REG - Fragrant Prosperity - Half-year Report
29/12/2022 17:00
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RNS Number : 2499L Fragrant Prosperity Holdings Ltd 29 December 2022
29 December 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 2022.
Chairmans 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 2022 to 30 September 2022.
During the financial period, the Company reported a net loss of £45,999. As
at 30 September 2022, the Company had cash in bank balance of £266,859.
During the period the Company continued to search for potential targets to
acquire as well as to seek additional funding. The current economic climate as
well as challenging financial markets mean this has taken longer than
expected, although the directors are optimistic that suitable funding and
resulting acquisition of a company will be forthcoming.
The Board looks forward to providing further updates to shareholders in due
course.
Chairman
29 December 2022
Enquires:
Fragrant Prosperity Holdings Limited
Simon James Retter +44 (0) 20 3137 1902
CONDENSED INTERIM FINANCIAL STATEMENTS
For the six-month period 1 April 2022 to 30 September 2022
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.
Company objective
The Company was formed to undertake an acquisition of a target company or
business. The Company does not have any specific acquisition under
consideration and does not expect to engage in substantive negotiations with
any target company or business until after Admission. The Directors believe
that their network, and the Company's cash resources and profile following
Admission, mean that the Company will target an Acquisition where the target
company has a value of up to £100 million. The Company expects that
consideration for the Acquisition will primarily be satisfied by issue of new
Shares to a vendor (or vendors), but that some cash may also be payable by the
Company. Any funds not used in connection with the Acquisition will be used
for future acquisitions, internal or external growth and expansion, and
working capital in relation to the acquired company or business.
Following completion of the Acquisition, the objective of the Company will be
to operate the acquired business and implement an operating strategy with a
view to generating value for its Shareholders through operational improvements
as well as potentially through additional complementary acquisitions following
the Acquisition. Following the Acquisition, the Company intends to seek
re-admission of the enlarged group to listing on the Official List and trading
on the London Stock Exchange or admission to another stock exchange.
The Company's efforts in identifying a prospective target company or business
will not be limited to a
particular industry or geographic region. However, given the experience of the
Directors, the Company expects to focus on acquiring a company or business in
the technology sector (in particular focussing on technology and/or
intellectual property that is used in the financial services industry) with
either all or a substantial portion of its operations in Europe or Asia. The
Directors' initial search will focus on businesses based in or with operations
in Hong Kong, Malaysia, or the United Kingdom.
Going Concern
During the prior year the Company worked on acquiring the entire share capital
of a business that led to significant expenditure on legal, due diligence and
other associated costs. The acquisition was due to be completed alongside a
capital raise to provide working capital for the enlarged group, due to
adverse market conditions the capital raise was unsuccessful and the result
was the depletion of the Company's existing cash reserves. As well as the
unsuccessful reverse takeover, significant additional expenditure was incurred
as a result of a dispute that arose during the prior period with a convertible
loan note holder, which was subsequently settled placing further strain on the
cash resources of the Company. Due to the limited cash balance as at the
period end the Company is in the process of seeking additional funding in
order to purse its strategy of making an acquisition to seek re-admission of
the enlarged group to listing on the Official List and trading on the London
Stock Exchange or admission to another stock exchange.
The Should the raising of new capital be unsuccessful then the Company faces
significant uncertainty over its ability to continue as a going concern. The
Company has reduced its cash expenditure to a minimum whilst it works on the
recapitalisation of the business.
Directors
The Directors of the Company since the last financial period are:
Mahesh s/o Pulandaran
Simon James Retter
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
29 December 2022
CONDENSED STATEMENT OF COMPREHESIVE INCOME (UNAUDITED)
FOR THE PERIOD FROM 1 APRIL 2022 TO 30 SEPTEMBER 2022
Period from 1 April 2021 to 30 September 2021
Period from 1 April 2022 to 30 September 2022
Notes £ £
INCOME - -
Administrative expenses (33,089) (390,089)
Interest charge (12,910) - (11,625)
OPERATING LOSS/LOSS BEFORE TAXATION (45,999) (401,714)
Income tax expense 3 - -
LOSS FOR THE PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY (45,999) (401,714)
OTHER COMPREHENSIVE INCOME
Other comprehensive income - -
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (45,999) (401,714)
CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
AS AT 30 SEPTEMBER 2022
As at As at
30 September 2022 (unaudited) 31 March 2022 (audited)
Notes £ £
CURRENT ASSETS
Cash and cash equivalents 266,859 281,448
Prepayments - -
266,859 281,448
CURRENT LIABILITIES
Trade Creditors (194,192) (189,192)
Accruals (37,579) (24,079)
Convertible loan note (491,713) (478,803)
(723,484) (692,074)
NET ASSETS (456,625) (410,626)
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Share capital 5 1,492,146 1,492,146
Retained Earnings (2,000,314) (1,954,315)
Convertible loan note reserve 51,543 51,543
TOTAL EQUITY (456,625) (410,626)
(1,954,315)
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE PERIOD FROM 1 APRIL 2022 TO 30 SEPTEMBER 2022
Period from 1 April 2021 to 30 September 2021
Period from 1 April 2022 to 30 September 2022
Notes £ £
Cash flow from operating activities
Loss before tax (45,999) (401,714)
Interest charge 12,910 11,615
Share Based Payment - -
Changes in working capital
18,500 228,220
18,500 228,220
Net cash flow from operating activities (14,589) (161,869)
Cash flow from financing activities
Issue of share capital - -
Issue of convertible loan note - 66,109
Net cash flow from financing activities - 66,109
Net increase in cash and cash equivalents (14,589) (95,760)
Cash and cash equivalents at beginning of period 281,448 562,204
Cash and cash equivalents at end of period 266,859 466,444
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
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)
Period from 1 April 2022 to 30 September 2022
Share capital Convertible Loan Note Reserve Retained earnings Total
£ £ £ £
As at 1 April 2022 1,492,146 51,543 (1,954,315)
(410,626)
Loss for the period - - (45,999) (45,999)
Share based payment charge - - - -
Total comprehensive loss for the period - -
As at 30 September 2022 1,492,146 51,543 (2,000,314) (456,625)
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 APRIL 2022 TO 30 SEPTEMBER 2022
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 2022 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
2022 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 2022.
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 2022 the Company recorded a loss
after tax of £45,999 (2021: £401,714 ) and a net cash outflow from operating
activities of £14,589 (2021: £161,869). The Company was focussed on raising
additional capital and on identifying a suitable target to acquire whilst
keeping cash expenditure to a minimum.
The Company had cash of £266,859 at 30 September 2022 and had significant
liabilities resulting in a negative asset position of £456,625. 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 2022. 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 and 2022 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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