REG - Fragrant Prosperity - Half-year Report
01/02/2022 07:00
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RNS Number : 2206A Fragrant Prosperity Holdings Ltd 01 February 2022
01 February 2022
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, WITHIN,
INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA,
THE REPUBLIC OF IRELAND OR JAPAN.
FRAGRANT PROSPERITY HOLDINGS LIMITED
("FPP" or "the Company")
Unaudited Interim Results
Fragrant Prosperity Holdings Limited (LSE: FPP) announces its unaudited
financial results for the period ended 30 September 2021.
Chairman's statement
I have pleasure in presenting the condensed financial statements of Fragrant
Prosperity Holdings Limited (the "Company" or "FPH") for the period from 1
April 2021 to 30 September 2021.
During the financial period, the Company reported a net loss of £401,714. As
at 30 September 2021, the Company had cash in bank balance of £466,444.
During the period the Company entered into a letter of Intent to acquire the
entire issued share capital of CiiTech Ltd a leading cannabis wellness company
based in the UK and Israel for consideration of £17.5m payable in newly
issued shares in the Company (subject to adjustment should the number of
CiiTech securities in issue change prior to completion of the acquisition).
The Company sought shareholder approval for the proposed transaction at its
recent AGM.
The Board looks forward to providing further updates to shareholders in due
course.
Simon Retter
Chairman
Enquires:
Fragrant Prosperity Holdings Limited
Simon James Retter +44 (0) 20 3137 1902
Optiva Securities Ltd (Financial Adviser)
Jeremy King +44 (0) 20 3137 1902
FRAGRANT PROSPERITY HOLDINGS LIMITED
INTERIM MANAGEMENT REPORT
FOR THE PERIOD FROM 1 APIL 2021 to 30 SEPTEMBER 2021
Introduction
The Company was incorporated on 28 January 2016 in the British Virgin Islands,
as an exempted company with limited liability under the Companies Law.
Its issued share capital, consisting of Ordinary Shares admitted to a Standard
Listing on the Official List in accordance with Chapter 14 of the Listing
Rules and to trading on the London Stock Exchange's main market for listed
securities on 5 September 2016.
Directors
The Directors of the Company since the last financial period are:
Mahesh s/o Pulandaran
Simon James Retter
Craig Marshak (resigned 10 November 2021)
Richard Samuel
Daniel Reshef
Corporate governance
In order to implement its business strategy, the Company has adopted a
corporate governance structure as follows:
· consistent with the rules applicable to companies with a Standard
Listing, unless required by law or other regulatory process, Shareholder
approval is not required in order for the Company to complete the Acquisition.
The Company will, however, be required to obtain the approval of the Board
before it may complete the Acquisition;
· the Board intends to comply, in all material respects, with certain
Main Principles of the UK Corporate Governance Code (as set out in more detail
in "Part II - The Company, its Board and the Acquisition Structure") and has
adopted a share dealing code that complies with the requirements of the Market
Abuse Regulations. All persons discharging management responsibilities
(comprising only the Directors at the date of this Document) shall comply with
the share dealing code from the date of Admission; and
· following the Acquisition, the Directors may seek to transfer the
Company from a Standard Listing to either a Premium Listing or other
appropriate listing venue, based on the track record of the company or
business it acquires, subject to fulfilling the relevant eligibility criteria
at the time. If the Company is successful in obtaining a Premium Listing,
further rules will apply to the Company under the Listing Rules and Disclosure
and Transparency Rules and the Company will be obliged to comply with or
explain any derogation from the UK Corporate Governance Code. In addition to,
or in lieu of, a Premium Listing, the Company may determine to seek a listing
on another stock exchange or seek re-admission to a Standard Listing.
Responsibility Statement
The Directors are responsible for preparing the Condensed Financial Statements
in accordance with the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority ('DTR') and with International
Accounting Standard 34 on Interim Financial Reporting (IAS 34).
The directors confirm that, to the best of their knowledge, this condensed
consolidated half-yearly report has been prepared in accordance with IAS 34.
The interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the
period and their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the remaining six
months of the financial year; and
· material related-party transactions during the period and any
material changes in the related-party transactions described in the last
annual report.
By order of the Board
Simon James Retter
Chairman
31 January 2022
CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE PERIOD FROM 1 APRIL 2021 TO 30 SEPTEMBER 2021
Period from 1 April 2020 to 30 September 2020 (unaudited)
Period from 1 April 2021 to 30 September 2021 (unaudited)
Notes £ £
INCOME - -
Administrative expenses (390,089) (180,598)
Interest charge (11,625) - -
OPERATING LOSS/LOSS BEFORE TAXATION (401,714) (180,598)
Income tax expense 3 - -
LOSS FOR THE PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY (401,714) (180,598)
OTHER COMPREHENSIVE INCOME
Other comprehensive income - -
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (401,714) (180,598)
The notes to the financial statements form an integral part of these financial
statement
CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
AS AT 30 SEPTEMBER 2021
As at As at
30 September 2021 (unaudited) 31 March 2021 (audited)
Notes £ £
CURRENT ASSETS
Cash and cash equivalents 466,444 562,204
Prepayments - 23,638
466,444 585,842
CURRENT LIABILITIES
Trade Creditors (170,000) (42,919)
Accruals (85,000) (7,500)
Convertible loan note (351,901) (274,166)
(606,901) (324,585)
NET ASSETS (140,457) (261,257)
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Share capital 5 1,492,146 1,492,146
Retained Earnings (1,683,000) (1,281,286)
50,397 50,397
TOTAL EQUITY (140,457) 261,257
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE PERIOD FROM 1 APRIL TO 30 SEPTEMBER 2021
Period from 1 April 2020 to 30 September 2020 (unaudited)
Period from 1 April 2021 to 30 September 2021 (unaudited)
Notes £ £
Cash flow from operating activities
Loss before tax (401,714) (180,598)
Interest charge 11,615
Share Based Payment - 50,000
Changes in working capital
228,220 5,125
228,220 5,125
Net cash flow from operating activities (161,869) (125,473)
Cash flow from financing activities
Issue of share capital -
Issue of convertible loan note 66,109 100,000
Net cash flow from financing activities 66,109 100,000
Net increase in cash and cash equivalents (95,760) (25,473)
Cash and cash equivalents at beginning of period 562,204 127,710
Cash and cash equivalents at end of period 466,444 102,238
CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Period from 1 April 2020 to 30 September 2020
Share capital Retained earnings Total
£ £ £
As at 1 April 2020 989,913 (1,089,578) (99,665)
Loss for the period - (180,598) (180,598)
Share based payment charge 50,000 50,000
Total comprehensive loss for the period - (130,598) (130,598)
As at 30 September 2020 989,913 (1,220,175) (230,262)
Period from 1 April 2021 to 30 September 2021
Share capital Convertible Loan Note Reserve Retained earnings Total
£ £ £ £
As at 1 April 2021 1,492,146 50,397 (1,281,286) 261,257
Loss for the period - - (401,714) (401,714)
Share based payment charge - -
Total comprehensive loss for the period - - (401,714) (401,714)
As at 30 September 2021 1,492,146 50,397 (1,683,000) (140,457)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD FROM 1 APRIL 2021 TO 30 SEPTEMBER 2021
1. GENERAL INFORMATION
The Company was incorporated in the British Virgin Islands on 28 January 2016
as an exempted company with limited liability under the Companies Law.
The Company's Ordinary shares are currently admitted to a standard listing on
the Official List and to trading on the London Stock Exchange.
The Company's nature of operations is to act as a special purpose acquisition
company.
2. ACCOUNTING POLICIES
Basis of preparation
The interim condensed unaudited financial statements for the period ended 30
September 2021 have been prepared in accordance with IAS 34 Interim Financial
Reporting. The results for the period ended 30 September 2021 are unaudited.
The condensed unaudited financial statements for the period ended 30 September
2021 has been prepared on a basis consistent with, and on the basis of, the
accounting policies set out in the financial information on the Company set
out in the Company's Prospectus for admission to the Standard Listing segment
of the Official List and in the audited financial statements for the year
ended 31 March 2021.
The financial information of the Company is presented in British Pound
Sterling ("£").
Standards and interpretations issued but not yet applied
At the date of authorisation of this financial information, the directors have
reviewed the Standards in issue by the International Accounting Standards
Board ("IASB") and IFRIC, which are effective for annual accounting periods
ending on or after the stated effective date. In their view, none of these
standards would have a material impact on the financial reporting of the
company.
Cash and cash equivalents
The Company considers any cash on short-term deposits and other short term
investments to be cash equivalents.
Taxation
The tax currently payable is based on the taxable profit for the period.
Taxable profit differs from net profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible
in other periods and it further excludes items that are never taxable or
deductible. The Company's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred income tax is provided for using the liability method on temporary
timing differences at the balance sheet date between the tax basis of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised in full for all temporary
differences. Deferred income tax assets are recognised for all deductible
temporary differences carried forward of unused tax credits and unused tax
losses to the extent that it is probable that taxable profits will be
available against which the deductible temporary differences, and
carry-forward of unused tax credits and unused losses can be utilised.
The carrying amount of deferred income tax assets is assessed at each balance
sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the
deferred income tax asset to be utilised. Unrecognised deferred income tax
assets are reassessed at each balance sheet date and are recognised to the
extent that is probable that future taxable profits will allow the deferred
income tax asset to be recovered.
Going concern
Until such time as the Company makes a significant investment it will meet its
day to day working capital requirements from its existing cash reserves and by
raising new equity finance.
In the six-month period ended 30 September 2021 the Company recorded a loss
after tax of £401,714 (2020: £180,598) and a net cash outflow from operating
activities of £161,869 (2020: £125,473). The Company raised an additional
£66,109 of new funds from the issue of a new convertible loan note with loan
note holders.
The Company had cash of £466,444 at 30 September 2021. Although the level of
cash outgoings prior to making an investment is expected to be modest, the
cash flow forecasts indicate that the Company needs to raise additional funds
in the coming months.
Although the directors believe that the Company will be successful in raising
the funds required there can be no guarantee of success of that fundraising.
Based on their assessment, the Directors have a reasonable expectation that
the Company has adequate resources, supplemented by the additional funds to be
raised, to continue as a going concern for the foreseeable future. Thus, they
continue to adopt the going concern basis of accounting in preparing these
financial statements.
The requirement to raise additional funds constitutes a material uncertainty
that may cast significant doubt on the ability of the Company to continue as a
going concern.
If the Company was unable to secure sufficient funding to enable it to
continue on a going concern basis then adjustments would be necessary to write
down assets to their recoverable amounts and provide for additional
liabilities.
Operating segments
The directors are of the opinion that the business of the Company comprises a
single activity, that of an investment company. Consequently, all activities
relate to this segment.
3. INCOME TAX EXPENSE
The Company is regarded as resident for the tax purposes in British Virgin
Islands.
No tax is applicable to the Company for the period ended 30 September 2021. No
deferred income tax asset has been recognised in respect of the losses carried
forward, due to the uncertainty as to whether the Company will generate
sufficient future profits in the foreseeable future to prudently justify this.
4. SHARE CAPITAL & RESERVES
Shares in issue Share capital
Number £
As at 31 March 2019 43,214,287 930,124
Issue of Ordinary shares 8,638,535 59,789
As at 30 September 2019 51,852,822 989,913
Issue of Ordinary shares - -
As at 30 September 2020 51,852,822 989,913
Issue of Ordinary shares
10,360,564 543,930
Issue costs - (41,696)
As at 30 September 2021 62,223,386 1,492,146
On 16 July 2019 the Company issued 8,638,535 new Ordinary Shares in the
company at a price of 0.75pence per share raising gross cash proceeds of
£64,789 and £59,789 net of expenses.
On 3 March 2021 the Company issued 10,360,564 new ordinary shares in the
company at a price of 5.25 pence per share.
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