REG - Amala Foods PLC - Annual Financial Report 2022
31/03/2023 12:45
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230331:nRSe9770Ua&default-theme=true
RNS Number : 9770U Amala Foods PLC 31 March 2023
-- Amala Foods Plc
("Amala" or the "Company")
Annual Financial Report 2022
Amala Foods Plc (LON: DISH), a cash shell company, is pleased to announce the
publication of the Annual Financial Report for the Year Ended 31 March 2022
which is below this announcement. The Annual Report will also shortly be
available via the National Storage Mechanism.
The Directors would like to highlight on page 10 that the Independent Auditors
state "In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the preparation of
the financial statements is appropriate. Our evaluation of the directors'
assessment of the company's ability to continue to adopt the going concern
basis of accounting included challenging the directors' going concern
assessment and the key underlying assumptions, assessing the likelihood of a
Reverse Takeover completing within the next 12 months, ascertaining the
company's latest financial position and their committed costs over the next 12
months and considering the terms of the convertible loan notes in issue at the
date of this report."
The going concern period is the period of twelve months following the
publication of the Annual Financial Report.
In order to conserve cash and to ensure that the proceeds of £405,000
Convertible Loan Notes as announced previously have the best prospect of
resulting in a Reverse Takeover, the Directors have agreed to not receiving
any remuneration for the period prior to and during the period of suspension
and until a successful transaction achieves a Reverse Takeover. The
Directors are actively seeking to identify new opportunities for the company.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION EU 596/2014 ("MAR").
Enquiries:
Jonathan Morley-Kirk, Non-Executive Chairman
jmk@bluebirdmv.com
COMPANY INFORMATION
Directors
Aidan Bishop Executive
Director
Jonathan Morley-Kirk
Non-executive Chairman
Celia Li
Non-executive Director*
Company
Secretary
Roger
Matthews
Registered office of the Company 1st Floor, Woodford
House
Peter Street
St Helier JE2 4SP
Jersey
Independent
Auditor PKF
Littlejohn LLP
15 Westferry Circus
Canary Wharf
London E14 4HD
Bankers eWealthGlobal
Group Limited
17 Broad St
St Helier
Jersey JE2
3RR
* appointed 17 March 2023
CONTENTS
Directors and Governance
Chairman's
Report
3
Report of the Directors
4
Strategic
Report
9
Accounts
Independent Auditor's Report to the Members of Amala Foods
PLC
10
Statement of Comprehensive Income
14
Statement of Financial Position
15
Statement of Changes in Equity
16
Cash Flow Statement
17
Notes to the
Accounts
18
CHAIRMAN'S REPORT
The new financial year opened with new optimism for the Company despite the
global pandemic continuing to have a significant impact to daily life and
business in the Philippines where its new early-stage plant-based business was
located, named Amala Foods Inc ("AFI").
AFI commenced a research and development phase within a purpose-built facility
and was able to create several beta products during the period that were
tested with a select number of restaurants with a view to further research and
product development. Whilst the early indications were encouraging it was
evident that the Company would require significant further funding to progress
to the stage of full commerciality with the potential for profitability.
By year end, the Directors had taken the decision to not invest further in AFI
given the potential new path ahead for the Company. After the period the
Company announced the execution of a Share Purchase Agreement (SPA) with Terra
Rara UK Ltd, with one of the conditions precedent being that the Company
dispose of any interest in AFI. Due to the Company having not advanced
sufficient funds to reach the first equity hurdle in AFI, the Company was not
entitled to be reimbursed for the funds advanced. The funds advanced in the
year were written off to the statement of comprehensive income in the year
ended 31 March 2022.
The Company raised GBP 210,000 via a placing in December 2021 for general
working capital purposes.
In February 2022, the Company signed a non-binding term sheet with Terra Rara
UK Ltd, a mining company, that could have led to a transaction that would have
been considered a Reverse Takeover. Whilst the future isn't quite clear at
this point for the Company, the Directors remain committed to seeking paths
that will create value for shareholders. Terra Rara UK Ltd held Rare Earth
Elements (REE) exploration assets via two subsidiaries in Angola and Uganda.
These exploration assets are located in close proximity to advanced stage REE
exploration assets held by other mining companies. The Company intended to
acquire 100% of the share capital of Terra Rara UK Ltd subject to regulatory
approvals and if it had been successful the acquisition price paid would have
represented 55% of the enlarged share capital.
After the period, the Company announced the execution of a Share Purchase
Agreement (SPA) with Terra Rara UK Ltd and requested a suspension of the
listing. The listing was suspended on 23 May 2022. The Company announced
the termination of the proposed transaction with Terra Rara UK Ltd after the
period on 17 March 2023. This decision was taken due to identified
administrative issues relating to some of the mining assets of Terra Rara
following further due diligence. Terra Rara are seeking to develop mining
exploration assets in two countries in Africa, where due diligence is lengthy
and complex. The Directors are actively seeking to identify new
opportunities for the Company with a view to identifying and completing a
successful transaction resulting in a Reverse Takeover.
The Directors have agreed to not receiving any remuneration for the period
prior to and during the period of suspension and until a successful
transaction reaches the stage of a Reverse Takeover. The Company announced
after the period raising GBP 405,000 of Convertible Loan Notes to fund a
transaction leading to a Reverse Takeover.
The Directors consider the Company to be a shell company. After the period, Ms
Celia Li was appointed to the Board as a Non-Executive Director. It is my
sincere hope that after a challenging couple of the years, that a path to
generate value for shareholders will be realised.
Jonathan Morley-Kirk
Chairman
31 March 2023
REPORT OF THE DIRECTORS
The Directors present the report together with the audited accounts of the
Company for the year ended 31 March 2022.
The Company
Amala Foods Plc is registered (registered number 121041) and domiciled in
Jersey. It was incorporated on 11 April 2016.
Principal Activity and Business Review
The Company's principal activity during the year ended 31 March 2022 was a
cash shell company. The Company signed a non-binding term sheet with a
mining company towards the end of the year with a view to a potential
transaction that would constitute a Reverse Takeover that resulted in the
execution of a Share Purchase Agreement after the year. The proposed
transaction was also terminated after the period. The Directors are actively
seeking new opportunities that will lead to a Reverse Takeover.
Results and Dividends
The results of the Company for the year ended 31 March 2022 show a loss before
taxation of GBP 1,090,841 (2021 loss before taxation of GBP 2,480,423).
The Directors do not recommend the payment of a dividend for the period ended
31 March 2022 (2021: GBP Nil).
The Directors note that during the year, the Company's last subsidiary,
BigDish UK Ltd, was struck off and therefore the Company had no subsidiaries
with trading activity in the year ended 31 March 2022. As a result, the
Company has prepared single entity financial statements. The comparatives
stated in the primary statements are that of the single entity and are
unaudited since no single entity financial statements were presented within
the 2021 consolidated financial statements.
Carbon Dioxide Emissions
At the current stage of development, carbon dioxide emissions are negligible
and it is not practical to be able to accurately measure the entity's
emissions and energy usage. At the appropriate time, the Company intends to
actively monitor carbon dioxide emissions and will devise strategies to reduce
emissions where possible and ensure applicable reporting thereon.
Future Developments
The Company's future developments are outlined in the Strategic Report section
and in the Post Balance Sheet events (refer note 18 of the audited accounts).
Going Concern
The Company entered into a Deed of Standstill with a creditor to reprofile
outstanding debt to a reduced amount of GBP 690,000 that would convert to
shares at the re-admission price upon a Reverse Takeover and that no interest
will accrue and for all existing warrants to be cancelled upon a Reverse
Takeover. Should a Reverse Takeover not take place by 22 September 2023 then
the creditor may call upon cash repayment.
Furthermore, after the balance sheet date, the Company announced that it
raised GBP 405,000 in Convertible Loan Notes that would be largely utilised to
fund a transaction leading to a Reverse Takeover. These Convertible Loan Notes
are automatically converted into shares upon a Reverse Takeover. However,
the holders of the convertible loan notes may call upon cash repayment between
April 2023 and the end of June 2023 should there be no Reverse Takeover .
Having prepared and reviewed cashflow forecasts, the Directors have
ascertained that further finance will need to be raised should the convertible
loans be required to be repaid in cash in the next 12 months. The Directors
are confident that should the convertible loan notes, in part or in full,
require repayment then they would be able to raise sufficient funds to be able
to make such repayments whilst still funding the Company's forecasted
expenditure. However, as completion of a reverse takeover by the required
dates and thus avoiding cash repayment of the convertible loan notes is not
guaranteed and given the requirement to raise further funds in such an event,
next 12 months, they acknowledge that a material uncertainty relating to going
concern exists.
Post year-end, the Directors have agreed to not receiving any remuneration due
to them as at 31 March 2022 and for their services provided during the period
of the suspension of the listing and until a successful transaction is
completed that results in a Reverse Takeover.
The accounts have therefore been prepared on a going concern basis. The
auditors make reference to going concern by way of a material uncertainty
within their audit report.
Principal Risks and Uncertainties
The principal business risks that have been identified are as below.
Transaction Risk
There is no guarantee that a suitable transaction will be identified and will
be successfully completed, resulting in a Reverse Takeover. Even if a
transaction is successful, there is no guarantee that the Directors will be
successful in managing the new business and derive the value that is hoped.
Should a transaction not complete, once identified, then the Directors will
need to invest further time and resources in identifying another suitable
target company.
Funding Risk
The Company has not yet achieved profitability and is therefore reliant on
periodically raising finance to fund its expenditure. There can be no
guarantees that additional capital will be available when required. Whilst
the Company raised GBP 405,000 in Convertible Loan Notes after the period,
there is no guarantee that further capital will be available if and when
required to complete a transaction that will result in a Reverse Takeover or
that further capital will be available to fund an enlarged group after the
completion of a transaction. The Directors have taken steps to conserve
cash including not receiving any remuneration until there is a successful
Reverse Takeover.
Key Personnel Risk
The Company is dependent on the experience and abilities of its Directors.
Whilst the Company does not expect any of the Directors to leave the Company,
if such individuals were to leave the Company, and the Company was unable to
attract suitable experienced personnel, it could have a negative impact on the
future prospects of the Company.
Corporate Governance
The Company is registered in Jersey. There is no applicable regime of
corporate governance to which the directors of a Jersey company must adhere
over and above the general fiduciary duties and duties of care, skill and
diligence imposed on such directors under Jersey law. As a Jersey company and
a company with a Standard Listing, the Company is not required to comply with
the provisions of the UK Corporate Governance Code. The Directors have
responsibility for the overall corporate governance of the Company and
recognise the need for appropriate standards of behaviour and accountability.
The Directors are committed to the principles underlying best practice in
corporate governance and have regard to certain principles outlined in the UK
Corporate Governance Code to the extent they are considered appropriate for
the Company given its size, early stage of operations and complexities.
Internal Control
The Directors acknowledge they are responsible for the Company's system of
internal control and for reviewing the effectiveness of these systems. The
risk management process and systems of internal control are designed to manage
rather than eliminate the risk of the Company failing to achieve its strategic
objectives. It should be recognised that such systems can only provide
reasonable and not absolute assurance against material misstatement or loss.
The Company has well established procedures which are considered adequate
given the size of the business. The Company is at an early stage in its
development and directors and senior management are directly involved in
approving all significant investment and expenditure decisions of the Company
and its subsidiaries.
Audit Committee
The Company has established an Audit Committee with delegated duties and
responsibilities. The Audit Committee is responsible, amongst other things,
for making recommendations to the Board on the appointment of auditors and the
audit fee, monitoring and reviewing the integrity of the Company's accounts
and any formal announcements on the Company's financial performance as well as
reports from the Company's auditors on those accounts. The Audit Committee
includes only Jonathan Morley-Kirk, which the Board has deemed is reasonable
for the time being but will be expanded once growth allows it.
Events after the Reporting Period
Refer note 18 to the audited accounts.
Company Directors (served during the year)
Audit Remuneration Committee
Position Appointment Date Committee
Jonathan Morley-Kirk Non-Executive Chairman 16 April 2016
Aidan Bishop Executive Director 16 April 2016 - -
Note: Celia Li was appointed as a Non-Executive Director on 17 March 2023 and
will join the Remuneration Committee.
Role of the Board
The Board sets the Company's strategy, ensuring that the necessary resources
are in place to achieve the agreed strategic priorities, and reviews
management and financial performance. It is accountable to shareholders for
the creation and delivery of strong, sustainable financial performance and
monitoring the Company's affairs within a framework of controls which enable
risk to be assessed and managed effectively. The Board also has responsibility
for setting the Company's core values and standards of business conduct and
for ensuring that these, together with the Company's obligations to its
stakeholders, are widely understood throughout the Company.
Directors Remuneration
The remuneration of the Executive Director is fixed by the Remuneration
Committee, which comprises of the Non-Executive Director. The Remuneration
Committee is responsible for reviewing and determining the Company policy on
executive remuneration and the allocation of long-term incentives to
executives and employees. The remuneration of Non-Executive Directors is
determined by the Board. In setting remuneration levels, the Company seeks to
provide appropriate reward for the skill and time commitment required in order
to retain the right caliber of Director at an appropriate cost to the Company.
The remuneration paid to, or receivable by, Directors in respect of 2022 and
2021 in relation to the period of their appointment as Director is GBP 140,000
(2021 - GBP 150,000). All amounts are short term in nature. The directors did
not receive any remuneration in the form of share based payments,
post-employment benefits, termination benefits or other long-term benefits in
the year ended 31 March 2022 (2021 - none). The Directors have agreed to not
receive any remuneration due for the period prior to and during the suspension
of the listing and until a transaction is completed that leads to a Reverse
Takeover.
31 Mar 2022 31 Mar 2021
(GBP) (GBP)
Executive Directors
Aidan Bishop 120,000 120,000
Non-executive Directors
Jonathan Morley-Kirk 20,000 20,000
Simon Perrée* - 10,000
Total Remuneration 140,000 150,000
· Resigned 24 September 2020. No termination benefits were paid.
Monza Capital Ventures Limited, which is associated with Aidan Bishop, held
55,018,687 shares in the Company at 31 March 2022 and 31 March 2021
(representing, 12.4% and 14.7% ownership of the Company at 31 March 2022 and
31 March 2021 respectivley). Jonathan Morley-Kirk held no shares in the
Company at 31 March 2022 and 31 March 2021. Aidan Bishop held 16,267,462 share
options at 31 March 2022 and 2021 and Jonathan Morley-Kirk held 444,444 share
options at 31 March 2022 and 2021.
Share Capital
At 31 March 2022 the issued share capital of the Company stood at 443,620,823
- with 70,000,000 new shares having been issued during the period (refer note
15 to the audited accounts).
Substantial Shareholders (unaudited)
At 31 March 2022 the following had notified the Company of disclosable
interests in 5% or more of the nominal value of the Company's shares.
Number %
Fiske Nominees Limited* 125,192,082 28.2%
Hargreaves Lansdowne (Nominees) Limited 72,226,646 16.3%
Interactive Investor Services Nominees Limited 40,071,269 9.0%
* Includes 55,018,687 shares held by Monza Capital Ventures Limited,
which is associated with Aidan Bishop. Monza Capital Ventures Limited
continued to hold 55,018,687 shares at the date of this Annual Report.
Employees
The Company has a policy of equal opportunities throughout the organisation
and is proud of its culture of diversity and tolerance.
Disclosure of Information to Auditor
So far as the Directors are aware, there is no relevant audit information of
which the company's auditor is unaware; and each Director has taken all the
steps that he ought to have taken as a Director in order to make himself aware
of any relevant audit information and to establish that the Company's auditor
is aware of that information.
The Directors confirm to the best of their knowledge that:
· the financial statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company;
· 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; and
· the annual report and accounts, taken as a whole, are fair, balanced
and understandable and provide the information necessary for shareholders to
assess the Company's position and performance, business model and strategy.
Auditor Appointment
The Company's auditor, PKF Littlejohn LLP, was initially appointed on 23 March
2020. It is proposed by the Board that they be reappointed as auditors at the
forthcoming AGM. The auditors have expressed their willingness to continue in
office.
Statement of Directors Responsibilities
The Directors are responsible for preparing the Annual Report and the accounts
in accordance with applicable laws and regulations. The Directors have
prepared the accounts for each financial period which present fairly the state
of affairs of the Company and the profit or loss of the Company for that
period.
The Directors have chosen to use the UK-adopted International Accounting
Standards ("UK-adopted IAS") in preparing the Company's accounts.
International Accounting Standard 1 requires that accounts present fairly for
each financial period the Company's financial position, financial performance
and cash flows. This requires the faithful representation of the effects of
transactions, other events and conditions in accordance with the definitions
and recognition criteria for assets, liabilities, income and expenses set out
in the International Accounting Standards Board's 'Framework for the
preparation and presentation of accounts. In virtually all circumstances, a
fair presentation will be achieved by compliance with all applicable
International Financial Reporting Standards.
A fair presentation also requires the Directors to:
· consistently select and apply appropriate accounting policies;
· present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
· make judgements and accounting estimates that are reasonable and
prudent;
· provide additional disclosures when compliance with the specific
requirements in UK-adopted IAS is insufficient to enable users to understand
the impact of particular transactions, other events and conditions on the
entity's financial position and financial performance;
· state that the Company has complied with UK-adopted IAS, subject to
any material departures disclosed and explained in the accounts; and
· prepare the accounts on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are also required to prepare accounts in accordance with the
rules of the London Stock Exchange for companies trading securities on the
Stock Exchange.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company, for safeguarding the assets, for taking reasonable steps for the
prevention and detection of fraud and other irregularities and for the
preparation of accounts.
Financial information is published on the Company's website. The maintenance
and integrity of this website is the responsibility of the Directors; the work
carried out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any changes that
may occur to the accounts after they are initially presented on the website.
Legislation in Jersey governing the preparation and dissemination of accounts
may differ from legislation in other jurisdictions.
Directors' Responsibility Statement
The Directors confirm to the best of their knowledge:
· The Company's accounts have been prepared in accordance with
UK-adopted IAS and give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Company.
· The annual report includes a fair review of the development and
performance of the business and the financial position of the Company,
together with a description of the principal risks and uncertainties that they
face.
This Directors' Report was approved by the Board of Directors on 30 March 2023
and is signed on its behalf.
By Order of the Board
Jonathan Morley-Kirk
Chairman
31 March 2023
STRATEGIC REPORT
The Company was mainly focused during the year on AFI, who were engaged in
research and development of plant-based products in the Philippines.
COVID-19 continued to have a significant impact and AFI had to make
significant adjustments resulting from restrictions imposed by the pandemic.
Substantial progress was made in research and development and several beta
products were tested in selected restaurants with a view to further research
and development. The Company noted that AFI was able to make speedy progress
at low cost when compared to similar companies at the same stage early of
development. However, it was noted that significant further funding would be
required in order for AFI to advance beyond research and development to
commercialisation.
The Directors made the decision by year-end to not invest further in AFI after
the execution of a term sheet with Terra Rara UK Ltd (see below) set the
Company on a new strategic path. After the period, the Company entered into
a Share Purchase Agreement with Terra Rara UK Ltd, with one of the conditions
precedent being that the Company have no interest in AFI. The Company did
not reach the required threshold to earn equity in AFI and as such was not
entitled to be reimbursed for funds advanced to date to AFI. The prepaid
consideration was written off in full.
The capital markets remained difficult for new funding and the Directors
considered further strategic changes in order to create value for
shareholders. Towards the end of the year the Company signed a non-binding
term sheet with Terra Rara UK Ltd, a mining company, with Rare Earth Elements
(RRE) exploration projects in Africa. This progressed to the Company entering
into an agreement to acquire 100% of the share capital of Terra Rara UK Ltd
that would lead to a Reverse Takeover. As a result, the Company's listing
was suspended in order that a regulatory process could begin. The Company
announced after the period that the proposed transaction with Terra Rara UK
Ltd was terminated due to identified administrative issues relating to some of
the mining assets following further due diligence. The Company now intends to
seek new opportunities and identify a potential transaction that will result
in a Reverse Takeover.
The Directors consider the Company to be a cash shell company under the
Listing Rules 5.6.5A R.
Key Performance Indicators
The Company intends to identify a suitable target company with the aim of
entering into a transaction, resulting in a Reverse Takeover. Whilst the
Directors had expected that the proposed transaction with Terra Rara UK Ltd
would have achieved this objective the potential transaction was terminated.
The Directors will seek to identify other suitable target companies that could
be in any sector and once identified will undertake a due diligence process.
Aidan Bishop
Executive Director
31 March 2023
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AMALA FOODS PLC
Opinion
We have audited the financial statements of Amala Foods Plc (the 'company')
for the year ended 31 March 2022 which comprise the Statement of Comprehensive
Income, the Statement of Financial Position, the Statement of Changes in
Equity, the Cash Flow Statement 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 ("UK-adopted IAS").
In our opinion, the financial statements:
· give a true and fair view of the state of the company's affairs
as at 31 March 2022 and of its loss for the year then ended; and
· have been properly prepared in accordance with UK-adopted IAS.
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.
Other matter
As at 31 March 2021, the Company had one fully owned subsidiary and thus was
part of a group and prepared consolidated financial statements for the year
ended 31 March 2021 which were audited. However, as the Company is registered
in Jersey, no Company Statement of Comprehensive Income, Company Statement of
Financial Position, Company Statement of Changes in Equity or Company Cash
Flow Statement were included in the consolidated financial statements for the
year ended 31 March 2021 and no individual financial statements were prepared
and audited. In the year ended 31 March 2022, the company's subsidiary was
dissolved and therefore individual financial statements have been prepared. As
a result, the comparative figures are unaudited.
Material uncertainty related to going concern
We draw attention to note 2.3 in the financial statements, which indicates
that the Company incurred a net loss of £1,090,841 during the year ended 31
March 2022, is in a net current liability position of £598,127 as at 31 March
2022 and should the Company not complete a reverse takeover by the maturity
dates of the convertible loan notes in issued, which fall on various dates
between April and September 2023, then they could be required to settle the
convertible loan notes in issue in cash and would be dependent on raising
further finance in order to fund such repayment. As stated in note 2.3, these
events or conditions, along with the other matters as set forth in note 2.3,
indicate that a material uncertainty exists that may cast significant doubt on
the company's ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
In auditing the financial statements, we have concluded that the 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 challenging the directors' going concern
assessment and the key underlying assumptions, assessing the likelihood of a
Reverse Takeover completing within the next 12 months, ascertaining the
company's latest financial position and their committed costs over the next 12
months and considering the terms of the convertible loan notes in issue at the
date of this report.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The
quantitative and qualitative thresholds for materiality determine the scope of
our audit and the nature, timing and extent of our audit procedures.
Materiality for the financial statements was set as £28,000 based upon 2.5%
of loss before tax. Materiality has been based upon loss before tax given
there are a small number of large balances in the Statement of Financial
Position and given the focus of management on cost-control in order to remain
a going concern.
The performance materiality and the triviality thresholds for the financial
statements were set at £21,000 and £1,400 respectively due to our
accumulated knowledge of the company and the assessed risk.
We also agreed to report to the Audit Committee any other differences below
that threshold that we believe warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. In particular we looked at
areas involving significant accounting estimates and judgements by the
directors and considered future events that are inherently uncertain, such as
the recoverable value of loan receivables and the fair value assigned to
warrants issued in the year. We also addressed the risk of management override
of internal controls, including among other matters consideration of whether
there was evidence of bias that represented a risk of material misstatement
due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section we
have determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Carrying value of loan receivables
During the year the company advanced $125k (£95k) to the acquisition target Our work in respect of this risk included, but was not limited to:
Terra Rara UK Ltd, a company conducting exploration for rare earth metals in
Africa. · Obtaining the loan agreement with Terra Rara UK Ltd and reviewing
to ascertain the key terms of the agreement;
There is a risk that the amounts advanced may not have been classified or
correctly accounted for in accordance with IFRS 9 Financial Instruments and · Ensuring that that loan receivable has been correctly classified
thus given the significant carrying value, the financial statements may be in accordance with IFRS 9;
materially misstated.
· Vouching the advance of funds to Terra Rara to bank statements;
As the target is an exploration company there is also risk that the loan
receivable may not be fully recoverable and thus materially overstated. · Ensuring that any interest income earned in respect of both loans
Additionally, significant judgement is required by the Directors in assessing has been correctly accounted for;
whether any expected credit losses are required to be recognised.
· Obtain management's IFRS 9 expected credit loss model assessment
In addition, during the year a loan receivable was settled via the receipt of in respect of both loan receivables. Review and challenge the key assumptions
shares in the Company previously held by the borrower. There is a risk that and judgements made and consider the accuracy and completeness of any such
the settlement of this loan and receipt of the Company's own shares has not charge recognised; and
been accounted for in accordance with IAS 32 and IFRS 9.
· In relation to the loan with Poppyflower Investments Ltd,
See note 9, 10 & 18 for further details in respect of these balances and obtaining the settlement agreement, vouching the receipt of shares and
the post-year end termination of the proposed transaction and note 3.2 for the ensuring that the settlement has been treated in accordance with IAS 32 and
judgements made by the directors when conducting their expected credit loss IFRS 9.
model review.
The directors assessed at the year-end that the loan receivable is recoverable
in full owing to the fact that the directors did not identify any events or
developments that took place in the month between the advancing of funds and
31 March 2022 that reduced their confidence in the likelihood of full
recovery. In addition, it was noted that repayment of the loan was not called
upon on or prior to 31 March 2022 as at year-end the directors were in the
process of negotiating the terms of the Share Purchase Agreement signed in May
2022.
Whilst the loan has yet to be recovered post year-end and the proposed
acquisition of Terra Rara UK Ltd has been terminated, which the directors
assess as being a non-adjusting post balance sheet event, following
conversations with the directors are confident that the balance will be
recovered in full albeit it should be noted that if it is not recovered then
the amount will need to be impaired. It was assessed that the termination of
the deal was a non-adjusting event as no such conditions were in existence at
31 March 2022 since the terms of the Share Purchase Agreement were still being
negotiated.
The loan due from Poppyflower was settled in full during the year via the
transfer of shares in the Company. The loan receivable was therefore
extinguished and the shares taken into treasury.
Other information
The other information comprises the information included in the annual
financial report, other than the financial statements and our auditor's report
thereon. The directors are responsible for the other information contained
within the annual financial report. Our opinion on the financial statements
does not cover the other information and 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to
which the Companies (Jersey) Law 1991 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 are not in agreement with the accounting
records and returns; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the 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 company and the sector in
which it operates to identify laws and regulations that could reasonably be
expected to have a direct effect on the financial statements. We obtained our
understanding in this regard through discussion with management, independent
research of the Companies (Jersey) Law 1991 and our accumulated knowledge and
experience of the industry.
· We determined the principal laws and regulations relevant to the
company in this regard to be those arising from the Financial Conduct
Authority (FCA) Listing Rules and Disclosure and Transparency Rules, and the
Companies (Jersey) Law 1991.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the company
with those laws and regulations. These procedures included, but were not
limited to:
o Discussions with management regarding compliance with laws and regulations
by the company;
o Reviewing board minutes; and
o Reviewing regulatory news announcements made.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that there was potential for management bias in relation to the
assessment of the recoverability of the loan receivables. We addressed this by
challenging the assumptions and judgements made by management. Please refer to
the Key audit matters section of our report for further detail.
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with our engagement letter dated 1 March 2023. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Joseph Archer (Engagement Partner)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2022 and 31 March 2021
31 Mar 2021
31 Mar 2022 (unaudited)
Note
GBP GBP
Administrative
expenses
(357,656) (603,313)
Impairment
9
(204,656) (1,762,865)
Share based payments expense
17
(332,232) (116,915)
Operating
loss
(894,544) (2,483,093)
Interest
income
9,707 22,083
Loan note
interest
(206,004) (19,413)
Loss before taxation
(1,090,841) (2,480,423)
Income tax
expense
8
-
-
Loss after
taxation
(1,090,841) (2,480,423)
Earnings per share:
Basic and diluted loss per share
(GBP)
15
(0.0028) (0.0069)
The accompanying accounting policies and notes form an integral part of these
accounts.
STATEMENT OF FINANCIAL POSITION
At 31 March 2022
31 Mar 2021
31 Mar 2022 (unaudited)
Note
GBP GBP
Current assets
Trade and other
receivables
10
94,675 229,924
Cash and cash
equivalents
11
19,867 105,559
114,542 335,483
Current liabilities
Trade and other
payables
12
(85,132)
(97,602)
Borrowings
12
(627,537) (200,000)
(712,669) (297,602)
Net
(liabilities)/assets
(598,127) 37,881
Equity
Issued share
capital
15
6,488,490 6,455,154
Retained
earnings*
(8,801,332) (7,723,415)
Other
reserves
14
1,714,715 1,306,142
Total
equity
(598,127) 37,881
The accompanying accounting policies and notes form an integral part of these
accounts.
These accounts were approved and signed by the Chairman.
Jonathan Morley-Kirk
Chairman
31 March 2023
STATEMENT OF CHANGES IN EQUITY
At 31 March 2022
Share
Retained Other
Total
Capital Earnings reserves
Equity
Note GBP
GBP GBP
GBP
At 31 March 2020 (unaudited)
5,972,980 (5,438,785)
1,391,010 1,925,205
Loss for the period
- (2,480,243)
- (2,480,243)
Total comprehensive income for the
period
- (2,480,243)
- (2,480,243)
Share options
reserves
-
-
120,818 120,818
Shares to be issued reserve
-
-
(10,073) (10,073)
Issue of new ordinary shares (net)
15 482,174
-
- 482,174
Share based
payments
- 116,915
(116,915) -
Translation
reserve
- 78,698
(78,698) -
Total transactions with owners
482,174 195,613
(84,868) 592,919
At 31 March 2021 (unaudited)
6,455,154 (7,723,415)
1,306,142 37,881
Loss for the period
- (1,090,841)
- (1,090,841)
Total comprehensive income for the
period
- (1,090,841)
- (1,090,841)
Share based payments -
options
- -
27,884
27,884
Shares to be issued reserve
-
- 89,265
89,265
Share based payments -
warrants
-
-
304,348 304,348
Expired
warrants
- 12,924
(12,924) -
Issue of new ordinary shares (net)
15 33,336
-
- 33,336
Total transactions with owners
33,336
12,924 408,573
454,833
At 31 March 2022
6,488,490 (8,801,332)
1,714,715 (598,127)
The accompanying accounting policies and notes form an integral part of these
accounts.
CASH FLOW STATEMENT
For the year ended 31 March 2022 and 31 March 2021
31 Mar 2021
31 Mar 2022 (unaudited)
Note
GBP GBP
Cash flows from operating activities
Cash paid to suppliers &
employees
(242,645) (501,945)
Net cash from operating
activities
(242,645) (501,945)
Cash flows from investing activities
Investments in Amala Foods
Inc
(204,656 ) -
Loan
issued
(94,675) -
Net cash used in investing
activities
(299,331) -
Cash flows from financing activities
Loan
received
246,284 200,000
Cash received from loan
receivable
- 50,000
Net proceeds from share capital
issue
210,000 -
Net cash from financing activities
456,284 250,000
Net decrease in
cash
(85,692) (251,945)
Cash and cash equivalents at start of
period
105,559 357,504
Cash and cash equivalents at end of the period
14
19,867 105,559
There have been significant non-cash transactions relating to the settlement
of operating and financial liabilities in the period.
All shares issued in the year to 31 March 2021 were to settle operating and
financial liabilities (refer notes 13 and 15).
In the year ended 31 March 2022, the Company received 3,700,00 shares into
treasury in full and final settlement of a loan receivable of GBP 239,961. The
Company transferred 7,092,617 shares held in treasury to creditors to settle
liabilities in the year ended 31 March 2022.
The accompanying accounting policies and notes form an integral part of these
accounts.
NOTES TO THE ACCOUNTS
For the year ended 31 March 2022
1. GENERAL INFORMATION
Amala Foods Plc ('Company') is a public company limited by shares. It was
incorporated on 11 April 2016 and is registered (registered number 121041) and
domiciled in Jersey. The Company's ordinary shares are on the Official List of
the UK Listing Authority in the standard listing section of the London Stock
Exchange (reference DISH).
2. BASIS OF PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (IFRS)
The Company's accounts have been prepared in accordance with UK-adopted
International Accounting Standards at 31 March 2022.
The accounts are prepared under the historical cost convention unless
otherwise stated in the accounting policies.
The accounts are presented in GB Pounds ('GBP'), which is the functional
currency of the Company and are rounded to the nearest pound.
During the year, the Company's last subsidiary, BigDish UK Ltd, was struck off
and therefore at the year-end the Company had no subsidiaries. As a result,
the Company has prepared single entity financial statements. The comparatives
stated in the primary statements are that of the single entity and are
unaudited since no single entity financial statements were presented within
the 2021 consolidated financial statements.
Certain amounts included in the accounts involve the use of judgement and/or
estimation. Judgements, estimations and sources of estimation uncertainty are
discussed in note 3.
2.1 In issue and effective for periods commencing on 01 April 2021
No new standards, amendments or interpretations, effective for the first time
for the financial year beginning on or after 1 April 2021 have had a material
impact on the Company.
Standards in issue but not yet effective
The Directors do not believe that the adoption of those standards, amendments
and interpretations which have been recently issued or revised but are not yet
effective will have a material impact on the Company.
2.3 Going Concern
The Company has the following loans, which total GBP 627,537 at 31 March 2022
(31 March 2021, GBP 200,000):
31 Mar 2022 31 Mar 2021
GBP GBP
Loan from other
parties
627,537 200,000
The Company made a loss in the year of GBP 1,0187,902. At 31 March 2022, the
cash held was GBP 19,867 and the Company had current liabilities of GBP
712,669.
The Company entered into a Deed of Standstill with a creditor to reprofile
outstanding debt to a reduced amount of GBP 690,000 that would convert to
shares at the re-admission price upon a Reverse Takeover and that no interest
will accrue and for all existing warrants to be cancelled upon a Reverse
Takeover. Should a Reverse Takeover not take place by 22 September 2023 then
the creditor may call upon cash repayment.
Furthermore, after the balance sheet date, the Company announced that it
raised GBP 405,000 in Convertible Loan Notes that would be largely utilised to
fund a transaction leading to a Reverse Takeover. These Convertible Loan Notes
are automatically converted into shares upon a Reverse Takeover. However,
the holders of the convertible loan notes may call upon cash repayment between
April and the end of June 2023 should there be no Reverse Takeover or chose
for interest to accrue on the loans.
Having prepared and reviewed cashflow forecasts, the Directors have
ascertained that further finance will need to be raised should the convertible
loans be required to be repaid in cash in the next 12 months. The Directors
are confident that should the convertible loan notes, in part or in full,
require repayment then they would be able to raise sufficient funds to be able
to make such repayments whilst still funding the Company's forecasted
expenditure. However, as completion of a reverse takeover by the required
dates and thus avoiding cash repayment of the convertible loan notes is not
guaranteed and given the requirement to raise further funds in such an event,
next 12 months, they acknowledge that a material uncertainty relating to going
concern exists.
Post year-end, the Directors have agreed to not receiving any remuneration due
to them as at 31 March 2022 and for their services provided during the period
of the suspension of the listing and until a successful transaction is
completed that results in a Reverse Takeover.
The accounts have therefore been prepared on a going concern basis. The
auditors make reference to going concern by way of a material uncertainty
within their audit report.
3. JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND SOURCES OF ESTIMATION
UNCERTAINTY
Certain amounts included in the accounts involve the use of judgement and/or
estimation. These are based on management's best knowledge of the relevant
facts and circumstances, having regard to prior experience. However,
judgements and estimations regarding the future are a key source of
uncertainty and actual results may differ from the amounts included in the
accounts. Information about judgements and estimation is contained in the
accounting policies and/or other notes to the accounts. The key areas are
summarised below.
3.1 Share based payments
Judgement is required when determining the fair value of options and warrants
issued under the scope of IFRS 2 (refer note 17 of the audited accounts) as a
number of the inputs are subjective. Management have determined that
Black-Scholes model was the most appropriate models to be used for the
valuation of the warrants issued in the year.
3.2 Recoverable value of loan receivable
The amounts advanced to Terra Rara UK Ltd during the year have been classified
as a loan receivable under IFRS 9 and therefore the Directors have had to
consider the recoverable value of this balance by applying the expect credit
loss approach. When applying this approach, the Directors have been required
to make judgements regarding the likelihood of the recovery of the balance.
The Directors have assessed that in the short time period between the
advancing of the funds and the year-end, no events or developments have been
noted to suggest that the likelihood of recovery decreased in this period and
therefore the Directors have assessed the balance to be fully recoverable.
Though the proposed acquisition of Terra Rara was terminated post year-end,
the Directors assessed this to be a non-adjusting and therefore no adjustments
were made to the carrying value of the loan receivable.
3.3 Recoverable value of prepaid consideration
During the year the Company advanced funds to Amala Food Inc under a joint
venture agreement. As the threshold to allow the Company to convert the funds
advanced into shares had not been reached at the year end, the balance was
deemed to be prepaid consideration and as such, in accordance with IFRS 9, the
Directors were required to assess the recoverability of the loan.
The joint venture agreement stipulated that amounts advanced to Amala Foods
Inc which totalled less than said threshold were not eligible to be
reimbursed. As this threshold was not reached during the year and since the
Directors had made the decision as at 31 March 2022 to not advance any further
funds, the Directors assessed the balance to not be recoverable and thus
impaired the full balance.
3.4 Post year-end settlement of convertible loan notes
The convertible loan notes issued prior to 31 March 2022 and those issued post
year-end are due for repayment in cash within 12 months of the approval date
of these financial statements should a Reverse Takeover not take place by the
dates noted within the underlying agreements.
Should the Reverse Takeover not take place by the specified dates, the
Directors have made the judgement that the Company would be able to settle the
convertible loan notes in cash by deferring payment until such a point that
they were able to raise the requisite funds.
4. ACCOUNTING POLICIES
The principal accounting policies are as determined below.
4.1 Financial assets
Financial assets are classified as either financial assets at amortised cost,
at fair value through other comprehensive income or at fair value through
profit or loss depending upon the business model for managing the financial
assets and the nature of the contractual cash flow characteristics of the
financial asset.
A loss allowance for expected credit losses is determined for all financial
assets, other than those at FVPL, at the end of each reporting period. The
Company applies a simplified approach to measure the credit loss allowance for
trade receivables using the lifetime expected credit loss provision.
The lifetime expected credit loss is evaluated for each trade receivable
taking into account payment history, payments made subsequent to year end and
prior to reporting, past default experience and the impact of any other
relevant and current observable data. The Company applies a general approach
on all other receivables classified as financial assets. The general approach
recognises lifetime expected credit losses when there has been a significant
increase in credit risk since initial recognition.
The Company derecognises a financial asset 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 of the asset to another
party.
4.2 Foreign currency translation
Functional and presentational currency
The functional currency of the Company is GBP in the reporting period as it is
the currency which most affects each company's revenue, costs and financing.
The Company's presentation currency is the GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions,
and from the translation at reporting period end exchange rates of monetary
assets and liabilities denominated in foreign currencies, are recognised in
the income statement.
4.3 Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand, demand deposits and
short term highly liquid investments and are measured at cost which is deemed
to be fair value as they have short-term maturities.
4.4 Financial liabilities
Financial liabilities include convertible loans and trade and other payables.
In the statement of financial position these items are included within Current
liabilities. Financial liabilities are recognised when the Company becomes a
party to the contractual agreements giving rise to the liability. Interest
related charges are recognised as an expense in Finance costs in the income
statement unless they meet the criteria of being attributable to the funding
of construction of a qualifying asset, in which case the finance costs are
capitalised.
Trade and other payables and convertible loans are recognised initially at
their fair value and subsequently measured at amortised costs using the
effective interest rate, less settlement payments. Convertible loans issued
in the year are classified as a financial liability as there is a contractual
obligation to pay cash that the issuer cannot avoid, the exceptions in IAS
32.16A-D are not met and that it is not a derivative.
The Company derecognises financial liabilities when the Company's obligations
are discharged, cancelled or have expired.
4.5 Income taxes
Current income tax liabilities comprise those obligations to fiscal
authorities in the countries in which the Company carries out operations and
where it generates its profits. They are calculated according to the tax rates
and tax laws applicable to the financial period and the country to which they
relate. All changes to current tax assets and liabilities are recognised as a
component of the tax charge in the income statement.
Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amount of assets and
liabilities in the consolidated accounts with their respective tax bases.
However, deferred tax is not provided on the initial recognition of goodwill,
nor on the initial recognition of an asset or liability unless the related
transaction is a business combination or affects taxes or accounting profit.
Deferred tax liabilities are provided for in full. Deferred tax assets are
recognised when there is sufficient probability of utilisation. Deferred tax
assets and liabilities are calculated at tax rates that are expected to apply
to their respective period of realisation, provided they are enacted or
substantively enacted at the balance sheet date.
4.6 Segmental Reporting
An operating segment is a component of the Company engaged in revenue
generation activity that is regularly reviewed by the Chief Operating Decision
Maker (CODM) for the purposes of allocating resources and assessing financial
performance. The CODM is considered to be the Board of Directors.
The Company's operating segments are based on geographical location and
determined solely as Jersey (refer note 5).
4.7 Share capital and unissued share capital
Financial instruments issued by the Company are treated as equity only to the
extent that they do not meet the definition of a financial liability. The
Company's ordinary shares are classified as equity and have no par value.
Costs directly associated with the issue of shares are charged to share
capital.
Where the Company has a contractual right to issue a fixed number of shares to
settle a fixed liability it recognises unissued share capital pending the
issue of shares.
Treasury shares are held by the Company at no par value and are adjusted
through share capital for receipts and disbursements.
4.8 Provisions, contingent liabilities and contingent assets
Other provisions are recognised when the present obligations arising from
legal or constructive commitment, resulting from past events, will probably
lead to an outflow of economic resources from the Company which can be
estimated reliably.
Provisions are measured at the present value of the estimated expenditure
required to settle the present obligation, based on the most reliable evidence
available at the balance sheet date. All provisions are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
4.9 Share-based payments and valuation of share options and warrants
The calculation of the fair value of equity-settled share-based awards
requires assumptions to be made regarding future events and market conditions.
These assumptions include the future volatility of the Company's share price.
These assumptions are then applied to a recognised valuation model in order to
calculate the fair value of the awards.
Where employees, directors or advisers are rewarded using share-based
payments, the fair value of the employees', directors' or advisers' services
are determined by reference to the fair value of the share options/warrants
awarded. Their value is appraised at the date of grant and excludes the impact
of any non-market vesting conditions (for example, profitability and sales
growth targets). In some instances, warrants issued in association with the
issue of Convertible Loan Notes also represent share-based payments and a
share-based payment charge is calculated for these instruments.
In accordance with IFRS 2, a charge is made to the statement of comprehensive
income for all share-based payments including share options based upon the
fair value of the instrument used. A corresponding credit is made to other
reserves, in the case of options/warrants awarded to employees, directors,
advisers and other consultants.
If service conditions or other vesting conditions apply, the expense is
allocated over the vesting period, based on the best available estimate of the
number of share options/warrants expected to vest. Non-market vesting
conditions are included in assumptions of the number of options / warrants
that are expected to become exercisable, and hence reflected in the
share-based payment charge.
Estimates are subsequently revised, if there is any indication that the number
of share options/warrants expected to vest differs from previous estimates. No
adjustment is made to the expense or share issue cost recognised in prior
periods if the number of share options ultimately vest differs from previous
estimates.
Upon exercise of share options, the proceeds received, net of any directly
attributable transaction costs, up to the nominal value of the shares issued,
are allocated to share capital.
Where share options are cancelled, this is treated as an acceleration of the
vesting period of the options. The amount that otherwise would have been
recognised for services received over the remainder of the vesting period is
recognised immediately within the Statement of Comprehensive Income.
All goods and services received in exchange for the grant of any share-based
payment are measured at their fair value.
5. SEGMENTAL REPORTING
The Company's operating segments are based on geographical location and
determined solely as Jersey
6. LOSS FOR THE PERIOD BEFORE TAX
31 Mar 2022 31 Mar 2021
GBP GBP
Loss for the period has been arrived at after charging:
Auditors remuneration
34,000
31,000
Directors
remuneration
140,000 150,000
Share based payments expense
332,232 116,915
Write off of prepaid consideration to
AFI
204,656 -
7. REMUNERATION
7.1 Remuneration of Management Personnel and Employees
In accordance with IAS 24 - Related party transactions, all Executive and
Non-executive Directors, who are the Company's key management personnel, are
those persons having authority and responsibility for planning, directing and
controlling the activities of the Company. Details of Directors Remuneration
is outlined in the Report of the Directors.
31 Mar 2022 31 Mar 2021
GBP GBP
Directors emoluments during the
period*
140,000 150,000
* Remuneration of GBP 23,000 was paid in the year ended 31 March 2022. The
balances due at 31 March 2022 have been transferred to Shares to be issued
reserve through the Company's salary sacrifice scheme.
7.2 Average Number of Employees
The average number of Employees during the period was made up as follows:
31 Mar 2022 31 Mar 2021
Directors 2 3
Average during the period 2 3
8. TAXATION
The Company is taxed at the standard rate of income tax for Jersey companies
which is 0%. Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions.
31 Mar 2022 31 Mar 2021
GBP GBP
Current tax charge - -
Deferred tax charge - -
Total tax charge - -
The tax charge for the period can be reconciled to the loss per the income
statement as follows:
31 Mar 2022 31 Mar 2021
GBP GBP
Loss before taxation 1,090,841 2,480,243
Jersey Corporation Tax at 0% - -
Total tax charge * - -
* No deferred tax asset has been recognised as jersey having a 0% corporation
tax, which means the there are no unutilised tax losses
9. INVESTMENTS & IMPAIRMENTS
BigDish UK Ltd ceased trading due to the COVID-19 pandemic and was officially
dissolved as of 24 August 2021.
The investment in the subsidiaries were fully impaired at the year ended 31
March 2021.
In the year ended 31 March 2022, the Company entered into a joint venture
agreement with Amala Foods Inc, advancing GBP 204,656 (USD 227,488) in the
year. This agreement stated that up to 70% of the share capital of Amala Food
Inc could be purchased by the Company for consideration of USD 1,000,000 but
USD 333,333 was required to be advanced by the Company before they would be
entitled to receive any shares in Amala Food Inc. It also stated that if the
Company decided not to advance funds equal to or exceeding that threshold then
those funds advanced would not be reimbursed to the Company.
As at the year-end, this threshold had not been met and the Directors did not
intend to advance any further funds to Amala Food Inc post year-end due to
signing a term sheet with Terra Rara UK Ltd. This set the Company on a path to
a new strategic direction that resulted in the signing of a Share Purchase
Agreement. That led to the suspension of the Company's listing in order for a
regulatory process to commence that if successful would have resulted in a
Reverse Takeover. One of the conditions precedent to the Share Purchase
Agreement was that the Company should have no interest in AFI. The Directors
assessed therefore that this prepaid consideration was not recoverable and
therefore impaired the balance in full (see note 6).
The changes in business structure have generated the following impairment
losses:
31 Mar 2022 31 Mar 2021
GBP GBP
Write off of Investments in BigDish companies - UK and the Philippines - 1,762,865
Write off of prepaid consideration - AFI 204,656 -
Total tax charge * 204,656 1,762,865
10. TRADE AND OTHER RECEIVABLES
31 Mar 2022 31 Mar 2021
GBP GBP
Loan
Receivables
94,675
229,924
Balance at end of
period
94,675
229,924
Loan receivables at 31 March 2022 relates to USD 125,000 loaned to Terra Rara
UK Ltd on 22 February 2022 with a 1 year term and carries a 0.5% interest
rate.
Loan receivables at 31 March 2021 relates to a GBP 250,000 loan due from
Poppyflower Investments Ltd, made in December 2019 at an interest rate of 10%
to be utilised for the corporate and marketing development of BigDish. GBP
50,000 was repaid during the year ended 31 March 2021. The loan balance was
settled in the year ended 31 March 2022 in full via the transfer of 3,700,000
shares in the Company held by the borrower. These shares were taken into
treasury.
11. CASH AND CASH EQUIVALENTS
31 Mar 2022 31 Mar 2021
GBP GBP
Cash at Bank
19,867
105,559
Cash is only held at substantial banks with high credit ratings.
12. TRADE AND OTHER PAYABLES
Current Liabilities
31 Mar 2022 31 Mar 2021
GBP GBP
Trade
payables
27,243 97,602
Accruals
57,889 -
Borrowings
627,537 200,000
Balance at end of period
712,669 297,602
The borrowings are a short-term loan to be used for working capital purposes
with an interest rate of 7.5%. The repayment terms were negotiated and
extended to Q1 2022. The Company drew down GBP 250,000 against the loan in
the year ended 31 March 2022 and recognised GBP 177,537 of loan re-negotiation
and interest chargers in the year. 9,728,720 warrants were issued during the
year ended 31 March 2021 in relation to the loan and re-negotiated in the year
ended 31 March 2022 - refer note 17 of the audited accounts. The share based
payment of GBP 304,438 related to the loan and the issue of 43,478,260
warrants at 1.15p with an expiry date of 16 July 2015 are detailed in note 17
of the audited accounts. The repayment terms were further negotiated in the
year ended 31 March 2022. No additional warrants were issued to the
convertible loan note holders as a result of the renegotiated repayment terms.
The note holders may call upon cash repayment should there be no Reverse
Takeover - refer note 18 of the audited accounts.
13. FINANCIAL INSTRUMENTS
13.1 Financial Assets at amortised cost
31 Mar 2022 31 Mar 2021
GBP GBP
Trade and other
receivables
94,675 229,924
Cash and cash
equivalents
19,867 105,559
Balance at end of
period
114,452 335,483
13.2 Financial Liabilities at amortised cost
31 Mar 2022 31 Mar 2021
GBP GBP
Current liabilities - trade payables and
accruals
85,132
97,602
Current liabilities - loans
627,537 200,000
Balance at end of period
712,669 297,602
13.3 Liquidity Risk
The Company monitors constantly the cash outflows from day to day business and
monitors long term liabilities to ensure that liquidity is maintained.
13.4 Interest Rate Risk
At the balance date the Company does not have any long-term variable rate
borrowings. The Directors do not consider the impact of possible interest rate
changes based on current market conditions to be material to the net result
for the year or the equity position at the year ended 31 March 2022 or the
period ended 31 March 2021.
13.5 Foreign Currency Risk
The Company is infrequently exposed to transaction foreign exchange risk due
to transactions not being matched in the same currency. This is managed, where
possible and material, by the Company retaining monies received in base
currencies in order to pay for expected liabilities in that base currency. The
Company currently has no currency hedging in place.
The Directors do not consider the impact of possible foreign exchange
fluctuations to be material to the net result for the year or the equity
position at the year-end for either the year ended 31 March 2022 or period
ended 31 March 2021.
The Company's exposure to financial assets and financial liabilities is as
shown in the following tables:
31 Mar 2022 31 Mar 2021
Financial Assets GBP GBP
GB Pounds 19,867 335,483
US Dollar 94,675 -
Balance at end of period 114,452 335,483
31 Mar 2022 31 Mar 2021
Financial Liabilities - Current GBP GBP
GB Pounds 712,669 297,602
Balance at end of period 712,669 297,602
13.6 Credit Risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in a financial loss to the Company. In order
to minimise this risk, the Company endeavours only to deal with companies
which are demonstrably creditworthy and this, together with the aggregate
financial exposure, is continuously monitored. The maximum exposure to credit
risk is the value of the outstanding amounts as follows:
31 Mar 2022 31 Mar 2021
GBP GBP
Trade and other
receivables
94,675* 229,924
Cash and cash
equivalents
19,867 105,559
* USD 125,000
Credit risk on cash and cash equivalents is considered to be acceptable as the
counterparties are substantial banks with high credit ratings. All receivables
are current assets and due within 12 months. The Company has assessed the
expected credit losses as GBP Nil for the years ended 31 March 2022 and 2021.
14. CAPITAL MANAGEMENT
For the purposes of the Company's capital management, capital includes called
up share capital, share-based payments for options, share-based payments for
warrants and equity reserves attributable to the equity holders of the Company
as reflected in the Statement of Financial Position.
The Company's capital management objectives are to ensure that the Company's
ability to continue as a going concern, and to provide an adequate return to
shareholders.
The Company manages the capital structure through a process of constant review
and makes adjustments to it in the light of changes in economic conditions and
the risk characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the Company may issue new shares, adjust
dividends paid to shareholders, return capital to shareholders, or seek
additional debt finance.
The nature of the Company's equity reserves is:
· Reserves - including warrants, options and shares to be issued
reserves related to the value of equity that investors have secured as part of
their funding provided to the Company and that management has agreed to issue
for settlement of remuneration; and
· Retained surplus / accumulated losses - comprise the Company's
cumulative accounting profits and losses since inception.
14.1 Reserves
31 Mar 2022 31 Mar 2021
GBP GBP
Share options reserve 977,617 949,733
Warrants reserve 381,159 89,733
Shares to be issued reserve* 355,939 266,676
Balance at end of period 1,714,715 1,306,142
The Company will settle outstanding liabilities to directors and employees
under the salary sacrifice scheme. The Directors Remuneration balances due are
reflected in Shares to be issued reserve through the Company's salary
sacrifice scheme.
15. SHARE CAPITAL
15.1 Share Capital
31 Mar 2022
31 Mar 2021
Number*
GBP
Number* GBP
Opening
balance
373,620,823 6,455,154
348,950,355 5,972,980
Ordinary shares - new shares issued during
70,000,000 210,000
24,670,468 482,174
the period
Other
adjustment**
-
(176,664)
-
-
Balance at end of period
443,620,823 6,488,490
373,620,823 6,455,154
* Number of shares issued and fully paid
** Reflects changes to treasury shares in the year ended 31 March 2022 -
including the receipt of 3,700,000 shares in settlement of the outstanding
loan, the issuance of 2,332,617 to settle unissued shares at 31 March 2021 and
the issuance of 4,760,000 shares to settle liabilities incurred in the year
ended 31 March 2022.
The shares have no par value. At 31 March 2022, the Company held 19,607,383
treasury shares.
15.2 Earnings Per Share
31 Mar 2022 31 Mar 2021
GBP GBP
Basic and diluted earnings per share (GBP) (0.0028) (0.0069)
Loss used to calculate basic and diluted earnings per share (1,090,841) (2,480,423)
Weighted average number of shares used in calculating basic and diluted 395,483,837 359,353,945
earnings per share
Basic earnings per share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding and shares to be issued during the period.
In 2022 and 2021, the potential ordinary shares were anti-dilutive as the
Company was in a loss making position and therefore the conversion of
potential ordinary shares would serve to decrease the loss per share from
continuing operations. Where potential ordinary shares are anti-dilutive a
diluted earnings per share is not calculated and is deemed to be equal to the
basic earnings per share. The warrants and options noted in note 17 could
potentially dilute EPS in the future.
16. RELATED PARTY TRANSACTIONS
The Company owes GBP 166,000 to Aidan Bishop at 31 March 2022 (2021 - GBP
69,000). The Company owes GBP 35,000 to Jonathan Morley-Kirk at 31 March 2022
(2021 - GBP 15,000). These debts are unsecured and interest free. The
balances are held in the Shares to be issued reserve in accordance with the
Company's salary sacrifice scheme. After the period the Directors have agreed
to not receive any remuneration due and will not receive any further
remuneration until a Reverse Takeover is achieved.
During the year ended 31 March 2022, following the entering into the joint
venture agreement between the Company and Amala Foods Inc, Aidan became a
director of Amala Foods Inc. This position carried no remuneration or other
benefits. See note 9 for details of transactions between the Company and Amala
Foods Inc.
During the year ended 31 March 2021 3,720,169 shares were issues to Monza
Capital Ventures Ltd, a party associated with Aidan Bishop, in lieu of shares
due to Aidan Bishop under the salary sacrifice scheme.
17. SHARE OPTIONS AND WARRANTS
17.1 Share Warrants
Warrants are denominated in Sterling and are issued for services provided to
the Company or as part of the acquisition of a subsidiary.
In the year ended 31 March 2022 the Company recognised Share Based Payments
expenses of GBP 304,348 in respect of warrants (31 March 2021, GBP 105,936).
In the year ended 31 March 2022, the Company issued 43,478,260 warrants at an
exercise price of 1.15p in relation to the short-term funding.
The warrants outstanding and exercisable at 31 March 2022 are:
No. outstanding and exercisable
Exercise price No. issued No. exercised No. lapsed or re-negotiated Expiry date
Issued in the year
ended 31 Mar 2019
4.50p 2,654,585 - (2,654,585) - 01 August 2021
Issued in the year
ended 31 Mar 2021
1.35p 4,324,320 - - 4,324,320 19 October 2023
1.10p 5,404,400 - - 5,404,400 19 November 2023
Issued in the year
ended 31 Mar 2022
1.15p 43,478,260 - - 43,478,260 16 July 2025
Balance at end of period 55,861,565 - (2,654,585) 53,206,980
The warrants were fair valued using a Black Scholes model, based on the
following parameters - risk free rate 0.9% (2021, 2.1%), volatility of 110%
for 4 years (2021, 50%).
17.2 Share Options
On 31 July 2018 and 19 February 2019 share options were granted by the Company
to an employee, non-executive directors, executive directors and senior
managers within the Company. The details of the Options are outlined in detail
in the Company's Annual Financial Report to 31 March 2021.
Under the provisions of IFRS 2 a charge is recognised for those share options
and awards under the share plan issued. The estimate of the fair value of the
services received is measured based on the Black-Scholes model for share
options granted under the executive and discretionary share option schemes.
The Monte-Carlo model was used to calculate the fair value of the performance
share plan awards.
The contractual life of the share options is used as an input into this model.
Expectations of early exercise are incorporated into the model. The vesting
period reflects the terms and conditions of the contracts.
The Company recognised a GBP 27,884 share based payments charge on the year
ended 31 March 2022 in respect of options issued in previous periods.
17.3 Share Awards
In the period ended 31 March 2019, the Company entered into an agreement with
a number of employees to issue a total of 599,156 shares at a price equal to
the admission price in two years' time should the employees in questions still
be employed by the Company.
With the individuals still being employed at the two-year anniversary and thus
the share awards being due to be issued in the current year, the Company
recognised a share based payment expense totalling GBP 26,962 in the year
ended 31 March 2021. Although due, the shares had not been issued to those
employees as at 31 March 2022 and thus the fair value of these share awards is
included within other reserves.
18. EVENTS AFTER THE REPORTING PERIOD
The Company entered into a Share Purchase Agreement with Terra Rara UK Ltd on
23 May 2022 with a view to a transaction that would constitute a Reverse
Takeover with resulted in the Company's listing being suspended on the same
day. The Company announced on 17 March 2023 that the proposed acquisition of
Terra Rara UK Ltd was terminated. The Directors determine this to be a
non-adjusting event due to their being no indication as at 31 March 2022 that
the transaction would be terminated and therefore no adjustments have been
made to the balance due from Terra Rara UK Ltd as at 31 March 2022 as a result
of this subsequent event.
The Company entered into a Deed of Standstill with a creditor to reprofile
outstanding debt to a reduced amount of GBP 690,000 that would convert to
shares at the re-admission price upon a Reverse Takeover and that no interest
will accrue and for all existing warrants to be cancelled upon a Reverse
Takeover.
The Company announced on 17 March 2023 that GBP 405,000 had been raised via
Convertible Loan Notes to fund a transaction leading to a Reverse Takeover.
The Convertible Loan Notes will automatically convert to shares upon a
successful Reverse Takeover at a 50% discount to the Readmission should a
Reverse Takeover be achieved by April 2023 and will be repayable in cash if
not.
The Directors agreed to receive no remuneration that was due as at the date of
suspension and have agreed not to accrue any remuneration until a Reverse
Takeover has been successfully completed.
The Company announced on 17 March 2023 the appointment of Celia Li to the
Board as a Non-Executive Director.
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 SDWFFFEDSESDRecent news on Amala Foods
See all newsREG - Amala Foods PLC - Transaction Update
AnnouncementREG - Amala Foods PLC - Result of AGM
AnnouncementREG - Amala Foods PLC - Further re Temporary Suspension
AnnouncementREG - Official List - Suspension - Amala Foods plc
AnnouncementREG - Amala Foods PLC - Temporary Suspension
Announcement