Thalassa Holdings Ltd (THAL)
Thalassa Holdings Ltd: Final Results For Year Ended 31 December 2022
10-Jul-2023 / 10:46 GMT/BST
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Thalassa Holdings Ltd
Thalassa Holdings Ltd
("Thalassa" or the "Company")
(Reuters: THAL.L, Bloomberg: THAL:LN)
Final Results For Year Ended 31 December 2022
The information set out below is extracted from the Company's Report and Accounts for the year ended 31 December 2022,
which will be published today on the Company's website. A copy will also be submitted to the National Storage Mechanism
where it will be available for inspection. Cross-references in the extracted information below refer to pages and
sections in the Company's Report and Accounts for the year ended 31 December 2022.
Group Results 2022 versus 2021 GBP GBP
-- Profit /(Loss) after tax for the year (GBP1.45m) vs GBP0.46m
-- Group Earnings Per Share (basic and diluted)*1 (GBP0.18) vs GBP0.06
-- Book value per share*2 GBP1.30 vs GBP1.40
-- Investment Holdings GBP8.4m vs GBP9.2m
-- Cash GBP0.6m vs
GBP5.4m
*1 based on weighted average number of shares in issue of 7,945,838 (2021: 7,945,838)
*2 based on actual number of shares in issue as at 31 December 2022 of 7,945,838 (2021: 7,945,838)
2022 HIGHLIGHTS
-- GBP3m investment in Tappit written off.
-- Chairman has agreed to contribute up to GBP3m from sale of personal property.
-- Board still reviewing legal avenues to recover Tappit losses from Directors. Chairman had warned them in
writing that the policies they were following would lead to financial disaster.
-- 2022 results benefitted from GBP471K contribution from realised hedging gains.
-- 2021, Chairman waived consultancy; 2022, Chairman's consultancy accrued, pending performance review.
CHAIRMAN'S STATEMENT
Results
2022 results were negatively impacted by the previously announced write off of the Company's investment in Tappit. As
also previously announced, I take responsibility for the decision and have offered GBP3m from the proceeds of the sale of
property I own.
The Company was fortunately well hedged during 2022 and realised gains of GBP471,000, somewhat reducing the Tappit loss.
Outlook - Weather Forecast
"Cloudy with a chance of Meatballs"
2023 got off to a flying start; investors parked their 2022 losses and piled straight back into equities,
notwithstanding the fastest increase in US interest rates on record.
I have updated the table below to reflect 2022 and YTD 2023 performance.
-- NASDAQ 100 (NDX) registered
±39% gain thru 3 July 2023
± (33%) loss in 2022
± 27% gain in 2021
± 48% gain in 2020,
± 38% in 2019,
± (1%) loss in 2018,
± 32% in 2017,
± 6% in 2016,
±8% in 2015,
±18% in 2014,
±35% in 2013
± 17% in 2012
± 3% in 2011
± 19% in 2010
± 54% in 2009
± (42%) loss in 2008
The first half of 2023 saw the S&P 500, NASDAQ Composite (CCMP) and NASDAQ 100 (NDX) rally back into Bull Market
territory (> 20%), this time led by Tech stocks, the six largest of which now represent 50% of the NDX (weighted by
mkt cap) and have accounted for most of the overall performance (± 80%) of this year's NDX performance. Major
performance contributions came from NVDA + 188.3% (Trailing 12M P/E 204.91x), TSLA +108.31% (Trailing 12M P/E 74.59x)
and AMZN +53.96% (Trailing 12M P/E 139.42x)
I would refer to these stocks as
Buzz Lightyear Stocks "To infinity and Beyond,"
or .
Wile E. Coyote Stocks
CHAIRMAN'S STATEMENT CONTINUED
Ignore the Bond Market at your Peril
It is key to note is that the bond market is the tail that wags the stock market's dog - it leads.and it is screaming
recession.again, as it did in 1990, 2000 and 2007. And with P/E ratios back in nose-bleed territory a recession will
only increase P/E multiples which will portend earnings declines and the inevitable collapse in asset prices.
NASDAQ P/E (TTM) CAPE*1 Ratio
23.06.23 30.92 30.35
12.31.22 23.72 34.20
12.31.21 39.00 59.53
12.31.20 39.46 55.33
12.31.19 27.29 41.65
12.31.18 20.34 35.19
*1 Cape Ratio: the Cyclically Adjusted P/E ratio otherwise known
as the Schiller CAPE ratio.
Whilst the market may currently look cheap, I would point out
that in 2020, interest rates were hovering around 0%; today, short
term Treasuries are yielding in excess of 5% and the Inverted Yield
Curve is screaming recession.
For distracted readers, Jeremy Grantham provides the following
summary of "bubble rules." Sigma is how GMO measures deviation from
the mean. 1. All 2-sigma equity bubbles in developed equity markets
have burst - all the way back to trend.The U.S. reached the 2-sigma
level in the summer of 2020. 2. But some of them went to 3-sigma or
more before they burst - producing longer and deeper pain. The
U.S. reached 3-sigma in late 2021. 3. Timing is uncertain and
when you get to 3-sigma superbubbles, such as we have now, there
are fewexamples. Yet they have all shown certain characteristics
before they broke:? A speculative investor frenzy that generated
stories for distant decades; ? A penultimate blow-off phase where
stock gains accelerate, as we had in 2020 (and again in the first
half of 2023, this time led by AI Tech Stocks); ? And the ultimate
narrowing phase - unique to these few superbubbles - where a
decreasing number of very large blue chips (or, as currently in
2023, Mega-Cap Tech Stocks masquerading as Blue Chips) go up as
evenriskier and more speculative stocks underperform or even
decline, as they did in 1929 and 2000, and 2022. For readers
interested in Jeremy Grantham's musings please follow the link
below.
https://www.gmo.com/americas/research-library/after-a-
timeout-back-to-the-meat-grinder_viewpoints/
Holdings ? ARL
The Flying Node bespoke seismic sensor development project,
supported by Net Zero Technology Centre (NZTC) and two major Energy
Companies, was completed in 2022. Extensive field testing and
analysis of the seismic data was performed which culminated in an
offshore trial at Fort William in Scotland. During this trial, the
Flying Node seismic sensor was benchmark tested against industry
standard ocean bottom nodes and comparison of the resulting data
sets concluded excellent performance of the ARL design.
The mechanical design of the Flying Node was also modified to
optimise the seismic sensor performance and an updated battery
system was also developed. This resulted in the build and test of a
MK2 version of the Flying Node which was used for the trials.
The software team also progressed the development of the
in-house node control and navigation software. Initial in water
testing of the software will start in the 2nd quarter of 2023.
Duncan Soukup
Chairman
4 July 2023
FINANCIAL REVIEW
GROUP RESULTS
Continuing Operations
Total Revenue from continuing operations for the year to 31
December 2022 was GBP0.30m (2021: GBP0.14m) related to grant income
for ARL and rental income in Switzerland.
Cost of Sales on continuing operations were GBP0.10m (2021:
GBP0.06m), resulting in a Gross Profit of GBP0.20m (2021: Gross
Profit GBP0.08m).
Administrative Expenses on continuing operations before
exceptional costs were GBP0.5m (2021: GBP1.4m) and Depreciation
GBP0.3m compared to GBP0.1m in 2021.
Operating Loss was therefore GBP0.6m (2021: loss GBP1.4m).
Net Financial Income/(Expense) of GBP0.2m included net foreign
exchange income, net interest expense and net income from financial
investments including fair value adjustments (2021: expense
GBP(0.4)m).
Other Losses were GBP0.9m (2021: loss of GBP0.02m).
Share of Losses of Associated Entities was GBP0.24m (2021:
GBP0.01).
Loss Before Tax on continuing operations was GBP1.5m (2021:
GBP1.8m).
Tax on continuing operations for the period was a credit of
GBP0.05m relating a R&D tax credit (2021: credit
GBP0.1m).
Loss for the year from Continuing Operations
was therefore GBP1.45m (2021: GBP1.7m). Discontinued
Operations
In 2021 id4 AG was sold to Anemoi International Ltd during the
year. During 2022 there were no discontinued operations (2021: loss
GBP0.3m), with a gain on disposal of nil (2021: GBP2.4m).
Profit/(Loss) for the year
This resulted in a Group loss for the year of GBP1.45m (2021:
profit GBP0.5m).
Net Assets at 31 December 2022 amounted to GBP10.3m (2021:
GBP11.2m) resulting in net assets per share of GBP1.30 based on
7,945,838 shares in issue versus GBP1.40 in 2021 including cash of
GBP0.6m equivalent to GBP0.06 per share (2021:
GBP1m and GBP0.12 per share.
Net Cash Flow from operations amounted to an inflow of
GBP0.2m as compared to GBP1.9m outflow in 2021.
Net Cash from Investing Activities, amounted to an outflow of
GBP1.2m (2021 GBP2.5m) relating to continuing operations in the
purchase of available for sale investments.
Net Cash Outflow from Financing Activities amounted to GBP4.3m
(2021: inflow GBP2.5m) relating to the settlement of the credit
facility.
Net Decrease in Cash and Cash Equivalents was
GBP5.4m resulting in Cash and Cash Equivalents at 31 December
2022 of GBP0.6m (2021: GBP5.4m).
DIRECTORS' REPORT
The Directors present their report and the audited financial
statements for the year ended 31 December 2022.
RESULTS AND DIVIDS
The Group made a loss attributable to shareholders of the parent
for the year ended 31 December 2022 of GBP1.4m (2021: profit
GBP0.5m). The Directors do not recommend the payment of a
dividend.
DIRECTORS AND DIRECTORS' INTERESTS
The Directors of the Company who held office during the year and
to date, including details of their interest in the share capital
of the Company, are as follows:
Name
Date Appointed Date Resigned Shares held Share options
Executive Director
C Duncan Soukup 26 September 2007 2,396,970 -
Non-Executive Directors
2 April 2008 39,870 -
Graham Cole David M Thomas Kenneth Morgan 2 April 2008 - -
24 May 2022 - -
DIRECTORS' REMUNERATION
2022 2021
Director Consultancy Director Consultancy
Fees Fees Fees Fees
GBP GBP GBP GBP
Executive Directors
Duncan Soukup 133,000 174,076 272,597 221,025
Non-Executive Directors
Graham Cole 10,307 - 18,419 -
David Thomas 20,635 - 18,419 -
Kenneth Morgan 5,091 - - -
Total remuneration 169,033 174,076 309,435 221,025
SUBSTANTIAL SHAREHOLDINGS
As of 31 December 2022, the Company had been advised of the following substantial shareholders
Name Holding %
Duncan Soukup 2,396,970 30.2%
THAL Discretionary Trust* 2,042,720 25.7%
Mark Costar 530,807 6.7%
Interactive Investor Services Nominees Limited 396,732 5.0%
Vidacos Nominees Limited 303,074 3.8%
Lynchwood Nominees Limited 263,353 3.3%
Other 2,012,182 25.3%
Total number of voting shares in issue 7,945,838 100.0
* C.Duncan Soukup is a trustee of THAL Discretionary Trust
SHARE BUY-BACK
There were no share buy backs during the year ended 31 December
2022, nor for the year ended 31 December 2021.
RELATED PARTY TRANSACTIONS
Details of all related party transactions are set out in note 22
to the financial statements.
OPERATIONAL RISKS
The Company may acquire either less than whole voting control
of, or less than a controlling equity interest in, an investment
target, which may limit its operational strategies.
The Company is dependent upon the Directors, and in particular,
Mr C. Duncan Soukup, who serves as the Executive Chairman, to
identify potential acquisition opportunities and to execute any
acquisition.The unexpected loss of the services of Mr Soukup or
other Directors could have a material adverse effect on the
Company's ability to identify potential acquisition opportunities
and to execute an acquisition.
The Company may invest in or acquire unquoted companies, joint
ventures or projects which, amongst other things, may be leveraged,
have limited operating histories, have limited financial resources
or may require additional capital. FINANCIAL RISKS
Details of the financial instrument risks and strategy of the
Group are set out in note 23.
GLOBAL ECONOMIC RISK
Whilst the long term impact of Brexit is still currently
uncertain and may have an impact on the Company's investments, the
Ukraine conflict has clouded the true effect. The Board continues
to evaluate the effects of these impacts on the investments and
will act accordingly to mitigate any potential loss.
DIRECTORS' REPORT CONTINUED
RISKS AND UNCERTAINTIES
A summary of the key risks and mitigation strategies is
below:
Risk Mitigation
Insufficient cash resources to meet liabilities, Short term and annual business plans are prepared and
1. continue as a going concern and finance key are reviewed on an ongoing basis. Use of various
projects. hedging instruments in order to mitigate major
financial risks.
Loss of key management/staff resulting in failure Regular review of both the Board's and key management's
2. to identify and secure potential investment abilities. Review of salaries and benefits including
opportunities and meet contractual requirements. long term incentives and ongoing communication with key
individuals.
Failure to maintain strong and effective The Board and senior management seek to establish and
3. relations with key stakeholders in investments maintain an open and transparent dialogue with key
resulting in loss of contracts or value. stakeholders.
Key management are professionally qualified. In
4. Failure to comply with law and regulations in the addition the Company appoints relevant professional
jurisdictions in which we operate. advisers (legal, tax, accounting etc) in the
jurisdictions in which we operate.
Significant changes in the political environment, The Company's current investments are not expected to
5. including the impact of Brexit, Covid-19 and the be adversely impacted and Management is continuing to
Ukraine conflict, results in loss of resources/ monitor the wider political environment to ensure that
market and/or business failure. steps are taken to mitigate political risk.
DIRECTORS' RESPONSIBILITIES
The Directors have elected to prepare the financial statements
for the Group in accordance with UK Adopted International
Accounting Standards ("IFRS").
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Group, for safeguarding the assets and
for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
International Accounting Standard 1 requires that financial
statements present fairly for each financial period the Group's
financial position, financial performance and cash flows. This
requires the faithful representation of the effects of
transactions, other events and conditions in accordance with the
definitions and recognition criteria for assets, liabilities,
income and expenses set out in the International Accounting
Standards Board's 'Framework for the preparation and presentation
of financial statements'. In virtually all circumstances, a fair
presentation will be achieved by compliance with all applicable UK
Adopted International Accounting Standards ("IFRS"). A fair
presentation also requires the Directors to:
-- select and apply appropriate accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs as applied by theUK is insufficient
to enable users to understand the impact of particular
transactions, other events and conditionson the entity's financial
position and financial performance; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume thatthe group will continue
in business.
All of the current Directors have taken all the steps that they
ought to have taken to make themselves aware of any information
needed by the Group's auditors for the purposes of their audit and
to establish that the auditors are aware of that information.The
Directors are not aware of any relevant audit information of which
the auditors are unaware.
The financial statements are published on the Group's website.
The maintenance and integrity of the Group's website is the
responsibility of the Directors. The Directors' responsibility also
extends to the ongoing integrity of the financial statements
contained therein
AGM
The Annual General Meeting was held at Anjuna, 28 Avenue de la
Liberté, 06360 Éze France on 29 June 2023 at 11.00 (CEST).
AUDITORS
A resolution to confirm the appointment RPG Crouch Chapman as
the Company's auditors was submitted to the shareholders at the
Annual General Meeting.
Approved by the Board and signed on its behalf by
C.Duncan Soukup
Chairman
4 July 2023
CORPORATE GOVERNANCE STATEMENT
The Company's shares are admitted to the Official List of the UK
Listing Authority and to trading on the London Stock Exchange's
Main Market. The Board recognises the importance and value for the
Company and its shareholders of good corporate governance. The
Company Statement on Corporate Governance is available at https://
thalassaholdingsltd.com/investor-relations/corporate- governance/
and repeated in full below.
BOARD OVERVIEW
In formulating the Company's corporate governance framework, the
Board of Directors have reviewed the principles of good governance
set out in the QCA code (the Corporate Governance Code for Small
and Mid- Sized Quoted Companies 2018 published by the Quoted
Companies Alliance) so far as is practicable and to the extent they
consider appropriate with regards to the Company's size, stage of
development and resources. However, given the modest size and
simplicity of the Company, at present the Board of Directors do not
consider it necessary to adopt the QCA code in its entirety.
The purpose of corporate governance is to create value and
long-term success of the Group through entrepreneurism, innovation,
development and exploration as well as provide accountability and
control systems to mitigate risks involved.
COMPOSITION OF THE BOARD AND BOARD COMMITTEES
As at the date of this report, the Board of Thalassa Holdings
Ltd comprises of one Executive Director and two Non- Executive
Directors, which complies with the QCA Code.
On the 24 May 2022, Kenneth Morgan was appointed to the board as
a further Non-executive Director.
BOARD BALANCE
The current Board membership provides a balance of industry and
financial expertise which is well suited to the Group's activities.
This will be monitored and adjusted to meet the Group's
requirements. The Board is supported by the Audit Committee,
Remuneration Committee and Regulatory Compliance Committee, all of
which have the necessary character, skills and knowledge to
discharge their duties and responsibilities effectively.
Further information about each Director may be found on the
Company's website at https://thalassaholdingsltd.com/
investor-relations/board-directors/.The Board seeks to ensure that
its membership has the skills and experience that it requires for
its present and future business needs.
All Directors have access to the advice and services of the
Company Secretary who is responsible for ensuring that Board
procedures and applicable rules and regulations are observed. The
Board has a procedure allowing Directors to seek independent
professional advice in furtherance of their duties, at the
Company's expense.
RE-ELECTION OF DIRECTORS
In line with the QCA code, all Directors are subject to re-
election each year, subject to satisfactory performance.
BOARD AND COMMITTEE MEETINGS
The Board meets sufficiently regularly to discharge its duties
effectively with a formal schedule of matters specifically reserved
for its decision.
The Board held three full meetings for regular business during
2022, in addition to a number of informal ones. These included
meetings of the Audit Committee, the Remuneration Committee and the
Regulatory Compliance Committee as required.
Director Meetings attended
Duncan Soukup 3
Graham Cole 2
David Thomas 3
Kenneth Morgan 1
AUDIT COMMITTEE
During the financial period to 31 December 2022, the Audit
Committee consisted of Graham Cole and any other one director.
The key functions of the audit committee are for monitoring the
quality of internal controls and ensuring that the financial
performance of the Group is properly measured and reported on and
for reviewing reports from the Company's auditors relating to the
Company's accounting and internal controls, in all cases having due
regard to the interests of Shareholders. The Committee has formal
terms of reference.
Former auditor, Jeffreys Henry LLP unexpectedly resigned in
December 2022. In the first quarter of 2023 therefore, the Group
experienced a delay in the audit process. New auditor, RPG Crouch
Chapman, was appointed on 19 April 2023.The Company has indicated
its independence to the Board.
At present, the Group does not have an internal audit function.
However, the committee believes that management has been able to
gain assurance as to the adequacy and effectiveness
of internal controls and risk management procedures. There is no
policy held on auditor rotation.
REMUNERATION COMMITTEE
During the financial period to 31 December 2022, the
Remuneration Committee consisted of David Thomas and any other one
director. It is responsible for determining the remuneration and
other benefits, including bonuses and share based payments, of the
Executive Directors, and for reviewing and making recommendations
on the Company's framework of executive remuneration.The Committee
has formal terms of reference.
The remuneration committee is a committee of the Board. It is
primarily responsible for making recommendations to the Board on
the terms and conditions of service of the executive Directors,
including their remuneration and grant of options.
REGULATORY COMPLIANCE COMMITTEE
During the financial period to 31 December 2022, the Regulatory
Compliance Committee consisted of Graham Cole and any other one
director.The committee is responsible for ensuring that the
Company's obligations under the Listing Rules are discharged by the
Board.The Committee has formal terms of reference.
STATEMENT ON CORPORATE GOVERNANCE
The corporate governance framework which Thalassa has
implemented, including in relation to board leadership and
effectiveness, remuneration and internal control, is based upon
practices which the board believes are proportionate to the risks
inherent to the size and complexity of Thalassa's operations.
The Board considers it appropriate to adopt the principles of
the Quoted Companies Alliance Corporate Governance Code ("the QCA
Code") published in April 2018.The extent of compliance with the
ten principles that comprise the QCA Code, together with an
explanation of any areas of non-compliance, and any steps taken or
intended to move towards full compliance, are set out below: 1.
Establish a strategy and business model which promote long-term
value for shareholders.
The Company is a Holding Company which has in the past and will
in the future seek to acquire assets which in the opinion of the
Board should generate long term gains for its shareholders.The
current strategy and business operations of the Company are set out
in the Chairman's Statement on page 6. Shareholders and potential
investors must realise that the objectives set out in that document
are simply that; "objectives" and that the Company may without
prior notification change these objectives based upon opportunities
presented to the Board or market conditions.
The Group's strategy and business model and amendments thereto,
are developed by the Executive Chairman and his senior management
team and approved by the Board. The management team, led by the
Executive Chairman, is responsible for implementing the strategy
and overseeing management of the business at an operational
level.
The Board is actively considering a number of opportunities and,
ultimately, the Directors believe that this approach will deliver
long-term value for shareholders. In executing the Group's
strategy, management will seek to mitigate/hedge risk whenever
possible.
As a result of the Board's view of the market, the Board has
adopted a five-pronged approach to future investments: 1.
Opportunistic: where an acquisition or investment exists because of
price dislocation (the price of a stock collapses but fundamentals
are unaffected) or where the Board identifies a special "off
market" opportunity; 2. Finance: The Board is currently
investigating opportunities in the FinTech sector; 3. Property: The
Company held a strategic stake in Alina Holdings Plc (formerly The
Local Shopping REIT plc). The Company's divestment is more
comprehensively described in the Letter to Shareholders dated 28
September 2020 published in the Reports and Documents section of
the Company's website; 4. Education:There are few businesses that
offer the same longevity and predictability of earnings as
Education; and 5. R&D: Development situations such as ARL where
the Board sees an opportunity to participate in
disruptive,early-stage technology.
The above outlined strategy is subject to change depending on
the Board's findings and prevailing market conditions. 2. Seek to
understand and meet shareholder needs and expectations.
The Board believes that the Annual Report and Accounts, and the
Interim Report published at the half-year, play an important part
in presenting all shareholders with an assessment of the Group's
position and prospects. All reports and press releases are
published in the Investor Relations section of the Company's
website.
CORPORATE GOVERNANCE STATEMENT CONTINUED 3. Take into account
wider stakeholder and social responsibilities and their
implications for long-termsuccess.
The Group is aware of its corporate social responsibilities and
the need to maintain effective working relationships across a range
of stakeholder groups. These include the Group's consultants,
employees, partners, suppliers, regulatory authorities and entities
with whom it has contracted. The Group's operations and working
methodologies take account of the need to balance the needs of all
of these stakeholder groups while maintaining focus on the Board's
primary responsibility to promote the success of the Group for the
benefit of its members as a whole. The Group endeavours to take
account of feedback received from stakeholders, making amendments
where appropriate and where such amendments are consistent with the
Group's longer-term strategy.
The Group takes due account of any impact that its activities
may have on the environment and seeks to minimise this impact
wherever possible. Through the various procedures and systems it
operates, the Group ensures full compliance with health and safety
and environmental legislation relevant to its activities. The
Group's corporate social responsibility approach continues to meet
these expectations. 4. Embed effective risk management, considering
both opportunities and threats, throughout the organisation.
The Board is responsible for the systems of risk management and
internal control and for reviewing their effectiveness. The
internal controls are designed to manage and whenever possible
minimise or eliminate risk and provide reasonable but not absolute
assurance against material misstatement or loss. Through the
activities of the Audit Committee, the effectiveness of these
internal controls is reviewed annually.
A budgeting process is completed once a year and is reviewed and
approved by the Board. The Group's results, compared with the
budget, are reported to the Board on a regular basis.
The Group maintains appropriate insurance cover in respect of
actions taken against the Directors because of their roles, as well
as against material loss or claims against the Group. The insured
values and type of cover are comprehensively reviewed on a periodic
basis.
The senior management team meet regularly to consider new risks
and opportunities presented to the Group, making recommendations to
the Board and/or Audit Committee as appropriate. The Board has an
established Audit Committee, a summary of which is set out in the
Board of Directors section of the Company's website.
The Company receives comments from its external auditors on the
state of its internal controls.
The more significant risks to the Group's operations and the
management of these have been disclosed in the Chairman's statement
on page 6. 5. Maintain the Board as a well-functioning, balanced
team led by the Chair.
The Board currently comprises two non-executive Directors and an
Executive Chairman. Directors' biographies are set out in the Board
of Directors section of the Company's website.
All of the Directors are subject to election by shareholders at
the first Annual General Meeting after their appointment to the
Board and will continue to seek re-election every year.
The Board is responsible to the shareholders for the proper
management of the Group and, in normal circumstances, meets at
least four times a year to set the overall direction and strategy
of the Group, to review operational and financial performance and
to advise on management appointments.
A summary of Board and Committee meetings held in the year ended
31 December 2022 is set out above.
The Board considers itself to be sufficiently independent.The
QCA Code suggests that a board should have at least two independent
Non-executive Directors. Both of the Non- executive Directors who
currently sit on the Board of the Company are regarded as
independent under the QCA Code's guidance for determining such
independence.
Non-executive Directors receive their fees in the form of a
basic cash fee based on attendance at board calls and board
meetings. Directors are eligible for bonuses. The current
remuneration structure for the Board's Non-executive Directors is
deemed to be proportionate. 6. Ensure that between them, the
directors have the necessary up-to-date experience, skills
andcapabilities.
The Board considers that the Non-executive Directors are of
sufficient competence and calibre to add strength and objectivity
to its activities, and bring considerable experience in technical,
operational and financial matters.
The Company has put in place an Audit Committee as well as
Remuneration and Listing Compliance Committees. The
responsibilities of each of these committees are described in
the Board of Directors section of the Company's website.
The Board regularly reviews the composition of the Board to
ensure that it has the necessary breadth and depth of skills to
support the on-going development of the Group.
The Chairman, in conjunction with the Company Secretary, ensures
that the Directors' knowledge is kept up to date on key issues and
developments pertaining to the Group, its operational environment
and to the Directors' responsibilities as members of the Board.
During the course of the year, Directors received updates from the
Company Secretary and various external advisers on a number of
regulatory and corporate governance matters.
Directors' service contracts or appointment letters make
provision for a Director to seek personal advice in furtherance of
his or her duties and responsibilities, normally via the Company
Secretary. 7. Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement.
The Board's performance is measured by the success of the
Company's acquisitions and investments and the returns that they
generate for shareholders and in comparison to peer group
companies. This performance is presented in the Group's monthly
management accounts and reported, discussed and reviewed with the
Board regularly. 8. Promote a corporate culture that is based on
ethical values and behaviours.
The Board seeks to maintain the highest standards of integrity
and probity in the conduct of the Group's operations. These values
are enshrined in the written policies and working practices adopted
by all employees in the Group. An open culture is encouraged within
the Group. The management team regularly monitors the Group's
cultural environment and seeks to address any concerns than may
arise, escalating these to Board level as necessary.
The Group is committed to providing a safe environment for its
staff and all other parties for which the Group has a legal or
moral responsibility in this area.
Thalassa has a strong ethical culture, which is promoted by the
actions of the Board and management team. The Group has an
anti-bribery policy and would report any instances of
non-compliance to the Board. The Group has undertaken a review of
its requirements under the General Data Protection Regulation,
implementing appropriate policies, procedures and training to
ensure it is compliant. 9. Maintain governance structures and
processes that are fit for purpose and support good decision-making
bythe Board.
The Board has overall responsibility for promoting the success
of the Group. The Chairman has day-to-day responsibility for the
operational management of the Group's activities. The non-executive
Directors are responsible for bringing independent and objective
judgment to Board decisions. Matters reserved for the Board include
strategy, investment decisions, corporate acquisitions and
disposals.
There is a clear separation of the roles of Executive Chairman
and Non-executive Directors. The Chairman is responsible for
overseeing the running of the Board, ensuring that no individual or
group dominates the Board's decision-making and ensuring the
Non-executive Directors are properly briefed on matters. Due to its
current size, the Group does not require nor bear the cost of a
chief executive. The Company's subsidiary ARL is led by two
directors.
The Chairman has overall responsibility for corporate governance
matters in the Group but does not chair any of the Committees. The
Chairman also has the responsibility for implementing strategy and
managing the day-to-day business activities of the Group. The
Company Secretary is responsible for ensuring that Board procedures
are followed and applicable rules and regulations are complied
with.
The Audit Committee normally meets at least once a year and has
responsibility for, amongst other things, planning and reviewing
the annual report and accounts and interim statements involving,
where appropriate, the external auditors.The Committee also
approves external auditors' fees and ensures the auditors'
independence as well as focusing on compliance with legal
requirements and accounting standards. It is also responsible for
ensuring that an effective system of internal control is
maintained. The ultimate responsibility for reviewing and approving
the annual financial statements and interim statements remains with
the Board.
A summary of the work of the Audit Committee undertaken in the
year ended 31 December 2022 is set out above. The Committee has
formal terms of reference, which are set out in the Board of
Directors section of the Company's website.
The Remuneration Committee, which meets as required, but at
least once a year, has responsibility for making recommendations to
the Board on the compensation of
CORPORATE GOVERNANCE STATEMENT CONTINUED
senior executives and determining, within agreed terms of
reference, the specific remuneration packages for each of the
Directors. It also supervises the Company's share incentive schemes
and sets performance conditions for share options granted under the
schemes.
A summary of the work of the Remuneration Committee undertaken
in the year ended 31 December 2022 is set out above.The Committee
has formal terms of reference.
The Directors believe that the above disclosures constitute
sufficient disclosure to meet the QCA Code's requirement for a
Remuneration Committee Report. Consequently, a separate
Remuneration Committee Report is not presented in the Group's
Annual Report.
The Listing Compliance Committee, which meets as required, is
responsible for ensuring that the Company's obligations under the
Listing Rules are discharged by the Board. The Committee has formal
terms of reference set out in the Board of Directors section of the
Company's website. 10. Communicate how the Group is governed and is
performing by maintaining a dialogue with shareholders andother
relevant stakeholders.
The Board believes that the Annual Report and Accounts, and the
Interim Report published at the half-year, play an important part
in presenting all shareholders with an assessment of the Group's
position and prospects. The Annual Report includes a Corporate
Governance Statement which refers to the activities of both the
Audit Committee and Remuneration Committee. All reports and press
releases are published in the Investor Relations section of the
Group's website.
The Group's financial reports and notices of General Meetings of
the Company can be found in the Reports and Documents section of
the Company's website. The results of voting on all resolutions in
future general meetings will be posted to this website, including
any actions to be taken as a result of resolutions for which votes
against have been received from at least 20 per cent of independent
shareholders.
C.Duncan Soukup
Chairman
4 July 2023
INDEPENT AUDITOR'S REPORT TO THE SHAREHOLDERS' OF THALASSA
HOLDINGS LTD
OPINION
We have audited the financial statements of Thalassa Holdings
Ltd and its subsidiaries (the 'Group') for the year ended 31
December 2022 which comprise the Consolidated Statement of Income,
Consolidated Statement of Comprehensive Income, Consolidated
Statement of Financial Position, Consolidated Statement of Cash
Flows, Consolidated Statement of Changes in Equity, and notes to
the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has
been applied in their preparation is International Financial
Reporting Standards as adopted in the United Kingdom (IFRS).
In our opinion, the financial statements:
-- give a true and fair view of the state of the Group's affairs
as at 31 December 2022 and of the Group's loss for the year then
ended;
-- have been properly prepared in accordance with IFRS.
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 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 entity's
ability to continue to adopt the going concern basis of accounting
included review of the expected cashflows for a period of 12 months
from the report date compared with the liquid assets held by the
Group.
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 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 APPROACH TO THE AUDIT
In planning our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective
judgements, for example in respect of significant accounting
estimates. As in all of our audits, we also addressed the risk of
management override of internal controls, including evaluating
whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed
sufficient work to be able to issue an opinion on the financial
statements as a whole, taking into account the structure of the
group and the parent company, the accounting processes and
controls, and the industry in which they operate.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgement, 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 we identified (whether or
not due to fraud), 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.The matter
identified was 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.
INDEPENT AUDITOR'S REPORT TO THE SHAREHOLDERS' OF THALASSA
HOLDINGS LTD CONTINUED
Our work included:
Carrying value of loans receivable
The Group held GBP5.5m (GBP5.7m) of loans at the balance -- Obtaining and reviewing loan agreements to ensure
sheet date. year end balances have been accurately reflected;
-- Assessing each loan for recoverability;
Loans should initially be held at amortised costs, plus -- Reviewing provisions provided for bad debts; and
accrued interest, less any provisions for bad debt
identified. -- Recalculating interest receivable in the year via
a proof in total by reference to the underlying loan
agreement
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
We consider gross assets to be the most significant determinant
of the Group's financial performance used by the users of the
financial statements. We have based materiality on 1.5% of gross
assets for each of the operating components. Overall materiality
for the Group was therefore set at GBP0.2m. For each component, the
materiality set was lower than the overall group materiality.
We agreed with the Audit Committee that we would report on all
differences in excess of 5% of materiality relating to the Group
financial statements. We also report to the Audit Committee on
financial statement disclosure matters identified when assessing
the overall consistency and presentation of the consolidated
financial statements.
OTHER INFORMATION
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. In connection with our audit of the
financial statements, 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 audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other
information. 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.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors' responsibilities
statement set out on page 15 the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's and the parent company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the
Group's financial reporting process.
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 our
opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not 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 aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the 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 legal and regulatory
frameworks within which the Group operatesfocusing on those laws
and regulations that have a direct effect on the determination of
material amounts anddisclosures in the financial statements.
-- We identified the greatest risk of material impact on the
financial statements from irregularities,including fraud, to be the
override of controls by management. Our audit procedures to respond
to these risksincluded enquiries of management about their own
identification and assessment of the risks of irregularities,
sample testing on the posting of journals and reviewing accounting
estimates for biases.
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.
OTHER MATTERS THAT WE ARE REQUIRED TO ADDRESS
We were appointed on 19 April 2023, and this is the first year
of our engagement as auditors for the Group.
We confirm that we are independent of the Group and have not
provided any prohibited non-audit services, as defined by the
Ethical Standard issued by the Financial Reporting Council.
Our audit report is consistent with our additional report to the
Audit Committee explaining the results of our audit.
INDEPENT AUDITOR'S REPORT TO THE SHAREHOLDERS' OF THALASSA
HOLDINGS LTD CONTINUED
USE OF OUR REPORT
This report is made solely to the Group's members, as a body.
Our audit work has been undertaken so that we might state to the
Group'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 Group and the Group's members, as a body, for
our audit work, for this report, or for the opinions we have
formed.
(Senior Statutory Auditor)
For and on behalf of RPG Crouch Chapman LLP
Chartered Accountants Registered Auditors
5th Floor, 14-16 Dowgate Hill London
EC4R 2SU
4 July 2023
CONSOLIDATED STATEMENT OF INCOME
for the year ended 31 December 2022
2022 2021
Note GBP GBP
Continuing Operations
Revenue 3 295,968 138,656
Cost of sales (95,925) (55,125)
Gross profit / (loss) 200,043 83,531
Total administrative expenses (531,024) (1,406,048)
Operating loss before depreciation (330,981) (1,322,517)
Depreciation and Amortisation 9&10 (305,848) (101,462)
Operating loss (636,829) (1,423,979)
Net financial income/(expense) 5 249,535 (355,204)
Other gains/(losses) (881,118) (22,380)
Share of losses of associated entities (235,658) (9,156)
Profit/(loss) before taxation (1,504,070) (1,810,719)
Taxation 7 54,167 132,240
Profit/(loss) for the year from continuing operations (1,449,903) (1,678,479)
Discontinued Operations
Profit/(loss) for the year from discontinued operations 6 - (305,509)
Gain on disposal of subsidiary 6 - 2,440,728
Profit/(loss) for the year (1,449,903) 456,740
Attributable to:
Equity shareholders of the parent (1,449,903) 456,740
Non-controlling interest - -
456,740 681,892
Earnings per share - GBP (using weighted average number of shares)
Basic and Diluted - Continuing Operations (0.18) 0.10
Basic and Diluted - Discontinued Operations 0.00 (0.04)
Basic and Diluted 8 (0.18) 0.06
The notes on pages 30 to 49 form an integral part of this
consolidated financial information
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2022
2022 2021
GBP GBP
Profit/(loss) for the financial year (1,449,903) 456,740
Other comprehensive income:
Exchange differences on re-translating foreign operations 594,684 134,698
Total comprehensive income (855,219) 591,438
Attributable to:
Equity shareholders of the parent (855,219) 591,438
Non-Controlling interest - -
Total Comprehensive income (855,219) 591,438
The notes on pages 30 to 49 form an integral part of this consolidated financial information.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2022
2022 2021
Note GBP GBP
Assets
Non-current assets
Intangible assets 9 1,319,695 907,531
Property, plant and equipment 10 2,030,733 1,661,081
Loans 12 5,571,412 5,705,273
Investments in associated entities 13 2,356,526 2,325,457
Total non-current assets 11,278,366 10,599,342
Current assets
Trade and other receivables 14 765,302 809,607
Available for sale financial assets 11 504,877 1,187,346
Cash and cash equivalents 629,215 5,398,208
Total current assets 1,899,394 7,395,161
Liabilities
Current liabilities
Trade and other payables 15 1,210,810 1,113,289
Borrowings 16 158,473 4,475,560
Total current liabilities 1,369,283 5,588,849
Net current assets 530,111 1,806,312
Non-current liabilities
Long term debt 16 1,510,377 1,252,335
Total non-current liabilities 1,510,377 1,252,335
Net assets 10,298,100 11,153,319
Shareholders' Equity
Share capital 19 128,977 128,977
Share premium 21,717,786 21,717,786
Treasury shares 19 (8,558,935) (8,558,935)
Other reserves (1,696,320) (1,696,320)
Foreign exchange reserve 4,430,855 3,836,171
Retained earnings (5,724,263) (4,274,360)
Total shareholders' equity 10,298,100 11,153,319
Total equity 10,298,100 11,153,319
The notes on pages 30 to 49 form an integral part of this consolidated financial information.
These financial statements were approved and authorised by the board on 4 July 2023.
Signed on behalf of the board by:
C. Duncan Soukup
Chairman
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2022
2022 2021
Notes
GBP GBP
Operating profit/(loss) from:
Continuing operations (636,829) (1,435,978)
Discontinued operations - (285,509)
Operating profit/(loss) including discontinued operations (636,829) (1,721,487)
Adjustments for:
Impairment losses on goodwill - 149,992
(Increase)/decrease in trade and other receivables 44,305 (311,077)
(Decrease)/increase in trade and other payables 97,521 347,870
Gain/(loss) on disposal of AFS investments 471,589 117,541
Net exchange differences (19,253) (93,995)
Other income 25,486 -
Depreciation and amortisation 9&10 306,497 210,401
Share of losses of associate/gain on disposal (234,828) (9,156)
Fair value movement on AFS financial assets 64,817 (704,554)
Cash generated by operations 119,306 (2,014,465)
Taxation 54,167 132,240
Net cash flow from operating activities 173,473 (1,882,225)
Sale/(purchase) of property, plant and equipment (517,376) (1,564,752)
Sale/(purchase) of intangible assets (418,408) (212,433)
Net (purchase)/sale of AFS financial assets (245,899) 97,010
Investments in associated entities (31,071) (815,428)
Net cash flow in investing activities (1,212,754) (2,495,603)
Cash flows from financing activities
Proceeds from borrowings 33,133 354,229
Repayment of borrowings (4,357,529) 2,167,225
Net cash flow from financing activities (4,324,396) 2,521,454
Net increase in cash and cash equivalents (5,363,677) (1,856,374)
Cash and cash equivalents at the start of the year 5,398,208 7,116,110
Effects of exchange rate changes on cash and cash equivalents 594,684 138,472
Cash and cash equivalents at the end of the year 629,215 5,398,208
The notes on pages 30 to 49 form an integral part of this
consolidated financial information.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Attributable to owners of the Company
Foreign Non- Total
Share Share Treasury Other Exchange Retained controlling
Shareholders Capital Premium
Shares Reserves Reserve Earnings Total
Interest Equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance as at
31 December 2020 128,977 21,717,786 (8,558,935) 78,716 3,697,697 (5,428,679) 11,635,562 (122,298) 11,513,264
Disposal of subsidiary - - - (1,775,036) - 697,579 (1,077,457) 122,298 (955,159)
with NCI
Exchange on conversion to - - - - 3,776 - 3,776 - 3,776
GBP
Total comprehensive - - - - 134,698 456,740 591,438 - 591,438
income
Balance as at
31 December 2021 128,977 21,717,786 (8,558,935) 3,836,171 (4,274,360) 11,153,319 - 11,153,319
(1,696,320)
Total comprehensive - - - - 594,684 (1,449,903) (855,219) - (855,219)
income
Balance as at
31 December 2022 128,977 21,717,786 (8,558,935) 4,430,855 (5,724,263) 10,298,100 - 10,298,100
(1,696,320)
* Upon conversion to GBP, the variance between opening and
closing rate for the reserves was taken to the Foreign Exchange
Reserve
The notes on pages 30 to 49 form an integral part of this
consolidated financial information.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2022 1. GENERAL INFORMATION
Thalassa Holdings Ltd (the "Company") is a British Virgin Island
("BVI") International business company ("IBC"), incorporated and
registered in the BVI on 26 September 2007. The Company is a
holding company with various interests across a number of
industries.
Autonomous Robotics Limited ("ARL" - formerly GO Science 2013
Ltd) is a wholly owned subsidiary of Thalassa and is an Autonomous
Underwater Vehicle ("AUV") research and development company.
Apeiron Holdings is a BVI registered business and is a wholly
owned by Thalassa. Until the 17 December 2021, it owned 84% of
Apeiron AG which is a company registered in Switzerland. Apeiron AG
was merged with id4 AG during the period and the resulting company
(named id4 AG) was sold to Anemoi International Limited on the 17
December 2021.
Aperion Holdings (BVI) is the 100% shareholder of Alfalfa
Holdings AG, a company registered in Switzerland.
WGP Geosolutions Limited is a wholly owned subsidiary of
Thalassa which is non-operational and has an additional subsidiary,
WGP Group AT GmbH which was dissolved on 24/08/2022. 2. ACCOUNTING
POLICIES
The Group prepares its accounts in accordance with applicable UK
Adopted International Accounting Standards.
The financial statements are expressed in GBP from 2021 and the
comparatives have been restated. Historically the financial
statements have been expressed in US dollars being the functional
currency of the company and its subsidiaries other than DOA
Exploration Ltd, and Autonomous Robotics Limited which have a
functional currency of pound sterling, WGP Group AT GmbH and WGP
Geosolutions Ltd of Euro and Alfalfa Holdings AG of Swiss
francs.
The change to presenting in GBP is due to the lack of USD as a
functional currency in either Thalassa or its subsidiaries. The
following exchange rates were used in the translation of the
accounts: -
Year end GBPUSD exchange rate as at 31 Dec 2022: 1.2103
(2021:1.350).
Average GBPUSD exchange rate as at 31 Dec 2022: 1.2802
(2021:1.357).
Year end GBPEUR exchange rate as at 31 Dec 2022: 1.1273
(2021:1.189).
Average GBPEUR exchange rate as at 31 Dec 2022: 1.158
(2021:1.154).
Year end GBPCHF exchange rate as at 31 Dec 2022: 1.1187
(2021:1.234).
Average GBPCHF exchange rate as at 31 Dec 20212 1.1764
(2021:1.221).
The principal accounting policies are summarised below. They
have been applied consistently throughout the period covered by
these financial statements. 1. FUNCTIONAL CURRENCY
The presentational currency of the financial statements is GBP,
whereas the functional currency of the Company is US Dollars.
Transactions in foreign currencies are initially recorded in the
functional currency by applying the spot exchange rate on the date
of the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated into the presentational
currency at the spot exchange rate on the balance sheet date. Any
resulting exchange differences are included in the statement of
comprehensive income. Non-monetary assets and liabilities, other
than those measured at fair value, are not retranslated subsequent
to initial recognition. 2. CHANGES IN ACCOUNTING POLICIES AND
DISCLOSURES
The Group changed to UK Adopted International Accounting
Standards at year-end 2021 from International Financial Reporting
Standards (IFRSs) as adopted by the European Union for the year
ended 31 December 2020.
Standards issued but not yet effective: There were a number of
standards and interpretations which were in issue during the
current period but were not effective at that date and have not
been adopted for these Financial Statements. The Directors have
assessed the full impact of these accounting changes on the
Company.To the extent that they may be applicable, the Directors
have concluded that none of these pronouncements will cause
material adjustments to the Group's Financial Statements.They
may
result in consequential changes to the accounting policies and
other note disclosures.The new standards will not be early adopted
by the Group and will be incorporated in the preparation of the
Group Financial Statements from the effective dates noted
below.
The new standards include:
IFRS 17 Insurance contracts 1
IAS 1 Presentation of financial statements and IFRS Practice
Statement 2 1 IAS 8 Accounting policies, changes in accounting
estimates and errors 1 IAS 12 Income Taxes 1
IFRS 7 Financial Instruments: Disclosures (Supplier Finance
Arrangements (Amendments to IAS 7 and IFRS 7)) 2 IFRS 16
Leases (Amendment - to clarify how a seller-lessee subsequently
measure sale and leaseback transactions) 2 IAS 1 Presentation of
financial statements (Amendment - Classification of Liabilities as
Current or Non-Current) 2 IAS 1 Presentation of financial
statements (Amendment - Non-current Liabilities with Covenants)
2
1 Effective for annual periods beginning on or after 1 January
2023
2 Effective for annual periods beginning on or after 1 January
2024 3. BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries). Control is achieved where the Company has the
power to govern the financial and operating policies of an entity
so as to obtain benefits from its activities.
Income and expenses of subsidiaries acquired or disposed of
during the year are included in the consolidated statement of
income from the effective date of acquisition and up to the
effective date of disposal, as appropriate. Total comprehensive
income of subsidiaries is attributed to the owners of the Company
and to the non-controlling interests even if this results in the
non- controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements
of subsidiaries to bring their accounting policies into line with
those used by other members of the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation. 4. JUDGEMENT AND ESTIMATES
The preparation of financial statements in conformity with IFRS
requires the Directors to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
The key judgement areas relate to the carrying value of
provisions for loans receivable. Plant and Equipment is reviewed
annually for indication of impairment. Intellectual property is
amortised and also reviewed annually for indication of impairment.
Loans receivable are reviewed for potential recovery and
impairments included where necessary. Capitalised research and
development costs are reviewed annually for indication if
impairment.
Judgement is also made in respect of the accounting treatment of
the THAL Discretionary Trust. Management's assessment is based on
various indicators including activities, decision-making, benefits
and risks of the Trust. Based on this assessment, management
consider that the THAL Discretionary Trust should not be
consolidated.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022 5. PROPERTY, PLANT AND
EQUIPMENT
Property, plant and equipment are stated at cost less
depreciation and any provision for impairment. Cost includes the
purchase price, including import duties, non-refundable purchase
taxes and directly attributable costs incurred in bringing the
asset to the location and condition necessary for it to be capable
of operating in the manner intended. Cost also includes capitalised
interest on borrowings, applied only during the period of
construction.
Fixed assets are depreciated on a straight-line basis between 3
and 15 years from the point at which the asset is put into use. 6.
INTANGIBLE ASSETS
GOODWILL
Goodwill arising on an acquisition of a business is carried at
cost as established at the date of acquisition of the business (see
note 2.16) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to
each of the Group's cash-generating units (or groups of cash-
generating units) that is expected to benefit from the synergies of
the combination.
A cash-generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there is
indication that the unit may be impaired. If the recoverable amount
of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the other assets of
the unit pro rata based on the carrying amount of each asset in the
unit. Any impairment loss for goodwill is recognised directly in
profit or loss in the consolidated statement of income. An
impairment loss recognised for goodwill is not reversed in
subsequent periods.
On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the determination of
the profit or loss on disposal.
As the underlying assets are not yet operational, amortisation
of capitalised development has not yet begun.
DEVELOPMENT COSTS
An intangible asset, which is an identifiable non-monetary asset
without physical substance, is recognised to the extent that it is
probable that the expected future economic benefits attributable to
the asset will flow to the Group and that its cost can be measured
reliably. Such intangible assets are carried at cost less
amortisation. Amortisation is charged to 'Administrative expenses'
in the Statement of Comprehensive Income on a straight-line basis
over the intangible assets' useful economic life.The amortisation
is based on a straight-line method typically over a period of 1-10
years depending on the life of the related asset.
Expenditure on research activities is recognised as an expense
in the period in which it is incurred. Development costs are
capitalised as an intangible asset only if the following conditions
are met:
-- an asset is created that can be identified;
-- it is probable that the asset created will generate future
economic benefit;
-- the development cost of the asset can be measured
reliably;
-- it meets the Group's criteria for technical and commercial
feasibility; and
-- sufficient resources are available to meet the development
costs to either sell or use as an asset.
OTHER INTANGIBLE ASSETS
Other intangible assets, including patents and trademarks, that
are acquired by the Group and have finite useful lives are measured
at cost less accumulated amortisation and any accumulated
impairment losses 7. IMPAIRMENT OF ASSETS
An assessment is made at each reporting date of whether there is
any indication of impairment of any asset, or whether there is any
indication that an impairment loss previously recognised for an
asset in a prior period may no longer exist or may have decreased.
If any such indication exists, the asset's recoverable amount is
estimated. An asset's recoverable amount is calculated as the
higher of the asset's value in use or its net selling price.
An impairment loss is recognised only if the carrying amount of
an asset exceeds its recoverable amount. An impairment loss is
charged to the statement of income in the period in which it
arises. A previously recognised impairment loss is reversed only if
there has been a change in the estimates used to determine the
recoverable amount of an asset, however not to an amount higher
than the carrying amount that would have been determined (net of
any depreciation / amortisation), had no impairment loss been
recognised for the asset in a prior period. A reversal of an
impairment loss is credited to the statement of income in the
period in which it arises. 8. INVESTMENTS
Available for sale investments are initially measured at cost,
including transaction costs. Gains and losses arising from changes
in fair value of available for sale investments are recognised at
fair value through profit or loss. 9. REVENUE
Revenue is measured at the fair value of the consideration
received or receivable.
In respect of contracts which are long term in nature and
contracts for ongoing services, revenue, restricted to the amounts
of costs that can be recovered, is recognised according to the
value of work performed in the period. Revenue in respect of such
contracts is calculated on the basis of time spent on the project
and estimated work to completion.
Where the outcome of contracts which are long term in nature and
contracts for ongoing services cannot be estimated reliably,
revenue is recognised only to the extent of the costs recognised
that are recoverable.
Where payments are received in advance in excess of revenue
recognised in the period, this is reflected as a liability on the
statement of financial position as deferred revenue.
Rental income from investment properties leased out under
operating leases is recognised net of VAT, returns, rebates and
discounts in the Income Statement on a straight-line basis over the
term of the lease. The directors consider this is in line with when
the Company's performance obligations are satisfied. Standard
payments terms are that services are paid in advance. When the
Group provides lease incentives to its tenants the cost of
incentives are recognised over the lease term, on a straight-line
basis, as a reduction to income. 10. TAXATION
The Company is incorporated in the BVI as an IBC and as such is
not subject to tax in the BVI. DOA Exploration Ltd and Autonomous
Robotics Ltd are incorporated in the UK and are therefore subject
to UK tax regulations. Alfalfa Holdings AG is incorporated in
Switzerland in the canton of Lucerne and are subject to Swiss tax
regulations.
Current tax assets and liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities,
based on tax rates and laws that are enacted or substantively
enacted by the reporting date.Tax is charged or credited directly
to equity if it relates to items that are credited or charged to
equity. Otherwise, tax is recognised in the income statement.
Deferred tax is provided in full using the liability method on
all timing differences which result in an obligation at the
reporting date to pay more tax, or the right to pay less tax, at a
future date, at rates that are expected to apply when they
crystalise based on current tax rates. Deferred tax assets are
recognised for all deductible temporary differences to the extent
that it is probable that taxable profits will be available against
which those deductible temporary differences can be utilised.
Deferred tax is not provided when the amounts involved are not
significant.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022 11. FOREIGN CURRENCY
Transactions in currencies other than the entity's functional
currency (foreign currencies) are recorded at the rate of exchange
prevailing on the dates of the transactions. At each reporting
date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the
financial reporting date. Exchange differences arising are included
in the statement of income for the period.
DOA Exploration Ltd and Autonomous Robotics Ltd are incorporated
in the UK and have a functional currency of GBP. Exchange
differences on the retranslation of operations denominated in
foreign currencies are included in Other Comprehensive Income.
Year end GBPUSD exchange rate as at 31 Dec 2022: 1.2103
(2021:1.350).
Average GBPUSD exchange rate as at 31 Dec 2022: 1.2802
(2021:1.357).
Year end GBPEUR exchange rate as at 31 Dec 2022: 1.1273
(2021:1.189).
Average GBPEUR exchange rate as at 31 Dec 2022: 1.158
(2021:1.154).
Year end GBPCHF exchange rate as at 31 Dec 2022: 1.1187
(2021:1.234).
Average GBPCHF exchange rate as at 31 Dec 20212 1.1764
(2021:1.221). 12. BORROWING COSTS
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets are added to the
cost of those assets until such a time as the assets are
substantially ready for their intended use or sale. All other
borrowing costs are recognised in profit and loss in the period
incurred. 13. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Financial assets and liabilities are recognised on the Group's
statement of financial position when the Group becomes party to the
contractual provisions of the instrument.
Loans and receivables are initially measured at fair value and
are subsequently measured at amortised cost, plus accrued interest,
and are reduced by appropriate provisions for estimated
irrecoverable amounts. Such provisions are recognised in the
statement of income.
Available for sale financial assets comprise investments which
do have a fixed maturity and are classified as current assets if
they are intended to be held for the medium to long term. They are
measured at fair value through profit or loss.
Trade receivables are initially measured at fair value and are
subsequently measured at amortised cost less appropriate provisions
for estimated irrecoverable amounts. Such provisions are recognised
in the statement of income.
Cash and cash equivalents comprise cash in hand and demand
deposits and other short-term highly liquid investments with
maturities of three months or less at inception that are readily
convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
Trade payables are not interest-bearing and are initially valued
at their fair value and are subsequently measured at amortised
cost.
Equity instruments are recorded at fair value, being the
proceeds received, net of direct issue costs.
Share Capital - Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of taxation,
from the proceeds.
Treasury shares - Where any Group company purchases the
Company's equity share capital, the consideration paid, including
any directly attributable incremental costs (net of income taxes)
is deducted from equity attributable to the Company's equity
holders until the shares are cancelled or reissued.
Where such shares are subsequently reissued, any consideration
received, net of any directly attributable incremental transaction
costs and the related income tax effects, is included in equity
attributable to the Company's equity holders.
Financial instruments require classification of fair value as
determined by reference to the source of inputs used to derive the
fair value.This classification uses the following three-level
hierarchy:
Level 1 - quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2 - inputs other than quoted prices included within level
1 that are observable for the asset or liability, either directly
(i.e., as prices) or indirectly (i.e., derived from prices);
Level 3 - inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
Borrowings are initially measured at fair value and are
subsequently measured at amortised cost, plus accrued interest. 14.
BUSINESS COMBINATIONS
Acquisitions of businesses are accounted for using the
acquisition method.The consideration transferred in a business
combination is measured at fair value, which is calculated as the
sum of the acquisition-date fair values of the assets transferred
by the Group, liabilities incurred by the Group to any former
owners and the equity interests issued by the Group in exchange for
control. Acquisition-related costs are generally recognised in
profit or loss as incurred.
At the acquisition date, the identifiable assets acquired, and
the liabilities assumed are recognised at their fair value.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-controlling
interests and the fair value of the acquirer's previously held
equity interest (if any) over the net of the acquisition- date
amounts of the identifiable assets acquired, and the liabilities
assumed. 15. GOING CONCERN
The financial statements have been prepared on the going concern
basis as management consider that the Group will continue in
operation for the foreseeable future and will be able to realise
its assets and discharge its liabilities in the normal course of
business. The Group has fully assessed its financial commitments
and at the year-end had net cash reserves of GBP0.5m plus a further
GBP2.9m of available for sale investments. 16. INVESTMENT IN
ASSOCIATED ENTITIES
Investments in associates are those over which the Group has
significant influence. These are accounted for using the equity
method of accounting. Significant influence is considered to be
participation in the financial and operating policy decisions of
the investee and is usually evidenced when the Group owns between
20% and 50% of that company's voting rights.
Investments in associates are initially recorded at cost and the
carrying amount is increased or decreased to recognise the Group's
share of the profits or losses of the associate after acquisition.
At the date of acquisition any excess of the cost of acquisition
over the Group's share of the fair values of the identifiable net
assets of the associate is recognised as goodwill.The carrying
amount of these investments is reduced to recognise any impairment
of the value of the individual investment. If the Group's share of
losses exceeds its interest in an associate the carrying value of
that investment is reduced to nil and the recognition of any
further losses is discontinued unless the Group has an obligation
to make further funding contributions to that associate.
The Group's share of associates' post-acquisition profits or
losses is recognised in profit or loss and the post-acquisition
movements in other comprehensive income is recognised within other
comprehensive income.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022 3. SEGMENT INFORMATION
Management have chosen to organise the Group information by
revenue generated. During the year the Group had one operating
segment comprised of rental income through the Aperion Group.
Information related to each reportable segment is set out
below.
Rental Sale of Total
Income Services Income
GBP GBP GBP
Revenue 211,048 - 211,048
Based on these segments, the reportable segments under IFRS 8 is as follows:
Total
Rental Other Continuing
Income segments Operations
GBP GBP GBP
Segment income statement
Revenue 211,048 84,920 295,968
Expenses (133,377) (1,360,813) (1,494,190)
Depreciation and amortisation (183,673) (122,175) (305,848)
Profit/loss before tax (106,001) (1,398,069) (1,504,070)
Attributable income tax (expense)/credit (440) 54,607 54,167
Profit/(loss) for the period (106,441) (1,343,462) (1,449,903)
Total
Rental Other Continuing
Income segments Operations
GBP GBP GBP
Segment statement of financial position
Non-current assets 1,990,862 9,287,504 11,278,366
Current assets (35,827) 1,935,221 1,899,394
Assets 1,955,035 11,222,725 13,177,760
Current liabilities 574,711 794,572 1,369,283
Non-current liabilities 1,500,532 9,845 1,510,377
Liabilities 2,075,243 804,417 2,879,660
Net assets (120,208) 10,418,308 10,298,100
Shareholders' equity (120,208) 10,418,308 10,298,100
Total equity (120,208) 10,418,308 10,298,100 4. EMPLOYEES
The average number of employees (excluding the Directors) employed by the Group was:-
2022 2021
Sales - -
Development 4 4
Admin - 5
4 9
5. NET FINANCIAL EXPENSE
2022 2021
GBP GBP
Loan interest receivable (53,935) 351,714
Loan interest payable (27,791) (41,263)
Bank interest receivable 33,133 1,515
Bank interest payable (1,653) (3,852)
Lease liability (91,535) (29,150)
Gains/(Losses) on investments 435,545 (540,173)
Foreign currency gains/(losses) (44,229) (93,995)
249,535 (355,204)
6. DISCONTINUED OPERATIONS
2022 2021
GBP GBP
Analysis of profit for the year from discontinued operations
Revenue - 28,000
Expenses - (333,509)
Profit before income tax - (305,509)
Income tax expense/(credit) - -
Profit after income tax of discontinued operations - (305,509)
Gain on sale of the subsidiary after income tax - 2,440,728
Profit from discontinued operation - 2,135,219
2022 2021
GBP GBP
Net cash inflow from operating activities - 8,519
Net cash outflow from investing activities - (418,246)
Net cash inflow from financing activities - 344,799
Net cash outflow in subsidiary - (64,928)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022 6. DISCONTINUED OPERATIONS
CONTINUED
Details of the sale of the subsidiary 2022 2021
GBP GBP
Consideration received
Shares in Anemoi International - 2,240,000
Carrying amount of assets sold - 200,728
Gain on sale - 2,440,728
On 17 December 2021, Apeiron Holdings BVI, a 100% owned
subsidiary of Thalassa, successfully completed the sale of its
subsidiary id4 AG to Anemoi International Ltd. Consideration
consisted of shares in Anemoi International Ltd to the value of
GBP2.24m.
Prior to the disposal of the associate, the loan outstanding
from Thalassa and Apeiron BVI was converted to a capital
contribution under Swiss and BVI law, this loan was used to finance
the losses bought forward in id4 AG of GBP697,597 and therefore
they have been offset resulting in a decrease in capital of
GBP1,077,457 before the removal of non-controlling interest. 7.
INCOME TAX EXPENSE
2022 2021
GBP GBP
Current tax/(credit) from continuing operations (54,167) (132,240)
Total Tax/(Credit) (54,167) (132,240)
GBP GBP
Profit/(loss) before tax from continuing operations (1,449,903) (1,678,479)
Tax at applicable rates (275,482) (318,911)
Losses carried forward 275,482 318,911
R&D Tax (Credit) relating to current year (54,167) (132,240)
Total Tax/(Credit) on continuing operations (54,167) (132,240)
GBP GBP
Profit before tax from discontinued operations - (305,509)
Tax at applicable rates - -
Total Tax on discontinued operations - -
The applicable tax rates in relation to the Group's profits are
BVI 0%, UK 19% & 25% and Swiss 12.3% (2021: 0%,19% and 12.3%).
The Applicable tax rate for the UK changed from 19% to 25% on 1
April 2023.
Autonomous Robotics Ltd has unprovided trading losses carried
forward of approximately GBP4.5m available for utilisation against
future trading profits. 8. EARNINGS PER SHARE
2022 2021
GBP GBP
The calculation of earnings per share is based on
the following loss attributable to ordinary shareholders and number of shares: Profit/(Loss) for
the year from continuing operations
(1,449,903) 762,249
Profit/(Loss) for the year from discontinued operations - (305,509)
Profit for the year (1,449,903) 456,740
Weighted average number of shares of the Company 7,945,838 7,945,838
Earnings per share:
Basic and Diluted (GBP) from continuing operations (0.18) 0.10
Basic and Diluted (GBP) from discontinued operations - (0.04)
Basic and Diluted (GBP) (0.18) 0.06
Number of shares outstanding at the period end: Number of shares in issue
7,945,838 7,945,838
Recording error - -
Treasury shares - -
Capital Redemption - -
Basic number of shares in issue 7,945,838 7,945,838
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022 9. INTANGIBLE ASSETS AND
GOODWILL
Development
costs Patents Software Sub-total Goodwill Total
GBP GBP GBP GBP GBP GBP
At 31 December 2020
Cost 614,072 81,026 - 695,098 265,154 960,252
Accumulated Impairment - - - - (115,162) (115,162)
Net book amount 614,072 81,026 - 695,098 149,992 845,090
Full-year ended
31 December 2021
Opening net book amount 614,072 81,026 - 695,098 149,992 845,090
Additions 372,071 45,356 22,550 439,976 - 439,976
Disposal of subsidiaries (223,785) - (223,785) (147,384) (371,169)
Amortisation charge - - (3,758) (3,758) (2,608) (6,366)
Closing net book amount 762,358 126,382 18,792 907,531 - 907,531
At 31 December 2021
Cost 762,358 126,382 22,550 911,289 - 911,289
Accumulated Impairment - - (3,758) (3,758) - (3,758)
Net book amount 762,358 126,382 18,792 907,531 - 907,531
Full-year ended
31 December 2022
Opening net book amount 762,358 126,382 18,792 907,531 - 907,531
Additions 391,289 27,119 - 418,408 - 418,408
Revaluation of c'fwd amount - - 2,546 2,546 - 2,546
Amortisation charge - - (8,790) (8,790) - (8,790)
Closing net book amount 1,153,647 153,501 12,548 1,319,695 - 1,319,695
At 31 December 2022
Cost 1,153,647 153,501 25,096 1,332,243 - 1,332,243
Accumulated Amortisation - - (12,548) (12,548) - (12,548)
Net book amount 1,153,647 153,501 12,548 1,319,695 - 1,319,695
The intangible assets held by the group increased as a result of
capitalising the development costs and patent fees of Autonomous
Robotics Ltd, alongside the introduction and build of a new finance
system in Thalassa Holdings Ltd.in 2021. Systems are being
amortised over a three year period. Goodwill related to the
acquisition of iD4 Ltd in December 2019 and alongside the
development costs of id4 were removed upon disposal of the
subsidiary in December 2021.
10. PROPERTY, PLANT AND EQUIPMENT
Plant
Land and and Motor
Total buildings Equipment Vehicles
Cost GBP GBP GBP GBP
Cost at 1 January 2021 574,510 55,556 137,693 381,261
FX movement 1,713 - 487 1,226
576,223 55,556 138,180 382,487
Additions 1,460,666 1,357,726 708 102,232
Disposal of Subsidiary (19,312) - (19,312) -
Cost at 31 December 2021 2,017,577 1,413,282 119,576 484,719
Depreciation
Depreciation at 1 January 267,781 18,519 117,522 131,740
FX movement 2,215 - 989 1,226
269,996 18,519 118,511 132,966
Charge for the year on continuing operations 95,116 9,392 3,940 81,784
Foreign exchange effect on year-end translation (137) (135) 952 (954)
Disposal of Subsidiary (8,479) - (8,479) -
Depreciation at 31 December 2021 356,496 27,776 114,924 213,796
Closing net book value at 31 December 2021 1,661,081 1,385,506 4,652 270,923
Cost at 1 January 2022 2,017,577 1,413,282 119,576 484,719
FX movement 201,735 137,001 9,377 55,357
2,219,312 1,550,283 128,953 540,076
Additions 517,376 515,846 1,530 -
Cost at 31 December 2022 2,736,688 2,066,128 130,483 540,076
Depreciation
Depreciation at 1 January 356,496 27,776 114,924 213,796
FX movement 36,920 - 9,315 27,605
393,416 27,776 124,239 241,401
Charge for the year on continuing operations 297,707 192,932 3,695 101,080
Foreign exchange effect on year end translation 14,832 14,832 - -
Depreciation at 31 December 2022 705,955 235,540 127,934 342,481
Closing net book value at 31 December 2022 2,030,733 1,830,589 2,549 197,595
As outlined in note 2.7, an assessment is made at each financial
reporting date as to whether there is any indication of impairment
of any asset. An impairment review of the Group's equipment has
been undertaken, taking into account obsolescence, market
conditions, value in use and useful economic life. As a result,
there has been no impairment charge in 2022 (2021: USDnil).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
11. INVESTMENTS - AVAILABLE FOR SALE FINANCIAL ASSETS
The Group classifies the following financial assets at fair value through profit or loss (FVPL):-
AFS investments have been valued incorporating Level 1 inputs in accordance with IFRS7.
Equity investments that are held for trading.
2022 2021
GBP GBP
Available for sale investments
At the beginning of the period 1,187,345 1,417,003
Additions 3,554,617 3,445,080
Unrealised gain/(losses) 87,635 (518,523)
Disposals (4,461,505) (3,172,142)
Forex on opening balance 136,785 15,928
At 31 December 504,877 1,187,346
12. LOANS AND PORTFOLIO HOLDINGS
2022 2021
GBP GBP
Loans at 1 January 1,333,599 1,279,849
Accrued interest 45,235 39,365
Forex on opening balance 153,635 14,385
Loans at 31 December 1,532,469 1,333,599
Portfolio Holdings at 1 January 4,371,674 4,292,777
Issued 746,009 255,607
Interest 325,237 293,767
Repaid (92) (475,861)
Forex 28,157 5,384
Written off - Tappit Loan Interest & Option Value (1,432,041) -
Portfolio holdings at 31 December 4,038,944 4,371,674
Total of loans and holdings 5,571,412 5,705,273
The Loan is to the THAL Discretionary Trust, interest is payable
at 3% per annum (reviewed periodically).
The THAL Discretionary Trust is a trust, independent of
Thalassa, established for the benefit of individuals or parties to
whom the Trustees wish to make awards at their discretion.
In September 2020 a loan was issued to Tappit Technologies (UK)
Ltd for GBP3m, in the form of a convertible loan note and incurred
a non-compounding interest charge of 8% with a maturity date 36
months post agreement date. As of December 31 2022, interest of
GBP424k was accrued. The Tappit Technologies (UK) Ltd loan notes
were revalued in 2020 at fair value using a discounted cash flow
method at the market rate of 10% on final value. The discount
element of the final conversion has been valued using the
Black-Scholes method to provide the fair value adjustment noted in
the table above. A fair value exercise was undertaken for 2021
under the same method with no adjustment necessary due to there
being no new shares or financing. The option was valued at
GBP1,008,294.
Without prior notification, Thalassa was advised on 26 January
2023, that Messrs Taylor and Pitts of Begbies Traynor (Central) LLP
had been appointed as administrators of Tappit on the 20 January
2023 and that a sale of Tappit's business and assets by way of a
pre-packaged sale to Tap Holdco Limited completed on the same
date.
Thalassa announced on 27 January 2023 that the position was
being written down to GBPNil in the books.The Chairman,
commensurately announced that on an exceptional and purely moral
basis he would proceeds from the sale of personal property in the
amount of Thalassa's initial investment of GBP3m. As a result, only
the value of the accrued interest and Option value, totalling
GBP1,432,041 has been written off, above.
Thalassa is still exploring all options including, but not
limited to, possible legal action against the Directors of
Tappit.
Upon formation of Anemoi International Ltd, a 10% fixed rate
cumulative convertible loan note was issued for USD350k, as per the
terms of the agreement the notes were converted to preference
shares in December 2021 but prior to the sale of id4 to Anemoi
International Ltd on 17 December 2021 - see note 13.
In December 2021 the warrants held by Thalassa for Anemoi
International Ltd, were transferred to the Anemoi Discretionary
Trust in exchange for a debt of USD345,000.The debt is repayable on
the exercising of the warrants by the beneficiaries of the
Trust.
13. ASSOCIATED ENTITIES
2022 2021
GBP GBP
Fair value of investment at 1 January
2,325,457
Fair value of investment at 17 December 2021 2,086,448
Share of profits/(losses) for the year attributable to the Group (235,659) (9,156)
Exchange Variance
266,728
Conversion of loan notes to preference shares 248,165
2,356,526 2,325,457
There are no other entities in which the Group holds 20% or more
of the equity, or otherwise exercises significant influence over
the affairs of the entity.
14. TRADE AND OTHER RECEIVABLES
2022 2021
GBP GBP
Trade receivables 86,669 123,344
Trade receivables 86,669 123,344
Other receivables 440,181 49,608
Corporation tax 106,663 128,893
Prepayments 131,789 507,762
Total trade and other receivables 765,302 809,607
The Directors consider that the carrying value of trade and
other receivables approximate to their fair value.
NOTES TO THE CONSOLIDATED STATEMENTS CONTINUED FINANCIAL
for the year ended 31 December 2022
15. TRADE AND OTHER PAYABLES
2022 2021
GBP GBP
Trade payables 677,135 666,526
Other payables 307,259 279,254
Accruals 226,416 167,509
Total trade and other payables 1,210,810 1,113,289
16. BORROWINGS
2022 2021
Non-current liabilities GBP GBP
Lease liabilities 1,510,377 1,252,335
1,510,377 1,252,335
2022 2021
Current liabilities GBP GBP
Credit facility - 4,324,649
Lease liabilities 158,473 150,911
158,473 4,475,560
In December 2020 the group entered into a fixed-term advance GBP
currency denominated credit facility.
The total available amount under the facility is GBPGBP10.3m of
which GBPNil was drawn down as at 31 December 2022 (2021: GBP4.4m).
The facility carries an interest rate of 0.7547%.
The credit facility was cancelled in December 2022.
17. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets mandatorily measured at FVPL include the following:-
2022 2021
GBP GBP
Non current assets
Investments in associated entities 2,356,526 2,325,457
Portfolio Holdings 4,038,944 4,371,674
Current assets
Available for sale financial assets 504,877 1,187,346
At 31 December 6,900,347 7,884,477
2022 2021
Amounts recognised in profit or loss:- GBP GBP
Available for sale financial assets 224,420 (502,595)
Investments in associated entities (235,658) (213,100)
Portfolio Holdings 101,691 181,563
90,453 (534,132)
18. LEASES AS LESSEE
Thalassa's subsidiary, Autonomous Robotics Ltd, entered into a
lease for the rent of the top floor of Eastleigh Court near
Warminster in January 2018 for GBP10,000 per annum. However, the
rent is being accrued and will only become payable upon successful
completion of the fund-raising exercise. A borrowing rate of 2.5%
has been applied to this lease. Previously, this lease was
classified as an operating lease under IAS 17.
Thalassa's subsidiary id4 entered into a lease in January 2021,
for the buildings surrounding and including Villa Kramerstein on
the banks of Lake Lucerne in Switzerland. Prior to the sale of id4,
the lease was transferred to another subsidiary of Thalassa,
Alfalfa Holdings AG. Since the accounting date, some of the
buildings have been sublet and therefore the income matches the
expenditure. A borrowing rate of 5% has been applied to this lease.
The weighted average incremental borrowing rate of 4.94% was
applied to lease liabilities recognised at the initial adoption of
IFRS 16. Where applicable, the Group has used the exemption under
IFRS 16 regarding the exemption of short-term leases and have
excluded from the balance sheet.
Right-of-use assets
Right-of-use assets related to leased properties that do not
meet the definition of investment property are presented as
property, plant and equipment (see note 10).
Land and buildings
GBP
Balance at 1 January 2022 1,385,504
Additions 515,846
Depreciation charge for the year (192,932)
Foreign exchange effect on year-end translation 122,171
Balance at 31 December 2022 1,830,589
Amounts recognised in profit or loss
2021 - Leases under IFRS 16 GBP
Interest on lease liabilities (91,535)
Expenses related to short-term leases (38,486)
Right of use asset (177,506)
(307,527)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
19. SHARE CAPITAL
As at As at
31 Dec 2022 31 Dec 2021
GBP GBP
Authorised share capital:
100,000,000 ordinary shares of USD0.01 each 1,000,000 1,000,000
Exchange Rate for Conversion 1.61674 1.61674
100,000,000 ordinary shares of USD0.01 each in GBP 618,529 618,529
Allotted, issued and fully paid:
20,852,359 ordinary shares of USD0.01 each 208,522 208,522
Average Exchange Rate for Conversion 1.61674 1.61674
20,852,359 ordinary shares of USD0.01 each in GBP 128,977 128,977
Number of
Number Treasury Treasury
of shares shares shares GBP
Balance at 31 December 2020 7,945,838 12,906,521 8,558,935
Shares purchased - - -
Balance at 31 December 2021 7,945,838 12,906,521 8,558,935
Shares purchased - - -
Balance at 31 December 2022 7,945,838 12,906,521 8,558,935
Treasury shares represents the cost of the Company buying back
its shares.There were 12,906,521 shares held in Treasury as at 31
December 2022 (2021: 12,906,521 shares) which comprised 61.9% of
the total issued share capital (2021: 61.9%). No purchase
took place in 2022 (2021: nil).
Under the Company's memorandum of association, the Company is
authorised to issue 100,000,000 shares of one class with a par
value of USUSD0.01 each. Under the Company's articles of
association, the Board is authorised to offer, allot, grant options
over or otherwise dispose of any unissued shares. Furthermore, the
Directors are authorised to purchase, redeem or otherwise acquire
any of the Company's own shares for such consideration as they
consider fit, and either cancel or hold such shares as treasury
shares.The directors may dispose of any shares held as treasury
shares on such terms and conditions as they may from time to time
determine. Further, the Company may redeem its own shares for such
amount, at such times and on such notice as the directors may
determine, provided that any such redemption is pro rata to each
shareholders' then percentage holding in the Company.
Share capital represents 7,945,838 ordinary shares of USD 0.01
each.
The shares have been translated at the exchange rate at the
point of issue and the period end movements taken to the foreign
exchange reserve. The average rate noted above therefore reflects
the aggregate rate at which the final share capital balance is
recognised.
The following describes the nature and purpose of each reserve
within equity:
Retained Earnings: All other net gains and losses and
transactions with owners (e.g. dividends) not recognised elsewhere
FX Reserves: Gains/losses arising on retranslating the net assets
of overseas operations into the reporting currency.
Share Premium: Amount subscribed for share capital in excess of
nominal value.
Other Reserves: Other reserves include, 1. Revaluation Reserves
(gains/losses arising on the revaluation of the group's property).
2. Capital Contribution related to the merger of id4 AG into
Apeiron Holdings AG.
20. CAPITAL MANAGEMENT
The Group's capital comprises ordinary share capital, retained
earnings and capital reserves.The Group's objectives when managing
capital are to provide an optimum return to shareholders over the
short to medium term through capital growth and income whilst
ensuring the protection of its assets by minimising risk. The Group
seeks to achieve its objectives by having available sufficient cash
resources to meet capital expenditure and ongoing commitments.
At 31 December 2022, the Group had capital of GBP10,298,100
(2021: GBP11,153,319). The Group does not have any externally
imposed capital requirements.
21. INVESTMENT IN SUBSIDIARIES
Details of the Company's subsidiaries at the year end are as follows:
Effective
Share holding
Name of subsidiary Place of incorporation 2022 2021
DOA Alpha Ltd (formerly WGP Group Ltd) British Virgin Islands 100% 100%
DOA Exploration Ltd (formerly WGP Exploration Ltd) United Kingdom 100% 100%
DOA Delta Ltd (formerly WGP Survey Ltd) British Virgin Islands 100% 100%
Apeiron Holdings (BVI) Ltd (formerly Autonomous Holdings Ltd) British Virgin Islands 100% 100%
Autonomous Robotics Ltd United Kingdom 100% 100%
WGP Geosolutions Limited Cyprus 100% 100%
WGP Group AT GmbH - dissolved 24/08/2022 Austria 0% 100%
Alfalfa Holdings AG Switzerland 100% 100%
The Group prepares its accounts in accordance with applicable UK
Adopted International Accounting Standards ("IFRS")., through
application of the appropriate standard the investments in
subsidiaries are held at cost within the Group financial
statements.
Due to the pre- or early stage revenue producing status, and
therefore book value, of Autonomous Robotics Limited the directors
of the Group feel that the IFRS cost basis does not represent a
market value of the subsidiaries. 22. RELATED PARTY
TRANSACTIONS
Under the consultancy and administrative services agreement
entered into on 3 January 2011 with a company in which the Chairman
has a beneficial interest, the Group accrued GBP307,076 in 2022
(2021: GBP493,622). Mr Soukup waived the 2021 balance of
GBP478,594 for services provided to the Group.
During the period Graham Cole, non-executive director, invoiced
the Group GBP6,215 of which GBPNil was owed as at 31 December 2022
(2021: GBP6.3k) and GBP4,092 accrued.
During the period David Thomas, non-executive director, invoiced
the Group GBPNil of which GBPNil was owed as at 31 December 2022
(2021: GBP18.4k) and GBP20,635 accrued.
During the period Kenneth Morgan, non-executive director,
invoiced the Group GBPNil of which GBPNil was owed as at 31
December 2022 and GBP5,091 accrued.
Athenium Consultancy Ltd, a company in which the Group owns
shares invoiced the group for financial and corporate
administration services totalling GBP165,000 for the period (Dec
2021: nil).
The Group was due GBP2,894 (2021: GBP48,701) from Anemoi
International Ltd, a company in which through its subsidiary
Apeiron Holdings BVI holds shares and is related by common control
through the Chairman, Duncan Soukup. During the year services
amounting to GBP22,013 (2021: GBP48,701) were charged from
Thalassa.
As at the year end the Group was due GBP17,073 (2021: GBP7,362)
from Alina Holdings Limited, a company under common directorship.
During the year services amounting to GBP91,167 (2021: GBP123,619)
were charged from Thalassa.
ARL owed rent of GBP10,000 during the period for trading
premises from Eastleigh Court Limited.The beneficiaries of
Eastleigh Court Ltd include D Soukup, a director during the
period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022 23. FINANCIAL
INSTRUMENTS
The Group's financial instruments comprise cash and cash
equivalents together with various items such as trade and other
receivables and trade payables etc, that arise directly from its
operations. The fair value of the financial assets and liabilities
approximates the carrying values disclosed in the financial
statements.
The main risks arising from the Group's financial instruments
are interest rate risk, foreign exchange risk, credit risk and
liquidity risk.
INTEREST RATE RISK
The Group does not undertake any hedging against interest rate
risk.The Group finances its operations from the cash balances on
the current and deposit accounts.The Group had total borrowings of
GBPNil as at 31 December 2022 (2021: GBP4.5m).
Interest rate sensitivity
The Group's exposure to the risk of changes in market interest
rates relates primarily to the Group's short-term credit
facilities. The impact of changes in interest rates on the cost is
as follows:
For the year ended December 31, 2022 Change in
interest rate cost GBP '000
Interest rate translations of:
+10 basis points 5
-10 basis points (5)
+100 basis points 20
-100 basis points (20)
FOREIGN EXCHANGE RISK
The Group undertakes FOREX and asset risk management activities
from time to time to mitigate foreign exchange risk.
An increase in foreign exchange rates of 5% at 31 December 2022
would have decreased the profit and net assets by GBP8,718
(2021:
GBP141,705). A decrease of 5% would have had an equal and
opposite impact.
As 31 December 2022 approximately 68% (2021: 10%) of amounts
owing to suppliers are held in GBP, 8% in EUR (2021: 17%), 6%
in USD (2021: 53%), 1% in NOK (2021: 0%) and 17% in CHF (2021:
21%).
CREDIT RISK
Group credit risk is predominantly a matter of individual
corporate risk. However, Group companies also operate in frontier
and challenging regions which has the potential to add risk and
uncertainty both from an operational and financial point of view.
Whenever and wherever possible the Group attempts to mitigate this
risk.
In line with other international companies, the Group is exposed
to geopolitical risks and the possibility of sanctions which could
adversely affect our ability to perform operations or collect
receivables from our clients.This risk is uninsurable and
unhedgeable.
LIQUIDITY RISK
The Group's strategy for managing cash is to maximise interest
income whilst ensuring its availability to match the profile of the
Group's expenditure. All financial liabilities are generally
payable within 30 days and do not attract any other contractual
cash flows. Based on current forecasts the Group has sufficient
cash to meet future obligations. The maturity analysis of the
current trade and other payables is as follows:
30 days 30-60 days 60-90 days 90+ days Total
31 December 2022
GBP GBP GBP GBP GBP
Finance lease liabilities 13,206 13,206 13,206 118,855 158,473
Trade payables 677,135 - - - 677,135
Other payables 30,132 - - 277,127 307,259
Accruals 43,814 4,110 - 178,492 226,416
764,287 17,316 13,206 574,474 1,369,283 24. SUBSEQUENT EVENTS
Without prior notification,Thalassa was advised on 26 January
2023, that Messrs Taylor and Pitts of Begbies Traynor (Central) LLP
had been appointed as administrators of Tappit on 20 January 2023
and that a sale of Tappit's business and assets by way of a pre-
packaged sale to Tap Holdco Limited completed on the same date.
Please see note 12 for more detail. 25. COPIES OF THE CONSOLIDATED
FINANCIAL STATEMENTS
The consolidated financial statements are available on the
Company's website: www.thalassaholdingsltd.com. 26. CONTROLLING
PARTIES
There is no one controlling party.
END
For further information, please contact:
Enquiries: enquiries@thalassaholdingsltd.com
Thalassa Holdings Ltd
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Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group. The issuer is solely responsible for the
content of this announcement.
-----------------------------------------------------------------------------------------------------------------------
ISIN: VGG878801114
Category Code: ACS
TIDM: THAL
LEI Code: 2138002739WFQPLBEQ42
Sequence No.: 256647
EQS News ID: 1676297
End of Announcement EQS News Service
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(END) Dow Jones Newswires
July 10, 2023 05:47 ET (09:47 GMT)
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