REG - Alkemy Capital Invs. - Annual Report & Financial Statements
18/05/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220518:nRSR8572La&default-theme=true
RNS Number : 8572L Alkemy Capital Investments PLC 18 May 2022
18 May 2022
Alkemy Capital Investments Plc
Annual Report & Financial Statements
Alkemy Capital Investments plc ("Alkemy") is pleased to announce the
publication of its audited Annual Report and Accounts for the year ended 31
January 2022 (the "Annual Report"). The Annual Report is available on the
Company's website, www.alkemycapital.co.uk (http://www.alkemycapital.co.uk) .
The Annual Report for the year ended 31 January 2022 is set out in full below.
Further information
For further information, please visit the Company's website:
www.alkemycapital.co.uk (http://www.alkemycapital.co.uk) or
www.teesvalleylithium.co.uk (http://www.teesvalleylithium.co.uk)
-Ends-
Alkemy Capital Investments Plc Tel: 0207 317 0636
Sam Quinn info@alkemycapital.co.uk (mailto:info@alkemycapital.co.uk)
VSA Capital Limited Tel: 0203 005 5000
Andrew Monk (corporate broking) amonk@vsacapital.com (mailto:amonk@vsacapital.com)
Andrew Raca (corporate finance) araca@vsacapital.com (mailto:araca@vsacapital.com)
Shard Capital Partners LLP
Damon Heath Tel: 0207 186 9952
damon.heath@shardcapital.com (mailto:damon.heath@shardcapital.com)
Isabella Pierre Tel: 0207 186 9927
isabella.pierre@shardcapital.com (mailto:isabella.pierre@shardcapital.com)
NOTES TO EDITORS
Alkemy is seeking to develop, construct and operate the world's leading
independent and sustainable lithium hydroxide production facility.
Alkemy, through its wholly-owned subsidiary Tees Valley Lithium, has secured a
9.6ha brownfields site at the Wilton International Chemical Park located in
Teesside, a major UK Freeport.
Alkemy has completed a Class 4 Feasibility Study for its proposed lithium
hydroxide facility which will process feedstock imported from various sources
to produce 96,000 tonnes of a premium, low-carbon lithium hydroxide annually,
representing around 15% of Europe's projected demand.
Forward Looking Statements
This news release contains forward‐looking information. The statements are
based on reasonable assumptions and expectations of management and Alkemy
provides no assurance that actual events will meet management's expectations.
In certain cases, forward‐looking information may be identified by such
terms as "anticipates", "believes", "could", "estimates", "expects", "may",
"shall", "will", or "would". Although Alkemy believes the expectations
expressed in such forward‐looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those projected.
Mining exploration and development is an inherently risky business. In
addition, factors that could cause actual events to differ materially from the
forward-looking information stated herein include any factors which affect
decisions to pursue mineral exploration on the relevant property and the
ultimate exercise of option rights, which may include changes in market
conditions, changes in metal prices, general economic and political
conditions, environmental risks, and community and non-governmental actions.
Such factors will also affect whether Alkemy will ultimately receive the
benefits anticipated pursuant to relevant agreements. This list is not
exhaustive of the factors that may affect any of the forward‐looking
statements. These and other factors should be considered carefully and readers
should not place undue reliance on forward-looking information.
Chairman's Statement
I have great pleasure in presenting our maiden Annual Report as a public
company. Alkemy Capital Investments plc ("Alkemy" or the "Company") was
incorporated on 21 January 2021 and in September 2021 raised £1.5 million
before expenses in an initial public offering on the Main Market of the London
Stock Exchange (the "IPO").
We formed Alkemy in order to undertake the acquisition of a controlling
interest in a company or business (an "Acquisition"), in the mining and
technology metals sectors, reflecting the experience of the Company's board of
Directors and advisers. Since our IPO, the Company saw a steady flow of
potential Acquisition opportunities and actively reviewed a number of projects
covering all stages of development in a range of commodities in multiple
jurisdictions.
Whilst evaluating these opportunities it became evident to the Board that
there was a significant and attractive opportunity to rapidly establish a
business in the downstream minerals processing sector. The Company, together
with its advisers, undertook an in-depth review of the potential of this
strategy, which further strengthened the Board's conviction.
In February 2022, we announced the formation of a subsidiary called Tees
Valley Lithium Limited ("TVL") that would aim to develop the UK's first
Lithium Hydroxide processing facility. This transaction and change of strategy
constituted a reverse takeover transaction under the listing rules of the
London Stock Exchange and resulted in Alkemy becoming an operating company.
Although we are still in the early stages, our aim is to build the most
sustainable and significant producer of lithium hydroxide globally, utilising
the advantages of the UK's chemical processing skills, infrastructure, green
energy and legislation. We expect to update the market in due course on
further exciting developments as we continue to advance this project.
Lithium Hydroxide Market
China dominates lithium conversion capacity (currently processing 90% of the
world's Lithium Hydroxide) and increasingly is moving upstream to secure
feedstock. The market for lithium hydroxide has been well articulated by many
analysts with a consensus forecasting that it will go into deficit causing
prices to rise significantly over the medium term.
It is also expected that Europe and the US will continue to use the higher
performance NMC batteries which require a lithium hydroxide feedstock.
Lithium Hydroxide Facility - Tees Valley
Alkemy via its wholly owned subsidiary TVL is looking to develop, construct
and operate one of the world's most sustainable producers of lithium hydroxide
with a view to becoming a key supplier to the UK and European mobile energy
market and has identified and entered into an exclusivity agreement with
Sembcorp Utilities (UK) in respect of a brownfields site at the Wilton
International chemical engineering park located in Teesside, a major UK
Freeport.
We have conducted initial high level due diligence into the feasibility of
establishing a Lithium Hydroxide Monohydrate ("LHM") plant at the site which
will aim to initially produce 24,000 tonnes per annum, and up to 96,000 tonnes
per annum, from lithium feedstock from various sources, to be sold to the UK
and European mobile energy markets. We are currently reviewing several
methodologies for the production of lithium hydroxide and consider that
processing LHM by either causticisation or electrochemical processing are the
most suitable for the Company.
The proposed development timeline is based on progressing production by way of
causticisation having achieved better results in recent studies and is also
based on knowledge of the accelerated development timelines being achieved on
other projects known to the Directors.
The anticipated timeline for the development of the project is as follows:
· Class 4 Capex and Opex study - completed April 2022
· Front End Engineering Study (FEED) - completed in Q3 2022
· Long lead time procurement - Q3 2022 to Q2 2023
· Financing - Q4 2022
· Main Construction, subject to financing - Q4 2022 to Q4 2023.
We are currently in discussions with several potential providers of primary
lithium sulphate feedstock and look forward to updating the market on this in
due course.
Key consultants/partners
Since announcing our change of strategy we have appointed several industry
leading consultants to help us deliver the project, including:
* Wave International - a leading consulting firm in the battery and tech metals
sector, with extensive upstream and downstream lithium processing experience.
Wave delivered the Class 4 study and have had a significant involvement in the
development of lithium hydroxide refineries in Australia. Wave will manage all
work programmes including the work of our other experts and consultants, in
order to develop a best-in-class lithium hydroxide monohydrate refining
process.
* ANZAPLAN - a leading engineering consultant who will assist TVL in the
development of the electrochemical route process.
* Nagrom laboratories - a leading laboratory who will advise on the removal of
impurities.
We expect to make further appointments as the project develops and will keep
the market updated on this front.
Funding
Alkemy is considering various funding options for the project including
private equity, a structured bond and an institutional equity component and
will update the market on this in due course. As it is intended to finance and
operate the facility via its operating subsidiary TVL, if this is achieved it
is anticipated that there will be no immediate dilution to Alkemy's
shareholders as part of the proposed financing process.
We would like to take this opportunity to thank our shareholders for their
continued support and look forward to reporting on our progress during 2022 as
we deliver on our new strategy.
Paul
Atherley
Non-Executive
Chairman
17 May
2022
Strategic Report
The Directors present the Strategic Report of the Company for the period ended
31 January 2022.
Review of business and future developments
The Company was incorporated and registered in England and Wales on 21 January
2021 and on 27 September 2021 was admitted to the Standard Listing segment of
the Official List of the UK Listing Authority and to trading on the London
Stock Exchange, having raised £1.5 million (before expenses) from the issue
of 2,999,999 million ordinary shares at a placing price of 50p.
The Company was formed to undertake an Acquisition of a controlling interest
in a company or business. Given their experience, the Board focused on the
mining and technology metals sectors.
As noted in the Chairman's Statement on page 4, after the period end on 25
February 2022, the Company announced that it had entered into an exclusivity
agreement (the "Exclusivity Agreement") with Sembcorp Utilities (UK) Limited
and a heads of terms in respect of a proposed option to enter into a lease
over a brownfields site (the "Site") at Wilton International (the "Agreement
to Lease") and a long lease over the Site. Wilton International is a
well-established chemical engineering park located in Teesside, a major
Freeport in the UK. A lease may be entered into by TVL, a subsidiary of the
Company, following exercise of the option granted under the Agreement to Lease
(the "Lease"). It is intended that TVL will be the operating company that
develops the Project.
On entry into the Exclusivity Agreement, the Company paid an exclusivity fee
of £50,000 and was granted a six month period of exclusivity in which to
further evaluate the Site and prepare the definitive Lease, a utilities
agreement and a services agreement, giving effect to the heads of terms. The
entering into the Exclusivity Agreement and incorporation of TVL constituted
an Acquisition and reverse takeover transaction under the rules of the London
Stock Exchange.
If, during the six month exclusivity period the Board determines that the
opportunities presented by the development of the Site would be in the best
interests of shareholders, the Company, via TVL, intends to enter into the
Lease and to commence the design, finance and construct of a plant that will
produce Lithium Hydroxide Monohydrate from Lithium Sulphate Monohydrate
feedstock with a view to becoming a key supplier to the UK and European
battery cell manufacturers (the "Project").
The principal activity of the Company is to act as the holding company to TVL,
an operating subsidiary, which will enter into the Agreement to Lease and the
Lease. The Company will provide a parent company guarantee to Sembcorp in
order to guarantee the operating subsidiary's obligations under the Agreement
to Lease and the Lease. The Company aims to implement an operating strategy
with a view to generating value for its shareholders through the creation of a
Lithium Hydroxide Monohydrate facility.
Key performance indicators
During the reporting period, the Company was focused on the evaluation of
various opportunities in the mining sector. When the Company enters into the
Lease, then financial, operational, health, safety, and environmental KPIs
will become more relevant and reported upon as appropriate. As a result, the
Directors are of the opinion that, other than the maintenance of cash and cash
equivalents, analysis using KPI's is not appropriate for an understanding of
the business at this time.
2021
Cash and cash equivalents £1,113,923
Principal risks and uncertainties
The principal risks and uncertainties currently faced by the Company are set
out further in the Risk Management Report on page 16.
Gender analysis
A split of our Directors, senior managers and employees by gender at the end
of the financial period is as follows:
Male - 2
Female - 2
The Company recognises the need to operate a gender diverse business. The
Board will also ensure any future employment takes into account the necessary
diversity requirements and compliance with all employment law. The Board has
experience and sufficient training and qualifications in dealing with such
issues to ensure they would meet all requirements. More detail will be
disclosed in the future annual reports once the Company enters into the Lease
and has completed its transition to an operating company.
Corporate social responsibility
The Company aims to conduct its business with honesty, integrity and openness,
respecting human rights and the interests of shareholders and employees. The
Company aims to provide timely, regular and reliable information on the
business to all its shareholders and conduct its operations to the highest
standards.
The Company strives to create a safe and healthy working environment for the
wellbeing of its staff and to create a trusting and respectful environment,
where all members of staff are encouraged to feel responsible for the
reputation and performance of the Company.
The Company aims to establish a diverse and dynamic workforce with team
players who have the experience and knowledge of the business operations and
markets in which we operate. Through maintaining good communications, members
of staff are encouraged to realise the objectives of the Company and their own
potential.
Corporate environmental responsibility
This will become more relevant once the Company enters into the Lease and
completes its transition to an operating company. The Board contains personnel
with a good history of running businesses that have been compliant with all
relevant laws and regulations and there have been no instances of
non-compliance in respect of environment matters.
The Company's policy is to minimize the risk of any adverse effect on the
environment associated with its activities with a thoughtful consideration of
key areas such as energy use, pollution, transport, renewable resources,
health and wellbeing. The Company also aims to ensure that its suppliers and
advisers meet with their legislative and regulatory requirements and that
codes of best practice are met and exceeded.
Section 172(1) Statement - Promotion of the Company for the benefit of the
members as a whole
The Directors believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members as a whole, as required
by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
1. Consider the likely consequences of any decision in the
long term,
2. Act fairly between the members of the Company,
3. Maintain a reputation for high standards of business
conduct,
4. Consider the interests of the Company's employees,
5. Foster the Company's relationships with suppliers,
customers and others, and
6. Consider the impact of the Company's operations on the
community and the environment.
The pre-revenue nature of the business is important to the understanding of
the Company by its members, employees and suppliers, and the Directors are as
transparent about the cash position and funding requirements as is allowed
under LSE regulations.
The application of the s172 requirements can be demonstrated in relation to
the some of the key decisions made during 2021 and after the period end:
1. Appointment of a high calibre, experienced management team;
2. Announcing the Company's new strategy; and
3. The execution of the Exclusivity Agreement.
The Board takes seriously its corporate social responsibilities to the
environment in which it works which will become more relevant once the Company
enters into the Lease and completes its transition to an operating company.
Paul Atherley
Non-Executive Chairman
17 May 2022
Board of Directors
Paul Atherley - Non-Executive Chairman (appointed 21 January 2021)
Mr Atherley is a highly experienced senior resources executive with wide
ranging international and capital markets experience. He graduated as mining
engineer from Imperial College London and has held a number of senior
executive and board positions. He is currently Chairman of LSE listed Pensana
Plc which is establishing the world's first independent and sustainable rare
earth processing facility in the UK.
He is based in London and has broad experience in raising debt and equity
finance for resource companies. He served as Executive Director of the
investment banking arm of HSBC Australia where he undertook a range of
advisory roles in the resources sector. He has completed a number of
acquisitions and financings of resources projects in Europe, China, Australia
and Asia.
Mr Atherley is a strong supporter of Women in STEM and has established a
scholarship which provides funding for young women to further their education
in science and engineering.
Sam Quinn - Non-Executive Director (appointed 21 January 2021)
Sam Quinn is a corporate lawyer with over fifteen years' worth of experience
in the natural resources sector, in both legal counsel and management
positions. Mr Quinn is a principal of Silvertree Partners, a London-based
specialist corporate services provider for the natural resources industry. In
addition Mr Quinn holds various other Non-Executive Directorships and company
secretarial roles for listed and unlisted natural resources companies. During
time spent in these roles, Mr Quinn has gained significant experience in the
administration, operation, financing and promotion of natural resource
companies.
Previously, Mr Quinn worked as the Director of Corporate Finance and Legal
Counsel for the Dragon Group, a London based natural resources venture capital
firm and as a corporate lawyer for Jackson McDonald Barristers &
Solicitors in Perth, Western Australia and for Nabarro LLP in London.
Helen Pein - Non-Executive Director (appointed 27 September 2021)
Helen has over 30 years' experience in natural resources sector and currently
serves as a Director of Pan Iberia Ltd, Trident Royalties Plc and Panex
Resources Pty Ltd.
Helen was formerly a Director of Pangea Exploration Pty Ltd, a company
affiliated with Denham Capital where she was part of the team directly
responsible for the discovery of a number of world-class gold and mineral
sands deposit across Africa. Helen is a recipient of the Gencor Geology
Award.
Directors' Report
The Directors present their annual report together with the financial
statements and Auditor's Report for the period ended 31 January 2022.
Results and dividends
The results of the Company for the period ended 31 January 2022 are set out in
the Statement of Comprehensive Income on page 27. The Directors do not
recommend the payment of a dividend for the period.
Directors and Directors' interests
The Directors who served during the period to date are as follows:
Paul Atherley
Sam Quinn
Helen Pein
The direct and beneficial shareholdings of the Board in the Company as at 31
January 2022 were as follows:
Number of ordinary shares % of issued
Direct Beneficial Total Share capital
P Atherley 3,000,000 - 3,000,000 50.1%
S Quinn 60,000 190,000 250,000 4.17%
H Pein - - - -
Substantial shareholders
As at the date of this Report, the total number of issued Ordinary Shares with
voting rights in the Company was 5,999,999. The Company has been notified of
the following interests of 3 per cent or more in its issued share capital as
at the date of this report.
Shareholder Number of ordinary shares % of issued share capital
Paul Atherley 3,000,000 50.1%
Jarvis Nominees 1,200,000 20%
Sam Quinn 250,000 4.17%
Colin Stone 200,000 3.33%
*Sam Quinn's shareholding includes 50,000 shares held by Silvertree Partners
LLP (which is 50% beneficially owned) and 140,000 shares held by Lionshead
Consultants Limited (which is 100% beneficially owned).
Corporate governance
The Company has set out its full Corporate Governance Statement on page 19.
The Corporate Governance Statement forms part of this Directors' report and is
incorporated into it by cross reference.
Greenhouse gas disclosures
The Company has no head office and only one employee other than its Directors,
and therefore has minimal carbon emissions below 40,000 kWh. It is not
practical to obtain emissions data and as such none is disclosed. This
disclosure will become more relevant once the Company enters into the Lease
and completes its transition to an operating company.
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.
Financial instruments and risk management
The Company is exposed to a variety of financial risks and the impact on the
Company's financial instruments are summarised in the Risk Management Report.
Details of the Company's financial instruments are disclosed in note 14 to the
financial statements.
Directors' insurance
The Company has implemented Directors and Officers Liability Indemnity
Insurance.
Events after the reporting period
On 25 February 2022 the Company announced that it had entered into the
Exclusivity Agreement and incorporated a subsidiary TVL, to pursue its new
strategy of developing a Lithium Hydroxide facility at Teesside, UK. Further
details of this are contained in the Strategic Report on page 6.
Going concern
The Company's assets are comprised almost entirely of cash. The Directors have
outlined their proposed new strategy for the Company in the Chairman's
Statement on page 4. As part of their assessment of going concern, the
Directors have prepared cash forecasts that show that the Company has
sufficient cash resources in order to complete the acquisition executed after
the period end and adopt the new strategy.
In order for the Company to be successful in its new strategy, it will need to
raise additional funds in the immediate term. The Directors are reasonably
confident that such funds will be forthcoming if and when they are required,
however as a successful fundraising in support of this strategy cannot be
assured, a material uncertainty exists in this regard. The Directors have a
reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future.
Accordingly, the Directors believe that as at the date of this report it is
appropriate to continue to adopt the going concern basis in preparing the
financial statements.
Disclosure of information to Auditors
The Directors confirm that:
· So far as each Director is aware, there is no relevant audit
information of which the company's auditor is unaware; and
· The Directors have taken all steps that they ought to have taken
as Directors in order to make themselves aware of any relevant audit
information and to establish that the auditors are aware of that information.
Auditor
A resolution proposing the re-appointment of Crowe U.K. LLP as auditor will be
put to shareholders at the Annual General Meeting.
This Directors' Report has been approved by the Board and signed on its behalf
by:
Paul Atherley
Non-Executive Chairman
17 May 2022
Directors' Remuneration Report
Until the Lease is entered into and the Company completes its transition to an
operating company, the Company will not have a separate remuneration
committee. The Board will instead periodically review the quantum of
Directors' fees, taking into account the interests of shareholders and the
performance of the Company and the Directors.
The items included in this report are unaudited unless otherwise stated.
The Directors who held office at 31 January 2022 are summarised as follows:
Name of Director Position
P Atherley Non-Executive Chairman
S Quinn Chief-Executive Officer
H Pein Non-Executive Director
Directors' Letters of appointment
Letter of Appointment - Paul Atherley
Pursuant to a letter of appointment dated 21 September 2021 between the
Company and Mr Atherley, Mr Atherley is engaged as Chairman with fees of
£24,000 per annum. Mr Atherley's appointment is for an initial term of 12
months. The appointment can be terminated by either party on three months
written notice.
Letter of Appointment - Sam Quinn
Pursuant to a letter of appointment dated 21 September 2021 between the
Company and Sam Quinn, Mr Quinn is engaged as a Non-Executive Director with
fees of £18,000 per annum, for an initial term of 12 months. The
appointment can be terminated by either party on three months written notice.
Letter of Appointment - Helen Pein
Pursuant to a letter of appointment dated 21 September 2021 between the
Company and Helen Pein, Helen is engaged as a Non-Executive Director with fees
of £18,000 per annum. Helen's appointment is for an initial term of 12
months. The appointment can be terminated by either party on three months
written notice.
In addition to the salaries received under the service agreements referenced
above, Sam Quinn and Helen Pein will be remunerated for additional work
performed for the Company which is outside the scope of their service
agreements, including project due diligence, consultancy and management
services. Sam Quinn and Helen Pein's contractual daily rate for these
additional services is £1,000 per day and both Sam Quinn and Helen Pein shall
be subject to a maximum of 3 days per calendar month.
Pursuant to a consultancy agreement dated 21 September 2021 between the
Company and Selection Capital Investments Limited the ("Consultancy
Agreement"), Paul Atherley is engaged as Key Personnel (as defined under the
Consultancy Agreement) contracted to provide services to the Company in
consideration of payment of £1,500 per day with a maximum amount of days
contracted to be 3 days per calendar month.
Terms of appointment
The services of the Directors are provided under the terms of letters of
appointments, as follows:
Director Year of appointment Number of periods completed Date of current engagement letter
P Atherley 2021 1 21 September 2021
S Quinn 2021 1 21 September 2021
H Pein 2021 1 21 September 2021
Consideration of shareholder views
The Board considers shareholder feedback received. This feedback, plus any
additional feedback received from time to time, is considered as part of the
Company's annual policy on remuneration.
Policy for salary reviews
The Company may from time to time seek to review salary levels of Directors,
taking into account performance, time spent in the role and market data for
the relevant role. It is intended that there will be a salary review during
the next period as the Company transitions to an operating company.
Policy for new appointments
It is not intended that there will be any new appointments to the Board in the
near term. It is intended that a full review of the Board will take place on
an annual basis following the Company's transition to an operating Company.
Directors' emoluments and compensation (audited)
Remuneration paid to the Directors' during the period ended 31 January 2022
was as follows (all figures are stated in GBP):
Director Directors fees Salary/Consulting fees Total remuneration
P Atherley 31 Jan 2022 8,267 - 8,267
S Quinn 31 Jan 2022 6,200 14,400 20,600
H Pein 31 Jan 2022 6,000 - 6,000
Total 31 Jan 2022 20,467 14,400 34,867
The highest paid Director of the Company in the period was Sam Quinn, who was
paid a total of £20,600 representing approx. 77% more than the average
Director remuneration of £11,622 in the period.
Directors' Remuneration Policy
Pursuant to the Directors' letters of appointment, as described above, the
Directors receive fees, all payable monthly in arrears. There is currently no
bonus or long-term incentive plan in operation for the Directors, although
this is subject to review and may be implemented in due course.
Based on the foregoing, the remuneration policy of the Company can be
summarised as follows:
How the element supports our strategic objectives Operation of the element Maximum potential payout and payment at threshold Performance measures used, weighting and time period applicable
Base Pay
Recognises the role and the responsibility for the delivery of strategy and Paid in 12 monthly instalments Contractual sum None
results
Pensions
None n/a n/a n/a
Short term incentives
None n/a n/a n/a
A remuneration committee is expected to be appointed once the Lease is entered
into, to consider an appropriate level of Directors' remuneration.
Although there is no formal Director shareholding policy in place, the Board
believe that share ownership by Directors strengthens the link between their
personal interests and those of shareholders.
No views were expressed by shareholders during the period on the remuneration
policy of the Company.
Other matters
The Company does not currently have any annual or long-term incentive schemes
in place for any of the Directors.
The Company does not have any pension plans for any of the Directors and does
not pay pension amounts in relation to their remuneration.
This Directors' Remuneration Report has been approved by the Board and signed
on its behalf by:
Paul Atherley
Non-Executive Chairman
17 May 2022
Risk Management Report
The Company has undertaken an evaluation of the risks it is exposed to which
are summarised as follows:
There is no assurance that the Company will determine that the Project is
economically viable and the Company may elect not to execute the option
granted under the Agreement to Lease
The success of the Company's business strategy is dependent on its ability to
identify sufficient suitable acquisition opportunities. Whist the Company
believes that the Project presents a good opportunity, it is still in the
process of evaluating such opportunity. If the Company fails to complete the
development of the Project it may be left with substantial unrecovered
transaction costs, potentially including fees, legal costs, accounting costs,
due diligence or other expenses. Furthermore, even if an agreement is reached
relating to the Project, the Company may fail to complete the Project for
reasons beyond its control. Any such event will result in a loss to the
Company of the related costs incurred, which could materially adversely affect
subsequent attempts to identify and acquire another target business.
Development and production activities are capital intensive and inherently
uncertain in their outcome and the Company may not make a return on its
investments, recover its costs or generate cash flows.
The construction of industrial facilities are capital intensive. In addition,
environmental damage could greatly increase the cost of operations, and
various operating conditions may adversely and materially affect the levels of
production. These conditions include delays in obtaining governmental
approvals or consents, insufficient storage or transportation capacity or a
change in demand for the product. While diligent supervision and effective
maintenance operations can contribute to maximising production rates over
time, production delays and declines from normal operations cannot be
eliminated and may adversely and materially affect the revenues, cash flow,
business, results of operations and financial resources and condition of the
Company and its subsidiary undertakings from time to time (the "Group").
Currently the Group has insufficient capital to meet the funding requirements
for the development of the Project
As the Company is still evaluating the Project, it is still considering the
associated costs with the development of the Project and the amount of
additional capital that may be required.
Whilst the Company has sufficient working capital for its present
requirements, that is for at least the next twelve months, the Company is of
the opinion that if it decides to proceed with the Project, the Group does not
have sufficient capital in order to complete the construction of the Project.
Based on a high-level preliminary review of expected costs the Directors
anticipate that a total of approximately £400 million (excluding financing
costs) of additional equity and / or debt financing will be required and
subject to the outcome of the feasibility and engineering studies the
Company's confirmation to proceed with the Project to fund the evaluation,
development and construction of the Project. The Company intends to raise the
development costs of the Project by:
(a) Debt finance - Any debt finance in respect of the Company for the
purposes of developing and completing the Project, is likely to be subject to
customary conditions precedent. As of the date of this document, the Company
has not yet begun the formal process of seeking third party debt financing in
respect of the Project, however the Company expects to carry out this process
immediately following completion of the feasibility studies and the Company's
confirmation to proceed with the Project.
(b) Equity finance - In relation to any equity financing, the Company
expects to engage advisers to assist the Company with its equity funding
requirements. The Company has not yet begun the formal process of seeking
formal engagement with advisers for equity financing in respect of the
Project, however the Company expects to carry out this process in due course
following completion of the feasibility and engineering studies.
Based on the Company's informal discussions with potential debt and equity
providers to date, the Directors are confident that within the period of
twelve months following the date of this document the Group will be able to
secure all the necessary finance required to develop and complete the Project.
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,
prospects, and the financial condition and results and operations of the Group
and could, ultimately lead to the insolvency of the Company.
The price of lithium hydroxide is affected by factors beyond the Group's
control
If the Group proceeds with the Project, and the market price of lithium
hydroxide decreases significantly for an extended period of time, the ability
for the Group to attract finance and ultimately generate profits could be
adversely affected. Numerous external factors and industry factors that are
beyond the control of the Group that affect the price of lithium hydroxide
include:
· industrial demand;
· levels of production;
· rapid short term changes in supply and demand because of
speculative or hedging activities; and
· global or regional political or economic events.
The price at which the Group can sell any lithium hydroxide it may produce in
the future will therefore be relevant to the future revenues that can be
generated by the Group and its ability to finance the Company going forward
and any adverse effects on such price could have a material adverse effect on
the Group's business, financial performance, results of operations and
prospects.
The Company may be unable to hire or retain personnel required to support the
Company going forward
The Group's ability to compete depends upon its ability to retain and attract
highly qualified management and technical personnel. Following completion of
the Project, the Company will evaluate the personnel of the acquired business
and may determine that it requires increased support to operate and manage the
acquired business in accordance with the Company's overall business strategy.
There can be no assurance that existing personnel of the acquired business
will be adequate or qualified to carry out the Company's strategy, or that the
Company will be able to hire or retain experienced, qualified employees to
carry out the Company's strategy
During the development of the Project, the Company may be unable to acquire or
renew necessary concessions, licenses, permits and other authorisations
The Project will require certain concessions, licences, permits and other
authorisations to carry out its operations. Any delay in obtaining or renewing
a license, permit or other authorisation may result in a delay in investment
or development of a resource and may have a materially adverse effect on the
acquired business' results of operations, cash flows and financial condition.
In addition, any concessions, licences, permits and other authorisations of
the Project may be suspended, terminated or revoked if it fails to comply with
the relevant requirements.
Failure to obtain (and shortages and disruptions in lead times to deliver)
certain key inputs may adversely affect the Company's operations during the
development of the Project
During the development of the Project, the Company's inability to timely
acquire feedstock, strategic consumables, raw materials, and processing
equipment could have an adverse impact on any results of operations and
financial condition. Periods of high demand for supplies can arise when
availability of supplies is limited. This can cause costs to increase above
normal inflation rates. Interruption to supplies or increase in costs could
adversely affect the operating results and cash flows of the Company during
the development of the Project.
COVID-19
The Group is committed to ensuring the safety and wellbeing of all employees,
contractors and stakeholders and accordingly will regularly assess
developments and the ability to recommence operations in a safe and
appropriate manner.
Further escalation of the COVID-19 pandemic, and the implementation of any
additional government-regulated restrictions which delays the Group in
carrying out its business activities ultimately delays the Group's ability to
reach production and start to generate cash and so could have a material
adverse impact on the Group's operations and financial results.
This Risk Management Report has been approved by the Board and signed on its
behalf by:
Paul Atherley
Non-Executive Chairman
17 May 2022
Corporate Governance Statement
The Company observes the requirements of the Quoted Company Alliance corporate
governance code (the "QCA Code") and is in compliance with the QCA Code, save
as set out below:
1. Given the composition of the Board, certain provisions of the QCA Code
are considered by the Board to be inapplicable to the Company. Specifically,
the Company does not consider it necessary to have a senior independent
Director and the Board will, at the outset, consist of only non-executive
Directors.
2. The QCA Code also recommends the submission of Directors for re-election
at annual intervals. No Director will be required to submit for re-election
until the first annual general meeting of the Company following the
Acquisition.
In the future, the Directors may seek to transfer from a Standard Listing to
either a Premium Listing or other appropriate stock market (although there can
be no guarantee that the Company will fulfil the relevant eligibility criteria
at the time and that a transfer to a Premium Listing or other appropriate
stock market will be achieved). However, in addition to or in lieu of a
Premium Listing, the Company may determine to seek a listing on another stock
exchange. Following such a Premium Listing, the Company would comply with the
continuing obligations contained within the Listing Rules and the Disclosure
and Transparency Rules in the same manner as any other company with a Premium
Listing.
The Company does not have nomination, remuneration, audit or risk committees.
The Board as a whole will instead review its size, structure and composition,
the scale and structure of the Directors' fees (taking into account the
interests of shareholders and the performance of the Company), take
responsibility for the appointment of auditors and payment of their audit fee,
monitor and review the integrity of the Company's financial statements and
take responsibility for any formal announcements on the Company's financial
performance. Following entry into the Lease, the Board intends to put in place
nomination, remuneration, audit and risk committees.
The Board has a share dealing code that complies with the requirements of the
Market Abuse Regulations. All persons discharging management responsibilities
(comprising only the Directors) comply with the share dealing code.
Carbon emissions
The Company currently has no trade, and one employee other than the Directors
and has no office. Therefore, the Company has minimal carbon emissions and it
is not practical to obtain emissions data at this stage.
Board of Directors
The Company has a Board it believes is well suited for the purposes of
implementing its business strategy, combining skill sets for the assessment of
investment and acquisition of royalties and streams in the mining sector.
The Directors are responsible for carrying out the Company's objectives,
implementing its business strategy and conducting its overall supervision.
Acquisition, divestment and other strategic decisions will all be considered
and determined by the Board.
The Board will provide leadership within a framework of prudent and effective
controls. The Board will establish the corporate governance values of the
Company and will have overall responsibility for setting the Company's
strategic aims, defining the business plan and strategy and managing the
financial and operational resources of the Company.
The Board aims to hold meetings on a quarterly basis and is regularly in
contact to discuss prospective acquisition opportunities.
The Articles of the Company contain express provisions relating to conflicts
of interest in line with the Companies Act 2006.
Shareholder communications
The Company uses its corporate website (www.alkemycapital.co.uk) to ensure
that the latest announcements, press releases and published financial
information are available to all shareholders and other interested parties.
The AGM is used to communicate with both institutional shareholders and
private investors and all shareholders are encouraged to participate. Separate
resolutions are proposed on each issue so that they can be given proper
consideration and there is a resolution to approve the Annual Report and
Accounts. Notice of the AGM is sent to shareholders at least 21 days before
the meeting and the results are announced to the London Stock Exchange and are
published on the Company's website.
Paul Atherley
Non-Executive Chairman
17 May 2022
Directors' Responsibility Statement
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 ("IFRS") 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 for that period.
In preparing these financial statements, the Directors are required to:
1. select suitable accounting policies and then apply them
consistently;
2. make judgements and accounting estimates that are
reasonable and prudent;
3. state whether applicable IFRSs as adopted by the United
Kingdom have been followed, subject to any material departures disclosed and
explained in the financial statements; and
4. prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and Company will
continue in business.
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 and the Directors
Remuneration Report comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and Company, and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
They are also responsible to make a statement that they consider that the
Annual Report and Financial Statements, taken as a whole, is fair, balanced,
and understandable and provides the information necessary for the shareholders
to assess the Company's position and performance, business model and strategy.
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 the Financial Statements may differ from legislation in other
jurisdictions.
Directors' responsibility statement pursuant to disclosure and Transparency
Rule
Each of the Directors, whose names and functions are listed within the Board
of Directors confirm that, to the best of their knowledge:
1. the financial statements are prepared in accordance with
IFRS as adopted by the United Kingdom, give a true and fair view of the
assets, liabilities, financial position and loss of the Company; and
2. the Annual Report and financial statements, including the
Strategic Report, includes a fair review of the development and performance of
the business and the position of the Company, together with a description of
the principal risks and uncertainties that they face.
Approved by the Board on 17 May 2022
Paul Atherley
Non-Executive Chairman
Independent auditor's report to the members of Alkemy Capital Investments Plc
Opinion
We have audited the financial statements of Alkemy Capital Investments Plc
(the "Company") for the period ended 31 January 2022 which comprise Statement
of Comprehensive income, Statement of Financial Position, Statement of Changes
in Equity and Statement of Cash flows and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK-adopted
international Accounting Standards.
In our opinion, the financial statements:
· give a true and fair view of the state of the company's affairs
as at 31 January 2022 and of its loss for the period then ended;
· have been properly prepared in accordance with UK-adopted
international accounting standards;
· 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 public interest 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 the section headed Going Concern in note 2 on page 31 of
the financial statements, which details the factors the Company has considered
when assessing the going concern position. As detailed in the relevant note on
page 32, the company will need to raise additional funds to be successful in
its strategy. As successful fundraising cannot be assured there exists a
material uncertainty that may cast significant doubt on the Company's ability
to continue as a going concern. Our opinion is not modified in respect of this
matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the company's ability to continue to adopt the going concern
basis of accounting included:
· Discussions with management with regards to future funding
requirements.
· Reviewing the directors' going concern assessment including the
worst-case scenario cash flow forecast that covers at least 12 months from the
date we expect to sign the audit report.
· Assessing the cash flow requirements of the Company based on
budgets and forecasts.
· Understanding what forecast expenditure is committed and what
could be considered discretionary.
· Considering the liquidity of existing assets in the statement of
financial position.
· Considering the options available to management for further
fundraising, or additional sources of finance.
· Considering potential downside scenarios and the resultant impact
on available and future funds.
· Making enquiries of management as to its knowledge of events or
conditions beyond the period of their assessment that may cast significant
doubt on the Company's ability to continue as a going concern, and evaluating
the reliability of the data underpinning the forecast cash flows along with
the numerical accuracy of the calculations.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.
Based on our professional judgement, we determined overall materiality for the
financial statements as a whole to be £39,500, based on a 5% of loss before
tax benchmark as this is the most appropriate measure of performance for the
entity.
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment. Performance materiality was set at 70% of materiality for the
financial statements as a whole, which equates to £27,650.
Where considered appropriate performance materiality may be reduced to a lower
level, such as, for related party transactions and directors' remuneration.
We agreed with the Board to report to it all identified errors in excess of
£1,975. Errors below that threshold would also be reported to it if, in our
opinion as auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
The entity is currently a cash shell having listed during the period and
raised capital from the share issue on the London Stock Exchange. The
transactions during the year are limited to administration and professional
fees. The support for these was provided to us by management.
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.
Apart from the material uncertainty related to going concern above, we have
determined that there are no other key audit matters.
Our audit procedures in relation to Going Concern were designed in the context
of our audit opinion as a whole. They were not designed to enable us to
express an opinion on this matter individually and we express no such opinion.
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 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 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 our 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 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 financial statements and the part of 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 the directors for the financial statements
As explained more fully in the directors' responsibilities statement set out
on page 21, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and the procedures in place for
ensuring compliance. The most significant identified were the Companies Act
2006 and Listing Rules for Companies. Our work included reviewing board
minutes, relevant correspondence and direct enquiries of management and those
charged with governance concerning whether they had knowledge of actual,
suspected, or alleged fraud.
· As part of our audit planning process we assessed the different
areas of the financial statements, including disclosures, for the risk of
material misstatement. We considered the risk was greater in areas that
involve significant management estimate or judgement. We communicated
identified fraud risks throughout the audit team and remained alert to any
indications of fraud throughout the audit.
· To address the pervasive risk of management override of control,
we also performed specific testing of a risk-based selection of journal
entries, both at the year end and throughout the year.
· In addition to the risk of management override of controls, we
considered the fraud risk related to any unusual transactions or unexpected
relationships, including assessing the risk of undisclosed related party
transactions.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that some material misstatements of the financial statements may not be
detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK). The potential effects of inherent limitations
are particularly significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized schemes
designed to conceal it, including deliberate failure to record transactions,
collusion or intentional misrepresentations being made to us.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Other matters which we are required to address
We were appointed by the board on 27 March 2022 to audit the financial
statements for the period ending 31 January 2022. This is the first period of
account for the company and the first year an audit is being performed.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the company and we remain independent of the company in conducting
our audit. The only non-audit services related to Crowe U.K. LLP acting as
reporting accountants during the IPO process.
Our audit opinion is consistent with the additional report to the Board.
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.
Matthew Stallabrass
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
55 Ludgate Hill
London
17 May 2022
Statement of Comprehensive Income
for the period 21 January 2021 to 31 January 2022
Notes Period to
31 January
2022
£
Continuing operations
Administrative expenses 4 (466,903)
Project Development expenses (330,747)
Loss before taxation (797,650)
Taxation 7 -
Loss after taxation for the period (797,650)
Total Comprehensive loss for the period (797,650)
Earnings per share:
Basic and diluted earnings per share (pence) 8 (19.875p)
There are no items of other comprehensive income
The notes on pages 31 to 39 are an integral part of these financial
statements.
Statement of Financial Position
As at 31 January 2022
Notes 31 January
2022
£
Current assets
Trade and other receivables 73
Cash and cash equivalents 10 1,113,923
Current and Total Assets 1,113,996
Equity
Share Capital 12 120,000
Share Premium 12 1,279,094
Retained Earnings (797,650)
Total Equity 601,444
Current Liabilities
Trade and other payables 11 512,552
Current and Total Liabilities 512,552
Total Equity and Liabilities 1,113,996
The notes on pages 31 to 39 are an integral part of these financial
statements.
The financial statements were approved and authorised for issue by the Board
on 17 May 2022.
Paul Atherley
Director
Alkemy Capital Investments plc
Statement of Changes in Equity
For the period ended 31 January 2022
Share capital Share Premium Retained Earnings Total
£ £ £ £
On incorporation 60,000 - - 60,000
Loss for the period - - (797,650) (797,650)
Total Comprehensive income - - (797,650) (797,650)
Transactions with owners:
Issue of shares 60,000 1,279,094 - 1,339,094
Total transactions with owners 60,000 1,279,094 - 1,339,094
Balance at 31 January 2022 120,000 1,279,094 (797,650) 601,444
The notes on pages 31 to 39 are an integral part of these financial
statements.
Statement of Cash Flows
for the period ended 31 January 2022
Notes Period to
31 January
2022
£
Cash flows from Operating Activities
Loss for the year before tax (797,650)
Increase in receivables (73)
Increase in payables 512,552
Net cash outflow from operating activities (285,171)
Cash flows from financing activities
Issue of shares (net of share issue expenses) 1,399,094
Net cash inflow from financing activities 1,399,094
Net increase in cash and cash equivalents during the period 1,113,923
Cash at the beginning of period -
Cash and cash equivalents at the end of the period 10 1,113,923
The notes on pages 31 to 39 are an integral part of these financial
statements.
Notes to the Financial Statements
1. GENERAL INFORMATION
Alkemy Capital Investments Plc is a company incorporated and domiciled in the
United Kingdom. The Company is a public limited company, which is listed on
the London Stock Exchange. The address of the registered office is 1 King
Street, Office 3.05, London, United Kingdom EC2V 8AU.
The Company was initially formed to undertake an acquisition of a controlling
interest in a company or business with the objective of operating the acquired
business and implementing an operating strategy to generate value for its
shareholders through operational improvements as well as potentially through
additional complementary acquisitions following the Acquisition.
On 25 February 2022, the Company announced that it had formed a subsidiary
called Tees Valley Lithium Limited ("TVL") that would aim to develop the UK's
first Lithium Hydroxide processing facility. This transaction and change of
strategy constituted a reverse takeover transaction under the listing rules of
the London Stock Exchange and resulted in Alkemy becoming an operating
company.
The financial statements which cover the period from incorporation on 21
January 2021 to 31 January 2022 are presented in British Pounds Sterling, the
currency of the primary economic environment in which the Company operates.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these
financial statements are set out below. The policies have been consistently
applied throughout the period, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with UK adopted
International Accounting Standards ("IAS" or "IFRS").
The financial statements are presented in pounds sterling ("£") which is also
the functional currency of the Company.
Going Concern
The Company's assets are comprised almost entirely of cash. The Directors have
outlined their proposed new strategy for the Company in the Chairman's
Statement on page 4. As part of their assessment of going concern, the
Directors have prepared cash forecasts that show that the Company has
sufficient cash resources in order to complete the transaction executed after
the period end and adopt the new strategy.
In order for the Company to be successful in its new strategy, it will need to
raise additional funds in the immediate term. The Directors are reasonably
confident that such funds will be forthcoming if and when they are required,
however as a successful fundraising in support of this strategy cannot be
assured, a material uncertainty exists in this regard. The Directors have a
reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future.
Accordingly, the Directors believe that as at the date of this report it is
appropriate to continue to adopt the going concern basis in preparing the
financial statements.
Statement of compliance
The financial statements comply with IFRSs as adopted by the U.K.
1. The company has adopted all relevant IFRSs which were in effect from
incorporation when preparing these financial statements.
2. Standards and Interpretations which are effective in the current period
(Changes in accounting policies); None of the standards which became effective
during the period which are applicable to the Company have had a material
impact.
3. Adoption of new Standards and Interpretations to standards in future
periods; The Directors anticipate that the adoption of new Standards and
Interpretations in future periods will have no material impact on the
financial statements of the Company. The Company expects to adopt all
relevant Standards and Interpretations as and when they become effective.
Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the board of
Directors that makes strategic decisions.
The Chief decision maker believes that the company's continuing operations
comprise one segment.
Taxation
Current taxation is the taxation currently payable on taxable profit for the
year.
Current tax is calculated at the tax rates (and laws) that have been enacted
or substantively enacted by the reporting date.
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 the 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 tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the
year 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
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.
Financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and deposit
balances at banks, together with other short-term, highly liquid investments
that are readily convertible into known amounts of cash within a period of 3
months and which are subject to an insignificant risk of changes in value.
Financial liabilities
Financial liabilities are recognised in the statement of financial position
when the Company becomes a party to the contractual provisions of the
instrument.
The Company's financial liabilities comprise trade and other payables.
Trade payables are recognised initially at their fair value and subsequently
measured at amortised cost.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Company after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds received net of
direct issue costs.
Ordinary shares are classified as equity.
Share capital account represents the nominal value of the shares issued.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax
benefits.
Retained earnings include all current period results as disclosed in the
Statement of Comprehensive Income.
Critical accounting judgments and estimations
The preparation of the financial statements in conformity with IFRS requires
the use of estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Although
these estimates are based on management's best knowledge of the amounts,
events or actions, actual results ultimately may differ from these estimates.
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.
The Directors consider the area of critical accounting judgements or
estimations in these financial statements to be the going concern principal.
See above for further details on the Directors' assessment that the Company is
a going concern.
3. BUSINESS AND GEOGRAPHICAL REPORTING
The accounting policy for identifying segments is based on internal management
reporting information that is regularly reviewed by the chief operating
decision maker, which is identified as the Board of Directors.
At this point, identifying and assessing investment projects is the only
activity the Company is involved in and is therefore considered as the only
operating/reportable segment.
Therefore the financial information of the single segment is the same as that
set out in the Company statement of comprehensive income, Company statement of
financial position, the Company statement of changes to equity and the Company
statement of cashflows.
4. EXPENSES BY NATURE
2022
£
Employee benefit expense (note 6) 156,897
Advertising and Marketing 3,200
Regulatory compliance expense 77,871
Audit 30,000
Legal fees 50,000
Other professional fees 124,253
Other operating expenses 24,682
Total administrative expenses 466,903
Project development costs of £330,747 in the period comprise the costs
incurred in progressing the Company's Project in Teesside, U.K. See note 16
for further details.
5. AUDITOR REMUNERATION
During the year the Company obtained the following services from the auditor:
2022
£
Fees payable to the auditor for non-audit services 28,200
Fees payable to the auditor for the audit of the Company 30,000
Total auditor's remuneration 58,200
6. EMPLOYEE BENEFIT EXPENSE
2022
£
Directors' salaries 20,467
Staff salaries 21,247
Recruitment costs 114,000
Social security 1,183
Total employee benefit expense 156,897
There was one employee in the period other than the Directors. Further
disclosures in respect of Directors' remuneration are included within the
Directors' Remuneration Report.
7. INCOME TAX
2022
£
Current tax -
Total -
2022
£
Loss on ordinary activities before taxation (797,650)
Tax calculated at domestic rate applicable to UK standard rate for small (151,554)
companies of 19%
Effects of:
Expenses not deductible for tax purposes -
Tax losses carried forward on which no deferred tax asset is recognised 151,554
Income tax credit -
Tax losses totalling approximately £797,650 have been carried forward for use
against future taxable profits. No deferred tax asset has been recognised in
respect of these tax losses.
Increases to the UK Corporation tax rate from 19% to 25% is effective from 1
April 2023, which was announced in the Spring Budget 2021.
8. EARNINGS PER SHARE
(a) Basic
Basic earnings per share is calculated by dividing the loss attributable to
equity holders of the Company by the weighted average number of ordinary
shares in issue during the period.
2022
£
Loss from continuing operations attributable to equity holders of the company (797,650)
Weighted average number of ordinary shares in issue 4,013,298
Pence
Basic and fully diluted loss per share from continuing operations (19.875)
As at 31 January 2022 there were no potentially dilutive instruments in issue
for consideration in arriving at the fully diluted loss per share.
9. DIVIDENDS
There were no dividends paid or proposed by the Company.
10. CASH AND CASH EQUIVALENTS
2022
£
Cash at bank and on hand 1,113,923
1,113,923
All of the Company's cash and cash equivalents are held in accounts which bear
interest at floating rates and the Directors consider their carrying amount
approximates to their fair value. Details of the credit risk associated with
cash and cash equivalents is set out in note 13.
11. TRADE AND OTHER PAYABLES
2022
£
Trade payables 331,997
Other payables 3,394
Accrued expenses 177,161
Total trade and other payables 512,552
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The Company has financial risk management
policies in place to ensure that all payables are paid within the pre-agreed
credit terms. The Directors consider that the carrying amount of trade
payables approximates to their fair value.
12. SHARE CAPITAL AND SHARE PREMIUM
Number of ordinary shares of 2p Share Capital Share premium
£ £
At 21 January 2021 3,000,000 60,000 -
Share issues 2,999,999 60,000 1,440,000
Share issue expenses - - (160,906)
At 31 January 2022 5,999,999 120,000 1,279,094
Share issues in period:
On 21 January 2021 the Company issued 3,000,000 ordinary shares of 2p for
cash.
On 27 September 2021, 2,999,999 ordinary shares were issued for cash at 50p
per share, raising £1,500,000 before expenses of £160,906.
13. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to a variety of financial risks which result from both
its operating and investing activities. The Company's risk management is
coordinated by the Board of Directors and focuses on actively securing the
Company's short to medium term cash flows by minimising the exposure to
financial markets.
The main risk the Company is exposed to through its financial instruments is
credit risk.
Capital risk management
The Company's objectives when managing capital are:
(a) to safeguard the Company's ability to continue as a going concern, so
that it continues to provide returns and benefits for shareholders;
(b) to support the Company's growth; and
(c) to provide capital for the purpose of strengthening the Company's risk
management capability.
The Company 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 Company 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. The Company is not subject to externally imposed
capital requirements.
Credit risk
The Company's financial instruments that are subject to credit risk are cash
and cash equivalents. The credit risk for cash and cash equivalents is
considered negligible since the counterparties are reputable financial
institutions.
The Company defines a default by a counterparty to be an event in which a
balance receivable remains unsettled after a period of 90 days from the date
on which the balance was due for settlement.
The Company's maximum exposure to credit risk is £1,113,923 comprising cash
and cash equivalents.
Liquidity Risk
The Company monitors its rolling cashflow forecasts and liquidity requirements
to ensure it has sufficient cash to meet its operational needs. As the
Company maintains its cash reserves in instant access current accounts
liquidity risk to operations is deemed to be minimal.
Interest Rate Risk
As the Company has no debt and does not maintain cash reserves on long term
deposit accounts liked to interest rates, interest rate risk to operations is
deemed to be minimal.
Foreign Exchange Risk
As the operations of the Company are focused entirely within the United
Kingdom, and hence denominated in Pounds Sterling, foreign exchange risk to
operations is deemed to be minimal.
14. FINANCIAL INSTRUMENTS
Categories of financial instruments:
2022
£
FINANCIAL ASSETS AT AMORTISED COST:
Cash and cash equivalents 1,113,923
2022
£
FINANCIAL LIABILITIES AT AMORTISED COST: 512,552
Trade and other payables
15. RELATED PARTY TRANSACTIONS
The compensation payable to Key Management personnel comprised £34,867 paid
by the Company to the Directors in respect of services to the Company. Full
details of the compensation for each Director are provided in the Directors'
Remuneration Report.
Sam Quinn is a partner in Silvertree Partners LLP who received £24,419 during
the period for the provision of administration, bookkeeping and secretarial
services. At the period end, an amount of £Nil was due to Silvertree Partners
LLP.
Sam Quinn is a director and shareholder of Lionshead Consulting Ltd who
received £14,400 during the period for the provision of consulting services.
At the period end, an amount of £Nil was due to Lionshead Consulting Ltd.
Paul Atherley is a director and shareholder of Selection Capital Ltd who
received £38,600 during the period in reimbursement of various costs met on
behalf of the Company in relation to its IPO. At the period end, an amount of
£Nil was due to Selection Capital Ltd.
16. POST PERIOD-END EVENTS
On 25 February 2022, the Company announced that it had entered into an
exclusivity agreement with Sembcorp Utilities (UK) Limited and a heads of
terms in respect of a proposed option to enter into a lease over a brownfields
site (the "Site") at Wilton International (the "Agreement to Lease") and a
long lease over the Site, a well-established chemical engineering park located
in Teesside, a major Freeport in the UK. A lease may be entered into by TVL, a
subsidiary of the Company incorporated following the reporting date, following
exercise of the option granted under the Agreement to Lease. It is intended
that TVL will be the operating company that develops the Project. A fee of
£50,000 was paid by the Company for the initial 6 month exclusivity option to
lease, with a further £245,000 to become payable if the option is exercised
in this period, giving both parties a period of 12 months from exercise in
which to formally execute the lease documentation, whereby the Company will
become liable to annual lease rentals of £500,850 per annum for the first two
years and £742,700 per annum thereafter for the remainder of the 30 year
lease term. On 8 March 2022 the Company announced the appointment of John
Walker as CEO of TVL.
17. ULTIMATE CONTROLLING PARTY
The Directors consider that Mr Paul Atherley's 50.01% interest in the Company
constitutes a controlling position and as such considers him to be the
ultimate controlling party.
18. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
There were no contingent liabilities or capital commitments as at 31 January
2022.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAESXFLAAEAARecent news on Alkemy Capital Investments
See all newsREG - Alkemy Capital Invs. - Change of Adviser
AnnouncementREG - Alkemy Capital Invs. - MOU with Syrah for UK’s first Graphite refinery
AnnouncementREG - Alkemy Capital Invs. - Corporate Update
AnnouncementREG - Stock Exch Notice - Admission to Trading - 04/01/2024
AnnouncementREG - Official List - Official List Notice
Announcement