REG - Inspirit Energy Hlds - Final Results
22/12/2023 11:30
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RNS Number : 8075X Inspirit Energy Holdings PLC 22 December 2023
22 December 2023
Inspirit Energy Holdings Plc
("Inspirit" or "the Company")
ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
Inspirit Energy Holdings Plc today
announces its audited results for the year ended 30 June 2023 (the
"Accounts").
Copies of the Company's Annual Report and Accounts will be sent to
shareholders and will be available on the Company's website
www.inspirit-energy.com today.
Further copies may be obtained directly from the Company's Registered Office
at Inspirit Energy Holdings plc, 200 Aldersgate Street, London EC1A 4HD.
Extracts of the Accounts are set out below.
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 30 June 2023
During the reporting period, Inspirit Energy Holdings plc (Inspirit)
successfully maintained its focus on the application of the Stirling engine in
various sectors, and had been primarily working with its engineering partners
on the fine details of the new Waste Heat Recovery (WHR) system for the
application on the Volvo marine engine. The unit has been built and tested
in Poland and with the issues in neighbouring Ukraine, sourcing materials and
components has still been challenging.
Using a non-branded automotive engine with the same horsepower as the Volvo
Penta D13 Engine running at 2400 revolutions per minute, the Company's phase
two trial in Poland managed by Inspirit's engineering team, and testing was
complete under varying scenarios, each for a duration of approximately one
hour, the unit provided consistent performance with peak output reaching 97kw.
After the reporting period, a test visit to our facility in Poland, we
identified external manufacturing errors in one component part of the WHR
system, this component having been specially manufactured with new heat
retaining coatings for the drive that powers the Helix Accelerator, to deliver
output of over 130kw. This item has a long lead time for delivery as it
needs to be manufactured and tested before installing and proceeding with the
final testing of the WHR unit. Although this has caused delays whilst we
secured alternative sources to manufacture this component, we are pleased to
report that this component is now in design with the manufacturer confirming
with confidence that it will meet the system requirements. The team have
continued to carry out longevity testing on stage one and two of the WHR
system and it is now projected that should be completed by between mid to end
of the 2nd quarter of 2024.
The board of Inspirit are very pleased with the team's achievements and the
progress that has been made to date. And the operating Board believe that
the WHR technology and the application can be applied to marine, waste heat
recycling from energy generation, refrigerated transport that uses diesel
engines and many more applications.
As per previous years, the board are continuing to assess funding options for
the development and commercialisation of our products and will continue to
demonstrate prudence in our approach to managing our current resources whilst
pushing forward with our product development.
I would like to thank my colleagues for their hard work and commitment to
driving the business forward during these challenging times.
J Gunn
Chairman and Chief Executive Officer
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU No. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
More information on Inspirit Energy can be seen at: www.inspirit-energy.com
(http://www.inspirit-energy.com/)
For further information please contact:
Inspirit Energy Holdings plc
John Gunn, Chairman and CEO +44 (0) 207 048 9400
Beaumont Cornish Limited
www.beaumontcornish.com
(Nominated Advisor)
Roland Cornish / James Biddle +44 (0) 207 628 3396
Global Investment Strategy UK Ltd
(Broker)
Samantha Esqulant +44 (0) 207 048 9045
STRATEGIC REPORT FOR THE YEAR ENDED 30 June 2023
Directors present their Strategic Report on Inspirit Energy Holdings plc (the
"Company") and its subsidiary undertakings (together the "Group") for the
year ended 30 June 2023.
REVIEW OF THE BUSINESS
Inspirit Energy Limited (IEL) continues to apply its expertise in the
application of the Stirling engine technology in different sectors including
Marine and Waste Heat Recovery.
The Company is also currently pursuing the development and commercialisation
of a world-leading micro-Combined Heat and Power ("mCHP") boiler for use in
commercial and residential markets. The mCHP boiler is powered by natural gas
or hydrogen and designed to produce hot water (for domestic hot water or
central heating) and a simultaneous electrical output that can be used locally
or fed back into the National Grid.
DEVELOPMENTS DURING THE YEAR
IEL has been working with its engineering partners on the fine details of the
new WHR for the application on the Volvo marine engine.
In addition, IEL successfully assembled and applied the first phase of the WHR
unit and with limited testing, the unit provided the highest recorded output
of over 97 kW in the first stage build test period. The WHR is a major
component in the application for the Volvo Marine engine and other heat
recovery applications the Company has been working on whereby waste heat
exhaust is recycled and converted to energy.
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE
The Director's believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006, as modified by the Companies ( Miscellaneous Reporting ) Regulations 2018 are outlined as follows:
a. Employee engagement
The quality, commitment and effectiveness of the Company's current and future employees are crucial to its continued success. Employee policies and programmes are designed to encourage employees to become interested in the Company's activities and to reward employees according to their contribution and capability and the Company's financial performance. Employee communications are a priority and regular briefings are used to disseminate relevant information.
Employment policies do not discriminate between employees or potential employees on the grounds of colour, race, ethnic or natural origin, sex, marital status, sexual orientation, religious beliefs or disability. If an employee were to become disabled whilst in employment and as a result was unable to perform his or her duties, every effort would be made to offer suitable alternative employment and assistance with retraining.
b. Suppliers and customers
The Company maintains an ongoing dialogue with its potential customers and
suppliers and the Company engages in supplier face-to-face meetings, email and
telephone conversations with directors and senior management of key suppliers.
When selecting suppliers and materials, issues such as the impact on the
community and the environment have actively been taken into consideration.
The Company pays its employees and creditors promptly and keeps its costs to a
minimum to protect shareholders' funds. The Executive Directors have agreed to
accrue their fees in this reporting period (note 5).
c. Shareholders and investors
The Company is quoted on AIM and its members will be fully aware, through
detailed announcements, shareholder meetings and financial communications, of
the Board's broad and specific intentions and the rationale for its decisions.
Other developments during the year:
On 8th December 2022, the Company announced that it entered into a
short-term, un-secured debt facility of up to US$250,000 (approximately
£205,075) (the "Facility"). Under the Facility Inspirit initially drew down
US$80,000 (approximately £65,624) (the "Initial Advance"). The Facility is
with Riverfort Global Opportunities PCC Limited, and the proceeds of the
advance are for general working capital.
The Facility has a 12-month term and allows Inspirit to draw down funds
("Advances") which will be repayable within 6 months in either cash or shares
at the Noteholders' discretion in respect of the Initial Advance and
thereafter at the agreement of the Company and Riverfort. If the debt is
repaid in shares, they will be repaid at 130% of the Reference Price being the
average of the five (5) daily VWAPs preceding the Drawdown Date in respect of
the relevant Advance (the "Fixed Premium Placing Price"). In the event that
Inspirit completes any share placing during the Term of the relevant Advance
and the share placing price is below the Fixed Premium Placing Price, the
Fixed Premium Placing Price will be amended to be the relevant share placing
price. Inspirit will issue the Noteholder with warrants in respect of each
Advance so as to represent 50% of the value of the relevant Advance, divided
by the relevant Reference Price; the warrants will have an exercise price of
Fixed Premium Placing Price and a 48-month term.
Inspirit drew down US$80,000 as the Initial Advance and issued Riverfort with
warrants to the value of 50% of the Initial Advance at the reference price of
0.03376 pence being 97,191,943 warrants. These warrants will have a term of 48
months and will be exercisable at 130% of the reference price being 0.04388
pence.
The Facility will attract 1.5% interest per month based on the value of the
outstanding indebtedness payable in cash and an implementation fee of 6% of
any Advances if settled in cash or 8% if issued in Shares. Accordingly,
inspirit will issued 15,550,710 Ordinary Shares of 0.001p each ("Shares") at a
price of 0.03376 pence each for the implementation fee in respect of the
Initial Advance (the "Initial Shares"). The Facility contains a right of first
refusal clause allowing Riverfort to match the terms of any alternative debt/
structured funding the Company may seek during the term of the Facility.
BOARD CHANGES
P Needley, Non-Executive Director was appointed on 13.2.23 and on the same
day, A Samaha stepped down from the board
RESULTS AND DIVIDENDS
The Group made a loss after taxation of £260,000 (2022: loss of £233,000)
and net assets as at 30 June 2023 were £2,402,000 (2022: £2,657,000).
The Directors do not propose a dividend for the year to 30 June 2023 (2022:
£nil).
KEY PERFORMANCE INDICATORS
The key performance indicators (KPI) used by the Board to monitor the
performance of the Group, are set out below:
PLC S 30 June 30 June
2023 2022
Net asset value £2,657,000
£2,402,000
Net asset value - fully diluted per share 0.056p 0.062p
Closing share price 0.026p 0.06p
Market capitalisation £1,114,670 £2,648,417
The Net asset value decreased but the Market capitalisation
increased during the reporting period. The closing share price was 0.026p
compared to 0.06p in 2022.
KEY RISKS AND UNCERTAINTIES
Early stage product development carries a high level of risk and uncertainty,
although the rewards can be outstanding. At this stage, there is a common
risk associated with all pioneering technologically advanced companies in
their requirement to continually invest in research and development. The Group
has already made significant investments in addressing opportunities in the
renewable energy sector.
Other risks and uncertainties within the Group are detailed in principle 4 of
the Corporate Governance Report.
GOING CONCERN RISK
The Group requires financing to fund its operations through to
commercialisation and the stage where it is profit generating and the Group
will seek to raise such funds via placings and short term debt finance. There
is the risk that the Group will not have access to sufficient funds to achieve
this. The Group seek to mitigate through forecast preparation, monitoring and
reducing discretionary costs.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The principal financial risk faced by the Group is liquidity risk. The Group's
financial instruments included borrowings and cash which it used to finance
its operations. At the year end, borrowings did not include any borrowings
supplied from the Group's principal bank, Barclays Bank Plc. More information
is given in Note 3 to the Financial Statements. The Group has no significant
concentrations of credit risk.
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are to safeguard the Group's and
Company's ability to continue its activities and bring its products to market.
Capital is defined based on the total equity of the Company. The Company
monitors its level of cash resources available against future planned
activities and may issue new shares in order to raise further funds from time
to time.
MANAGEMENT AND KEY PERSONNEL
The risk of high turnover of staff and other specialist staff recruitment
issues would have an impact on operation and reputation. The Board provides
recognition and support for well performing existing employees and has
implemented and monitors robust health and safety measures at the workplace.
TECHNOLOGY RISK
The Group's success is dependent on its technology and management's ability to
market it successfully. There is the risk that the technology could become
obsolete or a rival could develop an improved alternative. Management seek to
mitigate this by constantly seeking to improve the product, closing watching
its competitors and employing skilled personnel.
ASSESSMENT OF BUSINESS RISK
The Board regularly reviews operating and strategic risks. The Group's
operating procedures include a system for reporting financial and
non-financial information to the Board including:
· reports from management with a review of the business at each
Board meeting, focusing on any new decisions/risks arising;
· reports on the performance of its subsidiary;
· reports on selection criteria on the applications of its
technology;
· discussion with senior personnel; and
· consideration of reports prepared by third parties.
Details of other financial risks and their management are given in Note 3 to
the financial statements.
ON BEHALF OF THE BOARD
N Jagatia
Director
22 December 2023
REPORT OF THE DIRECTORSFOR THE YEAR ENDED 30 June 2023
The Directors present their annual report on the affairs of the Group and
Company, together with the audited financial statements for the year ended 30
June 2023.
PRINCIPAL ACTIVITIES
The principal activity of the Group and Company is that of development and
commercialisation of the mCHP boiler and application of the stirling
technology in other sectors such as marine, waste energy recycling and
automotive truck industries.
Details of the Group's principal activity can be found in the Strategic
Report.
GREENHOUSE GAS (GHG) EMISSIONS
The Group is aware that it needs to measure its operational carbon footprint
in order to limit and control its environmental impact. However, given the
very limited nature of its direct activities during the year under review, it
has not been practical to measure its carbon footprint.
The Group only measures the impact of its direct activities, as the full
impact of the entire supply chain
of its suppliers cannot be measured practically.
DIRECTORS
The Directors who held office in the period up to the date of approval of the
Financial Statements and their beneficial interests in the Company's issued
share capital at the beginning and end of the accounting year were:
**861,403,363 Ordinary Shares (direct 657,981,981 Ordinary Shares and indirect
via GIS 203,421,382 Ordinary Shares)
SIGNIFICANT SHAREHOLDERS
On 5th December 2023 the following were interested in 3 percent. or more of
the Company's share capital (including Directors, whose interests are also
shown above):
Number of ordinary shares % of ordinary share capital and voting rights
Name of shareholder
HARGREAVES LANSDOWN (NOMINEES) LIMITED 1,351,965,523 21.5%
HSBC GLOBAL CUSTODY NOMINEE (UK) LIMITED 1,180,307,919 18.8%
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED 762,814,287 12.1%
HSDL NOMINEES LIMITED 464,579,915 7.4%
VIDACOS NOMINEES LIMITED 536,898,690 8.5%
LAWSHARE NOMINEES LIMITED 426,964,621 6.8%
BARCLAYS DIRECT INVESTING NOMINEES LIMITED 309,818,565 4.9%
INDEMNITY OF OFFICERS
The Company maintains appropriate insurance cover against legal action brought
against its Directors and officers.
RESEARCH AND DEVELOPMENT
For details of the development activities undertaken in the year, please refer
to principle 1 of the Corporate Governance Report.
BOARD OF DIRECTORS
The Board is responsible for strategy and performance, approval of major
capital projects and the framework of internal controls. To enable the Board
to discharge its duties, all Directors receive appropriate and timely
information. All Directors have access to the advice and services of the
Company Secretary, who is responsible for ensuring the Board procedures are
followed and that applicable rules and regulations are complied with.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority. In addition to the
publication of an annual report and an interim report, there is regular
dialogue with shareholders and analysts. The Annual General Meeting is viewed
as a forum for communicating with shareholders, particularly private
investors. Shareholders may question the Executive Chairman and other members
of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's system of
internal control and for reviewing the effectiveness of these systems. The
risk management process and systems of internal control are designed to manage
rather than eliminate the risk of the Group failing to achieve its strategic
objectives. It should be recognised that such systems can only provide
reasonable and not absolute assurance against material misstatement or loss.
The Group has well established procedures which are considered adequate given
the size of the business.
MATTERS COVERED IN THE STRATEGIC REPORT
The business review, results, review of KPI's and future developments are
included in the Strategic Report and Chairman's Statement.
GOING CONCERN
As at 30 June 2023 the Group had a cash balance of £51,000 (2022: £160,000),
net current liabilities of £786,000 (2022: net current assets of £366,000)
and net assets of £2,402,000 (2022: £2,657,000). The Group has maintained
its core spend during the year whilst still managing to move its projects
forward and post year end secured a $250,000 loan facility and raised
£200,000 cash from a cash placing in November 2023. There can be no assurance
that the Group's projects will become fully developed and reach
commercialisation nor that there will be sufficient cash resources available
to the Group to do so.
The Directors have reviewed a detailed forecast based on the funds expected to
be raised and forecasted expenditure. Having made due and careful enquiry, the
Directors acknowledge that funds will need to be raised within the next 12
months to enable the Group to meets its obligations as they fall due, however,
the Directors are confident that the required funds will successfully be
raised through the issue of equity and/or debt to fund its operations over the
next 12 months.
The Directors, therefore, have made an informed judgement, at the time of
approving financial statements, that the Group is a going concern but they
acknowledge that the dependence on raising further funds during the next 12
months represents a material uncertainty. The Auditors have made reference to
going concern by way of a material uncertainty.
EVENTS AFTER THE REPORTING DATE
On 14th November 2023, the company announced that it has raised £200,000
through the placing (the "Placing") of 2,000,000,000 ordinary shares of 0.001
pence each in the share capital of the Company ("Ordinary Shares") at 0.01
pence per Ordinary Share (the "Placing Shares") and the proceeds of the
fundraise will be used for general working capital purposes.
John Gunn, the Company's Chairman and Chief Executive Officer participated in
the Placing by subscribing for 470,000,000 shares and Nilesh Jagatia, the
Company's Chief Financial Officer will be subscribing for 20,000,000
shares. After the Placing, John Gunn will directly and indirectly have a
holding of 1,331,403,363 Ordinary Shares representing an interest of
21.18% and, Nilesh Jagatia will have a holding of 64,857,142 Ordinary
Shares representing an interest of 1.03% of the enlarged share capital.
Following admission of the Placing Shares, the Company's enlarged issued share
capital will comprise 6,287,190,896 Ordinary Shares.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the directors have prepared the group and
parent company financial statements in accordance with UK-adopted
international accounting standards. Under company law the directors must not
approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the group and the parent company
and of the profit or loss of the group and the parent company for that period.
In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgments and accounting estimates that are reasonable and
prudent;
· state whether applicable UK-adopted international accounting
standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and the parent company
will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the group's and company's transactions and
disclose with reasonable accuracy at any time the financial position of the
group and the parent company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the group and the parent company and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions. The Company is compliant with AIM Rule 26 regarding the
Company's website. See www.inspirit-energy.com
(http://www.inspirit-energy.com) .
DISCLOSURE OF INFORMATION TO AUDITOR
In the case of each person who was a Director at the time this report was
approved:
· so far as that director is aware there is no relevant audit
information of which the Company's auditor is unaware; and
· that director has taken all steps that the director ought to
have taken as a director to make himself aware of any relevant audit
information and to establish that the Company's auditor is aware of that
information.
INDEPENDENT AUDITOR
A resolution that BBP Partnership be re-appointed will be proposed at the
annual general meeting. BBK Partnership have indicated their willingness to
continue in office.
ON BEHALF OF THE BOARD
N Jagatia
Director
22 December 2023
CORPORATE GOVERNANCE REPORT
Inspirit Energy Holdings plc
Quoted Companies Alliance Code ("QCA Code")
Principles: Application:
1) Strategy and business model to promote long-term values for This section complies with the requirements of the QCA Code.
shareholders
Inspirit Energy Holdings plc has maintained its focus on the application of
the Stirling engine in various sectors as well as progressing the
commercialisation efforts of the Group's micro combined heat and power
("mCHP") boilers and Waste Heat Recovery (WHR) applications. Inspirit achieved
a number of significant milestones including increasing the output of its WHR
to over 30kW.
These milestones continue to demonstrate strategic direction as an R&D
company in this niche sector. The operating Board has worked throughout to
identify differing potential applications for the technology where there is
significant potential for growth, as well as considering the future strategy
and funding of its operating subsidiary.
The Directors believe that the positive progress over the last year in the
alternative applications of the Stirling technology in the Marine and Waste
Heat Recovery (WHR) sectors is strong evidence of the need to refocus our
strategic objectives towards these areas. It should be noted that this is by
no means an abandonment of our MicroCHP boiler technology - on the contrary,
we are actively looking into the application of the technology in the rapidly
emerging hydrogen market. Additionally, with the continued growth demand for
electric cars, the Board will be looking at the automotive sector to utilise
the Stirling engine to provide a source of power to charge electric motor
cars.
The Group will also potentially make investments in complementary areas and
technologies that will utilise the Group's existing technical expertise.
This section complies with the requirements of the QCA Code.
2) Meeting and understanding shareholders needs and expectations
The Company has a close and ongoing relationship with its shareholders. The
Company also places great importance on effective and timely communication
with its shareholders. Shareholders are encouraged to attend the Company's
meetings (including the Annual General Meeting) to provide feedback and to
actively engage with the management on a regular basis. Furthermore, the
INSP's shareholders and investors can keep themselves updated about the
current Company's position by visiting the INSP's website
http://www.inspirit-energy.com (http://www.inspirit-energy.com/) .
This section complies with the requirements of the QCA Code.
3) Considering stakeholders and social responsibilities and their
implications for long term success
The Board recognises that the long-term success of the Group is reliant on
efforts of its employees, consultants, suppliers, regulators and stakeholders.
Employees: In order to support employees' growth and enforce social
responsibilities the Board has implemented systems to monitor and evaluate
employees' performance and to encourage well performing employees to progress
further by supporting them to attend courses. Employees' performance is
monitored through a process designed to encourage open and confidential
communication between the management and the employees on a regular basis.
Consultants: The Board recognises that consultants play a vital part for INSP
as they bring knowledge and expertise for specific areas, and in some
instances, they also provide training for existing staff.
Suppliers: INSP maintains a good working relationship with its suppliers to
provide for its growing business and to support its existing needs.
Regulators: The Board monitors and implements any legal or regulatory changes
where possible both domestically and overseas and is fully committed to
compliance.
Stakeholders: INSP encourages its shareholders to actively participate in
meetings and shareholders are provided with the opportunity to give feedback
on a regular basis.
This section complies with the requirements of the QCA Code.
4) Risk Management
The risks in the Group are managed by the audit committee which is responsible
to the Board to work closely with the executive directors to identify,
implement and manage risks faced by the Group.
INSP has robust controls and procedures in place to manage internal controls
of the Company and these are considered to be appropriate to the size and
complexity of the organisation. The audit committee has been set up to
evaluate and manage significant risks faced by the Group.
Control is established mainly through the Group's directors who monitor and
support the day to day running of the Group and where possible comply with the
Board's and shareholders concerns and requirements.
INSP has identified and implemented the following risks and controls to
mitigate risks:
Activity: Risk Impact Control(s)
Management High turnover of staff and other recruitment issues. Operational and reputational impact. Recognition and support for well performing existing employees.
Implementing and monitoring of robust health and safety measures at workplace.
Regulatory / legal adherence Non-compliance. Loss of licences resulting in inability to comply with the regulatory / legal Robust policies and procedures to be followed.
requirements.
Maintaining effective communication with the Company's Auditors and NOMAD on a
regular basis.
Strategic Failure of systems and controls. Loss of key data and inability to operate effectively. Disaster recovery policy to be followed in case of crisis.
Maintaining strong IT systems and controls in place.
Financial Internal: Inadequate systems and controls of accounting in place and Loss of business. The Board to regularly review operating and strategic risks.
liquidity risk.
Inability to continue trading as a going concern. The audit committee to provide adequate and sufficient information to the
Company's external auditors.
External:
Market and credit crisis;
Robust capital and liquidity levels in place alongside effective accounting
Short term liquidity freezes; systems and controls.
Commercialisation
Brexit.
Large proportion of the development work is successfully complete.
Covid 19
Diversification of suppliers and partners to meet delivery of activity.
Delays in activity internally and externally would lead to consumption of
working capital
Regulatory environment in domestic power market External: Potential to undermine microchip boiler product. Understanding regulatory environment and adapting system accordingly.
Changes in legislation regarding domestic power market.
Product Risk Internal: Potential for significant financial loss. Testing of product
Failure to develop commercial product. Certification.
Understanding of market place and competition.
The above matrix is kept up to date and regularly reviewed as changes arise in
order to mitigate risks.
5) Maintain the board as a well-functioning and balanced team led by the This section does not comply with the requirements of the QCA Code as the
chair board composition does not include a Non-Executive Chairman and two
Non-Executive Directors.
At the date of this publication the Board comprises of the Chairman (John
Gunn), the Chief Financial Officer (Nilesh Jagatia) and the independent
Non-Executive Director (Paul Needley). Further detail about the skills and
capabilities of these directors are set out in principle six below.
The letter of appointment of the Company's Directors and Secretary are
available for inspection at the Company's registered office and all directors
are subject to re-election at intervals of no more than three years.
The Board is responsible for strategy and performance of major capital
projects and the framework of internal controls. All directors have access to
seek independent advice should they feel that their knowledge of the given
task is insufficient. There is a clear balance between the executive director
and the non-executive director.
Furthermore, the directors liaise with the Company Secretary (Nilesh Jagatia),
who is responsible for compliance with the Board procedures and that
applicable rules and regulations are complied with.
The Board meets quarterly. The Board established the following committees;
Audit Committee and Remuneration Committee. All Directors are encouraged to
participate and attend meetings on a regular basis and the attendance is
closely monitored.
Despite the QCA recommendation of having two independent directors INSP has
opted to have only one non-executive director and a joint role of Chief
Executive Director and the Chairman as they feel that this is appropriate to
the current size and complexity of the organisation. INSP is still in the
R&D phase of its business cycle and therefore relies on a team of
consultants in developing the product. Following conclusion of this process,
certification is managed externally, and then commercial trials would
commence. As such the role of the Board, at this stage, is to oversee this
process, review strategy, hold high level discussions regarding possible
commercial trials and ensure adequate funding. As such, the current Board is
deemed sufficient. As and when the business develops beyond this stage the
Board will review its requirements at this stage. The Group is actively
looking to appoint an additional non-executive director to provide a balance
of the non-executive directors and executives as per the QCA.
6) Directors experience, skills and capabilities This section complies with the requirements of the QCA Code.
The Chairman: John Gunn
Mr Gunn is the founder of INSP and a 20.1% ( Direct and indirect) shareholder
of the Company. Mr Gunn is also the managing director and majority shareholder
of Global Investment Strategy UK Limited and a majority shareholder of
Octagonal Plc. With a career spanning over 30 years in the financial services
industry, Mr Gunn began his career in 1987 at Hoare Govett and has since
worked at Carr Sheppards Limited, Assicurazioni Generali S.p.A. and Williams
de Broe, where he was a senior investment manager until 2002.
Chief Financial Officer: Nilesh Jagatia
Mr Jagatia currently serves as Finance Director at INSP and also currently
holds the Finance Director position with a Financial Services group Octagonal
Ltd and AIM quoted Limitless Earth Plc (LME). Nilesh has been involved with
several IPO's and was previously Group Finance Director of an AIM quoted
Online Media and Publishing Company for a period of five years until July
2012. Nilesh has over 20 years' experience, including senior financial roles
in divisions of both Universal Music Group and Sanctuary Group plc. He served
as a Finance Director for an independent record label that expanded into the
US. Nilesh is a qualified accountant and holds a degree in finance.
Non-Executive Director: Anthony Samaha ( resigned 13.2.23)
Mr Samaha is a Chartered Accountant (Australia) who has over 20 years'
experience in accounting and corporate finance. Mr Samaha has worked for over
10 years with international accounting firms, including Ernst & Young,
principally in corporate finance, and mergers and acquisitions. He has
extensive experience in the listing and management of AIM quoted companies and
is currently Executive Director of AIM traded Reabold Resources Plc.
In addition to the Board directors above INSP uses Beaumont Cornish Limited as
their nominated adviser (NOMAD), Hill Dickinson LLP to assist with legal and
regulatory matters and FTB ITC Services Ltd to support the IT systems.
Non-Executive Director: Paul Needley ( Appointed 13.2.23)
Paul is an experienced Managing Director and Chartered Engineer with a proven
record of building a company based on strong values, reliability, and loyalty
to clients, employees and the gas, oil and renewable appliance industries in
which it operates. Paul is currently the Managing Director of Enertek
International Ltd ("Enertek"), one of the UK's largest independent engineering
R&D consultancies specialising in the design, development and
certification of energy consuming products. Enertek's clients include major
multinational corporations and government bodies, SME's, independent
organisations and sole traders. The company operates as an extension or
alternative to in-house R&D departments and specialises in the design for
manufacture, development and certification of products. The company operates
worldwide, hence Paul as a good insight into the feasibility, development,
commercialisation and productionisation of new products and technologies. Paul
is a Chartered Engineer, a Fellow of the Institution of Mechanical Engineers
and a Fellow of the Energy Institute.
7) Evaluation of the Board's performance This section complies with the requirements of the QCA Code.
INSP is fully committed to uphold Directors' independence and to regularly
evaluate their performance.
Where appropriate, INSP sets targets which the Directors have to adhere to.
Each Director is assigned with an individual target which is linked to the
corporate and financial targets of the Group. Career support, development and
training may also be provided to the Directors where necessary.
8) Promoting corporate culture, ethical values and behaviours This section complies with the requirements of the QCA Code.
INSP is committed to ethical conduct and to the governance structures that
ensure that the Group delivers long term value and earns the trust of its
shareholders. The shareholders are encouraged at General Meetings to express
their views and expectations in an open and respectful dialogue.
The Board is fully aware that their conduct impacts the corporate culture of
the Group as a whole and that this will impact the future performance of the
Group. The Directors are invited to provide an open comprehensive dialogue and
constructive feedback to the employees, and to promote ethical values and
behaviours within the Group.
INSP also believes that doing business honestly, ethically and with integrity
helps to build long-term, trusting relationship with our employees, customers,
suppliers and stakeholders. Our Code of business Conduct means that our
employees understand that we pride ourselves in high ethical standards. INSP
has zero tolerance for bribery and corruption among our employees.
9) Maintenance of governance structures and processes to support good This section complies with the requirements of the QCA Code.
decision making by the board
The Board is responsible for the ultimate decision making, the structures and
processes adopted by INSP. The Board is headed by the Chairman. In order to
comply with the Companies Act 2006 or QCA code the Board recognises that it
must comply with the following principles set out by the Act:
- duty to exercise independent judgement;
- duty to exercise reasonable care, skill and due diligence;
- duty to avoid conflicts of interest;
- duty not to accept benefits from third parties; and
- duty to declare interest in a proposed transaction or
arrangement.
The Chairman is responsible for leading the Board, sets the agenda and ensures
it is an effecting working group at the head of the Company. The Chairman is
also responsible for promoting a culture of openness and effective
communication with shareholders and to ensure that all board members receive
accurate, timely and clear information.
The Executive Directors are responsible for day to day running of the Company
and effective communications with the Board and the Shareholders. They
represent the Company to ensure quality of information provision, they
challenge and monitor performance of the teams, and they set business plans
and targets for the Company.
Non-Executive Director: INSP has one Non-Executive Director who is an
independent director. This is to reinforce the Group's commitment to a
transparent and effective governance structure which encourages and provides
ample opportunity for challenge and deliberation. The Non-Executive Director's
objective is to scrutinise the performance of the Board and senior management
as well as to monitor performance, agree goals and objectives. They will
satisfy themselves on the integrity of financial information and that
financial controls and systems of risk management are robust and fit for
purpose. The Non-Executive Director is also closely working with the
Remuneration Committee as they are responsible for determining appropriate
levels of remuneration of Executive Directors and have a prime role in
appointing / removing senior management.
The Company established the following committees to help with processes,
structures and support good decision making by the Board.
Audit Committee - The Audit Committee consists of Paul Needley and Nilesh
Jagatia. The Committee provides a forum for reporting by the Group's external
auditors. The committee is also responsible for reviewing a wider range of
matters, including half-year and annual results before their submission to the
board, as well as monitoring the controls that are in force to ensure the
integrity of information reported to shareholders. The Audit Committee will
advise the Board on the appointment of external auditors and on their
remuneration for both audit and non-audit work, and it will also discuss the
nature, scope and results of the audit with the external auditors. The
committee will keep under review the cost effectiveness, the independence and
objectivity of the external auditors.
Remuneration Committee - The Remuneration Committee consists of Paul Needley
and John Gunn. The Committee is responsible for making recommendations to the
Board, within agreed terms of reference, on the Company's framework of
executive remuneration and costs. The Remuneration Committee determines the
contract terms, remuneration and other benefits for the Executive Directors,
including performance related bonus schemes and compensation payments. The
Board itself determines the remuneration of the non-executive directors.
It is recognised that if the Group grows, it may be necessary to review the
current structure in order to provide better segregation of the
responsibilities and clear lines of reporting, that are consistent with
industry standards.
10) Shareholders communication This section complies with the requirements of the QCA Code.
The Company recognises that its shareholders are imperative for future growth
and prosperity of the Company. The Shareholders are treated equally both in
relation to participation at meetings and in the exercising of voting rights.
INSP's shareholders are encouraged to attend the annual general meetings and
the Company provides regulatory news updates and any other matters the Board
feels fit. The Company maintains the following website
https://www.inspirit-energy.com/investors
(https://www.inspirit-energy.com/investors) for investor relations.
The above matrix is kept up to date and regularly reviewed as changes arise in
order to mitigate risks.
5) Maintain the board as a well-functioning and balanced team led by the
chair
This section does not comply with the requirements of the QCA Code as the
board composition does not include a Non-Executive Chairman and two
Non-Executive Directors.
At the date of this publication the Board comprises of the Chairman (John
Gunn), the Chief Financial Officer (Nilesh Jagatia) and the independent
Non-Executive Director (Paul Needley). Further detail about the skills and
capabilities of these directors are set out in principle six below.
The letter of appointment of the Company's Directors and Secretary are
available for inspection at the Company's registered office and all directors
are subject to re-election at intervals of no more than three years.
The Board is responsible for strategy and performance of major capital
projects and the framework of internal controls. All directors have access to
seek independent advice should they feel that their knowledge of the given
task is insufficient. There is a clear balance between the executive director
and the non-executive director.
Furthermore, the directors liaise with the Company Secretary (Nilesh Jagatia),
who is responsible for compliance with the Board procedures and that
applicable rules and regulations are complied with.
The Board meets quarterly. The Board established the following committees;
Audit Committee and Remuneration Committee. All Directors are encouraged to
participate and attend meetings on a regular basis and the attendance is
closely monitored.
Despite the QCA recommendation of having two independent directors INSP has
opted to have only one non-executive director and a joint role of Chief
Executive Director and the Chairman as they feel that this is appropriate to
the current size and complexity of the organisation. INSP is still in the
R&D phase of its business cycle and therefore relies on a team of
consultants in developing the product. Following conclusion of this process,
certification is managed externally, and then commercial trials would
commence. As such the role of the Board, at this stage, is to oversee this
process, review strategy, hold high level discussions regarding possible
commercial trials and ensure adequate funding. As such, the current Board is
deemed sufficient. As and when the business develops beyond this stage the
Board will review its requirements at this stage. The Group is actively
looking to appoint an additional non-executive director to provide a balance
of the non-executive directors and executives as per the QCA.
6) Directors experience, skills and capabilities
This section complies with the requirements of the QCA Code.
The Chairman: John Gunn
Mr Gunn is the founder of INSP and a 20.1% ( Direct and indirect) shareholder
of the Company. Mr Gunn is also the managing director and majority shareholder
of Global Investment Strategy UK Limited and a majority shareholder of
Octagonal Plc. With a career spanning over 30 years in the financial services
industry, Mr Gunn began his career in 1987 at Hoare Govett and has since
worked at Carr Sheppards Limited, Assicurazioni Generali S.p.A. and Williams
de Broe, where he was a senior investment manager until 2002.
Chief Financial Officer: Nilesh Jagatia
Mr Jagatia currently serves as Finance Director at INSP and also currently
holds the Finance Director position with a Financial Services group Octagonal
Ltd and AIM quoted Limitless Earth Plc (LME). Nilesh has been involved with
several IPO's and was previously Group Finance Director of an AIM quoted
Online Media and Publishing Company for a period of five years until July
2012. Nilesh has over 20 years' experience, including senior financial roles
in divisions of both Universal Music Group and Sanctuary Group plc. He served
as a Finance Director for an independent record label that expanded into the
US. Nilesh is a qualified accountant and holds a degree in finance.
Non-Executive Director: Anthony Samaha ( resigned 13.2.23)
Mr Samaha is a Chartered Accountant (Australia) who has over 20 years'
experience in accounting and corporate finance. Mr Samaha has worked for over
10 years with international accounting firms, including Ernst & Young,
principally in corporate finance, and mergers and acquisitions. He has
extensive experience in the listing and management of AIM quoted companies and
is currently Executive Director of AIM traded Reabold Resources Plc.
In addition to the Board directors above INSP uses Beaumont Cornish Limited as
their nominated adviser (NOMAD), Hill Dickinson LLP to assist with legal and
regulatory matters and FTB ITC Services Ltd to support the IT systems.
Non-Executive Director: Paul Needley ( Appointed 13.2.23)
Paul is an experienced Managing Director and Chartered Engineer with a proven
record of building a company based on strong values, reliability, and loyalty
to clients, employees and the gas, oil and renewable appliance industries in
which it operates. Paul is currently the Managing Director of Enertek
International Ltd ("Enertek"), one of the UK's largest independent engineering
R&D consultancies specialising in the design, development and
certification of energy consuming products. Enertek's clients include major
multinational corporations and government bodies, SME's, independent
organisations and sole traders. The company operates as an extension or
alternative to in-house R&D departments and specialises in the design for
manufacture, development and certification of products. The company operates
worldwide, hence Paul as a good insight into the feasibility, development,
commercialisation and productionisation of new products and technologies. Paul
is a Chartered Engineer, a Fellow of the Institution of Mechanical Engineers
and a Fellow of the Energy Institute.
7) Evaluation of the Board's performance
This section complies with the requirements of the QCA Code.
INSP is fully committed to uphold Directors' independence and to regularly
evaluate their performance.
Where appropriate, INSP sets targets which the Directors have to adhere to.
Each Director is assigned with an individual target which is linked to the
corporate and financial targets of the Group. Career support, development and
training may also be provided to the Directors where necessary.
8) Promoting corporate culture, ethical values and behaviours
This section complies with the requirements of the QCA Code.
INSP is committed to ethical conduct and to the governance structures that
ensure that the Group delivers long term value and earns the trust of its
shareholders. The shareholders are encouraged at General Meetings to express
their views and expectations in an open and respectful dialogue.
The Board is fully aware that their conduct impacts the corporate culture of
the Group as a whole and that this will impact the future performance of the
Group. The Directors are invited to provide an open comprehensive dialogue and
constructive feedback to the employees, and to promote ethical values and
behaviours within the Group.
INSP also believes that doing business honestly, ethically and with integrity
helps to build long-term, trusting relationship with our employees, customers,
suppliers and stakeholders. Our Code of business Conduct means that our
employees understand that we pride ourselves in high ethical standards. INSP
has zero tolerance for bribery and corruption among our employees.
9) Maintenance of governance structures and processes to support good
decision making by the board
This section complies with the requirements of the QCA Code.
The Board is responsible for the ultimate decision making, the structures and
processes adopted by INSP. The Board is headed by the Chairman. In order to
comply with the Companies Act 2006 or QCA code the Board recognises that it
must comply with the following principles set out by the Act:
- duty to exercise independent judgement;
- duty to exercise reasonable care, skill and due diligence;
- duty to avoid conflicts of interest;
- duty not to accept benefits from third parties; and
- duty to declare interest in a proposed transaction or
arrangement.
The Chairman is responsible for leading the Board, sets the agenda and ensures
it is an effecting working group at the head of the Company. The Chairman is
also responsible for promoting a culture of openness and effective
communication with shareholders and to ensure that all board members receive
accurate, timely and clear information.
The Executive Directors are responsible for day to day running of the Company
and effective communications with the Board and the Shareholders. They
represent the Company to ensure quality of information provision, they
challenge and monitor performance of the teams, and they set business plans
and targets for the Company.
Non-Executive Director: INSP has one Non-Executive Director who is an
independent director. This is to reinforce the Group's commitment to a
transparent and effective governance structure which encourages and provides
ample opportunity for challenge and deliberation. The Non-Executive Director's
objective is to scrutinise the performance of the Board and senior management
as well as to monitor performance, agree goals and objectives. They will
satisfy themselves on the integrity of financial information and that
financial controls and systems of risk management are robust and fit for
purpose. The Non-Executive Director is also closely working with the
Remuneration Committee as they are responsible for determining appropriate
levels of remuneration of Executive Directors and have a prime role in
appointing / removing senior management.
The Company established the following committees to help with processes,
structures and support good decision making by the Board.
Audit Committee - The Audit Committee consists of Paul Needley and Nilesh
Jagatia. The Committee provides a forum for reporting by the Group's external
auditors. The committee is also responsible for reviewing a wider range of
matters, including half-year and annual results before their submission to the
board, as well as monitoring the controls that are in force to ensure the
integrity of information reported to shareholders. The Audit Committee will
advise the Board on the appointment of external auditors and on their
remuneration for both audit and non-audit work, and it will also discuss the
nature, scope and results of the audit with the external auditors. The
committee will keep under review the cost effectiveness, the independence and
objectivity of the external auditors.
Remuneration Committee - The Remuneration Committee consists of Paul Needley
and John Gunn. The Committee is responsible for making recommendations to the
Board, within agreed terms of reference, on the Company's framework of
executive remuneration and costs. The Remuneration Committee determines the
contract terms, remuneration and other benefits for the Executive Directors,
including performance related bonus schemes and compensation payments. The
Board itself determines the remuneration of the non-executive directors.
It is recognised that if the Group grows, it may be necessary to review the
current structure in order to provide better segregation of the
responsibilities and clear lines of reporting, that are consistent with
industry standards.
10) Shareholders communication
This section complies with the requirements of the QCA Code.
The Company recognises that its shareholders are imperative for future growth
and prosperity of the Company. The Shareholders are treated equally both in
relation to participation at meetings and in the exercising of voting rights.
INSP's shareholders are encouraged to attend the annual general meetings and
the Company provides regulatory news updates and any other matters the Board
feels fit. The Company maintains the following website
https://www.inspirit-energy.com/investors
(https://www.inspirit-energy.com/investors) for investor relations.
The above matrix is kept up to date and regularly reviewed as changes arise in
order to mitigate risks.
5) Maintain the board as a well-functioning and balanced team led by the
chair
This section does not comply with the requirements of the QCA Code as the
board composition does not include a Non-Executive Chairman and two
Non-Executive Directors.
At the date of this publication the Board comprises of the Chairman (John
Gunn), the Chief Financial Officer (Nilesh Jagatia) and the independent
Non-Executive Director (Paul Needley). Further detail about the skills and
capabilities of these directors are set out in principle six below.
The letter of appointment of the Company's Directors and Secretary are
available for inspection at the Company's registered office and all directors
are subject to re-election at intervals of no more than three years.
The Board is responsible for strategy and performance of major capital
projects and the framework of internal controls. All directors have access to
seek independent advice should they feel that their knowledge of the given
task is insufficient. There is a clear balance between the executive director
and the non-executive director.
Furthermore, the directors liaise with the Company Secretary (Nilesh Jagatia),
who is responsible for compliance with the Board procedures and that
applicable rules and regulations are complied with.
The Board meets quarterly. The Board established the following committees;
Audit Committee and Remuneration Committee. All Directors are encouraged to
participate and attend meetings on a regular basis and the attendance is
closely monitored.
Despite the QCA recommendation of having two independent directors INSP has
opted to have only one non-executive director and a joint role of Chief
Executive Director and the Chairman as they feel that this is appropriate to
the current size and complexity of the organisation. INSP is still in the
R&D phase of its business cycle and therefore relies on a team of
consultants in developing the product. Following conclusion of this process,
certification is managed externally, and then commercial trials would
commence. As such the role of the Board, at this stage, is to oversee this
process, review strategy, hold high level discussions regarding possible
commercial trials and ensure adequate funding. As such, the current Board is
deemed sufficient. As and when the business develops beyond this stage the
Board will review its requirements at this stage. The Group is actively
looking to appoint an additional non-executive director to provide a balance
of the non-executive directors and executives as per the QCA.
6) Directors experience, skills and capabilities
This section complies with the requirements of the QCA Code.
The Chairman: John Gunn
Mr Gunn is the founder of INSP and a 20.1% ( Direct and indirect) shareholder
of the Company. Mr Gunn is also the managing director and majority shareholder
of Global Investment Strategy UK Limited and a majority shareholder of
Octagonal Plc. With a career spanning over 30 years in the financial services
industry, Mr Gunn began his career in 1987 at Hoare Govett and has since
worked at Carr Sheppards Limited, Assicurazioni Generali S.p.A. and Williams
de Broe, where he was a senior investment manager until 2002.
Chief Financial Officer: Nilesh Jagatia
Mr Jagatia currently serves as Finance Director at INSP and also currently
holds the Finance Director position with a Financial Services group Octagonal
Ltd and AIM quoted Limitless Earth Plc (LME). Nilesh has been involved with
several IPO's and was previously Group Finance Director of an AIM quoted
Online Media and Publishing Company for a period of five years until July
2012. Nilesh has over 20 years' experience, including senior financial roles
in divisions of both Universal Music Group and Sanctuary Group plc. He served
as a Finance Director for an independent record label that expanded into the
US. Nilesh is a qualified accountant and holds a degree in finance.
Non-Executive Director: Anthony Samaha ( resigned 13.2.23)
Mr Samaha is a Chartered Accountant (Australia) who has over 20 years'
experience in accounting and corporate finance. Mr Samaha has worked for over
10 years with international accounting firms, including Ernst & Young,
principally in corporate finance, and mergers and acquisitions. He has
extensive experience in the listing and management of AIM quoted companies and
is currently Executive Director of AIM traded Reabold Resources Plc.
In addition to the Board directors above INSP uses Beaumont Cornish Limited as
their nominated adviser (NOMAD), Hill Dickinson LLP to assist with legal and
regulatory matters and FTB ITC Services Ltd to support the IT systems.
Non-Executive Director: Paul Needley ( Appointed 13.2.23)
Paul is an experienced Managing Director and Chartered Engineer with a proven
record of building a company based on strong values, reliability, and loyalty
to clients, employees and the gas, oil and renewable appliance industries in
which it operates. Paul is currently the Managing Director of Enertek
International Ltd ("Enertek"), one of the UK's largest independent engineering
R&D consultancies specialising in the design, development and
certification of energy consuming products. Enertek's clients include major
multinational corporations and government bodies, SME's, independent
organisations and sole traders. The company operates as an extension or
alternative to in-house R&D departments and specialises in the design for
manufacture, development and certification of products. The company operates
worldwide, hence Paul as a good insight into the feasibility, development,
commercialisation and productionisation of new products and technologies. Paul
is a Chartered Engineer, a Fellow of the Institution of Mechanical Engineers
and a Fellow of the Energy Institute.
7) Evaluation of the Board's performance
This section complies with the requirements of the QCA Code.
INSP is fully committed to uphold Directors' independence and to regularly
evaluate their performance.
Where appropriate, INSP sets targets which the Directors have to adhere to.
Each Director is assigned with an individual target which is linked to the
corporate and financial targets of the Group. Career support, development and
training may also be provided to the Directors where necessary.
8) Promoting corporate culture, ethical values and behaviours
This section complies with the requirements of the QCA Code.
INSP is committed to ethical conduct and to the governance structures that
ensure that the Group delivers long term value and earns the trust of its
shareholders. The shareholders are encouraged at General Meetings to express
their views and expectations in an open and respectful dialogue.
The Board is fully aware that their conduct impacts the corporate culture of
the Group as a whole and that this will impact the future performance of the
Group. The Directors are invited to provide an open comprehensive dialogue and
constructive feedback to the employees, and to promote ethical values and
behaviours within the Group.
INSP also believes that doing business honestly, ethically and with integrity
helps to build long-term, trusting relationship with our employees, customers,
suppliers and stakeholders. Our Code of business Conduct means that our
employees understand that we pride ourselves in high ethical standards. INSP
has zero tolerance for bribery and corruption among our employees.
9) Maintenance of governance structures and processes to support good
decision making by the board
This section complies with the requirements of the QCA Code.
The Board is responsible for the ultimate decision making, the structures and
processes adopted by INSP. The Board is headed by the Chairman. In order to
comply with the Companies Act 2006 or QCA code the Board recognises that it
must comply with the following principles set out by the Act:
- duty to exercise independent judgement;
- duty to exercise reasonable care, skill and due diligence;
- duty to avoid conflicts of interest;
- duty not to accept benefits from third parties; and
- duty to declare interest in a proposed transaction or
arrangement.
The Chairman is responsible for leading the Board, sets the agenda and ensures
it is an effecting working group at the head of the Company. The Chairman is
also responsible for promoting a culture of openness and effective
communication with shareholders and to ensure that all board members receive
accurate, timely and clear information.
The Executive Directors are responsible for day to day running of the Company
and effective communications with the Board and the Shareholders. They
represent the Company to ensure quality of information provision, they
challenge and monitor performance of the teams, and they set business plans
and targets for the Company.
Non-Executive Director: INSP has one Non-Executive Director who is an
independent director. This is to reinforce the Group's commitment to a
transparent and effective governance structure which encourages and provides
ample opportunity for challenge and deliberation. The Non-Executive Director's
objective is to scrutinise the performance of the Board and senior management
as well as to monitor performance, agree goals and objectives. They will
satisfy themselves on the integrity of financial information and that
financial controls and systems of risk management are robust and fit for
purpose. The Non-Executive Director is also closely working with the
Remuneration Committee as they are responsible for determining appropriate
levels of remuneration of Executive Directors and have a prime role in
appointing / removing senior management.
The Company established the following committees to help with processes,
structures and support good decision making by the Board.
Audit Committee - The Audit Committee consists of Paul Needley and Nilesh
Jagatia. The Committee provides a forum for reporting by the Group's external
auditors. The committee is also responsible for reviewing a wider range of
matters, including half-year and annual results before their submission to the
board, as well as monitoring the controls that are in force to ensure the
integrity of information reported to shareholders. The Audit Committee will
advise the Board on the appointment of external auditors and on their
remuneration for both audit and non-audit work, and it will also discuss the
nature, scope and results of the audit with the external auditors. The
committee will keep under review the cost effectiveness, the independence and
objectivity of the external auditors.
Remuneration Committee - The Remuneration Committee consists of Paul Needley
and John Gunn. The Committee is responsible for making recommendations to the
Board, within agreed terms of reference, on the Company's framework of
executive remuneration and costs. The Remuneration Committee determines the
contract terms, remuneration and other benefits for the Executive Directors,
including performance related bonus schemes and compensation payments. The
Board itself determines the remuneration of the non-executive directors.
It is recognised that if the Group grows, it may be necessary to review the
current structure in order to provide better segregation of the
responsibilities and clear lines of reporting, that are consistent with
industry standards.
10) Shareholders communication
This section complies with the requirements of the QCA Code.
The Company recognises that its shareholders are imperative for future growth
and prosperity of the Company. The Shareholders are treated equally both in
relation to participation at meetings and in the exercising of voting rights.
INSP's shareholders are encouraged to attend the annual general meetings and
the Company provides regulatory news updates and any other matters the Board
feels fit. The Company maintains the following website
https://www.inspirit-energy.com/investors
(https://www.inspirit-energy.com/investors) for investor relations.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF INSPIRIT ENERGY HOLDINGS PLC
FOR THE YEAR ENDED 30 June 2023
Opinion
We have audited the financial statements of Inspirit Energy Holdings Plc (the
'parent company') and its subsidiaries (the 'group') for the year ended 30
June 2023 which comprise the Consolidated Statement of Comprehensive Income,
the Consolidated and Company Statements of Financial Position, the
Consolidated and Company Statements of Changes in Equity, the Consolidated and
Company Statements of Cash Flows and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK-adopted
international accounting standards and as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act
2006.
In our opinion:
· the financial statements give a true and fair view of the state
of the group's and of the parent company's affairs as at 30 June 2023 and of
the group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that
the group incurred a loss of £260k during the year ended 30 June 2023, the
group's current liabilities exceeded its current assets by £786k at that date
and that the group and company are reliant on raising further finance in the
next 12 months in order to fund forecasted expenditure over this period. As
stated in note 2, these events or conditions, along with the other matters as
set forth in note 2, indicate that a material uncertainty exists that may cast
significant doubt on the company's ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the company's ability to continue to adopt the going concern
basis of accounting included reviewing and challenging cashflow forecasts, and
related key assumptions, prepared by management covering the going concern
period, discussing their strategies regarding future fund raises and assessing
the likelihood of the required funds being successfully raised by considering
the funds required and the group and company's ability to raise such funds.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The
quantitative and qualitative thresholds for materiality determine the scope of
our audit and the nature, timing and extent of our audit procedures. We also
determine a level of performance materiality which we use to assess the extent
of testing needed to reduce to an appropriately low level the probability that
the aggregate of uncorrected and undetected misstatements exceeds materiality
for the financial statements as a whole. In determining our overall audit
strategy, we assessed the level of uncorrected misstatements that would be
material for the financial statements as a whole.
Materiality for the consolidated financial statements was set as £66,000
(2022: £79,000) based upon net assets. Materiality has been based upon net
assets which we determined, in our professional judgement, to be the key
principal benchmark relevant to members of the parent company in assessing the
financial performance of the group due to the number of risks identified
relating to assets within the Consolidated Statement of Financial Position and
the relative size of gross assets, liabilities and equity compared to the
Consolidated Statement of Comprehensive Income. Performance materiality and
the triviality threshold for the consolidated financial statements was set at
£50,000 (2022: £63,200) and £1,000 (2022: £3,950) respectively given our
accumulated knowledge of the group, the number of risks identified and the
assessed risk level.
Materiality for the parent company was set as £50,000 (2022: £64,000) based
upon net assets. Net assets was considered to be an appropriate basis due to
the fact that the parent company is non-revenue earning and holds significant
material balances through investments in its subsidiaries and other assets and
cash held. Performance materiality and the triviality threshold for the parent
company was set at £37,000 (2022: £51,200) and £1,000 (2022: £3,200)
respectively given our accumulated knowledge of the group, the number of risks
identified and the assessed risk level.
We also agreed to report any other differences below that threshold that we
believe warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. In particular we looked at
areas involving significant accounting estimates and judgements by the
directors and considered future events that are inherently uncertain, such as
the recoverable value of the capitalised development costs. We also addressed
the risk of management override of internal controls, including among other
matters consideration of whether there was evidence of bias that represented a
risk of material misstatement due to fraud.
A full scope audit was performed on the complete financial information of both
components of the group.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section we
have determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Carrying value of Intangible Assets
Carrying value of intangible assets of £3.1m (2022: £3m). Refer to Note 4: Our work in this area included:
Critical Accounting Estimates.
· Obtaining management's assessment of impairment and reviewing and
challenging the key estimates and judgements used therein;
Intangible Assets is the largest asset within the financial statements and · Performing sensitivity analysis on the key areas of
represents the asset (development of its Stirling technology) from which, if estimation/judgement and verifying to supporting documentation where possible
successful, the group will generate revenue. including benchmarking against companies in the same industry;
· Substantive testing of the additions to intangible assets to
ensure they are eligible to be capitalised under IAS 38; and
There is a risk that the development costs capitalised during the year do not
meet the recognition criteria of IAS 38 Intangible Assets. · Reviewing disclosures in the financial statements to ensure
compliance with IFRS.
Since the Group are still in the process of developing their technology and
have not yet begun generating revenue from said technology, there is also the The positive developments in the year with respect to the application of the
risk that the carrying value of the intangible asset is impaired. Stirling technology to the marine industry demonstrated the commercial
potential of Inspirit's technology and thus indicate that the capitalised
development costs as at 30 June 2023 are materially recoverable.
Successful commercialisation of the group's Stirling technology is reliant on
project completion, the availability of sufficient funds (see the "Material
uncertainty related to going concern" section above for our conclusion in
respect of the directors' use of the going concern basis of accounting in the
preparation of the financial statements) and the required regulatory approvals
being obtained. It is drawn to the users' attention that none of these matters
are certain. Failure to achieve the above may result in an impairment to the
assets capitalised.
Carrying Value of Investment in Subsidiaries
Carrying value of investment in subsidiaries of £2.4m (2022: £2.4m). Refer Our work in this area included:
to Note 4: Critical Accounting Estimates.
· Obtaining the directors' assessment of impairment and reviewing
and challenging the key estimates and judgements used therein; and
Investments in subsidiaries is the largest asset within the Parent Company's · Performing sensitivity analysis on the key areas of
Statement of Financial Position and represents its investment in the estimation/judgement and verifying to supporting documentation where possible
subsidiary whose principal activity is the development of its Stirling including benchmarking against companies in the same industry.
technology from which, if successful, the group will generate revenue.
The positive developments in the year with respect to the application of the
There is the risk that the carrying value of the investment in subsidiary is Stirling technology to the marine industries demonstrated the commercial
impaired since the subsidiary is loss making and has yet to become revenue potential of Inspirit's technology and thus indicate that the investment in
generating. the subsidiary, the entity conducting said development, as at 30 June 2023 is
materially recoverable.
Successful commercialisation of the group's Stirling technology is reliant on
project completion, the availability of sufficient funds (see the "Material
uncertainty related to going concern" section above for our conclusion in
respect of the directors' use of the going concern basis of accounting in the
preparation of the financial statements) and the required regulatory approvals
being obtained. It is drawn to the users' attention that none of these matters
is certain. Failure to achieve the above may result in an impairment to the
carrying value of investments.
Other Matter
The financial statements of Inspirit Energy Holdings plc for the period ended
30 June 2022, were audited by another auditor who expressed an unmodified
opinion on those statements on 05 January 2023
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group and the parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
Our approach to identifying and assessing the risks of material misstatement
in respect of irregularities, including fraud and non-compliance with laws and
regulations, was as follows:
· the engagement partner ensured that the engagement team
collectively had the appropriate competence, capabilities and skills to
identify or recognise non-compliance with applicable laws and regulations;
· we identified the laws and regulations applicable to the company
through discussions with directors and other management, and from our
commercial knowledge and experience of the company's operating sector;
· we focused on specific laws and regulations which we considered
may have a direct material effect on the financial statements or the
operations of the group and the company, including the Companies Act 2006,
taxation legislation and data protection, anti-bribery, employment,
environmental and health and safety legislation;
· we assessed the extent of compliance with the laws and
regulations identified above through making enquiries of management and
inspecting legal correspondence; and
· identified laws and regulations were communicated within the
audit team regularly and the team remained alert to instances of
non-compliance throughout the audit.
We assessed the susceptibility of the group's and the company's financial
statements to material misstatement, including obtaining an understanding of
how fraud might occur, by:
· making enquiries of management as to where they considered there
was susceptibility to fraud, their knowledge of actual, suspected and alleged
fraud; and
· considering the internal controls in place to mitigate risks of
fraud and non-compliance with laws and regulations
To address the risk of fraud through management bias and override of controls,
we:
· performed analytical procedures to identify any unusual or
unexpected relationships;
· tested journal entries to identify unusual transactions;
· assessed whether judgements and assumptions made in determining
the accounting estimates set out in the financial statements were indicative
of potential bias; and
· investigated the rationale behind significant or unusual
transactions.
In response to the risk of irregularities and non-compliance with laws and
regulations, we designed procedures which included, but were not limited to:
· agreeing financial statement disclosures to underlying supporting
documentation;
· reading the minutes of meetings of those charged with governance;
· enquiring of management as to actual and potential litigation and
claims; and
· reviewing correspondence with HMRC, relevant regulators including
the Health and Safety Executive, and the company's legal advisors.
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
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Suraj Shah BFP ACA FCCA (Senior Statutory Auditor)
for and on behalf of BBK Partnership
Chartered Accountants
& Statutory Auditors
1 Beauchamp Court
10 Victors Way
Barnet
Hertfordshire
EN5 5TZ
Date: .............................................
GROUP STATEMENT OF COMPREHENSIVE INCOME FOR
THE YEAR ENDED 30 JUNE 2023
2023 2022
Note £'000 £'000
CONTINUING OPERATIONS:
Administrative expenses 7 (303) (329)
OPERATING LOSS (303) (329)
LOSS BEFORE INCOME TAX (303) (329)
Income tax credit 8 43 96
NET LOSS AND TOTAL COMPREHENSIVE INCOME LOSS FOR THE YEAR ATTRIBUTABLE TO THE (260) (233)
OWNERS OF THE PARENT
EARNINGS PER SHARE
- Basic and diluted earnings per share 9 (0.006p) (0.005p)
(attributable to owners of the parent)
STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2023
GROUP COMPANY
2023 2022 2023 2022
Note £'000 £'000 £'000 £'000
NON-CURRENT ASSETS
Intangible assets 10 3,167 2,998 - -
Property, plant and equipment 11 21 25 1 1
Investment in subsidiaries 12 - - 2,440 2,440
3,188 3,023 2,441 2,441
CURRENT ASSETS
Trade and other receivables 13 52 107 5 6
Cash and cash equivalents 14 51 160 - 158
103 267 5 164
TOTAL ASSETS 3,291 3,290 2,446 2,605
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
Share capital 15 2,104 2,103 2,104 2,103
Share premium 15 9,787 9,783 9,787 9,783
Merger reserve 3,150 3,150 3,150 3,150
Other reserves 3 3 3 3
Reverse acquisition reserve (7,361) (7,361) - -
Retained losses (5,281) (5,021) (13,439) (12,994)
TOTAL EQUITY 2,402 2,657 1,605 2,045
CURRENT LIABILITIES
Trade and other payables 17 726 533 676 460
Borrowings 18 163 100 163 100
889 633 840 560
TOTAL LIABILITIES 889 633 840 560
TOTAL EQUITY AND LIABILITIES 3,291 3,290 2,445 2,605
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 not to present the Parent Company Statement of
Comprehensive Income.
The loss for the Parent Company for the year was £444,642 (2022: loss of
£531,000).
These Financial Statements were approved by the Board of Directors on 22
December 2023 and were signed on its behalf by
N Jagatia
Director
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to the owners of the parent
Share capital Share premium Other reserves Merger reserve Reverse acquisition reserve Retained losses Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
BALANCE AT 30 June 2021 2,103 9,783 3 3,150 (7,361) (4,788) 2,890
Loss for the year - - - - - (233) (233)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - - (233) (233)
BALANCE AT 30 June 2022 2,103 9,783 3 3,150 (7,361) (5,021) 2,657
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - - (260) (260)
Share issues 1 4 - - - - 5
TRANSACTIONS WITH OWNERS RECOGNISED DIRECTLY IN EQUITY 1 4 - - - - 5
BALANCE AT 30 June 2023 2,104 9,787 3 3,150 (7,361) (5,281) 2,402
COMPANY STATEMENT OF CHANGES IN EQUITY
Attributable to equity shareholders
Share capital Share premium Merger Reserve Other reserves Retained losses Total Equity
£'000 £'000 £'000 £'000 £'000
BALANCE AT 30 June 2021 2,103 9,783 3,150 3 (12,463) 2,576
Loss for the year - - - - (531) (531)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - (531) (531)
BALANCE AT 30 June 2022 2,103 9,783 3,150 3 (12,994) 2,045
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - (445) (445)
Share issue costs 1 4 - - 5
TRANSACTIONS WITH OWNERS RECOGNISED DIRECTLY IN EQUITY 1 4 - - - 5
BALANCE AT 30 June 2023 2,104 9,787 3,150 3 (13,439) 1,605
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2023
GROUP GROUP COMPANY COMPANY
2023 2022 2023 2022
Note £'000 £'000 £'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss after tax (260) (233) (445) (531)
Depreciation 4 5 - -
Interco loan provision - - 211 258
Tax credit (43) (96) - -
Decrease/(increase) in trade and other receivables 55 3 2 2
Increase in trade and other payables 193 121 217 133
Tax received 43 24 - -
NET CASH USED IN OPERATING ACTIVITIES (8) (176) (16) (138)
CASH FLOWS FROM INVESTING ACTIVITIES
Development costs (169) (225) - -
Purchase of tangible fixed assets - - - -
Increase in loan to subsidiary - - (211) (258)
NET CASH USED IN INVESTING ACTIVITIES (169) (225) (211) (258)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in debt 63 63
Share issued for financing 5 - 5 -
NET CASH GENERATED FROM FINANCING ACTIVITIES 68 - 68 -
NET INCREASE IN CASH AND CASH EQUIVALENTS (109) (401) (158) (396)
Cash and cash equivalents at the beginning of the year 160 561 158 554
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 14 51 160 (0) 158
1 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
GENERAL INFORMATION
The principal activity of Inspirit Energy Holdings plc during the period was
that of developing and commercialising the mCHP boiler and in the prior year
started to refocus its expertise in the application of the Stirling engine
technology in different sectors including Marine and Waste Heat Recovery.
These financial statements show the consolidated results of the Group for the
year ended 30 June 2023 together with the comparative results for the year
ended 30 June 2022.
Inspirit Energy Holdings plc is a company incorporated and domiciled in
England and Wales and quoted on the Alternative Investment Market of the
London Stock Exchange. The address of its registered office is 200 Aldersgate
Street, London, EC1A 4HD.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with UK-adopted
International Accounting Standards and with the Companies Act 2006 applicable
to companies reporting under IFRS.
The financial statements have been prepared under the historical cost
convention and are presented in GBP Pound Sterling, rounded to the nearest
£1,000.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's and Company's
accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the
financial statements are disclosed in Note 4.
GOING CONCERN
As at 30 June 2023 the Group had a cash balance of £51,000 (2022: £160,000),
net current liabilities of £786,000 (2022: net current assets of £366,000)
and net assets of £2,402,000 (2022: £2,657,000). The Group has maintained
its core spend during the year whilst still managing to move its projects
forward and post year end secured a $250,000 loan facility and raised
£200,000 cash from a placing in November 2023. There can be no assurance that
the Group's projects will become fully developed and reach commercialisation
nor that there will be sufficient cash resources available to the Group to do
so.
The Directors have reviewed a detailed forecast based on the funds expected to
be raised and forecasted expenditure. Having made due and careful enquiry, the
Directors acknowledge that funds will need to be raised within the next 12
months to enable the Group to meets its obligations as they fall due, however,
the Directors are confident that the required funds will successfully be
raised through the issue of equity and/or debt to fund its operations over the
next 12 months.
The Directors, therefore, have made an informed judgement, at the time of
approving financial statements, that the Group is a going concern but they
acknowledge that the dependence on raising further funds during the next 12
months represents a material uncertainty. The Auditors have made reference to
going concern by way of a material uncertainty.
BASIS OF CONSOLIDATION
Inspirit Energy Holdings plc, the legal parent, is domiciled and incorporated
in the United Kingdom.
The Group Financial Statements consolidate the Financial Statements of
Inspirit Energy Holdings plc and its subsidiary, Inspirit Energy Limited, made
up to 30 June 2023.
Subsidiaries are entities over which the Group has control. The Group
controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The Group obtains and exercises
control through voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when
assessing whether the company controls another entity.
The cost of acquisition is measured as the fair value of the assets acquired,
equity instruments issued and liabilities incurred or assumed at the date of
exchange. Acquisition related costs are expensed as incurred. Intercompany
transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Profits and losses resulting from inter-company
transactions that are recognised in assets are also eliminated. Accounting
policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used
by the Group.
STATEMENT OF COMPLIANCE
The new and amended standards and interpretations which were applied for the
first time in the annual reporting period commenting 1 July 2021 have not had
a material effect on the Group and Company financial statements.
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS NOT YET ADOPTED
The standards, amendments and interpretations which are in issue but not yet
mandatorily effective are not expected to have a material effect on the Group
or Company financial statements.
SEGMENTAL REPORTING
Developing and commercialising the mCHP boiler and its related technology is
the only activity in which the Group is engaged and is therefore considered as
the only operating / reportable segment. The Group currently only operates in
the UK. The financial information therefore of the single segment is the same
as that set out in the Group Statement of Comprehensive Income and Group
Statement of Financial Position.
CURRENT AND DEFERRED INCOME TAX
The tax credit for the period comprises an estimated Research and Development
taxation credit to be received in respect of Research and Development costs
incurred during the year. Tax is recognised in the Statement of Comprehensive
Income, except to the extent that it relates to items recognised directly in
equity. In this case the tax is also recognised directly in other
comprehensive income or directly in equity, respectively.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
The current income tax credit is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the
countries where the Company's subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to or recoverable from the tax authorities.
FOREIGN CURRENCY TRANSLATION
a) FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the Financial Statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ("functional currency").
The consolidated Financial Statements are presented in Pounds Sterling (£),
which is the Group's presentation and Company's functional currency.
b) TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions, or
valuation where items are remeasured. Foreign exchange gains and losses
resulting from the settlement of such transactions, and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies, are recognised the Statement of Comprehensive Income.
Foreign exchange gains and losses relating to borrowings and cash and cash
equivalents are presented in the Statement of Comprehensive Income within
"Finance Income" or "Finance Costs".
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are charged to the
Statement of Comprehensive Income during the financial period in which they
are incurred.
Depreciation is calculated to allocate the cost of each class of asset to
their residual values over their estimated useful lives, as follows:
· Plant and Equipment - 15% reducing balance
· Fixtures and Fittings - 20% reducing balance
· Motor Vehicles - 5 years, straight line
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount, and are recognised within "Other (Losses)/Gains - Net" in
the Statement of Comprehensive Income.
INTANGIBLE ASSETS - DEVELOPMENT COSTS
Development costs relate to expenditure on the development of the mCHP boiler
technology and applications of the underlying engine technology.
Development costs incurred on the project are capitalised when all the
following conditions are satisfied:
· completion of the intangible asset is technically feasible so
that it will be available for use or sale;
· the Group intends to complete the intangible asset and use or
sell it;
· the Group has the ability to use or sell the intangible asset;
· the intangible asset will generate probable future economic
benefits;
· there are adequate technical, financial and other resources to
complete the development and to use or sell the intangible asset; and
· the expenditure attributable to the intangible asset during its
development can be measured reliably.
Directly attributable costs that are capitalised as part of the product
include any employee costs directly related to the development of the asset
and appropriate expenditure which directly furthers the development of the
project.
Other development expenditure that does not meet these criteria is recognised
as an expense as incurred. Development costs previously recognised as an
expense are not recognised as an asset in a subsequent period.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite useful life, are not subject to amortisation
and are tested annually for impairment. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). Non-financial assets other
than goodwill that suffered an impairment are reviewed for possible reversal
of the impairment at each reporting date. See note 4 for more information on
the impairment assessment performed by management.
FINANCIAL ASSETS
a) CLASSIFICATION
The Group classifies its financial assets as loans and receivables. The
classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at
initial recognition.
LOANS AND RECEIVABLES
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than 12 months after
the Statement of Financial Position date. These are classified as non-current
assets. The Group's loans and receivables comprise trade and other receivables
and cash and cash equivalents in the Statement of Financial Position.
b) RECOGNITION AND MEASUREMENT
Financial assets are initially measured at fair value plus transactions costs.
Loans and receivables are subsequently carried at amortised cost using the
effective interest method, except for short term receivables.
c) IMPAIRMENT OF FINANCIAL ASSETS
The Group assesses at the end of each reporting period whether there is
objective evidence that a financial asset, or a group of financial assets, is
impaired. A financial asset, or a group of financial assets, is impaired, and
impairment losses are incurred, only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial
recognition of the asset (a "loss event"), and that loss event (or events) has
an impact on the estimated future cash flows of the financial asset, or group
of financial assets, that can be reliably estimated.
The criteria that the Group uses to determine that there is objective evidence
of an impairment loss include:
· significant financial difficulty of the issuer or obligor;
· a breach of contract, such as a default or delinquency in
interest or principal repayments;
· the disappearance of an active market for that financial asset
because of financial difficulties;
· observable data indicating that there is a measurable decrease in
the estimated future cash flows from a portfolio of financial assets since the
initial recognition of those assets, although the decrease cannot yet be
identified with the individual financial assets in the portfolio; or
· for assets classified as available-for-sale, a significant or
prolonged decline in the fair value of the security below its cost.
ASSETS CARRIED AT AMORTISED COST
The amount of impairment is measured as the difference between the asset's
carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred), discounted at
the financial asset's original effective interest rate. The asset's carrying
amount is reduced, and the loss is recognised in the Statement of
Comprehensive Income. As a practical expedient, the Group may measure
impairment on the basis of an instrument's fair value using an observable
market price.
If, in a subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after the
impairment was recognised (such as an improvement in the debtor's credit
rating), the reversal of the previously recognised impairment loss is
recognised in the Statement of Comprehensive Income.
CASH AND CASH EQUIVALENTS
In the consolidated Statement of Cash Flows, cash and cash equivalents
comprise cash in hand and deposits held at call with bank.
FINANCIAL LIABILITIES
Financial liabilities are obligations to pay cash or other financial assets
and are recognised when the Group becomes a party to the contractual
provisions of the instruments. Financial liabilities are initially measured at
fair value, net of transactions costs. They are subsequently measured at
amortised cost using the effective interest method.
Financial liabilities are derecognised when the Group or Company's contractual
obligations expire, are cancelled or are discharged.
SHAREHOLDERS' EQUITY
Equity comprises the following:
· "Share capital" represents the nominal value of equity shares.
· "Share premium" represents the excess over nominal value of the fair value
of consideration received for equity shares, net of expenses
of the share issue.
· "Share option reserve" represents the cumulative cost of share based
payments.
· "Merger reserve" and "Reverse Acquisition reserve" represents historical
reserves formed upon
previous Business Combinations entered into by the Company that fall
outside the scope of
IFRS 3.
· "Retained losses" represents retained losses.
BORROWINGS
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the Statement of Comprehensive Income over the period
of the borrowings, using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months after the end of the reporting period.
BORROWINGS COSTS
Borrowing costs are recognised in profit or loss in the period in which they
are incurred.
SHARE BASED PAYMENTS
The Group operates equity-settled, share-based schemes, under which it
receives services from employees or third-party suppliers as consideration for
equity instruments (options and warrants) of the Group. The Group may also
issue warrants to share subscribers as part of a share placing. The fair value
of the equity-settled share based payments is recognised as an expense in the
Statement of Comprehensive Income or charged to equity depending on the nature
of the service provided or instrument issued. The total amount to be expensed
or charged is determined by reference to the fair value of the options
granted:
· including any market performance conditions;
· excluding the impact of any service and non-market performance
vesting conditions (for example, profitability or sales growth targets, or
remaining an employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (for example,
the requirement for employees to save).
In the case of warrants the amount charged to equity is determined by
reference to the fair value of the services received if available. If the fair
value of the services received is not determinable, the warrants are valued by
reference to the fair value of the warrants granted as described previously.
Non-market vesting conditions are included in assumptions about the number of
options or warrants that are expected to vest. The total expense or charge is
recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each reporting
period, the entity revises its estimates of the number of options that are
expected to vest based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the Statement of
Comprehensive Income or equity as appropriate, with a corresponding adjustment
to a separate reserve in equity.
When the options are exercised, the Company issues new shares. The proceeds
received, net of any directly attributable transaction costs, are credited to
share capital (nominal value) and share premium.
3 FINANCIAL RISK MANAGEMENT
The Group is exposed to a variety of financial risks which result from both
its operating and investing activities. The Group's risk management is
coordinated by the Board of Directors and focuses on actively securing the
Group's short to medium term cash flows by minimising the exposure to
financial markets.
The main risks the Group is exposed to through its financial instruments are
market risk (including market price risk), credit risk and liquidity risk.
MARKET PRICE RISK
The Group's exposure to market price risk mainly arises from potential
movements in the pricing of its products. The Group manages this price risk
within its long-term strategy to grow the business and maximise shareholder
return.
CREDIT RISK
The Group's financial instruments that are subject to credit risk are cash and
cash equivalents and loans and receivables. The credit risk for cash and
cash equivalents is considered negligible since the counterparties are
reputable financial institutions.
The Group's maximum exposure to credit risk is £103,000 (2022: £267,000)
comprising cash and cash equivalents and loans and receivables.
LIQUIDITY RISK
Liquidity risk arises from the possibility that the Group might encounter
difficulty in settling its debts or otherwise meeting its obligations related
to financial liabilities. The Group manages this risk through maintaining a
positive cash balance and controlling expenses and commitments. The
Directors are confident that adequate resources exist to finance current
operations.
The following table summarises the maturity profile of the Group's
non-derivative financial liabilities with agreed repayment periods. The table
has been drawn up based on contractual undiscounted cash flows based on the
earliest repayment date on which the Group can be required to pay. The table
includes both interest and principal cash flows. To the extent that the
interest flows are floating rate, the undiscounted amount is derived from the
interest rate curves at the balance sheet date:
Group Less than 1 year Between 1 and 2 years Between 2 and 5 years Over 5 years Total Carrying value
At 30 June 2023 £'000 £'000 £'000 £'000 £'000 £'000
Trade and other payables 726 - - - 726 726
Borrowings 163 - - - 163 163
At 30 June 2022
Trade and other payables 533 - - - 533 533
Borrowings 100 - - - 100 100
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
· to safeguard the Group's ability to continue as a going
concern, so that it continues to provide returns and benefits for
shareholders;
· to support the Group's growth; and
· to provide capital for the purpose of strengthening the
Group's risk management capability.
The Group actively and regularly reviews and manages its capital structure to
ensure an optimal capital structure and equity holder returns, taking into
consideration the future capital requirements of the Group and capital
efficiency, prevailing and projected profitability, projected operating cash
flows, projected capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and reserves, for
capital management purposes.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of Financial Statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. Estimates and judgements are continually evaluated and are
based on historical experience and other factors including expectations of
future events that are believed to be reasonable under the circumstances.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Group makes estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
RECOVERABLE VALUE OF R&D TAX DEBTOR
The Corporation tax receivable in Note 13 relates to the firm's Research &
Development tax reclaim that the firm is expected to receive once it files its
corporation tax returns. The directors have assessed the R&D tax debtor as
being fully recoverable based on historic successful submissions and post year
end the company recovered £68,000. The balance relates to R&D costs
incurred in FY2023 for which the claim has not been filed and will be filed on
the publication of the audited accounts and submission of its corporation tax
return.
IMPAIRMENT OF DEVELOPMENT COSTS AND INVESTMENT IN SUBSIDIARIES
The Group tests annually whether development costs and investments in the
subsidiaries, which have a carrying value of £3,167,000 and £2,440,000
respectively (2022: £2,998,000 and £2,440,000 respectively) have suffered
any impairment in accordance with the accounting policy as stated in Note 2.
The core development to date on the mCHP and Stirling technology is the base
technology that will be applied the Marine, Waste Heat Recovery, Hydrogen and
automotive sectors that the company will be focusing on in the future.
When a review for impairment is conducted, the recoverable amount is
determined based on value in use calculations prepared on the basis of
management's assumptions and estimates. As a result of their 2023 review
management has concluded that no impairment is required.
The value-in-use calculations require management to estimate future cash flows
expected to arise from the cash generating unit, once commercial production is
achieved, and apply a suitable discount rate in order to calculate present
value. These calculations require the use of estimates. See Note 10 for
further details.
Following other sources of products interest during the year, management have
focussed the value-in-use calculations on licensing sales rather than product
sales. This has been done as management consider that the revenues are more
near term in nature and note that it uses the same core developed technology.
Given the product's nature, the core estimates have remained broadly
consistent with prior years.
Note that the recoverability of the capitalised development costs and the
investment in subsidiaries is dependent on sufficient funds being raised as
and when required up to the point of commercialisation. Due to the dependence
on raising further funds to meet forecasted expenditure over the next 12
months, the Auditors have made reference to going concern by way of a material
uncertainty.
5 DIRECTOR'S AND KEY MANAGEMENT PERSONNEL EMOLUMENTS
2023 2022
£'000 £'000
Aggregate emoluments 144 144
Social security costs 6 6
150 150
Name of director Short Term Benefits Other Benefits Total Total
2023 2022
£'000 £'000 £'000 £'000
J Gunn 80 - 80 80
N Jagatia 40 - 40 40
A Samaha 10 - 10 12
P Needley 2 - 2 -
S Gunn* 12 - 12 12
144 - 144 144
*Key Management Personnel
The number of Directors who contributed to pension schemes during the year was
nil (2022: nil).
6 EMPLOYEE INFORMATION
2023 2022
£'000 £'000
Wages and salaries 237 237
Social security costs 2 2
239 239
Included in the above is a total of £93,357 (2022: £92,885) wages and
salaries for employees which has been included in Development costs.
Average number of persons employed (including executive directors and excludes
the Non Executive Director - Anthony Samaha and Paul Needley):
2023 2022
Number Number
Office and management 6 4
COMPENSATION OF KEY MANAGEMENT PERSONNEL
There are no key management personnel other than those disclosed in Note 5.
7 LOSS FOR THE YEAR
Loss for the year is arrived at after charging:
2023 2022
£'000 £'000
S Salaries and wages (Note 6) 146 146
A Audit and other fees 25 25
Depreciation 4 7
FX expense/credit - -
AUDITOR'S REMUNERATION
During the year the Group obtained the following services from the Company's
auditor:
2023 2022
£'000 £'000
Fees payable to the Company's auditor for the audit of the parent company and 25 25
the Group financial statements
8 Taxation
GROUP 2023 2022
£'000 £'000
Deferred tax - -
Current tax (43) (96)
Total current tax charge / (credit) (43) (96)
The tax on the Group's loss before tax differs from the theoretical amount
that would arise using the average rate applicable to losses of the
consolidated entities as follows:
2023 2022
£'000 £'000
Loss before tax from continuing operations (303) (329)
Loss before tax multiplied by rate of corporation tax in the UK of 25% (2022: (76) (63)
19%)
Tax effects of:
Expenses not deductible for tax purposes - -
Unrelieved tax losses carried forward 76 63
Research and development tax credit (43) (96)
Total tax (43) (96)
The Group has excess management expenses of approximately £6,041,000 (2022:
£5,781,00), capital losses of £150,000 (2022: £150,000) and non-trade
financial losses of approximately £119,000 (2022: £119,000) to carry forward
against future suitable taxable profits. No deferred tax asset has been
provided on any of these losses due to uncertainty over the timing of their
recovery.
9 EARNINGS PER SHARE
Earnings per ordinary share has been calculated by dividing the loss
attributable to equity holders of the Company by the weighted average number
of shares in issue during the year. The calculations of both basic and diluted
earnings per share for the year are based upon the loss for the year of
£233,000 (2022: £233,000). The weighted number of equity shares in issue
during the year was 4,280,075,914 (2022: 4,271,640,186 ).
In accordance with IAS 33, basic and diluted earnings per share are identical
as the effect of the exercise of share options and warrants would be to
decrease the loss per share and therefore deemed anti-dilutive. Details of
share options and warrants that could potentially dilute earnings per share in
future periods are set out in Note 16.
10 INTANGIBLE ASSETS
GROUP Development Costs Total
£'000 £'000
At 30 June 2021 2,773 2,773
Additions 225 225
At 30 June 2022 2,998 2,998
Additions 169 169
At 30 June 2023 3,167 3,167
No amortisation has been recognised on development costs to date as the assets
are still in the development stage and the related products are not yet ready
for sale. As such, the value-in-use calculations to support the carrying value
of development costs is directly reliant on the availability of future capital
funding in order to achieve product accreditation and enter into commercial
production. Additions during the year included £93,357 (2022: £92,885) of
capitalised wages.
The recoverable amount of the above cash generating unit has been determined
based on value-in-use calculations and includes revenue from stirling
applications in marine, commercial truck, Inspirit Charger (boiler technology)
with Hydrogen application and waste recycling activities. The value-in-use
calculations use cash flow projections based on financial budgets approved by
Management covering a five year period. They key estimates in the value-in-use
calculation are:
Growth rate - Nonlinear year on year increases based on directors' estimations
following discussion with a number of potential partners.
Discount rate used for the directors impairment review was 30% (2022
30%). Historically, the company used a discount rate of 15%, however in
FY2021 the board took a prudent view of increasing the rate to 30% due to
Covid-19 and the global downturn with it's impact on the economy. Although
the global economic outlook has improved, the board have been prudent in
maintaining the 30% discount rate.
The gross margin is derived from licensing the technology and it is remained
consistent with the margin assumed in the 2022 impairment assessment.
11 PROPERTY, PLANT AND EQUIPMENT
GROUP Plant and Equipment Fixtures and fittings Motor Vehicles Total
COST £'000 £'000 £'000 £'000
As at 30 June 2021 86 15 1 102
Additions
As at 30 June 2022 86 15 1 102
Additions
As at 30 June 2023 86 15 1 102
DEPRECIATION
As at 30 June 2021 59 12 1 72
Charge for year 4 1 5
As at 30 June 2022 63 13 1 77
Charge for year 3 1 4
As at 30 June 2023 66 14 1 81
NET BOOK VALUE
As at 30 June 2023 20 1 - 21
As at 30 June 2022 23 2 - 25
12 INVESTMENT IN SUBSIDIARIES
COMPANY 2023 2022
SHARES IN GROUP UNDERTAKINGS: £'000 £'000
At 1 July 2,440 2,440
Increase in loan to subsidiary 211 258
Provision against the loan balance outstanding (211) (258)
A 2,440 2,440
Included in the above is an amount of £3,515,314 (2022: £3,304,595) relating
to the amount due to the Company by its subsidiary Inspirit Energy Limited. A
provision of £3,515,314 (2022: £3,304,595) has been set against this loan
balance outstanding.
Investments in Group undertakings are recorded at cost, which is the fair
value of the consideration paid.
Details of Subsidiary Undertakings are as follows:
Name of subsidiary Registered address Registered capital Proportion of share capital held Nature of business
Inspirit Energy Limited** c/o Niren Blake LLP 2nd Floor, Solar House, 915 High Road, London, England, Ordinary shares 100% Product development
N12 8QJ
Company No.07160673 £15,230
*** Inspirit Energy Limited (Co No 07160673) is entitled and has taken
exemption under section 479a of the Companies Act 2006. No members of Inspirit
Energy Limited have required the company to obtain an audit of its accounts
for the year in question in accordance with section 476 of the Companies Act
2006
13 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Corporation tax* 43 96 - -
VAT recoverable 10 11 5 6
Other receivables - - - -
53 107 5 6
*The Corporation tax repayable relates to the R&D tax claim receivable
from HMRC.
The Directors consider that the carrying amount of receivables is
approximately equal to their fair value and under IFRS 9 that they are held at
amortised cost
14 CASH AND CASH EQUIVALENTS
GROUP COMPANY
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Cash and cash equivalents 51 160 - 158
The Directors consider the carrying amount of cash and cash equivalents
approximates to their fair value.
All of the Group and Company's cash and cash equivalents are held with
institutions with an AA credit rating.
15 SHARE CAPITAL AND SHARE PREMIUM
Number of ordinary shares Number of deferred shares Ordinary shares Deferred shares New Deferred B shares Share premium Total
£ £ £ £ £
At 30 June 2021 4,271,640,186 400,932 299,292 396,923 1,406,599 12,933,447 15,036,261
At 30 June 2022 4,271,640,186 400,932 299,292 396,923 1,406,599 12,933,447 15,036,261
Issue of New Shares 15,550,710 - 1,555.00 - - 3,695 5,250
At 30 June 2023 4,287,190,896 400,932 300,847 396,923 1,406,599 12,937,142 15,041,511
Both the Deferred shares and the New Deferred B shares have no voting rights.
On 6 June 2018, the Company announced that members, at a General meeting on
the same day, had approved the completion of a Capital Reorganisation which
comprised the sub-division of shares whereby each existing Ordinary Share of
0.1 pence each in the capital of the Company was sub-divided into 1 New
Ordinary Shares of 0.001 pence each and 1 Deferred B Share of 0.099 pence
each. This resulted in 1,420,806,859 New Ordinary Shares and 1,420,806,859
Deferred B Shares in issue.
16 SHARE BASED PAYMENTS
Share options and warrants can be granted to selected Directors and
third-party service providers.
Share options and warrants outstanding at the end of the year have the
following expiry dates and exercisable prices:
Weighted Average Exercise Price Options and warrants Weighted Average Exercise Price Options and warrants
2023 2022
At 1 July 0.00075 500,000,000 0.00075 500,000,000
Granted 0.0004388 97,191,943
Lapsed 0.00075 (500,000,000) - -
- -
At 30 June 0.0004388 97,191,943 0.00075 500,000,000
Grant date Expiry date Exercise price in £ per share Number of options and warrants Number of options and warrants
2023 2022
03-Jun-21 02-Jun-23 0.00075 500,000,000
14/12/2022* 13-Dec-23 0.0004388 97,191,943
97,191,943 500,000,000
On 8(th) November 2022, Inspirit drew down US$80,000 as the Initial Advance
and issued Riverfort with warrants to the value of 50% of the Initial Advance
at the reference price of 0.03376 pence being 97,191,943 warrants. These
warrants will have a term of 48 months and will be exercisable at 130% of the
reference price being 0.04388 pence.
17 TRADE AND OTHER PAYABLES
GROUP COMPANY
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Trade payables 51 54 12 17
Other payables 142 56 141 57
Social security and other taxes 8 35 - -
Accrued expenses 525 388 523 386
726 533 676 460
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value
18 BORROWINGS
GROUP COMPANY
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Current
Drawdown facility (see Note 1 and 2 below) 163 100 163 100
Total current borrowings 163 100 163 100
Note 1
The Drawdown facility relates to the facility entered into during 2017 with YA
Global Master SPV Limited. The facility is unsecured and carries an implied
interest rate of 10 per cent per annum, repayable in 12 equal monthly
instalments and has now lapsed. The directors are seeking to renew.
On 30 April 2015, the Company issued warrants to subscribe for 9,283,364 new
ordinary shares as part of the unsecured $3,000,000 Debt facility arrangement
with YA Global Master SPV Limited ("YA Global"). The issue of the warrants was
triggered following the drawdown of the initial Tranche 1, being $400,000,
under the terms of the agreement. The terms of the issue of warrants are
governed by the Debt Facility agreement, which specify that for every tranche
drawn down, the Company is required to issue 25% of the value of the drawdown
based on the interbank rate at the nearest possible date and using the average
Volume Weighted Average Price ("VWAP") of the Company for the five trading
days immediately prior the date of the agreement. Based on those terms, were
the Company to drawdown the remaining $2,600,000 they would be required to
issue further warrants to subscribe for an estimated total of 99,622,448 new
ordinary shares. The Directors do not expect to use the remaining facility in
the foreseeable future.
Note 2
On 8th December 2022, the Company announced that it entered into a
short-term, un-secured debt facility of up to US$250,000 (approximately
£205,075) (the "Facility"). Under the Facility Inspirit initially draw down
US$80,000 (approximately £65,624) (the "Initial Advance"). The Facility is
with Riverfort Global Opportunities PCC Limited, and the proceeds of the
advance are for general working capital.
The Facility has a 12-month term and allows Inspirit to draw down funds
("Advances") which will be repayable within 6 months in either cash or shares
at the Noteholders' discretion in respect of the Initial Advance and
thereafter at the agreement of the Company and Riverfort. If the debt is
repaid in shares, they will be repaid at 130% of the Reference Price being the
average of the five (5) daily VWAPs preceding the Drawdown Date in respect of
the relevant Advance (the "Fixed Premium Placing Price"). In the event that
Inspirit completes any share placing during the Term of the relevant Advance
and the share placing price is below the Fixed Premium Placing Price, the
Fixed Premium Placing Price will be amended to be the relevant share placing
price. Inspirit will issue the Noteholder with warrants in respect of each
Advance so as to represent 50% of the value of the relevant Advance, divided
by the relevant Reference Price; the warrants will have an exercise price of
Fixed Premium Placing Price and a 48 month term.
19 ANALYSIS OF CHANGES IN NET DEBT
£000s As at 1 July 2022 Cashflows Acquired Repayment Non-Cash movement As at 30 June 2023
Cash at bank and in hand 160 (109) - - - 51
£000s As at 1 July 2022 Cashflows Acquired Repayment Non-Cash movement As at 30 June 2023
Borrowings 100 - 63 - - 163
20 FINANCIAL INSTRUMENTS BY CATEGORY
2023 2022
£'000 £'000
FINANCIAL ASSETS AT AMORTISED COST:
Trade and other receivables (excluding prepayments, VAT and corporation tax) - -
Cash and cash equivalents 51 160
FINANCIAL LIABILITIES AT AMORTISED COST:
Trade and other payables 51 54
Borrowings 163 100
The table providing an analysis of the maturity of the non-derivative
financial liabilities has been included in Note 3.
21 ULTIMATE CONTROLLING PARTY
At the date of signing this report the Directors do not consider there to be
one single ultimate controlling party.
20
FINANCIAL INSTRUMENTS BY CATEGORY
2023
2022
£'000
£'000
FINANCIAL ASSETS AT AMORTISED COST:
Trade and other receivables (excluding prepayments, VAT and corporation tax)
-
-
Cash and cash equivalents
51
160
FINANCIAL LIABILITIES AT AMORTISED COST:
Trade and other payables
51
54
Borrowings
163
100
The table providing an analysis of the maturity of the non-derivative
financial liabilities has been included in Note 3.
21
ULTIMATE CONTROLLING PARTY
At the date of signing this report the Directors do not consider there to be
one single ultimate controlling party.
22 RELATED PARTY TRANSACTIONS
See note 6 for details of director's remuneration in the year.
During the year, NKJ Associates Ltd, a company in which N Jagatia is a
Director, charged consultancy fees of £40,000 (2022: £40,000). The amount
owed to NKJ Associates Ltd at year end is £152,000 (2022: £112,000).
Amount of fees due to John Gunn at 30 June 2023 was £320,000 (2022:
£240,000) and the amount of fees due to Anthony Samaha at 30 June 2022 was
£18,000 (2022: £10,000).
23 EVENTS AFTER THE REPORTING DATE
On 14th November 2023, the company announced that it has raised £200,000
through the placing (the "Placing") of 2,000,000,000 ordinary shares of 0.001
pence each in the share capital of the Company ("Ordinary Shares") at 0.01
pence per Ordinary Share (the "Placing Shares") and the proceeds of the
fundraise will be used for general working capital purposes.
John Gunn, the Company's Chairman and Chief Executive Officer participated in
the Placing by subscribing for 470,000,000 shares and Nilesh Jagatia, the
Company's Chief Financial Officer will be subscribing for 20,000,000
shares. After the Placing, John Gunn will directly and indirectly have a
holding of 1,331,403,363 Ordinary Shares representing an interest of
21.18% and, Nilesh Jagatia will have a holding of 64,857,142 Ordinary
Shares representing an interest of 1.03% of the enlarged share capital.
Following admission of the Placing Shares, the Company's enlarged issued share
capital will comprise 6,287,190,896 Ordinary Shares.
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. END FR FEEFFEEDSEEERecent news on Inspirit Energy Holdings
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