REG - ACP Energy PLC - Annual Report and Financial Statements
10/10/2022 07:00
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RNS Number : 2569C ACP Energy PLC 10 October 2022
10 October 2022
ACP ENERGY PLC
("ACP" or "the Company")
Annual Report and Financial Statements
Notice of Annual General Meeting
ACP Energy Plc (ACPE.L), the recently formed company set to capture value
accretive opportunities in the oil & gas industry, is announcing its
Annual Report and Financial Statements for the period ended 30 June 2022.
Chairman's Statement
I am pleased to report the audited financial statements to shareholders for
the period ended 30 June 2022.
During the period, ACP Energy listed on the Standard Main Market of the London
Stock Exchange on January 28, 2022, having raised a total of £830,000 (before
expenses) following ACP Energy's successful initial public offering ("IPO").
Since this time, the Company has been active in reviewing numerous
opportunities in the upstream oil and gas sector focusing on production and
development assets, as outlined in the Company's IPO Prospectus.
The Directors, who founded the business, have a significant interest in the
share capital of the Company and look forward to delivering on the commitment
made by shareholders.
Outlook
The period since the Company's IPO has been characterised by significant
geopolitical, economic and market volatility. However, we are encouraged by
the resilience in energy prices and remain positive on the medium-term
outlook. We believe that the current environment will provide a number of
interesting opportunities and are actively engaged in identifying and
completing an acquisition with significant potential to create value for
shareholders.
I would like to thank all shareholders for the support they have shown for the
Company's IPO and we look forward to sharing our progress in the near future.
Paul Welch
Executive Chairman
7 October 2022
Notice of Annual General Meeting
The Company's Annual General Meeting ("AGM") will be held on 10 November
2022 at 1.00 pm at 13 Hanover Square, London, W1S 1HN. Further details are
set out in the notice of AGM, which will be available on the Company's
website, www.acpenergyplc.com (http://www.acpenergyplc.com) , shortly and
will be sent to Shareholders later today.
For further information:
www.acpenergyplc.com (http://www.acpenergyplc.com)
ACP Energy
Paul Welch,
Chairman
Celicourt Communications
+44 208 434 2643 / acpenergy@celicourt.uk
Mark Antelme / Jimmy Lea
The Directors present the Strategic Report of the Company for the period ended
31 March 2022.
Review of business and future developments
Introduction
The Company was incorporated on 8 April 2021 in accordance with the laws of
England and Wales as a private limited company with the name ACP Energy
Limited. The Company was re-registered as a public limited company on 23
August 2021 with the name ACP Energy Plc.
Company Objectives
The Company was formed to acquire one or more target companies or
businesses. The resulting investment may be in a company, partnership,
special purpose vehicle or joint venture.
The Company will focus on opportunities within the upstream oil and gas
industry, such as appraisal, development or production of oil and gas,
particularly projects with identified oil and/or natural gas reserves and/or
resources. The Company will target opportunities that have a funding
requirement to development and/or increase production rates. The Company
will also focus on those opportunities that would provide the Company with an
economic interest (by equity, royalty or debt participation) and a control
interest (through board, technical committee and or management positions) and
whose potential value, over the long term, is greater than the price and costs
expended by the Company to acquire them.
The Company's efforts in identifying opportunities will not be limited to a
particular geographic location.
The Company does not have any specific Acquisition target under consideration.
Unless required by applicable law or other regulatory process, no Shareholder
approval will be sought by the Company in relation to any such acquisition (of
a target company or business).
Acquisition Strategy
The Board has identified the following criteria for the purpose of reviewing
and evaluating opportunities.
· Sectoral Focus: the Company intends to focus on
opportunities in the upstream oil and natural gas sector. The Company will
have a particular focus on producing assets, that require additional
investment to increase the production and reserves base. The Directors believe
that, based upon their collective experience, there are significant
opportunities in the upstream oil and gas sector, and in particular existing
producing assets that will generate value for Shareholders. The Directors,
together with their advisers, have extensive global networks within the
sector, and associated financial services, from which to solicit and assess
opportunities.
· Development Profile: the Company intends to focus on
producing assets that have not received sufficient investment capital due to
either local fiscal issues or a downturn in commodity prices. Such assets
will likely have had a certain amount of development work undertaken to
establish a minimum base of production or resource but that, for whatever
reason, now requires further funding in order to either fully develop the
opportunity or to repair or workover the asset to either return it to or
increase its production. The Company therefore expects to focus on
opportunities where the asset will be revenue generating either immediately
upon acquisition or within a reasonable timeframe following the work program
completion. The Directors believe that this strategy will balance investment
risk against long-term shareholder value.
· Geography: the Company does not propose to limit its
search to any specific geographic location; however, the Directors will ensure
that the geographic location of any investment opportunity is suitable for
institutional investment in the London market. The assets may be located
anywhere in the world but the Company will primarily be looking at
opportunities in proven hydrocarbon producing jurisdictions with established
oil and gas infrastructure, and the regulation of such activities.
· Size of Acquisition Target: the Company is not able to
provide an exact indication of the size of the acquisition target and it will
consider a range of prospective opportunities. The Directors will primarily
focus on opportunities that meet the acquisition criteria and which are likely
to generate value for shareholders. The Directors propose to use their
collective experience of identifying, originating, structuring and financing
oil and gas transactions to generate value for the Company.
The Directors propose to use their own research to identify potential
opportunities and their expertise to assess the propositions and will then
initiate discussions directly or via market contacts and professional
advisers.
The Directors have a broad range of contacts through which to identify
potential opportunities. Once identified, the Directors propose to conduct
initial due diligence and, where they believe further investigation is
required, propose to appoint appropriately qualified personnel and
professional advisers to assist. The Directors believe they can undertake this
process promptly, enabling them to determine quickly those opportunities that
could be value accretive to shareholders and to progress to formal due
diligence.
There is no specific expected target value for any proposed acquisition. The
Company expects that any funds not used for the Acquisition will be used for,
internal or external growth and expansion, and working capital in relation to
the acquired company or business. Furthermore, it is anticipated that the
Acquisition is likely to be near to generating revenue and or profit, which
will provide cash flow for future acquisitions.
Following completion of the Acquisition, the objective of the Company is to be
involved in the operation of the acquired business. The Company envisions
opportunities will be available to it by taking an active role in the
management through operational improvements, capacity expansions or funding
working capital. Operational management may provide superior insight into a
particular sector or operating region allowing value accretive complementary
acquisitions to be made.
The Directors' long-term aim is to create shareholder value by investing in
projects with dependable cashflows and build a portfolio where the Directors
believe that there are large potential upsides in value by providing vital
finance and expertise enabling a company or business in the natural resources
sector to increase its
production and reserve base.
Principal risks and uncertainties
RISKS RELATING TO THE COMPANY'S BUSINESS STRATEGY
There is no assurance that the Company will conclude an Acquisition in a
timely manner or at all.
The success of the Company's business strategy is dependent on its ability to
identify sufficient suitable Acquisition opportunities. The Directors are
unable to guarantee that the Company will be able to complete an Acquisition
or that it will be able to complete an Acquisition within a reasonable
timeframe.
An Acquisition target identified by the Company may not proceed for a number
of valid reasons, including, inter alia, the Company is outbid by a
competitor, terms cannot be agreed with the vendors or due diligence reveals
significant issues with the target. Aborting a proposed Acquisition or
Acquisitions could mean that the Company is left with substantial unrecovered
transaction costs, potentially including fees, legal costs, accounting costs,
due diligence or other expenses that may not allow it to pursue further
opportunities.
Even if the Company completes an Acquisition, there is no assurance that any
operating improvements will be successful or, that they will be effective in
increasing the valuation of any business acquired
Following an Acquisition, the Company will endeavour to generate Shareholder
value through applying financial and sectoral expertise to effect operational
improvements. However, there can be no assurance that the Company will be able
to propose and implement effective operational improvements for any company or
business which the Company acquires. In addition, even if the Company
completes an Acquisition, general economic and market conditions or other
factors outside the Company's control could make the Company's operating
strategies difficult or impossible to implement. Any failure to implement
these operational improvements successfully and/or the failure of these
operational improvements to deliver the anticipated benefits could have a
material adverse effect on the Company's results and financial condition.
The Company may be unable to complete an Acquisition or to fund the operations
of the target business if it does not obtain additional funding
The Company has not yet identified an Acquisition target but the Directors are
of the view that its Acquisition strategy will enable it to identify a range
of opportunities meeting its criteria and which are capable of returning value
to Investors. On that basis, the Company cannot currently predict the amount
of additional capital that may be required for an Acquisition if the target is
sufficiently large or if the target is not sufficiently cash generative,
further funds may need to be raised.
Although the Company intends to finance acquisitions primarily through the
issue of Ordinary Shares in the Company, if, following an acquisition, the
Company's cash reserves are insufficient; the Company may be required to seek
additional equity financing. The Company may not receive sufficient support
from its existing Shareholders to raise additional equity, and new equity
investors may be unwilling to invest on terms that are favourable to the
Company, or at all. The Company may also need to consider pursuing debt
financing as a means to obtain additional financing but the lenders may be
unwilling to provide debt financing to the Company on attractive terms, or at
all. To the extent that additional equity or debt financing is necessary to
complete an Acquisition and remains unavailable or only available on terms
that are unacceptable to the Company, the Company may be compelled either to
restructure or abandon an Acquisition, or proceed with an Acquisition on less
favourable terms, which may reduce the Company's return on the investment.
Even if additional financing is unnecessary to complete an Acquisition, the
Company may subsequently require equity or debt financing to implement
operational improvements in an acquired business. The failure to secure
additional financing or to secure such additional financing on terms
acceptable to the Company could have a material adverse effect on the
continued development or growth of the acquired business.
.
RISKS ASSOCIATED WITH NATURAL RESOURCES SECTOR
Industry-specific risks
The Directors' strategic goal is to complete an acquisition in the oil and gas
sector. Investors should nevertheless be aware that the oil and gas sector is
inherently tied to the performance of the global economy and, in particular,
fluctuations in the price of oil and gas.
The Directors cannot provide a clear indication of the timespan it will take
to conclude an Acquisition and any Acquisition will be subject to an
appropriate level of due diligence and investigation undertaken by the Board
together with its advisors. Investors should therefore be aware that a shift
in global economy and, in particular, fluctuations in the price of oil and
gas, during such time could mean that there are potentially fewer attractive
Acquisition opportunities available and this could mean that competition for
such intensifies. If such risks were to materialise this could mean that the
ability of the Board to complete an Acquisition could be adversely affected.
Production and development risks
Oil and gas production and development in which the Board intends to focus is
by its nature speculative in nature and involves a high degree of risk.
Shareholders should be aware that the company, business or asset that the
Company acquires as a result of an Acquisition may not ultimately reach the
stage of production and may not be able to generate revenue in timescales that
investors may consider reasonable or at all, as a result of factors beyond the
control of the Company and its Board. This could result in shareholders
losing their investment and or failing to generate any return on their
investment in the Company.
The specific factors relating to a potential Acquisition target are not
capable of being ascertained as at the date of this Document. Nevertheless,
the economics of developing oil and gas properties are affected by many
general factors including the cost of operations, availability of drilling
equipment, reserve and resources estimates, volatility of prices for oil and
gas, fluctuations in exchange rates, costs of development, infrastructure and
processing equipment and such other factors as government regulations,
including regulations relating to royalties, allowable production, importing
and exporting and environmental protection.
The exploration and development of a project following an Acquisition could be
subject to delay and potential funding issues. Production and development of
gas assets generally require significant capital investment. It could
therefore mean that several further fundraising rounds from the issue of new
Ordinary Shares are required following and in conjunction with an Acquisition
for the project to be able to reach a stage of production or may otherwise be
required to provide it with sufficient working capital. Such events are
likely to be dilutive to existing shareholders.
Analysis of directors, key employees and employees by sex
Number Male Female
Directors 4 4 0
Key Employees 0 0 0
Employees 0 0 0
Key performance indicators
Bank and cash controls:
Bank reconciliations are prepared at least monthly and reviewed by the Board.
All major items of expenditure are agreed by the Directors in advance.
There are no other key performance indicators for this period as the Company
has not completed its investment activity.
The Company operates in an uncertain environment and is subject to a number of
risk factors. The Directors have carried out a robust assessment of the risks
and consider the risk factors outlined above and below in this Strategic
Report are of relevance to the Company's activities, although it should be
noted that this list is not exhaustive and that other risk factors not
presently known or currently deemed immaterial may apply.
These risks were covered from page 14 and 26 of our IPO Prospectus.
Capital Resources and Returns Management
The Company has raised gross proceeds of £830,000 from the Placing and
Subscription. The Directors believe that, following an Acquisition, further
equity capital raisings may be required by the Company for working capital
purposes as the Company pursues its future objectives. Given that the
anticipated operating costs of the Company will be minimal, the Company does
not envisage that further funding will be required prior to an Acquisition.
It is intended that the purchase price for any potential Acquisition will be
satisfied by way of consideration shares in the Company or cash consideration
(or a combination). By utilising consideration shares this will enable to
Company to conserve cash resources for working capital purposes. However,
whether a further equity raising will be required and the amount of such
raising will depend on the nature of the Acquisition opportunities which arise
and the form of consideration the Company uses to make an Acquisition which
cannot be determined at this time.
Dividend policy
The Company intends to pay dividends on the Ordinary Shares following an
Acquisition at such times (if any) and in such amounts (if any) as the Board
determines appropriate in its absolute discretion. Prior to an Acquisition it
is unlikely that the Company will have any earnings but to the extent the
Company has any earnings it is the Company's current intention to retain any
such earnings for use in its business operations, and the Company does not
anticipate declaring any dividends in the foreseeable future. The Company
will only pay dividends to the extent that to do so is in accordance with all
applicable laws.at to do so is in accordance with all applicable laws.
Corporate governance
The Directors are committed to maintaining high standards of corporate
governance and propose, so far as is practicable given the Company's size and
nature, to voluntarily adopt and comply with the QCA Code. However, at
present, due to the size of the Company, the Directors acknowledge that
adherence to certain other provisions of the QCA Code may be delayed until
such time as the Directors are able to fully adopt them. In particular, action
will be required in the following areas:
· the QCA Code recommends that the Company separates the
roles of chairman and executive director. At the date of this Document, the
Chairman is Mr Paul Welch who is an executive director. As the Company grows,
the Board will seek to appoint additional independent directors, one of whom
will be appointed as senior independent director;
· the Company is currently too small to have an audit
committee, a remuneration committee or a nominations committee established and
the appointments to such committees will be revisited upon the completion of
an Acquisition along with incorporating terms of reference for them;
· Subject to the performance of the Company, the Directors
may, conditional on substantially growing the Group, seek to transfer the
Company from a Standard Listing to either a Premium Listing or other
appropriate listing venue, based on the track record of the Company and
subject to fulfilling the relevant eligibility criteria at the time. If the
Company is successful in obtaining a Premium Listing or other appropriate
listing, further rules will apply to the Company under the Listing Rules and
Disclosure Guidance and Transparency Rules and the Company will be obliged to
comply or explain any derogation from the UK Corporate Governance Code. In
order to implement its business strategy, as at the date of this Document, the
Company has adopted the corporate governance structure set out below
To demonstrate the Company's adherence to the QCA Code, the Company will hold
timely board meetings as issues arise which require the attention of the
Board. The Board is responsible for the management of the business of the
Company, setting the strategic direction of the Company and establishing the
policies of the Company. It is the Directors' responsibility to oversee the
financial position of the Company and monitor the business and affairs of the
Company, on behalf of the Shareholders, to whom they are accountable. The
primary duty of the Directors is to act in the best interests of the Company
at all times. The Board also addresses issues relating to internal control and
the Company's approach to risk management.
The Board as a whole will be responsible for sourcing Acquisitions and
ensuring that opportunities are in conformity with the Company's strategy. The
Board will meet periodically to: (i) discuss possible Acquisition
opportunities for the Company; (ii) monitor the deal flow and Acquisitions in
progress; and (iii) review the Company's strategy and ensure that it is
up-to-date and appropriate for the Company and its aims.
Conflicts of Interest
None of the Directors currently has any potential conflict of interests
between their duties to the Company and their private interests or other
duties. However, none of the Directors are employed by the Company on a
full-time basis and as such, conflicts may arise in the future as a Director
may allocate a portion of their time to other businesses leading to the
potential for conflicts of interest in their determination as to how much time
to devote to the Company's affairs.
Responsibility statement
This statement is being made by the Chairman Mr. Paul Welch and to the best of
his knowledge:
a. the financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the issuer, and
b. the management report includes a fair review of the development and
performance of the business and the position of the issuer, together with a
description of the principal risks and uncertainties that they face.
Section 172 Statement
As the Board of Directors of ACP Energy PLC, we have a legal responsibility
under section 172 of the Companies Act 2006 to act in the way we consider, in
good faith, would be most likely to promote the company's success for the
benefit of its members as a whole, and to have regard to the long-term effect
of our decisions on the company and its stakeholders. This statement
addresses the ways in which we as a Board fulfil this responsibility.
Promoting the company's success for its members: ACP Energy PLC was formed to
make one or more acquisitions in the upstream oil and gas industry. To enable
the Company to pursue its principal activity, it pursued an Initial Public
Offering ("IPO") of its shares onto the London Stock Exchange through a
Standard Listing to raise the necessary funds for the execution of its
business strategy. The IPO was successfully completed and the Company's shares
were admitted for trading on 28th January 2022. Following admission, the
Company is now focused on identifying acquisition opportunities in its chosen
sector.
The interests of the company's employees: Our employees are fundamental to us
achieving our long-term strategic objectives.
Our customers and suppliers: The Company has no operating business, no
customers and only a limited number of suppliers. Potential customers,
suppliers and joint venture partners are considered in light of their
suitability to comply with the Company's policies and objectives.
Our community: The Company has no operations that impact any communities.
However, upon a successful acquisition, it will assess its status and
engagement with communities, to ensure that it maintains a high standard in
its activities regarding health, safety and community relations. It will also
work responsibly with suppliers, and actively monitor performance on an
on-going basis.
The environment: The Company currently has a very limited environmental
impact. However, we recognise our environmental responsibilities and will
consider the carbon footprint and other environmental impacts of any assets
that are acquired and investigate measures that may be taken to reduce them.
Anti-corruption and anti-bribery policy: The Company and its management
recognise and acknowledge the responsibility under English law to promote
success of the Company for the benefits of its stakeholders. The Company and
its management also acknowledge and recognise the responsibility towards
partners, suppliers, contractors, investors, lenders and local community in
which future operational activities will take place. The Company has four
employees, being the directors, all male.
Acts of God and contagious diseases: Acts of God such as seismic activity,
flooding, inclement weather and natural disasters more generally, together
with outbreaks of highly contagious diseases, are beyond the control of the
Company and may adversely affect the economy, infrastructure and livelihood of
people in the countries in which the Company is operating or proposing to
operate. The Company's business and profitability may be adversely affected
should such acts of God and/or outbreaks occur and/or continue.
On behalf of the board
..............................
Mr J Orbell
Director
Date: 7 October 2022
The directors present their annual report and financial statements for the
period ended 30 June 2022.
Principal activities
The principal activity of the company is intended to be that of investment in
upstream oil and gas assets. The company was incorporated on 8 April 2021 and
did not trade in the period.
Results and dividends
The results for the period are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of a
final dividend.
The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of
signature of the financial statements were as follows:
Mr J Orbell (Appointed 6 May 2021)
Mr S Firth (Appointed 6 May 2021)
Mr J Tyler (Appointed 6 May 2021)
Mr P Welch (Appointed 8 April 2021)
Directors' remuneration for the period was £55,445 which includes an expense
of £54,732 relating to share based payments
Directors' interests
The directors' interests in the shares of the company were as stated below:
Ordinary shares of 0.2p each
Mr P Welch 6,875,000
Mr J Orbell 6,875,000
Mr S Firth 2,500,000
The Company's capital consists of ordinary shares, which rank pari passu in
all respects which are traded on the Standard segment of the Main Market of
the London Stock Exchange. There are no restrictions on the transfer of
securities in the Company or restrictions on voting rights and none of the
Company's shares are owned or controlled by employee share schemes. There are
no arrangements in place between shareholders that are known to the Company
that may restrict voting rights, restrict transfer of securities, result in
the appointment or replacement of Directors ,amend the Company's Article of
Association or restrict the powers of the company's Directors, including in
relating to the issuing or buying back by the company of its shares or any
significant agreements to which the company is a party that takes effect after
or terminate upon, a change of control of the Company following a takeover bid
or the like. The Founders are all subject to a 12 month lock-in and orderly
market restrictions.
Supplier payment policy
The company's current policy concerning the payment of trade creditors is to
follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre
Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
· settle the terms of payment with suppliers when agreeing the
terms of each transaction;
· ensure that suppliers are made aware of the terms of payment by
inclusion of the relevant terms in contracts; and
· pay in accordance with the company's contractual and other legal
obligations.
Trade creditors of the company at the year end were £15,139.
Substantial Shareholdings
At the date of signing these financial statements, the shareholders with an
interest over 3% were as follows:
Name Holding
Paul Welch 14.8%
James Timothy Orbell 14.8%
Stuart Firth 5.4%
La Tourelle Consulting Limited 14.8%
Blumen Capital Ltd 14.8%
Pershing Nominees 12.9%
Leander Christofides 4.3%
Paris Christofides 4.3%
Greenhouse Gas (GHG) Carbon emission
The Company is currently non-trading with no operating premises or employees
other than its Directors, and therefore has minimum carbon emissions. Total
emissions are expected to be lower than 40,000 Kwh. Accordingly, it is not
considered necessary to obtain emissions, energy consumption or energy
efficiency data and produce an Energy and Carbon Report under SI 2018/1155.
Financial instruments
The company has not entered into any financial instruments to hedge interest
rate or exchange rate risk.
Requirement of the Listing Rules
Listing Rule 9.8.4 requires the Company to include certain information in a
single identification section of the Annual Report or a cross reference table
indicating where the information is set out. The Directors confirm that there
are no disclosures required in relation to Listing Rule 9.8
Auditor
Jeffreys Henry LLP were appointed as auditor to the company and in accordance
with section 485 of the Companies Act 2006, a resolution proposing a future
appointment will be put forward at a General Meeting.
Statement of disclosure to auditor
Each director in office at the date of approval of this annual report confirms
that:
· so far as the director is aware, there is no relevant audit
information of which the company's auditor is unaware, and
· the director has taken all the steps that he / she ought to have
taken as a director in order to make himself / herself aware of any relevant
audit information and to establish that the company's auditor is aware of that
information.
This confirmation is given and should be interpreted in accordance with the
provisions of section 418 of the Companies Act 2006.
Going Concern
The Group's assets are comprised almost entirely of cash. The Directors have
outlined their strategy for the Group in the Strategic Report on page 2. As
part of their assessment of going concern, the Directors have prepared cash
forecasts that show that the Group has sufficient cash resources to execute
the Company's strategy.
Based on their enquiries and the information available to them and taking into
account the other risks and uncertainties set out herein, the Directors have a
reasonable expectation that the Company has adequate resources to continue
operating for the foreseeable future. Thus, they continue to adopt the going
concern basis of accounting in preparing this financial information.
Events after the reporting period
There were no events to disclose.
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 elected to prepare the
financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the United Kingdom. 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 company and
of the profit or loss of the company for that period. In preparing these
financial statements, International Accounting Standard 1 requires that
directors:
· properly select and apply accounting policies;
· present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable information;
· provide additional disclosures when compliance with the specific
requirements in IFRSs are insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the entity's
financial position and financial performance; and
· make an assessment of the company's ability to continue as a
going concern.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company's transactions and disclose with
reasonable accuracy at any time the financial position of the 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
company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
On behalf of the board
Mr J Orbell
Director
Date: 7 October 2022
Introduction
The information included in this report is not subject to audit other than
where specifically indicated.
Remuneration Committee
The Company is aware of its obligations under the UK Corporate Governance
Code. As it has announced previously, it will set up a Remuneration Committee
once it has commenced its trading activities and the Committee's function will
be to review the performance of executive directors and senior employees and
set their remuneration and other terms of employment.
The remuneration policy
Each of the Directors shall be paid a fee at such rate as may from time to
time be determined by the Board. Any Director who is appointed to any
executive office shall be entitled to receive such remuneration (whether by
way of salary, commission, participation in profits or otherwise) as the Board
or any committee authorised by the Board may decide, either in addition to or
in lieu of his remuneration as a Director. In addition, any Director who
performs services which in the opinion of the Board or any committee
authorised by the Board go beyond the ordinary duties of a Director, may be
paid such extra remuneration as the Board or any committee authorised by the
Board may determine.
Recruitment Policy
Base salary levels will take into account market data for the relevant role,
internal relativities, their individual experience and their current base
salary. Where an individual is recruited at below market norms, they may be
re-aligned over time, subject to performance in the role. Benefits will
generally be in accordance with the approved policy. For external and internal
appointments, the Board may agree that the Company will meet certain
relocation and/or incidental expenses as appropriate.
Service agreements and terms of appointment (audited)
The directors have service contracts with the company. These contracts are not
fixed term and may be terminated by either the Company or the Director by
giving a 3 months' notice.
Directors' interests
The directors' interests in the share capital of the Company are set out in
the Directors' report.
Directors' emoluments
During the period Paul Welsh was the only director that was employed by
the company. An accrual of £713 was recognised during the year relating to
his fees and there were no other accrual or payments relating to Directors'
emolument. A further £54,732 was recognised relating to directors
share-based payment expense as follows:
Mr J
Orbell
£18,246
Mr S
Firth
£Nil
Mr J
Tyler
£Nil
Mr P
Welch
£36,486
No pension contributions were made by the company on behalf of its directors,
and no excess retirement benefits have been paid out to current directors.
Payment for loss of Office
If a contract is to be terminated, the Company will determine such mitigation
as it considers
fair and reasonable in each case. The Company reserves the right to make
additional payments where such payments are made in good faith in discharge of
an existing legal obligation (or by way of damages for breach of such an
obligation); or by way of settlement or compromise of any claim arising in
connection with the termination of an Executive Director's office or
employment.
Percentage change tables (audited)
The Directors have considered the requirement for the percentage change tables
comparing the Chairman's percentage change of remuneration to that of the
average employee to not provide any meaningful information to the
shareholders. This is due to the company not having any employees in this or
the prior period with the exception of the Directors. The Directors will
review the inclusion of this table for future reports.
Company performance graph (audited)
The Directors have considered the requirement for a UK 10-year performance
graph comparing the Company's Total Shareholder Return with that of a
comparable indicator. The Directors do not currently consider that including
the graph will be meaningful because the Company has only been listed since
January 28 2022, is not paying dividends, is currently in a start-up mode bend
whose focus is to seek an acquisition. In addition, and as mentioned above,
the remuneration of Directors is not currently linked to performance and we
therefore do not consider the inclusion of this graph to be useful to
shareholders at the current time. The Directors will review the inclusion of
this table for future reports.
Other matters
There are no other reportable matters to disclose.
Approval by shareholders
At the next annual general meeting of the company a resolution approving this
report is to be proposed as an ordinary resolution. The Board considers
shareholder feedback received and guidance from shareholder bodies. This
feedback, plus any additional feedback received from time to time, is
considered as part of the Company's annual policy on remuneration.
On behalf of the board
Paul Welch, Executive Chairman
Date: 7 October 2022
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
ACP ENERGY PLC
FOR THE PERIOD ENDED 30 JUNE 2022
Opinion
We have audited the financial statements of ACP Energy Plc (the 'Company') for
the period ended 30 June 2022 which comprise the statement of income, the
statements of financial position, the statement of cash flows, the statement
of changes in equity and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK adopted
International Accounting Standards.("IFRS")
In our opinion the financial statements:
· give a true and fair view of the state of the Company's affairs
as at 30 June 2022 and of the loss for the period then ended;
· have been properly prepared in accordance with UK-adopted
International Accounting Standards; and
· 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 Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statement, we have concluded that the directors' use
of the going concern basis of accounting in the preparation of the financial
statements is appropriate. Our evaluation of the directors' assessment of the
company's ability to continue to adopt the going concern basis of accounting
included reviewing the forecasts covering the going concern period, and
ascertaining the latest cash position.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the company's ability to continue
as a going concern for a period of at least twelve months form when the
financial statements are authorised for issue
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report
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.
This is not a complete list of all risks identified by our audit.
· Valuation of share-based payments transactions
These are explained in more detail below:
Key audit matter How our audit addressed the key audit matter
Valuation of share-based payments transactions We undertook the following audit procedures, amongst others:
The Company provided options to the directors and warrants to non-employee · Compared the terms and conditions for a sample of the options issued
service providers, whereby the external service providers and the directors during the financial period included in the valuations with appropriate Board
render services and receive rights to acquire shares of the Company at a minutes and letters of advice to the service providers.
specified price. These share-based payment transactions are classified by the
Company as an equity-settled share-based payment transactions.
· Compared the option grant date used in the valuations to option
certificates and agreements.
The Company valued the options and warrants using the Black Scholes model,
where inputs such as volatility, dividend yield, risk-free rate and
adjustments for sub-optimal exercises are factored in to derive the valuation
of the warrants. These factors are subjective in nature and require management · Obtained the options valuation workings and assessed the reasonableness
to make judgements on the estimates to be used in the valuation of the of selected inputs used in valuation, agreeing the inputs to publicly
warrants. available information, where possible.
The accounting for share-based payments is a key audit matter because the · Assessed attributes, on a sample basis, in respect of the valuation of
expense recognised in the financial statements is material in nature and the warrants. Ascertained whether these attributes were appropriately included
monetary value, the impact on the profit and loss account being a charge of in the warrant valuation model, and the expense is recognised over the
£134,686 for the period and impact on the share premium account being appropriate vesting period.
£94,503.
· Assessed the reasonableness of the fair value calculation through
There is a risk that the estimates used in the valuation may be inconsistent re-performing the calculation using the Black Scholes model.
with the factors surrounding the business, therefore, the valuation may be
materially misstated. There is also a risk that the disclosures in the
financial statements are not in accordance with IFRSs.
· Evaluated the adequacy of disclosures made by the Company in the
financial statements in accordance with the requirements of IFRSs.
Based on the audit work carried performed, we are satisfied that the
assumptions and judgements used in the valuation of the options and warrants
are appropriate, the calculations are free from material misstatement and
appropriate disclosures have been made in accordance with IFRSs.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.
Based on our professional judgment, we determined materiality for the
financial statements as a whole as follows:
Company financial statements
Overall materiality £14,000
How we determined it 5% of net loss rounded to the nearest £'000
Rationale for We believe that gross assets are the primary measure used by shareholders in
assessing the position and performance of the Company at the end of the
benchmark applied period. Gross assets are generally accepted auditing benchmarks.
We agreed with the Board of Directors that we would report to them
misstatements identified during our audit above £700 as well as misstatements
below those amounts that, in our view, warranted reporting for qualitative
reasons.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular, we
looked at where the Directors made subjective judgments, for example in
respect of significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. As in all of our
audits we also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account the structure of the Company, its accounting processes, its internal
controls and the industry in which it operates.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report, other than the
financial statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with 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 period 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 Company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
· the Company financial statements and the directors' remuneration
report to be audited 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 directors' responsibilities statement set out
on page 11, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above and on the Financial Reporting Council's website, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which the audit was considered capable of detecting
irregularities, including fraud
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 senior statutory auditor ensured 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 the Directors, and from our commercial knowledge and
experience of the 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 Company, including Companies Act 2006, taxation legislation,
data protection, anti-bribery, employment, environmental, health and safety
legislation and anti-money laundering regulations.
· 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 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;
· 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 Note 3 of the Company
financial statements were indicative of potential bias;
• 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;
• reviewing correspondence with HMRC and the Company's legal
advisor.
There are inherent limitations in our audit procedures described above. The
more removed the laws and regulations are from financial transactions, the
less likely it is that we would become aware of non-compliance. Auditing
standards also limit the audit procedures required to identify non-compliance
with laws and regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than
those that arise from error as they may involve deliberate concealment or
collusion.
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
(file:///C%3A/Users/PaulWelch/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/ZC8K4VRZ/www.frc.org.uk/auditorsresponsibilities)
. This description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the Board of Directors on 11 August 2022 to audit the
financial statements for the period ending 30 June 2022. Our total
uninterrupted period of engagement is 1 period, covering the period ending 30
June 2022.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to Company and we remain independent of the Company in conducting our
audit.
Our audit opinion is consistent with the additional report to the Board of
Directors.
Use of this 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.
Sanjay Parmar (Senior Statutory Auditor)
For and on behalf of Jeffreys Henry LLP (Statutory Auditors)
Finsgate
5-7 Cranwood Street
London EC1V
9EE
7 October 2022
Period
ended
30 June
2022
Notes £
Administrative expenses (144,340)
Exceptional items - share-based payments (134,686)
Operating (loss)/profit 4 (279,026)
Income tax expense 7 -
(Loss)/profit and total comprehensive income for the period (279,026)
Earnings per share 8
Basic (0.62)
Diluted (0.62)
2022
Notes £
ASSETS
Current assets
Trade and other receivables 10 40,022
Cash and cash equivalents 599,876
639,898
Total assets 639,898
EQUITY
Called up share capital 17 93,200
Share premium account 18 560,183
Other reserves 19 229,189
Retained earnings (279,026)
Total equity 603,546
LIABILITIES
Current liabilities
Trade and other payables 15 36,352
Total liabilities 36,352
Total equity and liabilities 639,898
The financial statements were approved by the board of directors and
authorised for issue on 7 October 2022 and are signed on its behalf by:
..............................
Mr J Orbell
Director
Company registration number 13322549
Share capital Share premium account Other reserves Retained earnings Total
Notes £ £ £ £ £
Balance at 8 April 2021 - - - -
Period ended 30 June 2022:
Loss and total comprehensive income for the period - - (279,026) (279,026)
Transactions with owners in their capacity as owners:
Issue of share capital 17 93,200 560,183 - 653,383
Share-based payments 19 229,189 229,189
Balance at 30 June 2022 93,200 560,183 229,189 (279,026) 603,546
2022
Notes £ £
Cash flows from operating activities
Cash absorbed by operations 21 (148,010)
Net cash outflow from operating activities (148,010)
Financing activities
Proceeds from issue of shares 890,000
Share issue costs (142,114)
Net cash generated from/(used in) financing activities 747,886
Net increase in cash and cash equivalents 599,876
Cash and cash equivalents at beginning of period -
Cash and cash equivalents at end of period 599,876
1 Accounting policies
Company information
ACP Energy Plc is a public company limited by shares incorporated in England
and Wales. The registered office is 21 High Street, Lutterworth, LE17 4AT.
The company's principal activities and nature of its operations are disclosed
in the directors' report.
1.1 Accounting convention
The financial statements have been prepared in accordance with UK- adopted
International Financial Reporting Standards (IFRS) and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS, except as
otherwise stated.
The financial statements are prepared in sterling, which is the functional
currency of the company. Monetary amounts in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost
convention. The principal accounting policies adopted are set out below.
1.2 Going concern
The directors have at the time of approving the financial statements, a
reasonable expectation that the company has adequate resources to continue in
operational existence for the foreseeable future. Thus, the directors have
adopted the going concern basis of accounting in preparing the financial
statements.
At the end of the period, the Company is in a significant net asset position
of £603,546. At 30th June 2022, the Company has a cash balance of £599,876.
Based on the forecasted expenditure for the period to 31 October 2023, the
Directors are of that the company will have sufficient cash for the
foreseeable future.
The Directors are therefore of the opinion that the Company has adequate
resources to enable it to continue in operation for the foreseeable future.
For this reason, it continues to adopt the going concern basis in preparing
the financial statements
1.3 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term liquid investments with original maturities of three
months or less, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities.
1.4 Financial assets
Financial assets are recognised in the company's statement of financial
position when the company becomes party to the contractual provisions of the
instrument. Financial assets are classified into specified categories,
depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through
profit and loss are measured at fair value and any transaction costs are
recognised in profit or loss. Financial assets not classified as fair value
through profit and loss are initially measured at fair value plus transaction
costs.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised
cost where the objective is to hold these assets in order to collect
contractual cash flows, and the contractual cash flows are solely payments of
principal and interest. They can arise from the provision of goods and
services to customers (eg trade receivables). They are initially recognised at
fair value plus transaction costs directly attributable to their acquisition
or issue, and are subsequently carried at amortised cost using the effective
interest rate method, less provision for impairment where necessary.
Impairment of financial assets
Financial assets, other than those measured at fair value through profit or
loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a
result of one or more events that occurred after the initial recognition of
the financial asset, the estimated future cash flows of the investment have
been affected.
1 Accounting policies
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership to another entity.
1.5 Financial liabilities
The company recognises financial debt when the company becomes a party to the
contractual provisions of the instruments.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other
short-term monetary liabilities, are initially measured at fair value net of
transaction costs directly attributable to the issuance of the financial
liability. They are subsequently measured at amortised cost using the
effective interest method. For the purposes of each financial liability,
interest expense includes initial transaction costs and any premium payable on
redemption, as well as any interest or coupon payable while the liability is
outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company's
obligations are discharged, cancelled, or they expire.
1.6 Equity instruments
Equity instruments issued by the company are recorded at the proceeds
received, net of direct issue costs. Dividends payable on equity instruments
are recognised as liabilities once they are no longer at the discretion of the
company.
1.7 Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
company's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable 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 goodwill or from the
initial recognition of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end
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 is realised.
Deferred tax is charged or credited in the income statement, 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 the company has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and liabilities relate
to taxes levied by the same tax authority.
1 Accounting policies
1.8 Employee benefits
The cost of short-term employee benefits are recognised as a liability and an
expense, unless these cost are required to be recognised as part of the cost
of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in
which the employee's services are received.
Termination benefits are recognised immediately as an expense when the Company
is demonstrably committed to terminate the employment of an employee or to
provide termination benefits.
1.9 Share-based payments
Equity-settled share-based payments are measured at fair-value at the date of
grant by reference to the fair value of the equity instrument granted using
the Black-Scholes model. The fair value determined at the grant date is
expensed on a straight-line basis over the vesting period, based on the
estimate of shares that will eventually vest. A corresponding adjustment is
made to equity.
When the terms and conditions of equity-settled share-based payments at the
time they were granted are subsequently modified, the fair value of the
original fair value is recognised over the remaining vesting period in
addition to the grant date fair value of the original share-based payment. The
share-based payment expense is not adjusted if the modified fair value is less
than the original fair value.
Cancellation or settlement (including those resulting from employee
redundancies) are treated as an acceleration of vesting and the amount that
would have recognised over the remaining vesting period is recognised
immediately.
1.9 Foreign exchange
Transactions in currencies other than pound sterling are recorded at the rates
of exchange prevailing at the dates of the transactions. At each reporting end
date, monetary assets and liabilities that are denominated in foreign
currencies are retranslated at the rates prevailing on the reporting end date.
Gains and losses arising on translation in the period are included in profit
or loss.
2 Adoption of new and revised standards and changes in accounting policies
In the current period, the following new and revised Standards and
Interpretations have been adopted by the company and have an effect on the
current period or may have an effect on future periods:
IAS 1 Amendments to IAS 1 to clarify the classification of liabilities as current or
non-current.
3 Critical accounting estimates and judgements
In the application of the company's accounting policies, the directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised, if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current
and future periods.
There are no 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.
4 Operating loss
Period ended 30 June 2022
Operating loss for the period is stated after charging/(crediting): £
Fees payable to the company's auditor for the audit of the company's financial 15,000
statements
5 Employees
The average monthly number of persons employed by the company during the
period including directors was:
Period ended 30 June 2022
Number
Directors 4
Their aggregate remuneration comprised:
Period ended 30 June 2022
£
Directors emoluments 55,445
6 Directors' remuneration
Period ended 30 June 2022
£
Remuneration for qualifying services 713
Share based payment expense 54,732
7 Income tax expense
The charge for the period can be reconciled to the loss per the income
statement as follows:
Period ended 30 June 2022
£
Loss before taxation (279,026)
Expected tax credit based on a corporation tax rate of 19.00% (53,015)
Effect of expenses not deductible in determining taxable profit 25,590
Change in unrecognised deferred tax assets 27,425
Taxation charge for the period -
The excess management expenses carried forward at 30 June 2022 were £144,342.
8 Earnings per share
Period ended 30 June 2022
Number
Number of shares
Weighted average number of ordinary shares for basic earnings per share 44,996,347
Period ended 30 June 2022
Earnings (all attributable to equity shareholders of the company) £
Continuing operations
Loss/profit for the period from continued operations (279,026)
Pence per share
Basic and diluted earnings per share
From continuing operations (0.62)
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of shares outstanding
during the period. Diluted earnings per share is calculated on the same basis
as basic earnings per share but with a further adjustment for the weighted
average shares in issue to reflect the effect of all dilutive potential
ordinary shares. There are no dilutive potential ordinary shares, so the
diluted earnings per share is equal to the basic earnings per share.
9 Credit risk
Cash deposits and financial transactions give rise to credit risk in the event
that counter parties fail to perform under the contract. Given the level of
cash deposits and financial assets within these financial statements, the
probability of material loss is considered to be at an acceptable level.
The carrying amount of financial assets recorded in the financial statements,
which is net of impairment losses, represents the company's maximum exposure
to credit risk.
The company does not hold any collateral or other credit enhancements to cover
this credit risk.
10 Trade and other receivables
2022
£
VAT recoverable 21,097
Prepayments 18,925
40,022
11 Trade receivables - credit risk
Fair value of trade receivables
The directors consider that the carrying amount of trade and other receivables
is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting end date.
12 Fair value of financial liabilities
The directors consider that the carrying amounts of financial liabilities
carried at amortised cost in the financial statements approximate to their
fair values.
13 Liquidity risk
The following table details the remaining contractual maturity for the
company's financial liabilities with agreed repayment periods. The contractual
maturity is based on the earliest date on which the company may be required to
pay.
Less than 1 month 1 - 3 months Total
£ £ £
At 30 June 2022
Trade payables 15,139 - 15,139
Accruals - 21,213 21,213
15,139 21,213 36,352
13 Liquidity risk
Liquidity risk management
Responsibility for liquidity risk management rests with the board of
directors. The company manages liquidity risk by maintaining adequate
reserves, by continuously monitoring forecast and actual cash flows, and by
matching the maturity profiles of financial assets and liabilities.
14 Market risk
The company is not exposed to the financial risks of changes in foreign
currency exchange rates and interest rates. It is also not affected by
interest rate benchmark reform.
15 Trade and other payables
2022
£
Trade payables 15,139
Accruals 21,213
36,352
16 Deferred taxation
No deferred tax asset has been recognised in respect of the excess management
expenses amounting to £144,342 as it is not considered virtually certain that
there will be future taxable profits available in the foreseeable future.
These deductible temporary differences may be carried forward indefinitely.
17 Share capital
2022 2022
Ordinary share capital Number £
Issued and fully paid
Ordinary shares of 0.2p each 46,600,000 93,200
Reconciliation of movements during the period:
Ordinary shares
Number
At 8 April 2021 -
Issue of fully paid shares 46,600,000
At 30 June 2022 46,600,000
17 Share capital
On incorporation, the company issued 3,000 ordinary shares of £0.10 for
consideration of £300 cash. On 6th July 2021, the company sub-divided the
3,000 shares into 150,000 ordinary shares with par value of £0.002 per share
and issued 29,850,000 ordinary shares at a price of £0.002 per share for a
total cash consideration of £59,700. On 28th January 2022, the company issued
a further 16,600,000 ordinary shares with par value of £0.002 per share for a
total consideration of £830,000. Share issue expenses totalling £142,114
were incurred relating to this issue and are deducted from the company's share
premium (see note 18). The ordinary shares have full rights in the company
with respect to voting, dividends and distributions.
18 Share premium account
2022
£
At the beginning of the period -
Issue of new shares 796,800
Share issue expenses (142,114)
Share-based payments (Note 19) (94,503)
At the end of the period 560,183
19 Share-based payment transactions
24,998,950 options and 5,548,000 warrants over £0.002 ordinary shares in the
Company were issued on 21(st) January. A further 6,000,000 warrants were
issued on 2(nd) March 2022 in respect of services provided in the reporting
period.
The options and warrants issued on 21(st) January 2022 were in respect of
services provided in the period . Therefore, share-based payment expense has
been recognised in these financial statements amounting to £229,189. The
warrants issued on 2(nd) March 2022 were in respect of IPO, and expenses
totalling £94,503 are deducted from the company's share premium.
The table below summarises the options granted, exercised and cancelled during
the period:
Number of options Number of warrants Weighted average exercise price
2022 2022 2022
Outstanding at 8 April 2021
Granted in the period 24,998,950.00 0.01
11,548,000.00 0.0625
Outstanding as at 30 June 2022 24,998,950.00 11,548,000.00 0.02
Exercisable at 30 June 2022 24,998,950.00 11,548,000.00 0.02
The options issued during the period vest on over 3 years on the RTO . The
warrants vested on the date of the grant.
The options issued during the period vest on over 3 years on the RTO . The
warrants vested on the date of the grant.
19 Share-based payment
transactions
(Continued)
The weighted average fair value of the options and warrants on the measurement
date was £0.0350 and £0.0088 respectively. The weighted average exercise
price was £0.01 for options and £0.0625 for warrants.
Inputs were as follows:
2022
Pool 1 Pool 2 Pool 3
Weighted average share price 0.065 0.065 0.067
Weighted average exercise price 0.01 0.0625 0.0625
Expected volatility 60% 60% 60%
Expected life 2 3 2
Expected dividend yields - - -
Volatility was calculated based upon the anticipated volatility of newly
listed companies of a similar market capitalisation and number of
shareholders.
20 Capital risk management
The company manages its capital to ensure that it will be able to continue as
a going concern while maximising the return to stakeholders through the
optimisation of the debt and equity balance,
The capital structure of the company consists of cash and cash equivalents and
equity comprising share capital, reserves and retained earnings. The company
reviews the capital structure annually and as part of this review considers
that cost of capital and the risks associated with each class of capital.
The company is not subject to any externally imposed capital requirements.
21 Cash absorbed by operations
2022
£
Loss for the period before income tax (279,026)
Share based payment expense 134,686
Movements in working capital:
Increase in trade and other receivables (40,022)
Increase in trade and other payables 36,352
Cash absorbed by operations (148,010)
2022
£
Other reserves
Other reserves arising from share-based payment transactions 229,189
Relates to equity settled share-based payments 94,503
The expected life used in the model has been adjusted, based on management's
best estimate, for the effects of non-transferability, exercise restrictions
and behavioural considerations.
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