast knowledge
in developing backward compatible Hydrogen products such as:
domestic and commercial cookers, domestic and commercial heating
systems etc. They have now gained the knowledge which could
be very beneficial to Inspirit in developing a Hydrogen product,
with a view of also looking at our existing products to make
them hydrogen powered backwards compatible.
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END
FR FELFWUEFSEEE
(END) Dow Jones Newswires
December 29, 2021 12:29 ET (17:29 GMT)
Grafico Azioni Inspirit Energy (LSE:INSP)
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Da Nov 2023 a Dic 2023
Grafico Azioni Inspirit Energy (LSE:INSP)
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