REG - Highway Capital PLC - Annual Financial Report
20/06/2025 12:45
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RNS Number : 8101N Highway Capital PLC 20 June 2025
Company registration no. 02991159
HIGHWAY CAPITAL plc
ANNUAL REPORT
For the year ending 28 February 2023
HIGHWAY CAPITAL plc
Contents
Page
Chairman's
statement
3
Strategic report
4
Directors'
report
6
Directors' responsibility statement
10
Directors' remuneration
report
11
Corporate
governance
13
Independent auditors'
report
16
Statement of comprehensive
income
21
Statement of financial
position
22
Statement of changes in
equity
23
Statement of cash flows
24
Notes to the
accounts
25
Company
information
32
HIGHWAY CAPITAL plc
Chairman's statement
Year ended 28 February 2023
Dear Shareholders
In the year ended February 2023, the Company continued to focus on the Reverse
Takeover transaction with Guinevere Capital Esports & Entertainment.
At the time of publication of this report, as announced on 25 September 2024,
the above transaction has ceased.
The company has made significant progress, since announcing termination of the
Reverse Takeover transaction and commencement of the Corporate Restructuring
as announced on 25 September 2024.
The Directors strongly believe that company will be in a much stronger
position to pursue potential strategic opportunities after completing a
successful Company Voluntary Arrangement ("CVA").
Highway Capital Plc, between February and April 2025, raised £45,334 to fund
its professional costs related to publishing the annual accounts. On a
successful conclusion of the CVA process and restoration of the full listing
on the London Stock Exchange, the company will raise additional funds to cover
working capital.
Maciej Szytko
Director
19 June 2025
HIGHWAY CAPITAL plc
Strategic report
Year ended 28 February 2023
Review of Business
On 11 October 2021, Highway Capital Plc entered into Heads of Terms with
Guinevere Capital Esports & Entertainment. The Reverse Takeover
transaction was terminated in September 2024. The company had no business
operations during the year under review.
Convertible Loan Notes - Current Financial Year
The Convertible Loan Note issued on 13 April 2022 for the amount of £12,000
to an unconnected investor has a conversion price of 10p per new ordinary
share and 5% interest per annum.
The Convertible Loan Note issued on 14 October 2022 for the amount of
£100,000 to an unconnected investor has a conversion price of 5p per new
ordinary share and 5% interest per annum.
The Company repaid the principal amount of Convertible Loan Note issued on 17
July 2017 and issued new Convertible Loan Note for the accrued interest of
£6,550. The new Convertible Loan Note has a conversion price of 5p per new
ordinary share and 5% interest per annum.
Financial review
Key Highlights
2023 2022
Management fees - -
Administrative expenses (429,749) (525,809)
Operating loss (429,749) (525,809)
Interest receivable 4 6
Basic loss per share 8 (3.74)p (4.58)p
Bank and cash
1
4,974
HIGHWAY CAPITAL plc
Strategic report continued
Year ended 28 February 2023
Greenhouse gas emissions and energy consumption
The Company is exempt from the requirements on disclosing its annual quantity
of emissions and energy consumption for which it is responsible.
Future plans for the business
As detailed by the Chairman in his Chairman's Statement, in the year ended
February 2023, the Company continued to focus on the Reverse Takeover
transaction with Guinevere Capital Esports & Entertainment.
At the time of publication of this report, as announced on 25 September 2024,
the above transaction has ceased.
Furthermore, the Company has commenced a Corporate Restructuring process and
will provide more details in the February 2024 annual report.
Key risks and uncertainties
LSE listing suspension: The suspension prevents its stakeholders from trading
the company's shares on the London Stock Exchange. The suspension also has a
negative impact on attracting new capital and attracting potential companies
interested in the Reverse Takeover transactions.
Foreign currencies: The company deals in a variety of foreign currencies:
Continual review of foreign currency movements to ensure company undertakes
transactions in the most financially beneficial currency and ensuring the
company is not overly exposed in one currency.
Brexit: Changing legislative environment between post Brexit UK and EU may
place additional regularity burdens on the company which make it more
difficult to operate with EU based companies to investments with Europe:
Reviewing strategies to monitor and address the Brexit negotiations and
outcomes.
Crisis in Ukraine: The crisis in Ukraine may impact the Company's ability to
execute an acquisition. However, the Directors will review, on an ongoing
basis, the options for the Company, including raising additional funds.
Approved on behalf of the board of directors:
Maciej Szytko
Director
19 June 2025
HIGHWAY CAPITAL plc
Directors' report
Year ended 28 February 2023
Your directors have the pleasure in submitting their report and the audited
accounts for the year ended 28 February 2023, and consider it to be fair,
balanced and understandable.
Principal activity
The Company's business strategy is to identify, evaluate and complete suitable
acquisition opportunities.
Business review and management report
The loss on ordinary activities for the year before taxation was £429,745
(2022: restated loss £525,803). After taxation, the loss of £429,745 (2022:
restated loss £525,803) has been transferred to reserves.
The company continues to keep expenditure to a minimum in order to preserve
its cash resources. The company had cash at bank and in hand of £1 at 28
February 2023 (2022: £4,974).
Events that have occurred since the end of the financial year are detailed in
note 16 to the accounts. Details of future developments can be found in the
Chairman's statement.
Principle risks and uncertainties
The principal risks and uncertainties that the company faces are in
identifying and acquiring suitable investments, and in raising sufficient
future funds.. The income of the company fluctuates with movements in interest
rates.
At the date of approving these financial statements the directors are not
aware of any adverse impact arising from the crisis in Ukraine.
Dividends
The directors do not recommend the payment of a final dividend for the year
(2022: nil).
Directors
The following directors served during the year to 28 February 2023:
L. Sobolewski (Chairman) - resigned 16 September 2024
M. Szytko
N. Mayster - resigned 10 January 2025
B. Patnaik
Details of directors' remuneration, service contracts and interests in the
ordinary shares of the company are included in the directors' remuneration
report on pages 11 and 12.
Dr Sobolewski retires by rotation and offers himself for re-election at the
AGM. He does not have a service contract with the company. Following formal
performance evaluations, the Board believes that the Chairman has performed
effectively and that he should be re-elected.
Biographies of directors
Ludwik Sobolewski, 57, was appointed a non-executive director and Chairman on
22 January 2016. Mr Sobolewski currently serves as CEO of the Bucharest Stock
Exchange, where he has been charged with a mission to implement a deep reform
of the infrastructure of the Romanian capital market, in cooperation with the
Government, the National Bank of Romania, the Romanian Financial Services
Authority and market participants. Prior to joining the Bucharest Stock
Exchange, Mr Sobolewski served as the CEO and President of the Management
Board of the Warsaw Stock Exchange. Mr Sobolewski's background also includes
serving as President of the Association of Polish Lawyers and Executive
Vice-President of the National Depository for Securities. Mr Sobolewski is
currently on the supervisory boards of ZE PAK, a company listed on the Warsaw
Stock Exchange, the Financial Revision Commission of the Sztuka Media Film
Foundation and he is a member of the Council of the Teraz Polska (Poland Now)
Foundation, promoting small and medium entrepreneurship.
HIGHWAY CAPITAL plc
Directors' report continued
Year ended 28 February 2023
Maciej Szytko, 40, was appointed as a non-executive director on 19 September
2011. He is a Commercial Studies graduate from the University of Westminster.
Maciej has extensive experience in the financial market gained through
participation across a broad range of projects and capital transactions,
including PE/VC projects as well as Equity and Debt Raising for both IPO and
SPO transactions. He is currently a self-employed adviser and active investor
in public and private companies with a focus on the Commonwealth of
Independent States (CIS) and the Warsaw Stock Exchange (WSE), where his first
financial successes occurred.
Nicolay Mayster, 47, was appointed as non-executive director on 29 April 2019.
He graduated in Tunisia in 1997 with a Bachelor degree in Managerial Sciences,
major - Banking Management. Nicolay started his career in Tunisia as an equity
analyst in Smart Finance, a local research firm. In Bulgaria, he worked as
an analyst and a stock broker for a large brokerage firm before starting
Intercapital in 2001. Nicolay is a Chartered Financial Analyst.
Biswanath Patnaik, 45, was appointed as non-executive director on 27 November
2019. He holds an MBA and a Law degree from Utkal University, and is a
banker with operations in London, Singapore and Dubai. Mr Patnaik is also a
co-owner of a Multispeciality Hospital in Bhubaneswar, India. He is the
Chairman of an international committee of a Social Action Foundation based out
of Delhi, which provides vocational training and education to under privileged
children. Biswanath's family owns three mines in the state of Odisha in
India, which extract iron ore, bauxite and paraphyte.
Substantial shareholdings
At 28 February 2023 the company had been notified, in accordance with the
Disclosure and Transparency Rules of the Financial Services Authority, of the
following notifiable interests in the ordinary share capital of the company:
Number of Ordinary Shares Percentage Holding
Mrs C. C. Rowan 2,375,745 20.68%
M. Szytko 2,622,060 22.82%
N. Mayster 1,900,000 16.54%
D. Wheatley 435,644 3.79%
P. Fellerman 650,000 5.66%
Wildman Asset Management SA 850,000 7.40%
There have been no subsequent notified changes since the year end.
Payment of suppliers
It is the company's policy to pay suppliers in accordance with the terms
agreed for each transaction.
Disclosure of information to auditor
The directors confirm that:
· so far as each director is aware, there is no relevant audit
information of which the Company's auditor is unaware, and
· the directors have taken all the steps they ought to have taken as
directors in order to make themselves aware of any relevant audit information
and to establish that the Company's auditor is aware of that information.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
HIGHWAY CAPITAL plc
Directors' report continued
Year ended 28 February 2023
Qualifying third party indemnity provisions
The company's Articles of Association provide, subject to the provisions of UK
legislation, an indemnity for directors and officers of the company in respect
of liabilities they may incur in defending certain proceedings against them.
Auditors
A resolution proposing that Macalvins Limited be re-appointed as auditors of
the company will be put to the annual general meeting in accordance with
Section 485 of the Companies Act 2006.
Going concern
The Directors have reviewed projections for a period of at least 12 months
from the date of approval of the Financial Statements.
In making their assessment of going concern, the Directors have considered the
Company's position carefully and discussed it with its shareholders,
noteholders, creditors, investors and professional advisors.
The Company has made significant progress, since announcing termination of the
Reverse Takeover transaction and commencement of the Corporate Restructuring
as announced on 25 September 2024.
The Directors strongly believe that Company will be in a much stronger
position to pursue potential strategic opportunities after completing a
successful Company Voluntary Arrangement ("CVA"). The Directors believe that,
a Company Voluntary Arrangement, if approved, would reduce Highway Capital
Plc's net liabilities and allow for the Company to continue as an entity for
the benefit of all stakeholders.
Highway Capital Plc, between February and April 2025, raised £45,334 to fund
its professional costs related to publishing the annual accounts. On a
successful conclusion of the CVA process and restoration of the full listing
on the London Stock Exchange, the company will raise additional funds to cover
working capital.
However, the successful implementation of a strategic opportunity or ongoing
or future funding have been identified as material uncertainties which may
cast doubt over the going concern assessment. Whilst acknowledging this
uncertainty, based on their expectations of future successful fund raising and
continued financial support from interested investors, the Directors consider
it appropriate to continue to prepare the financial statements on a going
concern basis.
Greenhouse gas emissions and energy consumption
The Company is exempt from the requirements on disclosing its annual quantity
of emissions and energy consumption for which it is responsible.
Post balance sheet events
As detailed by the Chairman in his Chairman's Statement, the Company has made
significant progress, since announcing termination of the Reverse Takeover
transaction and commencement of the Corporate Restructuring as announced on 25
September 2024, and the directors believe that it will be in a much stronger
position to pursue potential strategic opportunities after completing a
successful Company Voluntary Arrangement ("CVA").
Highway Capital Plc, between February and April 2025, raised £45,334 to fund
its professional costs related to publishing the annual accounts. On a
successful conclusion of the CVA process and restoration of the full listing
on the London Stock Exchange, the company will raise additional funds to cover
working capital.
Financial risk management
The company's financial risk management objective is to minimize, as far as
possible, the company's exposure to such risk as detailed in note 20 to the
accounts.
HIGHWAY CAPITAL plc
Directors' report continued
Year ended 28 February 2023
S172 Statement
The Board believes that, individually and together, they have acted in the way
they consider, in good faith, would be most likely to promote the success of
the Company for the benefit of its members as a whole, having regard to
stakeholders and matters set out in s172(1)(a-f) of the Companies Act 2006 in
the decisions taken during the year ended 28 February 2023.
Engagement with employees
The Company currently does not have any employees other than directors or
customers, but recognizes that the long-term success of the business relies on
effective engagement with customers and employees.
Engagement with suppliers
The Company's only suppliers currently are those supplying professional
services. The Company manages relationships with suppliers as closely as
possible to ensure the services provided meet the Company's high standards.
Engagement with shareholders
Feedback from investors is obtained through direct interaction between the
Company's Board. The voting record at the Company's general meetings is
monitored for any investor feedback/issues.
The Board recognizes the importance of effective communication with its
shareholders. A range of corporate information is available on the Company's
website and this statement and the information within the Company's Annual
Report provide details to stakeholders on how the Company is governed. Company
performance is communicated to its shareholders and the market in its results
announcements, with further trading updates made where required and
appropriate
By order of the board
Maciej Szytko Director
19 June 2025
HIGHWAY CAPITAL plc
Directors' responsibility statement
Year ended 28 February 2023
The directors are responsible for preparing the strategic report and the
directors' report and the accounts in accordance with applicable law and
regulations.
Company law requires the directors to prepare accounts for each financial year
which give a true and fair view of the state of affairs of the company and of
the profit or loss for that period. In preparing those accounts, the directors
are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and estimates that are reasonable and prudent;
· state whether applicable UK accounting standards, including FRS 102
have been followed, subject to any material departures disclosed and explained
in the accounts;
· notify its shareholders in writing about the use of disclosure
exemptions, if any, of FRS 102 used in the preparation of 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 responsible for keeping adequate accounting records that are
sufficient to show and explain the company's transactions and disclose with
reasonable accuracy at any time the financial position of the company and
enable them to ensure that the accounts comply with the Companies Act 2006.
They are also responsible for the system of internal control, and for taking
such steps as are reasonably open to them to safeguard the assets of the
company and to prevent and detect fraud and other irregularities. The
directors are also responsible for ensuring that all information relevant to
the audit has been made available to the auditors.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
The directors confirm that:
- so far as each director is aware, there is no
relevant audit information of which the company's
auditor is unaware; and
- the directors have taken all the steps that they
ought to have taken as directors in order to make
themselves aware of any relevant audit information and to establish that the
company's auditor is aware of that information.
Under applicable law and regulations, the directors are also responsible for
preparing a strategic report, a directors' report, directors' remuneration
report and corporate governance statement that comply with that law and those
regulations.
The directors confirm that, to the best of their knowledge and belief:
- the accounts in this document, prepared in
accordance with applicable UK law and accounting
standards, give a true and fair view of the assets, liabilities, financial
position and loss of the company; and
- the business review and management report in the
directors' report includes a true and 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 it faces.
By order of the board
Maciej Szytko Director
19 June 2025
HIGHWAY CAPITAL plc
Directors' remuneration report
Year ended 28 February 2023
Introduction
The information included in this report is not subject to audit other than
where specifically indicated.
Remuneration committee
During the year under review the remuneration committee was headed by Ludwik
Sobolewski, the Chairman, and also comprised Maciej Szytko. This committee's
primary function is to review the performance of executive directors and
senior employees and set their remuneration and other terms of employment.
Since the disposal of its trading subsidiary on 24 January 2001, the company
has only had one executive director and no senior employees. The committee is
also responsible for administering any share option scheme or bonus schemes.
The remuneration committee determines the company's policy for the
remuneration of directors, having regard to the UK Corporate Governance Code
and its provisions on directors' remuneration.
The remuneration policy
It is the aim of the committee to remunerate directors competitively and to
reward performance. Details of the remuneration packages of individual
directors are set out below. There are currently no long term incentive plans,
performance bonuses or pension schemes in place. The views of the
shareholders have been considered in the formulation of the remuneration
policy, including through meeting at the AGM. At the last AGM held, a
resolution was passed to approve the directors' remuneration report. It is
the intention to implement a similar directors' remuneration policy in
2023/2024 to that in 2022/2023.
11
HIGHWAY CAPITAL plc
Directors' remuneration report continued
Year ended 28 February 2023
Service agreements and terms of appointment
None of the directors has a service contract with the company.
Directors' interests
The directors' interests in the share capital of the company are shown below.
All interests are beneficial.
There have been no notified changes in the interests of the directors since
the year end.
Number of ordinary shares
28.2.2023 28.2.2022
M. Szytko 2,622,060 2,622,060
N. Mayster 1,900,000 1,900,000
Directors' emoluments (audited)
Directors' emoluments including amounts payable to third parties in respect of
directors' services are comprised as follows:
No pension contributions were made by the company on behalf of its directors
(2022; nil)
No director currently has share options, and no share options were granted to
or exercised by the directors during the period under review. In connection
with his resignation on 20 April 2016, Mr Wheatley was granted 150,000 options
to subscribe for new ordinary shares in Highway Capital plc at a price of 20
pence per share at any time until 20 April 2021, which lapsed during the
previous year.
Basic Salary Compensation payment Taxable Benefits 2023 Total 2022 Total
Non-executive directors: Fees
L. Sobolewski 36,000 - - - 36,000 36,000
M. Szytko 60,000 - - - 60,000 60,000
N. Mayster - - - - - -
B. Patnaik - - - - - -
£ 96,000 £ - £ - £ - £96,000 £ 96,000
There are currently no management contracts for Mr Mayster and Mr Patnaik.
Approval by shareholders
At the next annual general meeting of the company a resolution approving this
report is to be proposed as an ordinary resolution.
This report was approved by the board on 19 June 2025 and signed on its behalf
by:
Maciej Szytko
Chairman and Head of Remuneration Committee
HIGHWAY CAPITAL plc
Corporate governance
Year ended 28 February 2023
The policy of the Board is to manage the affairs of the company with reference
to the UK Corporate Governance Code, which is publicly available from the
Financial Reporting Council. In July 2013 the company changed from a Premium
to a Standard listing. The listing is currently suspended.
Application of principles of good governance Board of directors
During the year under review the board comprised of the non-executive
Chairman, Ludwik Sobolewski, and the three non-executive directors, Maciej
Szytko, Nicolay Mayster and Biswanath Patnaik. The articles of association
require a third, but not greater than a third, of the directors to retire by
rotation each year. Since the disposal of the company's trading subsidiary on
24 January 2001 the company has not had a Chief Executive. The Board intends
to appoint a Chief Executive when a new business is acquired.
There are regular board meetings each year and other meetings are held as
required to direct the overall company strategy and operations. Board meetings
follow a formal agenda covering matters specifically reserved for decision by
the Board. These cover key areas of the company's affairs including overall
strategy, acquisition policy, approval of budgets, major capital expenditure
and significant transactions and financing issues.
The board has delegated certain responsibilities, within defined terms of
reference, to the audit committee and the remuneration committee as described
below. The appointment of new directors is made by the board as a whole.
During the year ended 28 February 2023, there were 12 Board meetings, 1 audit
committee meeting and 1 remuneration committee meeting. All meetings were
fully attended.
The board undertakes a formal annual evaluation of its own performance and
that of its committees and individual directors, through discussions and
one-to-one reviews with the Chairman and the senior independent director. The
terms and conditions of appointment of the non-excutive directors are
available for inspection at Eden House, Reynolds Road, Beaconsfield HP9 2FL.
Audit committee
During the year under review the audit committee was headed by Ludwik
Sobolewski, the Chairman, and also comprised Maciej Szytko. The committee's
terms of reference are in accordance with the UK Corporate Governance Code.
The committee reviews the company's financial and accounting policies, interim
and final results and annual report prior to their submission to the board,
together with management reports on accounting matters and internal control
and risk management systems. It reviews the auditors' management letter and
considers any financial or other matters raised by both the auditors and
employees.
The committee considers the independence of the external auditors and ensures
that their objectivity and independence are not impaired. During the year no
non-audit services were provided by the external auditors.
The committee has primary responsibility for making recommendations to the
board in respect of the appointment, reappointment and removal of the external
auditors.
HIGHWAY CAPITAL plc
Corporate governance continued
Year ended 28 February 2023
Remuneration committee
During the year under review the remuneration committee was headed by Ludwik
Sobolewski, the Chairman, and also comprised Maciej Szytko.
The committee's primary function is to review the performance of directors and
senior employees and to set their remuneration and other terms of employment.
It is also responsible for administering any share option and bonus schemes.
Relations with shareholders
The company encourages two-way communication with both its institutional and
private investors and responds promptly to all queries received. An
understanding of the views of the major shareholders of the company has been
developed, including through meeting at the AGM.
Internal controls
The directors are responsible for internal control in the company and for
reviewing its effectiveness. Procedures have been designed for safeguarding
assets against unauthorised use or disposition; for maintaining proper
accounting records; and for the reliability of financial information used
within the business or for publication. Such procedures are designed to manage
rather than eliminate the risk of failure to achieve business objectives and
can only provide reasonable and not absolute assurance against material error,
losses or fraud. In addition, there is an ongoing process in place for
identifying, evaluating and managing the significant risks faced by the
company.
The key procedures that the directors have established are designed to provide
effective internal control within the company and are regularly reviewed by
the board. This is in accordance with The Turnbull Guidance provided by the
Institute of Chartered Accountants in England and Wales. Such procedures have
been in place throughout the period under review and up to the date of
approval of the annual report and accounts.
Due to the size of the company, all key decisions are made by the board and
the assessment and management of risk is an integral part of the board's
decision-making process.
The company's organisational structure has clear lines of responsibility and
the board continues to review systems to monitor and investigate the major
business risks facing the company.
The board has established control procedures for all key financial areas of
the business, which enable the board to maintain full and effective control.
These controls include defined procedures for seeking and obtaining approval
for major transactions and controls relating to the security of assets. The
company operates a comprehensive budgeting and financial reporting system.
The directors have reviewed the effectiveness of the company's systems of
internal control as they operated during the period under review and consider
that there have been no material losses, contingencies or uncertainties caused
by weaknesses in internal controls. The directors do not consider that an
internal audit function is presently necessary as the company is a "cash
shell".
LSE listing suspension
On 22 September 2016, Highway Capital Plc was suspended from the Official List
and from trading on the Main Market due to the change in the strategic
direction of the company's business away from its stated aim; to find an
acquisition that would enhance shareholder value. On 11 October 2016, the
company announced it entered into a non-legally binding head of terms for the
acquisition of the Targets which if completed would have constituted a reverse
takeover under the Listing Rules. Highway Capital Plc currently complies with
its obligations and UKLR 21.1.5 rule as a suspended issuer. The suspension
prevents its stakeholders from trading the company's shares on the London
Stock Exchange. The Board remains optimistic that once the outstanding annual
reports are released and a successful Corporate Restructuring completed, the
company's suspension will be lifted.
HIGHWAY CAPITAL plc
Corporate governance continued
Year ended 28 February 2023
Going concern
The Directors have reviewed projections for a period of at least 12 months
from the date of approval of the Financial Statements.
In making their assessment of going concern, the Directors have considered the
Company's position carefully and discussed it with its shareholders,
noteholders, creditors, investors and professional advisors.
The Company has made significant progress, since announcing termination of the
Reverse Takeover transaction and commencement of the Corporate Restructuring
as announced on 25 September 2025.
The Directors strongly believe that Company will be in a much stronger
position to pursue potential strategic opportunities after completing a
successful Company Voluntary Arrangement ("CVA"). The Directors believe that,
a Company Voluntary Arrangement, if approved, would reduce Highway Capital
Plc's net liabilities and allow for the Company to continue as an entity for
the benefit of all stakeholders.
Highway Capital Plc, between February and April 2025, raised £45,334 to fund
its professional costs related to publishing the annual accounts. On a
successful conclusion of the CVA process and restoration of the full listing
on the London Stock Exchange, the company will raise additional funds to cover
working capital.
However, the successful implementation of a strategic opportunity or ongoing
or future funding have been identified as material uncertainties which may
cast doubt over the going concern assessment. Whilst acknowledging this
uncertainty, based on their expectations of future successful fund raising and
continued financial support from interested investors, the Directors consider
it appropriate to continue to prepare the financial statements on a going
concern basis.
Statement of compliance
In the opinion of the directors, the company has complied throughout the year
ended 28 February 2023 with all provisions relevant to a company of its size
set out in the UK Corporate Governance Code, except for the items outlined
below.
Code provision A.2.1 - Since the disposal of the company's trading subsidiary
on 24 January 2001 the company has not had a Chief Executive. The board
intends to appoint a Chief Executive when a new business is acquired.
Code provision B.2.1 - A nomination committee has not been set up, as the
directors consider that it is not appropriate while the company is a "cash
shell" without any employees. The board intends to set up a nomination
committee when a new business is acquired.
Code provision C.3.1 - Since the appointment of Ludwik Sobolewski as
non-executive Chairman on 22 January 2016, the company has had one rather than
at least two independent non-executive directors on the audit committee.
FCA DTR.4.1.3 - On 22 September 2016, Highway Capital Plc was suspended from
the Official List and from trading on the Main Market due to the change in the
strategic direction of the company's business away from its stated aim; to
find an acquisition that would enhance shareholder value. The Board remains
optimistic that once the outstanding annual reports are released and a
successful Corporate Restructuring completed, the company's suspension will be
lifted.
15
HIGHWAY CAPITAL plc
Independent Auditors' Report to the members of Highway Capital plc
Year ended 28 February 2023
Qualified opinion
We have audited the financial statements of Highway Capital plc (the
"Company") for the year ended 28 February 2023, which comprise the statement
of financial position, the statement of comprehensive income, the statement of
changes in equity, the statement of cash flows, and notes to the financial
statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation
is applicable law and United Kingdom Accounting Standards, including Financial
Reporting Standard 102 'The Financial Reporting Standard applicable in the UK
and Republic of Ireland' (United Kingdom Generally Accepted Accounting
Practice).
In our opinion, except for the effects of the matter described in the Basis
for Qualified Opinion section of our report, the financial statements:
give a true and fair view of the state of the Company's affairs as
at 28 February 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for qualified opinion
The Company has prepared its financial statements on a going concern basis, as
disclosed in Note 1. The Company is in a net liability position of £1.85
million, has no cash reserves, and a large portion of creditor balances are
classified as current. The Company entered into negotiations for a Company
Voluntary Arrangement (CVA) during the year, the outcome of which remains
inconclusive. Furthermore, the non-disclosure of the details and extent of the
CVA process constitute lack of sufficient disclosure relating to the going
concern ability of the entity. The shares of Highway Capital plc remain
suspended from trading on the London Stock Exchange.
Management has obtained a non-binding financial letter of support from a
related party that partially addresses the Company's short-term obligations.
However, the financial statements do not adequately disclose the existence of
a material uncertainty that may cast significant doubt on the Company's
ability to continue as a going concern. In our view, this constitutes a
material misstatement of the financial statements due to inadequate
disclosure.
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, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence
obtained is sufficient and appropriate to provide a basis for the auditor's
opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that management's use
of the going concern basis of accounting is appropriate. However, as described
in the Basis for Qualified Opinion section, we identified a material
misstatement due to the inadequate disclosure of a material uncertainty
related to going concern.
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period. 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.
HIGHWAY CAPITAL plc
Independent Auditors' Report to the members of Highway Capital plc
Year ended 28 February 2023
1. Going Concern and Material Uncertainty
Key audit matter
The group's ability to continue as a going concern is dependent on securing
sufficient financial support and managing its liabilities as they fall due. At
year end, the group was in a net liabilities position, had no available cash
reserves, and had classified all creditors as current. In addition, the group
entered into a Company Voluntary Arrangement (CVA) with creditors during the
year.
Management's going concern assessment is supported by a non-binding financial
letter of support from a related party covering only a portion of outstanding
liabilities, and there is no executed financing agreement for the balance.
These factors give rise to a material uncertainty related to going concern. We
consider this a key audit matter due to the significant judgement involved and
the potential impact on the basis of preparation of the financial
statements.
How our audit addressed the key audit matter
Our procedures included:
· Evaluating management's forecasts, underlying assumptions, and
the robustness of the cash flow projections.
· Reviewing the terms and implications of the CVA and whether
liabilities had been legally restructured.
· Assessing the credibility and sufficiency of the letter of
support and its enforceability.
· Performing stress testing on cash flow scenarios to assess the
group's ability to meet liabilities as they fall due.
· Reviewing the adequacy of disclosures in the financial statements
regarding going concern and the related material uncertainty.
Based on our work, we consider that the financial statements appropriately
disclose the existence of a material uncertainty that may cast significant
doubt on the group's ability to continue as a going concern.
2. Accounting for Convertible Loan Notes
Key audit matter
During the year, the group issued convertible loan notes (CLNs). These were
initially accounted for entirely as liabilities. Upon review, we identified
that the conversion feature had not been appropriately assessed under IAS 32:
Financial Instruments: Presentation. The instruments were subsequently
corrected to reflect both a liability and an equity component, with a material
adjustment and restatement of comparative figures.
This matter was significant due to the complexity of classification under IAS
32, the risk of material misstatement, and the need for management to correct
the error during the audit process.
How our audit addressed the key audit matter
Our procedures included:
· Reviewing the CLN agreements and evaluating whether the terms met
the definition of a compound financial instrument.
· Engaging internal specialists to advise on the technical
application of IAS 32.
· Recalculating the equity and liability split using the residual
value method.
· Assessing the restatement's accuracy and the appropriateness of
the related disclosures.
We found that the revised accounting treatment and disclosures were
appropriate and compliant with the applicable financial reporting framework.
HIGHWAY CAPITAL plc
Independent Auditors' Report to the members of Highway Capital plc
Year ended 28 February 2023
Other information
The directors are responsible for the other information. The other information
comprises the information in the Report of the directors but does not include
the financial statements and our Report of the auditors thereon.
Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit, the
information given in the Report of the directors for the financial year for
which the financial statements are prepared is consistent with the financial
statements; and the Report of the directors has been prepared in accordance
with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our
opinion:
· adequate accounting records have not been kept, 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
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of Directors
As explained in the Statement of directors' responsibilities set out on page
10, 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 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.
HIGHWAY CAPITAL plc
Independent Auditors' Report continued
Year ended 28 February 2023
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.
As part of an audit in accordance with ISAs (UK), we exercise professional
judgement and maintain professional scepticism throughout the audit.
The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below.
The objectives of our audit in respect of fraud are to:
· Identify and assess the risks of material misstatement in the
financial statements due to fraud;
· Obtain sufficient appropriate audit evidence regarding those
assessed risks through designing and implementing appropriate responses; and
· Respond appropriately to fraud or suspected fraud identified
during the audit.
However, the primary responsibility for the prevention and detection of fraud
rests with management and those charged with governance.
Our approach to detecting irregularities, including fraud, involved the
following:
· Obtaining an understanding of the legal and regulatory framework
applicable to the entity and how the Company is complying with that framework.
The most significant laws and
· regulations we considered included the Companies Act 2006, FRS
102 Section 1A, and relevant UK tax legislation.
· Discussions with management and those charged with governance to
understand procedures and controls established to prevent and detect fraud.
· Discussions among the audit engagement team regarding risk of
fraud, including management override of controls.
· Performing specific procedures to respond to these risks,
including:
o Testing journal entries and other adjustments;
o Evaluating the business rationale of significant transactions;
o Performing analytical procedures on key estimates;
o Confirming group balances and significant transactions;
o Assessing the adequacy and compliance of disclosures in the financial
statements.
There are inherent limitations in the audit procedures described above.
Irregularities, including fraud, may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. As such,
there is a risk that audit procedures may not detect a material misstatement
arising from fraud, particularly the further the audit date is from the date
of the underlying transactions.
The risks of material misstatement that had the greatest effect on our audit
included the accounting treatment of the convertible loan notes and going
concern.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
This description forms part of our auditor's report.
HIGHWAY CAPITAL plc
Independent Auditors' Report continued
Year ended 28 February 2023
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Pankaj Rajani (Senior Statutory
Auditor)
For and on behalf of Macalvins
Limited
Chartered Accountants & Statutory Auditors
7 St John's Road
Harrow
Middlesex
HA1 2EY
19 June 2025
HIGHWAY CAPITAL plc
Statement of comprehensive income
Year ended 28 February 2023
Notes 2023 2022
£ £
Management fees 2 - -
Administrative expenses (429,749) (525,809)
Operating loss 3 (429,749) (525,809)
Interest receivable 4 6
Administrative expenses (183,689) (178,759)
Taxation for period - -
6
Loss for the financial period and total comprehensive income (429,745) (525,803)
Basic loss per share 8 (3.74)p (4.58)p
Diluted loss per share 8 (3.74)p (4.58)p
Basic loss per share from continuing operations 8 (3.74)p (4.58)p
Diluted loss per share from continuing operations 8 (3.74)p (4.58)p
Continuing operations
There are no acquired or discontinued operations in the above two financial
periods.
Statement of comprehensive income
The company has no items of other comprehensive income other than the profit
or loss for the above two financial periods.
The notes on pages 25 to 31 form part of these Financial Statements.
HIGHWAY CAPITAL plc
Statement of financial position
As at 28 February 2023
Notes 2023 2022
£ £
Current assets
Debtors 10 8,614 27,470
Cash at bank and in hand 1 4,974
8,615 32,444
Creditors: amounts falling due within one year 11 (1,375,975) (649,198)
Net current liabilities (1,367,360) (616,754)
Total assets less current liabilities (1,367,360) (616,754)
Creditors: amounts due after more than one year 12 (483,230) (822,471)
Net liabilities £(1,850,590) £(1,439,225)
Capital and reserves
Share capital 14 229,804 229,804
Share premium account 17 474,971 474,971
Convertible loan equity reserve 228,182 203,327
Retained earnings 17 (2,783,547) (2,347,327)
Total equity shareholders' deficit £(1,850,590) £(1,439,225)
Approved by the board on 19 June 2025
Maciej Szytko
Chairman
Company registration no. 02991159
The notes on pages 25 to 31 form part of these Financial Statements.
HIGHWAY CAPITAL plc
Statement of changes in equity
Year ended 28 February 2023
Share Share Convertible loan equity Retained Total
capital premium earnings
account reserve
Balance at 1 March 2021 229,804 474,971 99,927 (1,830,684) (1,025,982)
Period ended 28 February 2022:
Loss and total comprehensive income for the year - - - (525,803) (525,803)
Prior period adjustments - - - 9,160 9,160
Convertible loan equity reserve - - 103,400 - 103,400
Balance at 28 February 2022 229,804 474,971 203,327 (2,347,327) (1,439,225)
Period ended 28 February 2023:
Loss and total comprehensive income for the year - - - (429,745) (429,745)
Prior period adjustments - - - (6,475) (6,475)
Convertible loan equity reserve - - 24,855 - 24,855
Balance at 28 February 2023 £229,804 £474,971 £228,182 £(2,783,547) £(1,850,590)
The notes on pages 25 to 31 form part of these Financial Statements.
HIGHWAY CAPITAL plc
Statement of cash flows
Year ended 28 February 2023
2023 2022
£ £
Cash flows from operating activities
Loss for the financial period (429,745) (525,803)
Adjustments for:
Interest receivable (4) (6)
Changes in:
Trade and other debtors 18,856 (10,239)
Trade and other creditors 311,804 220,578
Cash generated from operations (99,089) (315,470)
Interest received 4 6
Net cash from operating activities (99,085) (315,464)
Cash flows from financing activities
Issue of new equity (net of costs) - -
Proceeds from loans to company 118,550 278,000
Repayment and conversion of loans to company (25,650) -
Net cash from financing activities 92,900 278,000
Net (decrease)/ increase in cash and cash equivalents (6,185) (37,464)
Cash and cash equivalents at beginning of period (311) 37,153
Cash and cash equivalents at end of period (6,496) (311)
Net cash reconciliation
Cash at bank and in hand 1 4,974
Bank loans and overdrafts (note 11) (6,497) (5,285)
Cash and cash equivalents at end of period (6,496) (311)
The notes on pages 25 to 31 form part of these Financial Statements
HIGHWAY CAPITAL plc
Notes to the accounts
Year ended 28 February 2023
The company is a public limited company (limited by shares) incorporated in
the United Kingdom. The company's registered number is 02991159, and its
registered office and principal place of business address is Eden House,
Reynolds Road, Beaconsfield, Buckinghamshire, HP9 2FL. The principal activity
of the company is to identify, evaluate and complete suitable acquisition
opportunities.
1.
Accounting policies
Statement of compliance
These financial statements have been prepared in compliance with FRS 102, "The
Financial Reporting Standard applicable in the UK and the Republic of
Ireland".
Basis of accounting
The accounts have been prepared under the historical cost convention and in
accordance with applicable accounting standards.
Highway Capital plc does not prepare consolidated accounts and the directors
have therefore continued to prepare its accounts in accordance with FRS 102
rather than international accounting standards.
The financial statements are prepared in sterling, which is the functional
currency of the entity.
Going concern
The Directors have reviewed projections for a period of at least 12 months
from the date of approval of the Financial Statements.
In making their assessment of going concern, the Directors have considered the
Company's position carefully and discussed it with its shareholders,
noteholders, creditors, investors and professional advisors.
The Company has made significant progress, since announcing termination of the
Reverse Takeover transaction and commencement of the Corporate Restructuring
as announced on 25 September 2024.
The Directors strongly believe that Company will be in a much stronger
position to pursue potential strategic opportunities after completing a
successful Company Voluntary Arrangement ("CVA"). The Directors believe that,
a Company Voluntary Arrangement, if approved, would reduce Highway Capital
Plc's net liabilities and allow for the Company to continue as an entity for
the benefit of all stakeholders.
The Directors are optimistic that they would be successful in raising funds
required for the foreseeable future, subject to positive CVA outcome.
However, the successful implementation of a strategic opportunity or funding
has been identified as a material uncertainty which may cast doubt over the
going concern assessment. Whilst acknowledging this uncertainty, based upon
the above, the Directors consider it appropriate to continue to prepare the
financial statements on a going concern basis.
Consolidation
At 28 February 2023, Highway Capital plc was a stand-alone company and is
therefore not required to prepare consolidated accounts.
Deferred taxation
Deferred tax is provided in full at appropriate rates in respect of taxation
deferred by timing differences between the treatment of certain items for
taxation and accounting purposes, if those timing differences are not
permanent and have originated but not reversed by the balance sheet date. The
deferred tax balance has not been discounted
HIGHWAY CAPITAL plc
Notes to the accounts continued
Year ended 28 February 2023
Foreign currencies
Profit and loss account transactions denominated in foreign currencies are
translated into sterling and recorded at the rate of exchange ruling at the
date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of exchange ruling at the
balance sheet date. All differences are taken to the profit and loss
account.
Turnover
Revenue relates to management fees receivable for services carried out in the
UK, and is recognised on the delivery of services to which it relates at the
fair value of the consideration received or receivable based on agreed rates
net of discounts, VAT and other sales related taxes.
Interest receivable
Interest receivable is recognised as income in the period on the effective
income basis.
Judgements and key sources of estimation uncertainty
In the application of the company's accounting policies, the directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities, including the recoverability of debtors,
that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates. The
estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised where the revision affects only that period, or in the
period of the revision and future periods where the revision affects both
current and future periods.
The directors have considered the above and do not believe that there are any
estimates or assumptions which have a significant effect on the amounts
recognised in the financial statements that require disclosure.
Financial instruments and financial liabilities
The Company's financial instruments comprise cash, trade debtors and trade
creditors that arise directly from its operations and are measured at their
transaction price. The Company's policy has been, and continues to be, that no
speculative trading in financial derivatives shall be undertaken.
Basic financial liabilities, including creditors, bank loans, loans from
investors and convertible loan notes, are initially recognized at transaction
price unless the arrangement constitutes a financing transaction, where the
debt instrument is measured at the present value of the future payments
discounted at a market rate of interest. Financial liabilities classified as
payable within one year are not amortised.
Borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset are capitalised as part of the cost of that
asset. Other borrowing costs are recognised as an expense in the period in
which they are incurred.
Convertible loan notes
The issued Convertible Loan Notes are treated by the Company in accordance
with its accounting policy under IAS 32, as follows:
· The liability component is measured first, typically at the
present value of future cash flows.
· The equity component is then measured as the residual amount.
· Once recognised, the equity component is not remeasured.
2. Turnover
Turnover relates to management fees receivable for services carried out in the
UK - £nil (2022: £nil).
HIGHWAY CAPITAL plc
Notes to the accounts continued
Year ended 28 February 2023
3. Operating loss
This is stated after charging: 2023 2022
Directors' remuneration - Salaries and fees 96,000 96,000
Auditors' remuneration - Audit fees 15,000 15,000
Auditors' remuneration - Non-audit fees 52,500 97,500
Other expenses 266,249 317,309
Total £429,749 £525,809
4. Employees
The average number of employees, including directors and key management
personnel, during the year was made up as follows
2023 2022
No. No.
Directors 4 4
Employee costs, including directors and key management personnel, during the
year amounted to:
2023 2022
Salaries and fees £96,000 £96,000
5. Directors' remuneration
Salaries and fees
£96,000
£96,000
5. Directors' remuneration
Information relating to directors' emoluments is included in the directors'
remuneration report on pages 11 and 12 There were no key management
personnel in the year, other than directors.
6. Taxation Based on the loss for the year:
2023 2022
U.K. corporation tax at 19% (2022: 19%) £- £-
The tax assessed on the loss on ordinary activities for the period is lower
than the standard rate of corporation tax in the UK of 19% (2022: 19%).
Factors affecting the tax credit for the year
Loss on ordinary activities before taxation £(429,745) £(525,803)
Loss on ordinary activities before taxation multiplied by the small company £(81,652) £(99,903)
rate of UK corporation tax of 19% (2022: 19%)
Effects of:
Current period tax losses not utilized 66,534 54,845
Disallowed expenditure 15,118 45,058
£81,652 £99,903
Current tax credit £- £-
The company has estimated losses of £3,010,000 (2022: restated £2,642,000)
that may be available for carry forward against future profits, and estimated
capital losses of £1,471,000 (2022: £1,471,000) that may be available for
carry forward against future chargeable gains. No deferred tax asset has been
recognised in the accounts in respect of these unrelieved losses.
HIGHWAY CAPITAL plc
Notes to the accounts continued
Year ended 28 February 2023
7. Dividends
2023 2022
Interim dividend paid per
share
- -
£- £-
8. Loss per share
The loss per ordinary share calculation has been based on the loss
attributable to ordinary shareholders of £429,745 (2022: restated loss
£525,803), divided by 11,490,201 (2022: 11,490,201), being the weighted
average number of ordinary shares in issue during the year. There is no
difference between the basic and the diluted loss per ordinary share. There
are no discontinued operations in either period and, therefore, the basic and
the diluted loss per ordinary share from continuing operations are the same as
the basic and the diluted loss per ordinary share.
9. Capital commitments
At 28 February 2023 the company had no capital commitments or contracts for
capital expenditure (2022: £nil).
10. Debtors
2023 2022
Other debtors 8,614 27,470
Prepayments - -
£8,614 £27,470
11. Creditors: amounts falling due within one year
2023 2022
Loans payable 571,486 82,995
Bank overdraft 6,497 5,285
Trade creditors 353,931 225,921
Accruals 444,061 334,997
£1,375,975 £649,198
The loan note holders have all confirmed that they wish to convert their loans
to equity when the company completes a suitable acquisition.
Loan notes are unsecured, convertible at the holder's request into new
ordinary shares in the company at a price of 5 or 10 pence per share; in the
event that the loans are not repaid or converted prior to their maturity date
then they will attract accrued interest at a rate of 5% or 12% per annum..
HIGHWAY CAPITAL plc
Notes to the accounts continued
Year ended 28 February 2023
12. Creditors: amounts due after more than one year
2023 2022
Loans payable 483,230 822,471
£483,230 £822,471
The loans payable due after more than one year of £483,230 (2022: restated
£822,471) are unsecured, repayable after two or five years, convertible at
the holder's request into new ordinary shares in the company at a price of 5
or 10 pence per share; in the event that the loans are not repaid or converted
prior to their maturity date then they will attract accrued interest at a rate
of 5% or 12% per annum.
13. Deferred taxation
The estimated deferred tax asset not recognised in the accounts, based on a
19% rate of tax, amounts to £851,000 (2022: based on a 19% rate of tax
restated £781,000). Of this amount, £279,000 (2022: £279,000). may be
recoverable by the company against future chargeable gains, and £572,000
(2022: £502,000) may be recoverable against future profits.
14. Share capital Number of Shares Nominal Value Number of Shares Nominal Value
2023 2023 2022 2022
Allotted, called-up and fully paid:
Ordinary shares of 2p each 11,490,201 £229,804 11,490,201 £229,804
Each 2p ordinary share is entitled to one vote in any circumstances; All
dividends shall be apportioned and paid proportionately to the amount paid up
on the ordinary shares during any proportion or proportions of the period in
respect of which the dividend is paid; No shares of the company are currently
redeemable or liable to be redeemed at the choice of the company or the
shareholder.
The company also has convertible loan notes in issue which if fully converted
would increase the number of ordinary shares allotted by 15,730,320 shares
(2022: 13,979,320 shares). These shares would benefit from all the rights and
benefits as detailed above.
15. Related party transactions
The company has no ultimate controlling party.
As at the balance sheet date, there are loans at full value of £31,288 (2022:
£31,288) due from the company to B Patnaik, a director; and £70,000 (2022:
£70,000) due to D Zych, a former director and a shareholder. The terms of
these loans are set out in note 12 above.
As at the balance sheet date there is a loan at full value of £255,000 (2022:
£255,000) due from the company on normal commercial terms to N Mayster a
director and shareholder of Highway Capital PLC. The terms are interest at 5%
and this is considered reasonable and in line with third party market rates
available to the entity.
No other related party transactions were undertaken as such that are required
to be disclosed under FRS 102.
HIGHWAY CAPITAL plc
Notes to the accounts continued
Year ended 28 February 2023
16. Post balance sheet events
As detailed by the Chairman in his Chairman's Statement, the Company has made
significant progress, since announcing termination of the Reverse Takeover
transaction and commencement of the Corporate Restructuring as announced on 25
September 2024, and the directors believe that it will be in a much stronger
position to pursue potential strategic opportunities after completing a
successful Company Voluntary Arrangement ("CVA").
17. Reserves
Share premium account - This reserve records the amount above the nominal
value received for shares sold, less transaction costs.
Retained earnings - This reserve records retained earnings and accumulated
losses.
18. Prior year adjustment - convertible loan notes
During the year ended 28 February 2023, the Group identified that convertible
loan notes issued in previous years had not been correctly accounted for in
accordance with FRS 102 Section 22. The instruments, which contained both a
liability and an equity component, had been fully recorded as a liability.
As a result, a prior period adjustment has been made to recognise the equity
component of the convertible loans (£203,327) in a newly presented
Convertible Loan Equity Reserve within equity. The comparative figures for
2022 have been restated accordingly.
The impact of the prior period adjustment on the 2022 comparative figures is
as follows:
· Decrease in loss for the year by £17,323
· Decrease in loan creditor due within one year by £915,943
· Increase in loan creditor due after one year by £483,230
· Decrease in accruals by £136,338
· Increase in convertible loan equity reserve by £203,327
· Increase in profit and loss account reserve by £9,160
19. Other financial commitments
At 28 February 2023 the company had no commitments under non-cancellable
operating leases or finance leases (2022: £nil).
20. Financial instruments
The Company's financial instruments comprise cash, trade debtors and trade
creditors that arise directly from its operations. The Company's policy has
been, and continues to be, that no speculative trading in financial
derivatives shall be undertaken.
The cash is held in bank current and premium accounts and on treasury deposit,
which receive varying rates of interest that is recognised on a receivable
basis. All financial assets and liabilities are denominated in Sterling.
Fair value of financial assets and liabilities
The fair value of financial assets and liabilities, calculated by discounting
expected future cash flows at prevailing interest rates, is as follows:
HIGHWAY CAPITAL plc
Notes to the accounts continued
Year ended 28 February 2023
2023 2022
Financial assets
Trade and other receivables 8,614 27,470
Cash at bank 1 4,974
£8,615 £32,444
Financial liabilities
Bank overdraft 6,497 5,285
Trade and other payables 353,931 225,921
Loans payable - within 1 year 571,486 82,995
Loans payable - after 1 year 483,230 822,471
£1,415,144 £1,136,672
The fair value of the financial assets and financial liabilities is equal to
their carrying values. All financial assets are categorized as loans and
receivables and all financial liabilities are categorized as financial
liabilities at amortized cost.
The entity has convertible loan notes. In accordance with reporting standards,
the instrument was assessed as a compound financial instrument, with the
liability component measured at the present value of future contractual cash
flows and the equity component representing the residual value attributable to
the option to convert the loan into ordinary shares.
The equity component of £228,182 has been recognised in the Convertible Loan
Equity Reserve within equity and will not be subsequently remeasured. The
liability component is recognised under borrowings.
Hedging
The Company makes no use of forward currency contracts, other financial
derivatives or hedging.
Interest rate risk
The Company does not have an interest rate policy in isolation but regularly
reviews the interest rates being received on deposits.
Liquidity risk
The principal policy of the Company in managing liquidity risk is to align the
anticipated timing of expenditure with the availability of its cash balances.
21. Net debt reconciliation
1 March 28 February 2023
2022 Cash flows £
£ £
Cash at bank and in hand 4,974 1
Bank overdrafts (5,285) (6,497)
(311) (6,496)
HIGHWAY CAPITAL plc
Company information
Directors
Maciej Szytko (non-executive Chairman)*
Biswanath Patnaik (non-executive director)*
* member of the remuneration & audit committees
Secretary, registered office, and principal
Maciej Szytko
place of
business
Eden House, Reynolds Road
Beaconsfield HP9 2FL
Place of
incorporation
England and Wales
Registrars and share transfer
office Neville Registrars
Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands B63 3DA
Share price
information
Information about the day-to-day movement of the
Company's share price can be obtained from the London Stock Exchange: Code HWC
Auditors
Macalvins Limited
Chartered Accountants 7 St John's Road, Harrow, London, HA1 2EY
Bankers
Revolut Ltd
7 Westferry Circus
London, E14 4HD
Solicitors
RWK Goodman
69 Carter Lane London
EC4A 5EQ
HIGHWAY CAPITAL plc
THE FOLLOWING DOES NOT FORM PART OF THE FINANCIAL STATEMENTS
Financial review
Year to Restated Year to Year to Year to Year to
28.2.2023 28.2.2022 28.2.2021 29.2.2020 28.2.2019
Management fees - - 164,500 - -
Other income - - - - -
Administrative expenses (429,749) (525,809) (299,290) (292,425) (207,689)
Operating profit/(loss) (429,749) (525,809) (134,790) 292,425) (207,689)
Profit on disposal of subsidiaries - - - - -
Income from fixed asset investments - - - - -
Interest receivable 4 6 9 44 8,326
Amount written back/(off) investments - - - - (38,172)
Profit/(loss) on ordinary activities before taxation (429,745) (525,803) (134,781) (292,381) (237,535)
Taxation - - - - -
Profit/(loss) on ordinary activities after taxation (429,745) £(525,803) £(134,781) £(292,381) £(237,535)
Earnings/(loss) per share (3.74)p (4.58)p (1.17)p (2.54)p (2.48)p
Diluted earnings/(loss) per share (3.74)p (4.58)p (1.17)p (2.54)p (2.48)p
Dividend per share nil nil nil nil nil
(525,809)
(134,790)
292,425)
(207,689)
Profit on disposal of subsidiaries
-
-
-
-
-
Income from fixed asset investments
-
-
-
-
-
Interest receivable
4
6
9
44
8,326
Amount written back/(off) investments
-
-
-
-
(38,172)
Profit/(loss) on ordinary activities before taxation
(429,745)
(525,803)
(134,781)
(292,381)
(237,535)
Taxation
-
-
-
-
-
Profit/(loss) on ordinary activities after taxation
(429,745)
£(525,803)
£(134,781)
£(292,381)
£(237,535)
Earnings/(loss) per share
(3.74)p
(4.58)p
(1.17)p
(2.54)p
(2.48)p
Diluted earnings/(loss) per share
(3.74)p
(4.58)p
(1.17)p
(2.54)p
(2.48)p
Dividend per share
nil
nil
nil
nil
nil
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