REG - Inspirit Energy Hlds - Final Results
29/12/2021 17:30
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RNS Number : 9850W Inspirit Energy Holdings PLC 29 December 2021
29 December 2021
Inspirit Energy Holdings Plc
("Inspirit" or "the Company")
ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2021
NOTICE OF ANNUAL GENERAL MEETING
Inspirit Energy Holdings Plc today
announces its audited results for the year ended 30 June 2021 (the
"Accounts").
Copies of the Company's Annual Report and Accounts will be sent to
shareholders along with a Notice of AGM and will be available on the Company's
website www.inspirit-energy.com today.
The AGM will be held at 200 Aldersgate Street, London EC1A 4HD at 11 am on
9(th) February 2022.
Further copies may be obtained directly from the Company's Registered Office
at Inspirit Energy Holdings plc, 200 Aldersgate Street, London EC1A 4HD.
Extracts of the Accounts are set out below.
Chairman's Statement
Inspirit Energy Holdings plc (Inspirit) has maintained its focus on the
application of the Stirling engine in various sectors during the year, and
during the last few months of the financial year ended 30 June 2021, COVID 19
restrictions eased and Inspirit had been working with its engineering partners
on the fine details of the new Waste Heat Recovery (WHR) system for the
application on the Volvo marine engine. Details on the electrical and the
main mechanical systems are near completion, and it is hoped that by the end
of 2021 all major items of the WHR system will be complete, with a view to
having the designs for a full working prototype that can be put into testing
and manufacture.
Despite the global slowdown and access to materials, the operating Board
believe that the company has maintained a positive progress over the last year
in the alternative applications of the Stirling engine and there is strong
evidence of the need to refocus our strategic objectives towards these areas
that include marine and waste heat recovery. We wait to assess the impact on
government's ban on oil and gas boilers on new build property from 2025, but
there is no clear outcome with existing households gas boiler heating. It
should be noted that this is by no means an abandonment of our MicroCHP boiler
technology as over 65% of the technology for the Inspirit charger is
applicable to the marine and waste heat recovery applications. The Company
is in discussion with an organisation that can modify and re-engineer the
heater head that is potentially applicable in the rapidly emerging hydrogen
market.
As per prior years, the board are continuing to assess funding options for the
development and commercialisation of our products and will continue to
demonstrate prudence in our approach to managing our current resources whilst
pushing forward with our product development.
I would like to personally thank my colleagues for their hard work and
commitment to driving the business forward during these challenging times.
J Gunn
Chairman and Chief Executive Officer
29 December 2021
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part
of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018.
Upon the publication of this announcement, this inside information is now
considered to be in the public domain.
More information on Inspirit Energy can be seen at: www.inspirit-energy.com
(http://www.inspirit-energy.com/)
For further information please contact:
Inspirit Energy Holdings plc
John Gunn, Chairman and CEO +44 (0) 207 048 9400
Beaumont Cornish Limited
www.beaumontcornish.com
(Nominated Advisor)
Roland Cornish / James Biddle +44 (0) 207 628 3396
Global Investment Strategy UK Ltd
(Broker)
Samantha Esqulant +44 (0) 207 048 9045
STRATEGIC REPORT FOR THE YEAR ENDED 30 JUNE 2021
The Directors present their Strategic Report on Inspirit Energy Holdings plc
(the "Company") and its subsidiary undertakings (together the "Group") for the
year ended 30 June 2021.
REVIEW OF THE BUSINESS
Inspirit Energy Limited (IEL) is currently in the process of refocusing its
expertise in the application of the Stirling engine technology in different
sectors including Marine and Waste Heat Recovery.
The Company is also currently pursuing the development and commercialisation
of a world-leading micro-Combined Heat and Power ("mCHP") boiler for use in
commercial and residential markets. The mCHP boiler is powered by natural gas
or hydrogen and designed to produce hot water (for domestic hot water or
central heating) and a simultaneous electrical output that can be used locally
or fed back into the National Grid.
DEVELOPMENTS DURING THE YEAR
Despite COVID 19 impacting the year with lockdowns, supply line issues and
general movement in Europe, IEL had been working with its engineering partners
on the fine details of the new WHR for the application on the Volvo marine
engine.
In addition, IEL developed and applied a new innovative technology that will
become an integral part of the of WHR System. Whilst still in the early
stages of development, the Inspirit Helix Accelerator system (IHA), works
alongside the WHR system taking the heat from the original source and
increasing it via an exothermic reaction demonstrated to be at least 26%.
Essentially, the heat source that passes though the IHA is amplified to
provide a greater heat source for the Stirling engine, resulting in greater
power output and efficiency. The Company believes that this technology,
along with the Stirling technology that Inspirit Energy has also developed,
makes this system more innovative than anything currently on the market. IHA
has other applications where the current heat source is in a lower threshold
and the traditional use of Stirling technology would not seem a benefit to
recover lost energy.
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE
The Director's believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
· Consider the likely consequences of any decision in the long term;
· Act fairly between the members of the Company;
· Maintain a reputation for high standards of business conduct;
· Consider the interests of the Company's employees;
· Foster the Company's relationships with suppliers, customers and others; and
· Consider the impact of the Company's operations on the community and the environment.
The Company is quoted on AIM and its members will be fully aware, through
detailed announcements, shareholder meetings and financial communications, of
the Board's broad and specific intentions and the rationale for its decisions.
When selecting suppliers and materials, issues such as the impact on the
community and the environment have actively been taken into consideration.
The Company pays its employees and creditors promptly and keeps its costs to a
minimum to protect shareholders funds.
Other developments during the year:
On 3rd November 2020, the Company announced that it had entered into a letter
of support for the development of a Waste Heat Recovery ("WHR") system
following a successful model design and application demonstration with Volvo
Penta, a world-leading supplier of power solutions for marine and industrial
applications.
On 3rd November 2020, the Company announced that it had received Warrant
Conversion notices for £150,000 at 0.07 per share on the Warrants attached to
Convertible Loan Notes (CLN's) issued on the 4th May 2018.
On 4th November 2020, the Company announced that it is in discussions
regarding a possible collaboration with an engineering company with expertise
in advanced gasification.
On 16th November 2020, the Company announced that it had received warrant
conversion notices for £107,500 at 0.07 p per share on the Warrants attached
to Convertible Loan Notes (CLN's) issued on the 4 May 2018 to the Directors of
the Company and accordingly issued 153,571,427 Ordinary Shares. The ordinary
shares in relation to the converted warrants consisted of the Chairman and
CEO, John Gunn was issued 71,428,571 new Ordinary Shares of 0.001p each;
Global Investment Strategy UK Ltd (A company with direct control by John Gunn)
was issued 67,857,142 new Ordinary shares and Nilesh Jagatia, Finance
Director, was issued 14,285,714 Ordinary Shares
On 27th May 2021, the Company announced that it had raised a gross amount of
£500,000 through the placing of 1,000,000,000 ordinary shares of 0.001 pence
each in the share capital of the Company at 0.05 pence per Ordinary Share. For
every two Placing Shares they subscribed to, placees will also receive one
warrant over Ordinary Shares valid for 24 months from the date of issue
exercisable at 0.075 pence per Ordinary Share.
BOARD CHANGES
None.
RESULTS AND DIVIDENDS
The Group made a loss after taxation of £253,000 (2020: loss of £199,000)
and net assets were £2,891,000 (2020: £2,416,000).
The Directors do not propose a dividend for the year to 30 June 2021 (2020:
£nil).
KEY PERFORMANCE INDICATORS
The key performance indicators (KPI) used by the Board to monitor the
performance of the Group, are set out below:
PLC S 30 June 30 June
2021 2020
Net asset value £2,891,000 £2,416,000
Net asset value - fully diluted per share 0.074p 0.10p
Closing share price 0.05p 0.05p
Market capitalisation £2,135,820 £1,451,891
The Net asset value and Market capitalisation have increased
during the period due to the placing and warrant
conversions during the reporting period. The closing share price
has maintained the same price during these
unprecedent times and provides a positive reflection on the
company.
COVID 19 ASSESMENT
During the reporting period, the Group continued to develop its microCHP
boiler, Marine engine and Waste Hear Recovery (WHR) application with its
European partners. Specifically, the Company has spent time working to refine
Inspirit's Stirling technology, reviewing the potential supply chain and
detailing the product specifics for potential commercial partners. This
progress was achieved despite the significant issues resulting from the
COVID-19 pandemic in Europe, which was instrumental in causing some of these
European partners to cease trading and therefore necessitated their
replacement with other competent manufacturers.
The Board recognises that these are still unprecedented times and that the
necessary actions Global and European Governments are taking to control
COVID-19 are inevitably causing disruption to the economy and supply chain for
components. As with all businesses, we are not immune to this and experienced
movement and lock down restrictions in the UK and Europe. As a result, our
European partners and Marine counterparts are constantly reviewing the
timeline in resuming development and testing of our technology.
Despite supply and manufacturing issues I identified above, the Company
developed and applied a new innovative technology that will become an integral
part of the of WHR System. Whilst still in the early stages of development,
the Inspirit Helix Accelerator system (IHA), works alongside the WHR system
taking the heat from the original source and increasing it via an exothermic
reaction demonstrated to be at least 26%. Essentially, the heat source that
passes though the IHA is amplified to provide a greater heat source for the
Stirling engine, resulting in greater power output and efficiency. The
Company believes that this technology, along with the Stirling technology that
Inspirit Energy has also developed, makes this system more innovative than
anything currently on the market.
To mitigate the impact of COVID 19, the Company has diversified their supplier
base with multiple suppliers in different countries. In the event that any
country has further lock downs or restrictions we would be able to swap
supplier with minimal impact on our project plan.
KEY RISKS AND UNCERTAINTIES
Early stage product development carries a high level of risk and uncertainty,
although the rewards can be outstanding. At this stage, there is a common
risk associated with all pioneering technologically advanced companies in
their requirement to continually invest in research and development. The Group
has already made significant investments in addressing opportunities in the
renewable energy sector.
Other risks and uncertainties within the Group are detailed in principle 4 of
the Corporate Governance Report.
GOING CONCERN RISK
The Group requires financing to fund its operations through to revenue
generation. There is the risk that the Group will not have access to
sufficient funds to achieve this. The Group seek to mitigate through forecast
preparation and monitoring. Further details are on page 9.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The principal financial risk faced by the Group is liquidity risk. The Group's
financial instruments included borrowings and cash which it used to finance
its operations. At the year end, borrowings did not include any borrowings
supplied from the Group's principal bank, Barclays Bank Plc. More information
is given in Note 3 to the Financial Statements. The Group has no significant
concentrations of credit risk.
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are to safeguard the Group's and
Company's ability to continue its activities and bring its products to market.
Capital is defined based on the total equity of the Company. The Company
monitors its level of cash resources available against future planned
activities and may issue new shares in order to raise further funds from time
to time.
MANAGEMENT AND KEY PERSONNEL
The risk of high turnover of staff and other specialist staff recruitment
issues would have an impact on operation and reputation. The Board provides
recognition and support for well performing existing employees and has
implemented and monitors robust health and safety measures at the workplace.
TECHNOLOGY RISK
The Group's success is dependent on its technology and management's ability to
market it successfully. There is the risk that the technology could become
obsolete or a rival could develop an improved alternative. Management seek to
mitigate this by constantly seeking to improve the product, closing watching
its competitors and employing skilled personnel.
ASSESSMENT OF BUSINESS RISK
The Board regularly reviews operating and strategic risks. The Group's
operating procedures include a system for reporting financial and
non-financial information to the Board including:
· reports from management with a review of the business at each
Board meeting, focusing on any new decisions/risks arising;
· reports on the performance of investments;
· reports on selection criteria of new investments;
· discussion with senior personnel; and
· consideration of reports prepared by third parties.
Details of other financial risks and their management are given in Note 3 to
the financial statements.
ON BEHALF OF THE BOARD
N Jagatia
Director
29 December 2021
REPORT OF THE DIRECTORSFOR THE YEAR ENDED 30 JUNE 2021
The Directors present their annual report on the affairs of the Group and
Company, together with the audited financial statements for the year ended 30
June 2021.
PRINCIPAL ACTIVITIES
The principal activity of the Group and Company is that of development and
commercialisation of the mCHP boiler and application of the stirling
technology in other sectors.
Details of the Group's principal activity can be found in the Strategic
Report.
DIRECTORS
The Directors who held office in the period up to the date of approval of the
Financial Statements and their beneficial interests in the Company's issued
share capital at the beginning and end of the accounting year were:
Number of Number of
ordinary shares share options and warrants
30 June 30 June 30 June 30 June
2021 2020 2021 2020
J Gunn ** 861,403,363 507,983,664 0 71,428,571*
N Jagatia 44,857,142 30,571,428 0 14,285,714*
A Samaha - - - -
*Warrant conversion price of 0.07p per share and issued on 22 November 2019
**861,403,363 Ordinary Shares (direct 657,981,981 Ordinary Shares and indirect
via GIS 203,421,382 Ordinary Shares)
INDEMNITY OF OFFICERS
The Company maintains appropriate insurance cover against legal action brought
against its Directors and officers.
RESEARCH AND DEVELOPMENT
For details of the development activities undertaken in the year, please refer
to principle 1 of the Corporate Governance Report.
BOARD OF DIRECTORS
The Board is responsible for strategy and performance, approval of major
capital projects and the framework of internal controls. To enable the Board
to discharge its duties, all Directors receive appropriate and timely
information. All Directors have access to the advice and services of the
Company Secretary, who is responsible for ensuring the Board procedures are
followed and that applicable rules and regulations are complied with.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority. In addition to the
publication of an annual report and an interim report, there is regular
dialogue with shareholders and analysts. The Annual General Meeting is viewed
as a forum for communicating with shareholders, particularly private
investors. Shareholders may question the Executive Chairman and other members
of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's system of
internal control and for reviewing the effectiveness of these systems. The
risk management process and systems of internal control are designed to manage
rather than eliminate the risk of the Group failing to achieve its strategic
objectives. It should be recognised that such systems can only provide
reasonable and not absolute assurance against material misstatement or loss.
The Group has well established procedures which are considered adequate given
the size of the business.
MATTERS COVERED IN THE STRATEGIC REPORT
The business review, results, review of KPI's and future developments are
included in the Strategic Report and Chairman's Statement.
GOING CONCERN
As at 30 June 2021 the Group had a cash balance of £561,000 (2020:
£128,000), net current assets of £88,000 (2020: net current liabilities of
£285,000) and net assets of £2,891,000 (2020: £2,416,000). The Group has
maintained its core spend during the year whilst still managing to move its
projects forward and is in negotiations to renew its expired drawdown
facility. There can be no assurance that the Group's projects will become
fully developed and reach commercialisation nor that there will be sufficient
cash resources available to the Group to do so.
Whilst further funds will likely be raised next year in order to fund the
product development activities, the key justification for the Group be a going
concern is that the committed cost base is very low compared to the current
cash reserves and thus discretionary costs can be reduced, deferred and/or
eliminated as and when needed during the going concern period. The directors
believe the group to have sufficient cash reserves at present to meet the
group's obligations over the following 12 months, however, the Directors have
committed to providing support of up to £150,000 over this period should
working capital shortfalls arise. Therefore the directors consider it
appropriate to prepare the financial statements on the going concern basis.
The Directors acknowledge that COVID-19 has had and is likely to continue to
have an adverse impact on the global economy and capital markets. The
Directors are however confident that the Group remains a going concern in
spite of these expected impacts due to its current cash reserves, its low
committed cost base and the aforementioned support from Directors' should
working capital shortfalls arise.
EVENTS AFTER THE REPORTING DATE
On 2nd November 2021, the company announced that it was in early-stage
discussions with a view to entering into an agreement with a British
certification company Enertek International Ltd. Enertek International have
won several development contracts from the government (BEIS) and have gained a
vast knowledge in developing backward compatible Hydrogen products such as:
domestic and commercial cookers, domestic and commercial heating systems etc.
They have now gained the knowledge which could be very beneficial to Inspirit
in developing a Hydrogen product, with a view of also looking at our existing
products to make them hydrogen powered backwards compatible.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the directors have prepared the group and
parent company financial statements in accordance with international
accounting standards in conformity with the Companies Act 2006. Under company
law the directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
group and the parent company and of the profit or loss of the group and the
parent company for that period. In preparing these financial statements, the
directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgments and accounting estimates that are reasonable and
prudent;
· state whether applicable international accounting standards in
conformity with the requirements of the Companies Act 2006 have been followed,
subject to any material departures disclosed and explained in the financial
statements; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and the parent company
will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the group's and company's transactions and
disclose with reasonable accuracy at any time the financial position of the
group and the parent company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the group and the parent company and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities.
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 Company is compliant with AIM Rule 26 regarding the
Company's website. See www.inspirit-energy.com
(http://www.inspirit-energy.com) .
DISCLOSURE OF INFORMATION TO AUDITOR
In the case of each person who was a Director at the time this report was
approved:
· so far as that director is aware there is no relevant audit
information of which the Company's auditor is unaware; and
· that director has taken all steps that the director ought to
have taken as a director to make himself aware of any relevant audit
information and to establish that the Company's auditor is aware of that
information.
INDEPENDENT AUDITOR
A resolution that PKF Littlejohn LLP be re-appointed will be proposed at the
annual general meeting. PKF Littlejohn LLP have indicated their willingness to
continue in office.
ON BEHALF OF THE BOARD
N Jagatia
Director
29 December 2021
CORPORATE GOVERNANCE REPORT
Inspirit Energy Holdings plc
Quoted Companies Alliance Code ("QCA Code")
Principles: Application:
1) Strategy and business model to promote long-term values for This section complies with the requirements of the QCA Code.
shareholders
Inspirit Energy Holdings plc has maintained its focus on the application of
the Stirling engine in various sectors as well as progressing the
commercialisation efforts of the Group's micro combined heat and power
("mCHP") boilers amidst the backdrop of the challenges posed by the
COVID-19-pandemic. Despite these market headwinds, Inspirit achieved a number
of significant milestones including the signing of a letter of support with
world-leading marine engine manufacturer Volvo Penta for the development of a
Waste Heat Recovery system as well as entering discussions with a leading
gasification technology company regarding a possible collaboration.
These milestones demonstrate how the previous year has been a pivotal one for
the business and its strategic direction as an R&D company. The operating
Board has worked throughout to identify differing potential applications for
the technology where there is significant potential for growth, as well as
considering the future strategy and funding of its operating subsidiary.
As recently announced by the UK Government and set out in its Energy White
Paper entitled 'Powering our net zero future', new measures will be introduced
to advance the decarbonisation of heat and transport including the switching
of home heating, at scale, to low-carbon alternatives with the Government
outlining a 'decisive shift' away from new gas boiler installations which are
expected to be phased out by mid-2030s.
The Directors believe that the positive progress over the last year in the
alternative applications of the Stirling technology in the Marine and Waste
Heat Recovery (WHR) sectors is strong evidence of the need to refocus our
strategic objectives towards these areas. It should be noted that this is by
no means an abandonment of our MicroCHP boiler technology - on the contrary,
we are actively looking into the application of the technology in the rapidly
emerging hydrogen market. Additionally, with the continued growth demand for
electric cars, the Board will be looking at the automotive sector to utilise
the Stirling engine to provide a source of power to charge electric motor
cars.
The Group will also potentially make investments in complementary areas and
technologies that will utilise the Group's existing technical expertise.
This section complies with the requirements of the QCA Code.
2) Meeting and understanding shareholders needs and expectations
The Company has a close and ongoing relationship with its shareholders. The
Company also places great importance on effective and timely communication
with its shareholders. Shareholders are encouraged to attend the Company's
meetings (including the Annual General Meeting) to provide feedback and to
actively engage with the management on a regular basis. Furthermore, the
INSP's shareholders and investors can keep themselves updated about the
current Company's position by visiting the INSP's website
http://www.inspirit-energy.com (http://www.inspirit-energy.com/) .
This section complies with the requirements of the QCA Code.
3) Considering stakeholders and social responsibilities and their
implications for long term success
The Board recognises that the long-term success of the Group is reliant on
efforts of its employees, consultants, suppliers, regulators and stakeholders.
Employees: In order to support employees' growth and enforce social
responsibilities the Board has implemented systems to monitor and evaluate
employees' performance and to encourage well performing employees to progress
further by supporting them to attend courses. Employees' performance is
monitored through a process designed to encourage open and confidential
communication between the management and the employees on a regular basis.
Consultants: The Board recognises that consultants play a vital part for INSP
as they bring knowledge and expertise for specific areas, and in some
instances, they also provide training for existing staff.
Suppliers: INSP maintains a good working relationship with its suppliers to
provide for its growing business and to support its existing needs.
Regulators: The Board monitors and implements any legal or regulatory changes
where possible both domestically and overseas and is fully committed to
compliance.
Stakeholders: INSP encourages its shareholders to actively participate in
meetings and shareholders are provided with the opportunity to give feedback
on a regular basis.
This section complies with the requirements of the QCA Code.
4) Risk Management
The risks in the Group are managed by the audit committee which is responsible
to the Board to work closely with the executive directors to identify,
implement and manage risks faced by the Group.
INSP has robust controls and procedures in place to manage internal controls
of the Company and these are considered to be appropriate to the size and
complexity of the organisation. The audit committee has been set up to
evaluate and manage significant risks faced by the Group.
Control is established mainly through the Group's directors who monitor and
support the day to day running of the Group and where possible comply with the
Board's and shareholders concerns and requirements.
INSP has identified and implemented the following risks and controls to
mitigate risks:
Activity: Risk Impact Control(s)
Management High turnover of staff and other recruitment issues. Operational and reputational impact. Recognition and support for well performing existing employees.
Implementing and monitoring of robust health and safety measures at workplace.
Regulatory / legal adherence Non-compliance. Loss of licences resulting in inability to comply with the regulatory / legal Robust policies and procedures to be followed.
requirements.
Maintaining effective communication with the Company's Auditors and NOMAD on a
regular basis.
Strategic Failure of systems and controls. Loss of key data and inability to operate effectively. Disaster recovery policy to be followed in case of crisis.
Maintaining strong IT systems and controls in place.
Financial Internal: Inadequate systems and controls of accounting in place and Loss of business. The Board to regularly review operating and strategic risks.
liquidity risk.
Inability to continue trading as a going concern. The audit committee to provide adequate and sufficient information to the
Company's external auditors.
External:
Market and credit crisis;
Robust capital and liquidity levels in place alongside effective accounting
Short term liquidity freezes; systems and controls.
Commercialisation
Brexit.
Large proportion of the development work is successfully complete.
Covid 19
Diversification of suppliers and partners to meet delivery of activity.
Delays in activity internally and externally would lead to consumption of
working capital
Regulatory environment in domestic power market External: Potential to undermine microchip boiler product. Understanding regulatory environment and adapting system accordingly.
Changes in legislation regarding domestic power market.
Product Risk Internal: Potential for significant financial loss. Testing of product
Failure to develop commercial product. Certification.
Understanding of market place and competition.
The above matrix is kept up to date and regularly reviewed as changes arise in
order to mitigate risks.
5) Maintain the board as a well-functioning and balanced team led by the This section does not comply with the requirements of the QCA Code as the
chair board composition does not include a Non-Executive Chairman and two
Non-Executive Directors.
At the date of this publication the Board comprises of the Chairman (John
Gunn), the Chief Financial Officer (Nilesh Jagatia) and the independent
Non-Executive Director (Anthony Samaha). Further detail about the skills and
capabilities of these directors are set out in principle six below.
The letter of appointment of the Company's Directors and Secretary are
available for inspection at the Company's registered office and all directors
are subject to re-election at intervals of no more than three years.
The Board is responsible for strategy and performance of major capital
projects and the framework of internal controls. All directors have access to
seek independent advice should they feel that their knowledge of the given
task is insufficient. There is a clear balance between the executive director
and the non-executive director.
Furthermore, the directors liaise with the Company Secretary (Nilesh Jagatia),
who is responsible for compliance with the Board procedures and that
applicable rules and regulations are complied with.
The Board meets quarterly. The Board established the following committees;
Audit Committee and Remuneration Committee. All Directors are encouraged to
participate and attend meetings on a regular basis and the attendance is
closely monitored.
Despite the QCA recommendation of having two independent directors INSP has
opted to have only one non-executive director and a joint role of Chief
Executive Director and the Chairman as they feel that this is appropriate to
the current size and complexity of the organisation. INSP is still in the
R&D phase of its business cycle and therefore relies on a team of
consultants in developing the product. Following conclusion of this process,
certification is managed externally, and then commercial trials would
commence. As such the role of the Board, at this stage, is to oversee this
process, review strategy, hold high level discussions regarding possible
commercial trials and ensure adequate funding. As such, the current Board is
deemed sufficient. As and when the business develops beyond this stage the
Board will review its requirements at this stage. The Group is actively
looking to appoint an additional non-executive director to provide a balance
of the non-executive directors and executives as per the QCA.
6) Directors experience, skills and capabilities This section complies with the requirements of the QCA Code.
The Chairman: John Gunn
Mr Gunn is the founder of INSP and a 20.2% ( Direct and indirect) shareholder
of the Company. Mr Gunn is also the managing director and majority shareholder
of Global Investment Strategy UK Limited and a majority shareholder of
Octagonal Plc. With a career spanning over 30 years in the financial services
industry, Mr Gunn began his career in 1987 at Hoare Govett and has since
worked at Carr Sheppards Limited, Assicurazioni Generali S.p.A. and Williams
de Broe, where he was a senior investment manager until 2002.
Chief Financial Officer: Nilesh Jagatia
Mr Jagatia currently serves as Finance Director at INSP and also currently
holds the Finance Director position with a Financial Services G group
Octagonal Ltd and AIM quoted and Limitless Earth Plc (LME). Nilesh has been
involved with several IPO's and was previously Group Finance Director of an
AIM quoted Online Media and Publishing Company for a period of five years
until July 2012. Nilesh has over 20 years' experience, including senior
financial roles in divisions of both Universal Music Group and Sanctuary Group
plc. He served as a Finance Director for an independent record label that
expanded into the US. Nilesh is a qualified accountant and holds a degree in
finance.
Non-Executive Director: Anthony Samaha
Mr Samaha is a Chartered Accountant (Australia) who has over 20 years'
experience in accounting and corporate finance. Mr Samaha has worked for over
10 years with international accounting firms, including Ernst & Young,
principally in corporate finance, and mergers and acquisitions. He has
extensive experience in the listing and management of AIM quoted companies and
is currently Executive Director of AIM traded Reabold Resources Plc.
In addition to the Board directors above INSP uses Beaumont Cornish Limited as
their nominated adviser (NOMAD), Hill Dickinson LLP to assist with legal and
regulatory matters and FTB ITC Services Ltd to support the IT systems.
7) Evaluation of the Board's performance This section complies with the requirements of the QCA Code.
INSP is fully committed to uphold Directors' independence and to regularly
evaluate their performance.
Where appropriate, INSP sets targets which the Directors have to adhere to.
Each Director is assigned with an individual target which is linked to the
corporate and financial targets of the Group. Career support, development and
training may also be provided to the Directors where necessary.
8) Promoting corporate culture, ethical values and behaviours This section complies with the requirements of the QCA Code.
INSP is committed to ethical conduct and to the governance structures that
ensure that the Group delivers long term value and earns the trust of its
shareholders. The shareholders are encouraged at General Meetings to express
their views and expectations in an open and respectful dialogue.
The Board is fully aware that their conduct impacts the corporate culture of
the Group as a whole and that this will impact the future performance of the
Group. The Directors are invited to provide an open comprehensive dialogue and
constructive feedback to the employees, and to promote ethical values and
behaviours within the Group.
INSP also believes that doing business honestly, ethically and with integrity
helps to build long-term, trusting relationship with our employees, customers,
suppliers and stakeholders. Our Code of business Conduct means that our
employees understand that we provide ourselves in high ethical standards. INSP
has zero tolerance for bribery and corruption among our employees.
This section complies with the requirements of the QCA Code.
9) Maintenance of governance structures and processes to support good
decision making by the board
The Board is responsible for the ultimate decision making, the structures and
processes adopted by INSP. The Board is headed by the Chairman. In order to
comply with the Companies Act 2006 or QCA code the Board recognises that it
must comply with the following principles set out by the Act:
- duty to exercise independent judgement;
- duty to exercise reasonable care, skill and due diligence;
- duty to avoid conflicts of interest;
- duty not to accept benefits from third parties; and
- duty to declare interest in a proposed transaction or
arrangement.
The Chairman is responsible for leading the Board, sets the agenda and ensures
it is an effecting working group at the head of the Company. The Chairman is
also responsible for promoting a culture of openness and effective
communication with shareholders and to ensure that all board members receive
accurate, timely and clear information.
The Executive Directors are responsible for day to day running of the Company
and effective communications with the Board and the Shareholders. They
represent the Company to ensure quality of information provision, they
challenge and monitor performance of the teams, and they set business plans
and targets for the Company.
Non-Executive Director: INSP has one Non-Executive Director who is an
independent director. This is to reinforce the Group's commitment to a
transparent and effective governance structure which encourages and provides
ample opportunity for challenge and deliberation. The Non-Executive Director's
objective is to scrutinise the performance of the Board and senior management
as well as to monitor performance, agree goals and objectives. They will
satisfy themselves on the integrity of financial information and that
financial controls and systems of risk management are robust and fit for
purpose. The Non-Executive Director is also closely working with the
Remuneration Committee as they are responsible for determining appropriate
levels of remuneration of Executive Directors and have a prime role in
appointing / removing senior management.
The Company established the following committees to help with processes,
structures and support good decision making by the Board.
Audit Committee - The Audit Committee is currently chaired by Anthony Samaha
and its other member is Nilesh Jagatia. The Committee provides a forum for
reporting by the Group's external auditors. The committee is also responsible
for reviewing a wider range of matters, including half-year and annual results
before their submission to the board, as well as monitoring the controls that
are in force to ensure the integrity of information reported to shareholders.
The Audit Committee will advise the Board on the appointment of external
auditors and on their remuneration for both audit and non-audit work, and it
will also discuss the nature, scope and results of the audit with the external
auditors. The committee will keep under review the cost effectiveness, the
independence and objectivity of the external auditors.
Remuneration Committee - The Remuneration Committee is currently chaired by
Anthony Samaha and its other member is John Gunn. The Committee is responsible
for making recommendations to the Board, within agreed terms of reference, on
the Company's framework of executive remuneration and costs. The Remuneration
Committee determines the contract terms, remuneration and other benefits for
the Executive Directors, including performance related bonus schemes and
compensation payments. The Board itself determines the remuneration of the
non-executive directors.
It is recognised that if the Group grows, it may be necessary to review the
current structure in order to provide better segregation of the
responsibilities and clear lines of reporting, that are consistent with
industry standards.
This section complies with the requirements of the QCA Code.
10) Shareholders communication
The Company recognises that its shareholders are imperative for future growth
and prosperity of the Company. The Shareholders are treated equally both in
relation to participation at meetings and in the exercising of voting rights.
INSP's shareholders are encouraged to attend the annual general meetings and
the Company provides regulatory news updates and any other matters the Board
feels fit. The Company maintains the following website
https://www.inspirit-energy.com/investors
(https://www.inspirit-energy.com/investors) for investor relations.
The above matrix is kept up to date and regularly reviewed as changes arise in
order to mitigate risks.
5) Maintain the board as a well-functioning and balanced team led by the
chair
This section does not comply with the requirements of the QCA Code as the
board composition does not include a Non-Executive Chairman and two
Non-Executive Directors.
At the date of this publication the Board comprises of the Chairman (John
Gunn), the Chief Financial Officer (Nilesh Jagatia) and the independent
Non-Executive Director (Anthony Samaha). Further detail about the skills and
capabilities of these directors are set out in principle six below.
The letter of appointment of the Company's Directors and Secretary are
available for inspection at the Company's registered office and all directors
are subject to re-election at intervals of no more than three years.
The Board is responsible for strategy and performance of major capital
projects and the framework of internal controls. All directors have access to
seek independent advice should they feel that their knowledge of the given
task is insufficient. There is a clear balance between the executive director
and the non-executive director.
Furthermore, the directors liaise with the Company Secretary (Nilesh Jagatia),
who is responsible for compliance with the Board procedures and that
applicable rules and regulations are complied with.
The Board meets quarterly. The Board established the following committees;
Audit Committee and Remuneration Committee. All Directors are encouraged to
participate and attend meetings on a regular basis and the attendance is
closely monitored.
Despite the QCA recommendation of having two independent directors INSP has
opted to have only one non-executive director and a joint role of Chief
Executive Director and the Chairman as they feel that this is appropriate to
the current size and complexity of the organisation. INSP is still in the
R&D phase of its business cycle and therefore relies on a team of
consultants in developing the product. Following conclusion of this process,
certification is managed externally, and then commercial trials would
commence. As such the role of the Board, at this stage, is to oversee this
process, review strategy, hold high level discussions regarding possible
commercial trials and ensure adequate funding. As such, the current Board is
deemed sufficient. As and when the business develops beyond this stage the
Board will review its requirements at this stage. The Group is actively
looking to appoint an additional non-executive director to provide a balance
of the non-executive directors and executives as per the QCA.
6) Directors experience, skills and capabilities
This section complies with the requirements of the QCA Code.
The Chairman: John Gunn
Mr Gunn is the founder of INSP and a 20.2% ( Direct and indirect) shareholder
of the Company. Mr Gunn is also the managing director and majority shareholder
of Global Investment Strategy UK Limited and a majority shareholder of
Octagonal Plc. With a career spanning over 30 years in the financial services
industry, Mr Gunn began his career in 1987 at Hoare Govett and has since
worked at Carr Sheppards Limited, Assicurazioni Generali S.p.A. and Williams
de Broe, where he was a senior investment manager until 2002.
Chief Financial Officer: Nilesh Jagatia
Mr Jagatia currently serves as Finance Director at INSP and also currently
holds the Finance Director position with a Financial Services G group
Octagonal Ltd and AIM quoted and Limitless Earth Plc (LME). Nilesh has been
involved with several IPO's and was previously Group Finance Director of an
AIM quoted Online Media and Publishing Company for a period of five years
until July 2012. Nilesh has over 20 years' experience, including senior
financial roles in divisions of both Universal Music Group and Sanctuary Group
plc. He served as a Finance Director for an independent record label that
expanded into the US. Nilesh is a qualified accountant and holds a degree in
finance.
Non-Executive Director: Anthony Samaha
Mr Samaha is a Chartered Accountant (Australia) who has over 20 years'
experience in accounting and corporate finance. Mr Samaha has worked for over
10 years with international accounting firms, including Ernst & Young,
principally in corporate finance, and mergers and acquisitions. He has
extensive experience in the listing and management of AIM quoted companies and
is currently Executive Director of AIM traded Reabold Resources Plc.
In addition to the Board directors above INSP uses Beaumont Cornish Limited as
their nominated adviser (NOMAD), Hill Dickinson LLP to assist with legal and
regulatory matters and FTB ITC Services Ltd to support the IT systems.
7) Evaluation of the Board's performance
This section complies with the requirements of the QCA Code.
INSP is fully committed to uphold Directors' independence and to regularly
evaluate their performance.
Where appropriate, INSP sets targets which the Directors have to adhere to.
Each Director is assigned with an individual target which is linked to the
corporate and financial targets of the Group. Career support, development and
training may also be provided to the Directors where necessary.
8) Promoting corporate culture, ethical values and behaviours
This section complies with the requirements of the QCA Code.
INSP is committed to ethical conduct and to the governance structures that
ensure that the Group delivers long term value and earns the trust of its
shareholders. The shareholders are encouraged at General Meetings to express
their views and expectations in an open and respectful dialogue.
The Board is fully aware that their conduct impacts the corporate culture of
the Group as a whole and that this will impact the future performance of the
Group. The Directors are invited to provide an open comprehensive dialogue and
constructive feedback to the employees, and to promote ethical values and
behaviours within the Group.
INSP also believes that doing business honestly, ethically and with integrity
helps to build long-term, trusting relationship with our employees, customers,
suppliers and stakeholders. Our Code of business Conduct means that our
employees understand that we provide ourselves in high ethical standards. INSP
has zero tolerance for bribery and corruption among our employees.
9) Maintenance of governance structures and processes to support good
decision making by the board
This section complies with the requirements of the QCA Code.
The Board is responsible for the ultimate decision making, the structures and
processes adopted by INSP. The Board is headed by the Chairman. In order to
comply with the Companies Act 2006 or QCA code the Board recognises that it
must comply with the following principles set out by the Act:
- duty to exercise independent judgement;
- duty to exercise reasonable care, skill and due diligence;
- duty to avoid conflicts of interest;
- duty not to accept benefits from third parties; and
- duty to declare interest in a proposed transaction or
arrangement.
The Chairman is responsible for leading the Board, sets the agenda and ensures
it is an effecting working group at the head of the Company. The Chairman is
also responsible for promoting a culture of openness and effective
communication with shareholders and to ensure that all board members receive
accurate, timely and clear information.
The Executive Directors are responsible for day to day running of the Company
and effective communications with the Board and the Shareholders. They
represent the Company to ensure quality of information provision, they
challenge and monitor performance of the teams, and they set business plans
and targets for the Company.
Non-Executive Director: INSP has one Non-Executive Director who is an
independent director. This is to reinforce the Group's commitment to a
transparent and effective governance structure which encourages and provides
ample opportunity for challenge and deliberation. The Non-Executive Director's
objective is to scrutinise the performance of the Board and senior management
as well as to monitor performance, agree goals and objectives. They will
satisfy themselves on the integrity of financial information and that
financial controls and systems of risk management are robust and fit for
purpose. The Non-Executive Director is also closely working with the
Remuneration Committee as they are responsible for determining appropriate
levels of remuneration of Executive Directors and have a prime role in
appointing / removing senior management.
The Company established the following committees to help with processes,
structures and support good decision making by the Board.
Audit Committee - The Audit Committee is currently chaired by Anthony Samaha
and its other member is Nilesh Jagatia. The Committee provides a forum for
reporting by the Group's external auditors. The committee is also responsible
for reviewing a wider range of matters, including half-year and annual results
before their submission to the board, as well as monitoring the controls that
are in force to ensure the integrity of information reported to shareholders.
The Audit Committee will advise the Board on the appointment of external
auditors and on their remuneration for both audit and non-audit work, and it
will also discuss the nature, scope and results of the audit with the external
auditors. The committee will keep under review the cost effectiveness, the
independence and objectivity of the external auditors.
Remuneration Committee - The Remuneration Committee is currently chaired by
Anthony Samaha and its other member is John Gunn. The Committee is responsible
for making recommendations to the Board, within agreed terms of reference, on
the Company's framework of executive remuneration and costs. The Remuneration
Committee determines the contract terms, remuneration and other benefits for
the Executive Directors, including performance related bonus schemes and
compensation payments. The Board itself determines the remuneration of the
non-executive directors.
It is recognised that if the Group grows, it may be necessary to review the
current structure in order to provide better segregation of the
responsibilities and clear lines of reporting, that are consistent with
industry standards.
10) Shareholders communication
This section complies with the requirements of the QCA Code.
The Company recognises that its shareholders are imperative for future growth
and prosperity of the Company. The Shareholders are treated equally both in
relation to participation at meetings and in the exercising of voting rights.
INSP's shareholders are encouraged to attend the annual general meetings and
the Company provides regulatory news updates and any other matters the Board
feels fit. The Company maintains the following website
https://www.inspirit-energy.com/investors
(https://www.inspirit-energy.com/investors) for investor relations.
The above matrix is kept up to date and regularly reviewed as changes arise in
order to mitigate risks.
5) Maintain the board as a well-functioning and balanced team led by the
chair
This section does not comply with the requirements of the QCA Code as the
board composition does not include a Non-Executive Chairman and two
Non-Executive Directors.
At the date of this publication the Board comprises of the Chairman (John
Gunn), the Chief Financial Officer (Nilesh Jagatia) and the independent
Non-Executive Director (Anthony Samaha). Further detail about the skills and
capabilities of these directors are set out in principle six below.
The letter of appointment of the Company's Directors and Secretary are
available for inspection at the Company's registered office and all directors
are subject to re-election at intervals of no more than three years.
The Board is responsible for strategy and performance of major capital
projects and the framework of internal controls. All directors have access to
seek independent advice should they feel that their knowledge of the given
task is insufficient. There is a clear balance between the executive director
and the non-executive director.
Furthermore, the directors liaise with the Company Secretary (Nilesh Jagatia),
who is responsible for compliance with the Board procedures and that
applicable rules and regulations are complied with.
The Board meets quarterly. The Board established the following committees;
Audit Committee and Remuneration Committee. All Directors are encouraged to
participate and attend meetings on a regular basis and the attendance is
closely monitored.
Despite the QCA recommendation of having two independent directors INSP has
opted to have only one non-executive director and a joint role of Chief
Executive Director and the Chairman as they feel that this is appropriate to
the current size and complexity of the organisation. INSP is still in the
R&D phase of its business cycle and therefore relies on a team of
consultants in developing the product. Following conclusion of this process,
certification is managed externally, and then commercial trials would
commence. As such the role of the Board, at this stage, is to oversee this
process, review strategy, hold high level discussions regarding possible
commercial trials and ensure adequate funding. As such, the current Board is
deemed sufficient. As and when the business develops beyond this stage the
Board will review its requirements at this stage. The Group is actively
looking to appoint an additional non-executive director to provide a balance
of the non-executive directors and executives as per the QCA.
6) Directors experience, skills and capabilities
This section complies with the requirements of the QCA Code.
The Chairman: John Gunn
Mr Gunn is the founder of INSP and a 20.2% ( Direct and indirect) shareholder
of the Company. Mr Gunn is also the managing director and majority shareholder
of Global Investment Strategy UK Limited and a majority shareholder of
Octagonal Plc. With a career spanning over 30 years in the financial services
industry, Mr Gunn began his career in 1987 at Hoare Govett and has since
worked at Carr Sheppards Limited, Assicurazioni Generali S.p.A. and Williams
de Broe, where he was a senior investment manager until 2002.
Chief Financial Officer: Nilesh Jagatia
Mr Jagatia currently serves as Finance Director at INSP and also currently
holds the Finance Director position with a Financial Services G group
Octagonal Ltd and AIM quoted and Limitless Earth Plc (LME). Nilesh has been
involved with several IPO's and was previously Group Finance Director of an
AIM quoted Online Media and Publishing Company for a period of five years
until July 2012. Nilesh has over 20 years' experience, including senior
financial roles in divisions of both Universal Music Group and Sanctuary Group
plc. He served as a Finance Director for an independent record label that
expanded into the US. Nilesh is a qualified accountant and holds a degree in
finance.
Non-Executive Director: Anthony Samaha
Mr Samaha is a Chartered Accountant (Australia) who has over 20 years'
experience in accounting and corporate finance. Mr Samaha has worked for over
10 years with international accounting firms, including Ernst & Young,
principally in corporate finance, and mergers and acquisitions. He has
extensive experience in the listing and management of AIM quoted companies and
is currently Executive Director of AIM traded Reabold Resources Plc.
In addition to the Board directors above INSP uses Beaumont Cornish Limited as
their nominated adviser (NOMAD), Hill Dickinson LLP to assist with legal and
regulatory matters and FTB ITC Services Ltd to support the IT systems.
7) Evaluation of the Board's performance
This section complies with the requirements of the QCA Code.
INSP is fully committed to uphold Directors' independence and to regularly
evaluate their performance.
Where appropriate, INSP sets targets which the Directors have to adhere to.
Each Director is assigned with an individual target which is linked to the
corporate and financial targets of the Group. Career support, development and
training may also be provided to the Directors where necessary.
8) Promoting corporate culture, ethical values and behaviours
This section complies with the requirements of the QCA Code.
INSP is committed to ethical conduct and to the governance structures that
ensure that the Group delivers long term value and earns the trust of its
shareholders. The shareholders are encouraged at General Meetings to express
their views and expectations in an open and respectful dialogue.
The Board is fully aware that their conduct impacts the corporate culture of
the Group as a whole and that this will impact the future performance of the
Group. The Directors are invited to provide an open comprehensive dialogue and
constructive feedback to the employees, and to promote ethical values and
behaviours within the Group.
INSP also believes that doing business honestly, ethically and with integrity
helps to build long-term, trusting relationship with our employees, customers,
suppliers and stakeholders. Our Code of business Conduct means that our
employees understand that we provide ourselves in high ethical standards. INSP
has zero tolerance for bribery and corruption among our employees.
9) Maintenance of governance structures and processes to support good
decision making by the board
This section complies with the requirements of the QCA Code.
The Board is responsible for the ultimate decision making, the structures and
processes adopted by INSP. The Board is headed by the Chairman. In order to
comply with the Companies Act 2006 or QCA code the Board recognises that it
must comply with the following principles set out by the Act:
- duty to exercise independent judgement;
- duty to exercise reasonable care, skill and due diligence;
- duty to avoid conflicts of interest;
- duty not to accept benefits from third parties; and
- duty to declare interest in a proposed transaction or
arrangement.
The Chairman is responsible for leading the Board, sets the agenda and ensures
it is an effecting working group at the head of the Company. The Chairman is
also responsible for promoting a culture of openness and effective
communication with shareholders and to ensure that all board members receive
accurate, timely and clear information.
The Executive Directors are responsible for day to day running of the Company
and effective communications with the Board and the Shareholders. They
represent the Company to ensure quality of information provision, they
challenge and monitor performance of the teams, and they set business plans
and targets for the Company.
Non-Executive Director: INSP has one Non-Executive Director who is an
independent director. This is to reinforce the Group's commitment to a
transparent and effective governance structure which encourages and provides
ample opportunity for challenge and deliberation. The Non-Executive Director's
objective is to scrutinise the performance of the Board and senior management
as well as to monitor performance, agree goals and objectives. They will
satisfy themselves on the integrity of financial information and that
financial controls and systems of risk management are robust and fit for
purpose. The Non-Executive Director is also closely working with the
Remuneration Committee as they are responsible for determining appropriate
levels of remuneration of Executive Directors and have a prime role in
appointing / removing senior management.
The Company established the following committees to help with processes,
structures and support good decision making by the Board.
Audit Committee - The Audit Committee is currently chaired by Anthony Samaha
and its other member is Nilesh Jagatia. The Committee provides a forum for
reporting by the Group's external auditors. The committee is also responsible
for reviewing a wider range of matters, including half-year and annual results
before their submission to the board, as well as monitoring the controls that
are in force to ensure the integrity of information reported to shareholders.
The Audit Committee will advise the Board on the appointment of external
auditors and on their remuneration for both audit and non-audit work, and it
will also discuss the nature, scope and results of the audit with the external
auditors. The committee will keep under review the cost effectiveness, the
independence and objectivity of the external auditors.
Remuneration Committee - The Remuneration Committee is currently chaired by
Anthony Samaha and its other member is John Gunn. The Committee is responsible
for making recommendations to the Board, within agreed terms of reference, on
the Company's framework of executive remuneration and costs. The Remuneration
Committee determines the contract terms, remuneration and other benefits for
the Executive Directors, including performance related bonus schemes and
compensation payments. The Board itself determines the remuneration of the
non-executive directors.
It is recognised that if the Group grows, it may be necessary to review the
current structure in order to provide better segregation of the
responsibilities and clear lines of reporting, that are consistent with
industry standards.
10) Shareholders communication
This section complies with the requirements of the QCA Code.
The Company recognises that its shareholders are imperative for future growth
and prosperity of the Company. The Shareholders are treated equally both in
relation to participation at meetings and in the exercising of voting rights.
INSP's shareholders are encouraged to attend the annual general meetings and
the Company provides regulatory news updates and any other matters the Board
feels fit. The Company maintains the following website
https://www.inspirit-energy.com/investors
(https://www.inspirit-energy.com/investors) for investor relations.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INSPIRIT ENERGY HOLDINGS PLC
FOR THE YEAR ENDED 30 JUNE 2021
Opinion
We have audited the financial statements of Inspirit Energy Holdings Plc (the
'parent company') and its subsidiaries (the 'group') for the year ended 30
June 2021 which comprise the Group Statement of Comprehensive Income, the
Group and Company Statement of Financial Position, the Group Statement of
Changes in Equity, the Company Statement of Changes in Equity and the Group
and Company Statement of Cash Flows and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and international
accounting standards in conformity with the requirements of the Companies Act
2006 and as regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
In our opinion:
· the financial statements give a true and fair view of the state
of the group's and of the parent company affairs as at 30 June 2021 and of the
group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006;
· the parent company financial statements have been properly
prepared in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and as applied in accordance
with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and parent company's ability to continue to adopt
the going concern basis of accounting included reviewing cashflow forecasts
covering the next 12 months and challenging the key inputs and assumptions
underpinning said forecasts, ascertaining the group's current cash position,
understanding the level of support to be provided by the directors and
obtaining proof of the directors' commitments to provide said support.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's or parent company's
ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The
quantitative and qualitative thresholds for materiality determine the scope of
our audit and the nature, timing and extent of our audit procedures. We also
determine a level of performance materiality which we use to assess the extent
of testing needed to reduce to an appropriately low level the probability that
the aggregate of uncorrected and undetected misstatements exceeds materiality
for the financial statements as a whole. In determining our overall audit
strategy, we assessed the level of uncorrected misstatements that would be
material for the financial statements as a whole.
Materiality for the consolidated financial statements was set as £87,000
(2020: £73,000) based upon net assets. Materiality has been based upon net
assets which we determined, in our professional judgement, to be the key
principal benchmark relative to members of the parent company in assessing the
financial performance of the group.. Performance materiality and the
triviality threshold for the consolidated financial statements was set at
£69,600 (2020: £58,400) and £4,350 (2020: £3,650) respectively.
Materiality for the parent company was set as £86,000 (2020: £68,000) based
upon net assets, though capped so as to be below group materiality. Net assets
was considered to be an appropriate basis due to the fact that the parent
company is non-revenue earning and holds significant material balances through
investments in its subsidiaries and other assets and cash held. Performance
materiality and the triviality threshold for the Company was set at £68,800
(2020: £54,400) and £4,300 (2020: £3,400) respectively.
We also agreed to report any other differences below that threshold that we
believe warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. In particular we looked at
areas involving significant accounting estimates and judgements by the
directors and considered future events that are inherently uncertain, such as
the recoverable value of the capitalised development costs. We also addressed
the risk of management override of internal controls, including among other
matters consideration of whether there was evidence of bias that represented a
risk of material misstatement due to fraud.
A full scope audit was performed on the complete financial information of both
components of the group.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How the scope of our audit responded to the key audit matter
Recoverability of Intangible Assets
Carrying value of intangible assets of £2.8m (2020: £2.7m). Refer to Note 4: Our work in this area included:
Critical Accounting Estimates.
· Obtaining management's assessment of impairment and reviewing and
challenging the key estimates and judgements used therein;
Intangible Assets is the largest amount within the financial statements and · Performing sensitivity analysis on the key areas of
represents the asset (development of its Stirling technology) from which, if estimation/judgement and verifying to supporting documentation where possible
successful, the group will generate revenue. including benchmarking against companies in the same industry;
· Substantive testing of the additions to intangible assets to
ensure they are eligible to be capitalised under IAS 38; and
There is a risk that the development costs capitalised during the year do not
meet the recognition criteria of IAS 38 "Intangible Assets". · Reviewing disclosures in the financial statements to ensure
compliance with IFRS.
There is also the risk that the carrying value of the intangible asset is
impaired.
Upon discussing developments in the year with Management and testing the
additions in the year, the costs capitalised in the year were found to be
capitalised in accordance with IAS 38.
The positive developments in the year with respect to the application of the
Stirling technology to the Marine and Waste Heat Recovery industries
demonstrated the commercial potential of Inspirit's technology and thus
indicate that the capitalised development costs as at 30 June 2021 are
materially recoverable.
Successful commercialisation of the group's Stirling technology is reliant
both on project completion, sufficient funds and the required regulatory
approvals being obtained. It is drawn to the users' attention that none of
these matters is certain. Failure to achieve the above may result in an
impairment to the assets capitalised.
Furthermore, the successful commercialisation of the application of the
Stirling engine technology is reliant on further testing and, should results
be positive, further discussions with the interested parties.
Going concern
As at 30 June 2021 the Group had cash reserves totalling £561k. As the Group Our work in this area included:
is non-revenue generating, there is a reliance on raising funds through
issuing debt and/or equity. Additional funds may need to be raised during the § A detailed review of budgets and cash flow forecasts including challenging
going concern assessment period to fund future operations and meet working key assumptions used;
capital requirements. In addition, the Group has not historically performed in
accordance with budget. As such there is the risk that the Group is not a § Comparing actual performance to budget;
going concern.
§ Challenging management as to when the Group's core product is likely to
achieve commercial sales;
§ Evaluating the track record of assumptions used versus actual results in
order to assess the historical accuracy of the Group's forecasting;
§ Discussions with management and obtaining evidence that support can be
given where required;
§ Reviewing the Group's cash position as at the date of approval of the
financial statements, and understanding the available headroom under the loan
facility agreement; and
§ Considering the impact of COVID-19 on the Group's ability to remain a going
concern.
Based on support being available from Directors ,if required, to cover any
potential shortfall it is considered reasonable to prepare the financial
statements on the going concern basis.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company 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 more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group and the parent 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 group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and parent company and the
sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management,
industry research and experience of the sector.
· We determined the principal laws and regulations currently relevant
to the group and parent company in this regard to be those arising from UK
Company Law, rules applicable to issuers on the AIM Market and international
accounting standards.
· We identified areas of laws and regulations that could reasonably
be expected to have a material effect on the financial statements from our
sector experience and through discussion with the Directors. We considered the
event of compliance with those laws and regulations as part of our procedures
on the related financial statement items. We communicated laws and regulations
throughout our audit team and remained alert to any indications of
non-compliance throughout the audit of the group.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
with those laws and regulations. These procedures included, but were not
limited to:
o Discussions with Management regarding compliance with laws and regulations
by the parent company and all components;
o Reviewing board minutes; and
o Review of regulatory news announcements made.
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with 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.
Joseph Archer (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
29 December 2021
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
2021 2020
Note £'000 £'000
CONTINUING OPERATIONS:
Administrative expenses 7 (277) (240)
OPERATING LOSS (277) (240)
LOSS BEFORE INCOME TAX (277) (240)
Income tax credit 8 24 41
NET LOSS AND TOTAL COMPREHENSIVE INCOME LOSS FOR THE YEAR ATTRIBUTABLE TO THE (253) (199)
OWNERS OF THE PARENT
EARNINGS PER SHARE
- Basic and diluted earnings per share 9 (0.007p) (0.009p)
(attributable to owners of the parent)
STATEMENT OF FINANCIALPOSITION
FOR THE YEAR ENDED 30 June 2021
GROUP COMPANY
Company Number: 05075088
2021 2020 2021 2020
Note £'000 £'000 £'000 £'000
NON-CURRENT ASSETS
Intangible assets 10 2,773 2,666 - -
Property, plant and equipment 11 30 35 1 -
Investment in subsidiaries 12 - - 2,440 2,440
2,803 2,701 2,441 2,440
CURRENT ASSETS
Trade and other receivables 13 37 49 7 4
Cash and cash equivalents 14 561 128 554 126
598 177 561 130
TOTAL ASSETS 3,401 2,878 3,002 2,570
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
Share capital 15 2,103 1,967 2,103 1,967
Share premium 15 9,783 9,192 9,783 9,192
Merger reserve 3,150 3,150 3,150 3,150
Other reserves 3 3 3 3
Reverse acquisition reserve (7,361) (7,361) - -
Retained losses (4,788) (4,535) (12,463) (12,132)
TOTAL EQUITY 2,890 2,416 2,576 2,180
NON-CURRENT LIABILITIES
- - - -
CURRENT LIABILITIES
Trade and other payables 17 411 362 326 290
Borrowings 18 100 100 100 100
511 462 425 390
TOTAL LIABILITIES 511 462 425 390
TOTAL EQUITY AND LIABILITIES 3,401 2,878 3,002 2,570
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 not to present the Parent Company Statement of
Comprehensive Income.
The loss for the Parent Company for the year was £331,000 (2020: loss of
£280,000).
These Financial Statements were approved by the Board of Directors on 29
December 2021 and were signed on its behalf by
N Jagatia
Director
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 June 2021
Attributable to the owners of the parent
Share capital Share premium Other reserves Merger reserve Reverse acquisition reserve Retained losses Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
BALANCE AT 30 June 2019 1,818 8,185 3 3,150 (7,361) (4,336) 1,459
Loss for the year - - - - - (199) (199)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - - (199) (199)
Share issues 149 1,028 - - - - 1,177
Share issue costs - (21) - - - - (21)
TRANSACTIONS WITH OWNERS RECOGNISED DIRECTLY IN EQUITY 149 1,007 - - - - 1,156
BALANCE AT 30 June 2020 1,967 9,192 3 3,150 (7,361) (4,535) 2,416
Loss for the year - - - - - (253) (253)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - - (253) (253)
Share issues 136 621 - - - - 757
Share issue costs - (30) - - - (30)
TRANSACTIONS WITH OWNERS RECOGNISED DIRECTLY IN EQUITY 136 591 - - - - 727
BALANCE AT 30 June 2021 2,103 9,783 3 3,150 (7,361) (4,788) 2,890
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Attributable to equity shareholders
Share capital Share premium Merger Reserve Other reserves Retained losses Total Equity
£'000 £'000 £'000 £'000 £'000 £'000
BALANCE AT 30 June 2019 1,818 8,185 3,150 3 (11,852) 1,304
Loss for the year - - - - (280) (280)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - (280) (280)
Share issues 149 1,028 - - - 1,177
Share issue costs - (21) - - - (21)
TRANSACTIONS WITH OWNERS RECOGNISED DIRECTLY IN EQUITY 149 1,007 - - - 1,156
BALANCE AT 30 June 2020 1,967 9,192 3,150 3 (12,132) 2,180
Loss for the year - - - - (331) (331)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - (331) (331)
Share issues 136 622 - - 757
Share issue costs - (30) - - (30)
TRANSACTIONS WITH OWNERS RECOGNISED DIRECTLY IN EQUITY 136 592 - - - 727
BALANCE AT 30 June 2021 2,103 9,784 3,150 3 (12,463) 2,576
GROUP GROUP COMPANY COMPANY
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
2021 2020 2021 2020
Note £'000 £'000 £'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss after tax (253) (199) (331) (280)
Depreciation 7 6 1 -
Interco loan provision - - 85 75
Tax credit (24) (41) - -
Decrease/(increase) in trade and other receivables (6) 9 (2) 5
Increase/(decrease) in trade and other payables 50 87 35 84
Tax received 42 46 - -
NET CASH USED IN OPERATING ACTIVITIES (184) (92) (212) (116)
CASH FLOWS FROM INVESTING ACTIVITIES
Development costs (108) (96) - -
Purchase of tangible fixed assets (2) (3) (2) -
Increase in loan to subsidiary - - (85) (75)
NET CASH USED IN INVESTING ACTIVITIES (110) (99) (87) (75)
CASH FLOWS FROM FINANCING ACTIVITIES
Gross proceeds from issue of shares 757 300 757 300
Share issue costs (30) (21) (30) (21)
NET CASH GENERATED FROM FINANCING ACTIVITIES 727 279 727 279
NET INCREASE IN CASH AND CASH EQUIVALENTS 433 88 428 88
Cash and cash equivalents at the beginning of the year 128 40 126 38
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 15 561 128 554 126
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
1 GENERAL INFORMATION
The principal activity of Inspirit Energy Holdings plc during the period was
that of developing and commercialising the mCHP boiler and is currently in the
process of refocusing its expertise in the application of the Stirling engine
technology in different sectors including Marine and Waste Heat Recovery.
These financial statements show the consolidated results of the Group for the
year ended 30 June 2021 together with the comparative results for the year
ended 30 June 2020.
Inspirit Energy Holdings plc is a company incorporated and domiciled in
England and Wales and quoted on the Alternative Investment Market of the
London Stock Exchange. The address of its registered office is 200 Aldersgate
Street, London, EC1A 4HD.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with applicable
International Financial Reporting Standards ("IFRS") and IFRS Interpretations
Committee (IFRS IC) and with the Companies Act 2006 applicable to companies
reporting under IFRS.
The financial statements have been prepared under the historical cost
convention and are presented in GBP Pound Sterling, rounded to the nearest
£1,000.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's and Company's
accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the
financial statements are disclosed in Note 4.
GOING CONCERN
The financial statements have been prepared on the going concern basis. The
mCHP boiler development project has not yet reached commercialisation and as
such the Group and Company are not generating revenues. However, the Group
is refocusing its strategy towards alternate applications of its existing
technology in other lucrative sectors. These sectors include marine, waste
heat recovery and automotive industries. An operating loss and cash outflows
are expected in the 12 months subsequent to the date of these financial
statements and therefore the Group will need to manage its cash resources
appropriately.
Whilst further funds will likely be raised next year in order to fund the
product development activities, the key justification for the Group be a going
concern is that the committed cost base is very low compared to the current
cash reserves and thus discretionary costs can be reduced, deferred and/or
eliminated as and when needed during the going concern period. The directors
believe the group to have sufficient cash reserves at present to meet the
group's obligations over the following 12 months, however, the Directors have
committed to providing support of up to £150,000 over this period should
working capital shortfalls arise. Therefore the directors consider it
appropriate to prepare the financial statements on the going concern basis.
The Directors acknowledge that COVID-19 has had and is likely to continue to
have an adverse impact on the global economy and capital markets. The
Directors are however confident that the Group remains a going concern in
spite of these expected impacts due to its current cash reserves, its low
committed cost base and the aforementioned support from Directors' should
working capital shortfalls arise.
BASIS OF CONSOLIDATION
Inspirit Energy Holdings plc, the legal parent, is domiciled and incorporated
in the United Kingdom.
The Group Financial Statements consolidate the Financial Statements of
Inspirit Energy Holdings plc and its subsidiary, Inspirit Energy Limited, made
up to 30 June 2021.
Subsidiaries are entities over which the Group has control. The Group
controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The Group obtains and exercises
control through voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when
assessing whether the company controls another entity.
The cost of acquisition is measured as the fair value of the assets acquired,
equity instruments issued and liabilities incurred or assumed at the date of
exchange. Acquisition related costs are expensed as incurred. Intercompany
transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Profits and losses resulting from inter-company
transactions that are recognised in assets are also eliminated. Accounting
policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used
by the Group.
STATEMENT OF COMPLIANCE
The Group and Company have applied the following new and amended standards for
the first time for its annual reporting period commencing 1 July 2020:
Standard Impact on initial application Effective date
IFRS 3 (amendments) Definition of a Business 01 January 2020
IFRS standards (amendments) References to the Conceptual Framework 01 January 2020
IAS 1 (amendments) Definition of Material 01 January 2020
IAS 8 (amendments) Definition of Material 01 January 2020
IFRS 9, IAS 39 and IFRS 7 (amendments) Interest Rate Benchmark Reform 01 January 2020
These new and amended standards have not had a material effect on the Group
and Company financial
statements.
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS NOT YET ADOPTED
At the date of approval of these financial statements, the following standards
and interpretations which have not been applied in these financial statements
were in issue but not yet effective (and in some cases had not been adopted by
the UK):
Standard Impact on initial application Effective date
IFRS standards (amendments) Interest rate benchmark reform 01 January 2021
IFRS 3 (amendments) Business combinations 01 January 2022
IAS 37 (amendments) Onerous contracts 01 January 2022
IFRS standards (amendments) 2018-2020 annual improvement cycle 01 January 2022
IAS 16 (amendments) Proceeds before intended use 01 January 2022
IFRS 17 Insurance Contracts 01 January 2023
IFRS 17 (amendments) Insurance contracts 01 January 2023
IAS 1 (amendments) Reclassification of liabilities as current or non-current 01 January 2023
The new and amended Standards and Interpretations which are in issue but not
yet mandatorily effective is not expected to be material.
SEGMENTAL REPORTING
Developing and commercialising the mCHP boiler and its related technology is
the only activity in which the Group is engaged and is therefore considered as
the only operating / reportable segment. The Group currently only operates in
the UK. The financial information therefore of the single segment is the same
as that set out in the Group Statement of Comprehensive Income and Group
Statement of Financial Position.
CURRENT AND DEFERRED INCOME TAX
The tax credit for the period comprises Research and Development taxation
credit received during the year. Tax is recognised in the Statement of
Comprehensive Income, except to the extent that it relates to items recognised
directly in equity. In this case the tax is also recognised directly in other
comprehensive income or directly in equity, respectively.
The current income tax credit is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the
countries where the Company's subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to or recoverable from the tax authorities.
FOREIGN CURRENCY TRANSLATION
a) FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the Financial Statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ("functional currency").
The consolidated Financial Statements are presented in Pounds Sterling (£),
which is the Group's presentation and Company's functional currency.
b) TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions, or
valuation where items are remeasured. Foreign exchange gains and losses
resulting from the settlement of such transactions, and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies, are recognised the Statement of Comprehensive Income.
Foreign exchange gains and losses relating to borrowings and cash and cash
equivalents are presented in the Statement of Comprehensive Income within
"Finance Income" or "Finance Costs".
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are charged to the
Statement of Comprehensive Income during the financial period in which they
are incurred.
Depreciation is calculated to allocate the cost of each class of asset to
their residual values over their estimated useful lives, as follows:
· Plant and Equipment - 15% reducing balance
· Fixtures and Fittings - 20% reducing balance
· Motor Vehicles - 5 years, straight line
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount, and are recognised within "Other (Losses)/Gains - Net" in
the Statement of Comprehensive Income.
These new and amended standards have not had a material effect on the Group
and Company financial
statements.
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS NOT YET ADOPTED
At the date of approval of these financial statements, the following standards
and interpretations which have not been applied in these financial statements
were in issue but not yet effective (and in some cases had not been adopted by
the UK):
Standard Impact on initial application Effective date
IFRS standards (amendments) Interest rate benchmark reform 01 January 2021
IFRS 3 (amendments) Business combinations 01 January 2022
IAS 37 (amendments) Onerous contracts 01 January 2022
IFRS standards (amendments) 2018-2020 annual improvement cycle 01 January 2022
IAS 16 (amendments) Proceeds before intended use 01 January 2022
IFRS 17 Insurance Contracts 01 January 2023
IFRS 17 (amendments) Insurance contracts 01 January 2023
IAS 1 (amendments) Reclassification of liabilities as current or non-current 01 January 2023
The new and amended Standards and Interpretations which are in issue but not
yet mandatorily effective is not expected to be material.
SEGMENTAL REPORTING
Developing and commercialising the mCHP boiler and its related technology is
the only activity in which the Group is engaged and is therefore considered as
the only operating / reportable segment. The Group currently only operates in
the UK. The financial information therefore of the single segment is the same
as that set out in the Group Statement of Comprehensive Income and Group
Statement of Financial Position.
CURRENT AND DEFERRED INCOME TAX
The tax credit for the period comprises Research and Development taxation
credit received during the year. Tax is recognised in the Statement of
Comprehensive Income, except to the extent that it relates to items recognised
directly in equity. In this case the tax is also recognised directly in other
comprehensive income or directly in equity, respectively.
The current income tax credit is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the
countries where the Company's subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to or recoverable from the tax authorities.
FOREIGN CURRENCY TRANSLATION
a) FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the Financial Statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ("functional currency").
The consolidated Financial Statements are presented in Pounds Sterling (£),
which is the Group's presentation and Company's functional currency.
b) TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions, or
valuation where items are remeasured. Foreign exchange gains and losses
resulting from the settlement of such transactions, and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies, are recognised the Statement of Comprehensive Income.
Foreign exchange gains and losses relating to borrowings and cash and cash
equivalents are presented in the Statement of Comprehensive Income within
"Finance Income" or "Finance Costs".
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are charged to the
Statement of Comprehensive Income during the financial period in which they
are incurred.
Depreciation is calculated to allocate the cost of each class of asset to
their residual values over their estimated useful lives, as follows:
· Plant and Equipment - 15% reducing balance
· Fixtures and Fittings - 20% reducing balance
· Motor Vehicles - 5 years, straight line
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount, and are recognised within "Other (Losses)/Gains - Net" in
the Statement of Comprehensive Income.
INTANGIBLE ASSETS - DEVELOPMENT COSTS
Development costs relate to expenditure on the development of the mCHP boiler
technology and applications of the underlying engine technology.
Development costs incurred on the project are capitalised when all the
following conditions are satisfied:
· completion of the intangible asset is technically feasible so
that it will be available for use or sale;
· the Group intends to complete the intangible asset and use or
sell it;
· the Group has the ability to use or sell the intangible asset;
· the intangible asset will generate probable future economic
benefits;
· there are adequate technical, financial and other resources to
complete the development and to use or sell the intangible asset; and
· the expenditure attributable to the intangible asset during its
development can be measured reliably.
Directly attributable costs that are capitalised as part of the product
include any employee costs directly related to the development of the asset
and appropriate expenditure which directly furthers the development of the
project.
Other development expenditure that does not meet these criteria is recognised
as an expense as incurred. Development costs previously recognised as an
expense are not recognised as an asset in a subsequent period.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite useful life, are not subject to amortisation
and are tested annually for impairment. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For
the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows (cash-generating
units). Non-financial assets other than goodwill that suffered an impairment
are reviewed for possible reversal of the impairment at each reporting date.
See note 4 for more information on the impairment assessment performed by
management.
FINANCIAL ASSETS
a) CLASSIFICATION
The Group classifies its financial assets as loans and receivables. The
classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at
initial recognition.
LOANS AND RECEIVABLES
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than 12 months after
the Statement of Financial Position date. These are classified as non-current
assets. The Group's loans and receivables comprise trade and other receivables
and cash and cash equivalents in the Statement of Financial Position.
b) RECOGNITION AND MEASUREMENT
Financial assets are initially measured at fair value plus transactions costs.
Loans and receivables are subsequently carried at amortised cost using the
effective interest method, except for short term receivables.
c) IMPAIRMENT OF FINANCIAL ASSETS
The Group assesses at the end of each reporting period whether there is
objective evidence that a financial asset, or a group of financial assets, is
impaired. A financial asset, or a group of financial assets, is impaired, and
impairment losses are incurred, only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial
recognition of the asset (a "loss event"), and that loss event (or events) has
an impact on the estimated future cash flows of the financial asset, or group
of financial assets, that can be reliably estimated.
The criteria that the Group uses to determine that there is objective evidence
of an impairment loss include:
· significant financial difficulty of the issuer or obligor;
· a breach of contract, such as a default or delinquency in
interest or principal repayments;
· the disappearance of an active market for that financial asset
because of financial difficulties;
· observable data indicating that there is a measurable decrease in
the estimated future cash flows from a portfolio of financial assets since the
initial recognition of those assets, although the decrease cannot yet be
identified with the individual financial assets in the portfolio; or
· for assets classified as available-for-sale, a significant or
prolonged decline in the fair value of the security below its cost.
ASSETS CARRIED AT AMORTISED COST
The amount of impairment is measured as the difference between the asset's
carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred), discounted at
the financial asset's original effective interest rate. The asset's carrying
amount is reduced, and the loss is recognised in the Statement of
Comprehensive Income. As a practical expedient, the Group may measure
impairment on the basis of an instrument's fair value using an observable
market price.
If, in a subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after the
impairment was recognised (such as an improvement in the debtor's
credit rating), the reversal of the previously recognised impairment loss is
recognised in the Statement of Comprehensive Income.
CASH AND CASH EQUIVALENTS
In the consolidated Statement of Cash Flows, cash and cash equivalents
comprise cash in hand and deposits held at call with bank.
FINANCIAL LIABILITIES
Financial liabilities are obligations to pay cash or other financial assets
and are recognised when the Group becomes a party to the contractual
provisions of the instruments. Financial liabilities are initially measured at
fair value, net of transactions costs. They are subsequently measured at
amortised cost using the effective interest method.
Financial liabilities are derecognised when the Group or Company's contractual
obligations expire, are cancelled or are discharged.
SHAREHOLDERS' EQUITY
Equity comprises the following:
· "Share capital" represents the nominal value of equity shares.
· "Share premium" represents the excess over nominal value of the fair
value of consideration received
for equity shares, net of expenses of the share
issue.
· "Share option reserve" represents the cumulative cost of share based
payments.
· "Merger reserve" and "Reverse Acquisition reserve" represents historical
reserves formed upon
previous Business Combinations entered into by
the Company that fall outside the scope of IFRS 3.
· "Retained losses" represents retained losses.
BORROWINGS
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the Statement of Comprehensive Income over the period
of the borrowings, using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months after the end of the reporting period.
BORROWINGS COSTS
Borrowing costs are recognised in profit or loss in the period in which they
are incurred.
SHARE BASED PAYMENTS
The Group operates equity-settled, share-based schemes, under which it
receives services from employees or third-party suppliers as consideration for
equity instruments (options and warrants) of the Group. The Group may also
issue warrants to share subscribers as part of a share placing. The fair value
of the equity-settled share based payments is recognised as an expense in the
Statement of Comprehensive Income or charged to equity depending on the nature
of the service provided or instrument issued. The total amount to be expensed
or charged is determined by reference to the fair value of the options
granted:
· including any market performance conditions;
· excluding the impact of any service and non-market performance
vesting conditions (for example, profitability or sales growth targets, or
remaining an employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (for example,
the requirement for employees to save).
In the case of warrants the amount charged to equity is determined by
reference to the fair value of the services received if available. If the fair
value of the services received is not determinable, the warrants are valued by
reference to the fair value of the warrants granted as described previously.
Non-market vesting conditions are included in assumptions about the number of
options or warrants that are expected to vest. The total expense or charge is
recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each reporting
period, the entity revises its estimates of the number of options that are
expected to vest based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the Statement of
Comprehensive Income or equity as appropriate, with a corresponding adjustment
to a separate reserve in equity.
When the options are exercised, the Company issues new shares. The proceeds
received, net of any directly attributable transaction costs, are credited to
share capital (nominal value) and share premium.
3 FINANCIAL RISK MANAGEMENT
The Group is exposed to a variety of financial risks which result from both
its operating and investing activities. The Group's risk management is
coordinated by the Board of Directors and focuses on actively securing the
Group's short to medium term cash flows by minimising the exposure to
financial markets.
The main risks the Group is exposed to through its financial instruments are
market risk (including market price risk), credit risk and liquidity risk.
MARKET PRICE RISK
The Group's exposure to market price risk mainly arises from potential
movements in the pricing of its products. The Group manages this price risk
within its long-term strategy to grow the business and maximise shareholder
return.
CREDIT RISK
The Group's financial instruments that are subject to credit risk are cash and
cash equivalents and loans and receivables. The credit risk for cash and
cash equivalents is considered negligible since the counterparties are
reputable financial institutions.
The Group's maximum exposure to credit risk is £599,000 (2020: £176,000
comprising cash and cash equivalents and loans and receivables.
LIQUIDITY RISK
Liquidity risk arises from the possibility that the Group might encounter
difficulty in settling its debts or otherwise meeting its obligations related
to financial liabilities. The Group manages this risk through maintaining a
positive cash balance and controlling expenses and commitments. The
Directors are confident that adequate resources exist to finance current
operations.
The following table summarises the maturity profile of the Group's
non-derivative financial liabilities with agreed repayment periods. The table
has been drawn up based on contractual undiscounted cash flows based on the
earliest repayment date on which the Group can be required to pay. The table
includes both interest and principal cash flows. To the extent that the
interest flows are floating rate, the undiscounted amount is derived from the
interest rate curves at the balance sheet date:
Group Less than 1 year Between 1 and 2 years Between 2 and 5 years Over 5 years Total Carrying value
At 30 June 2021 £'000 £'000 £'000 £'000 £'000 £'000
Trade and other payables 411 - - - 411 411
Borrowings 100 - - - 100 100
At 30 June 2020
Trade and other payables 326 - - - 326 326
Borrowings 100 - - - 100 100
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
· to safeguard the Group's ability to continue as a going concern,
so that it continues to provide returns and benefits for shareholders;
· to support the Group's growth; and
· to provide capital for the purpose of strengthening the Group's
risk management capability.
The Group actively and regularly reviews and manages its capital structure to
ensure an optimal capital structure and equity holder returns, taking into
consideration the future capital requirements of the Group and capital
efficiency, prevailing and projected profitability, projected operating cash
flows, projected capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and reserves, for
capital management purposes.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of Financial Statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. Estimates and judgements are continually evaluated and are
based on historical experience and other factors including expectations of
future events that are believed to be reasonable under the circumstances.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Group makes estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
IMPAIRMENT OF DEVELOPMENT COSTS AND INVESTMENT IN SUBSIDIARIES
The Group tests annually whether development costs and investments in the
subsidiaries, which have a carrying value of £2,773,000 and £2,440,000
respectively (2020: £2,666,000 and £2,440,000 respectively) have suffered
any impairment in accordance with the accounting policy as stated in Note 2.
The core development to date on the mCHP and Stirling technology is the base
technology that will be applied the Marine, Waste Heat Recovery, Hydrogen and
automotive sectors that the company will be focusing on in the future.
When a review for impairment is conducted, the recoverable amount is
determined based on value in use calculations prepared on the basis of
management's assumptions and estimates. As a result of their 2021 review
management has concluded that no impairment is required.
The value-in-use calculations require management to estimate future cash flows
expected to arise from the cash generating unit, once commercial production is
achieved, and apply a suitable discount rate in order to calculate present
value. These calculations require the use of estimates. See Note 10 for
further details.
Following other sources of products interest during the year, management have
focussed the value-in-use calculations on licensing sales rather than product
sales. This has been done as management consider that the revenues are more
near term in nature and note that it uses the same core developed technology.
Given the product's nature, the core estimates have remained broadly
consistent with an increase in gross margin given the shift in focus to
licensing which is consider will provide a higher margin than product sales.
CASH AND CASH EQUIVALENTS CLASSIFICATION
During the year-ended 30 June 2020, Management made a change in judgment
regarding the liquidity of cash balances held on their behalf by another
entity. This change in judgment led to these balances in 2021 and 2020 to be
classified as cash and cash equivalents rather than other debtors.
5 DIRECTOR'S AND KEY MANAGEMENT PERSONNEL EMOLUMENTS
2021 2021
£'000 £'000
Aggregate emoluments 144 144
Social security costs 6 6
150 150
Name of director Short Term Benefits Other Benefits Total Total
2021 2020
£'000 £'000 £'000 £'000
J Gunn 80 - 80 80
N Jagatia 40 - 40 40
A Samaha 12 - 12 12
S Gunn* 12 - 12 12
144 - 144 144
*Key Management Personnel
The number of Directors who contributed to pension schemes during the year was
nil (2020: nil).
6 EMPLOYEE INFORMATION
2021 2020
£'000 £'000
Wages and salaries 144 144
Social security costs 6 6
150 150
In addition to the above a total of £96,331 (2020: £93,000) wages and
salaries for employees has been included in Development costs.
Average number of persons employed (including executive directors):
2021 2020
Number Number
Office and management 4 4
COMPENSATION OF KEY MANAGEMENT PERSONNEL
There are no key management personnel other than those disclosed in Note 5.
7 LOSS FOR THE YEAR
Loss for the year is arrived at after charging:
2021 2020
£'000 £'000
S Salaries and wages (Note 6) 150 150
A Audit and other fees 20 20
Depreciation 7 6
AUDITOR'S REMUNERATION
During the year the Group obtained the following services from the Company's
auditor:
2021 2020
£'000 £'000
Fees payable to the Company's auditor for the audit of the parent company and 20 18
the Group financial statements
8 Taxation
GROUP 2021 2020
£'000 £'000
Deferred tax - -
Current tax (24) (41)
Total current tax charge / (credit) (24) (41)
The tax on the Group's loss before tax differs from the theoretical amount
that would arise using the average rate applicable to losses of the
consolidated entities as follows:
2021 2020
£'000 £'000
Loss before tax from continuing operations (277) (240)
Loss before tax multiplied by rate of corporation tax in the UK of 19% (2020: (53) (46)
19%)
Tax effects of:
Expenses not deductible for tax purposes - -
Unrelieved tax losses carried forward 53 46
Research and development tax credit (24) (41)
Total tax (24) (41)
The Group has excess management expenses of approximately £5,450,000 (2020:
£5,200,000), capital losses of £150,000 (2020: £150,000) and non-trade
financial losses of approximately £119,000 (2020: £119,000) to carry forward
against future suitable taxable profits. No deferred tax asset has been
provided on any of these losses due to uncertainty over the timing of their
recovery.
9 EARNINGS PER SHARE
Earnings per ordinary share has been calculated by dividing the loss
attributable to equity holders of the Company by the weighted average number
of shares in issue during the year. The calculations of both basic and diluted
earnings per share for the year are based upon the loss for the year of
£253,000 (2020: £199,000). The weighted number of equity shares in issue
during the year was 3,399,326,136 (2020: 2,305,913,967).
In accordance with IAS 33, basic and diluted earnings per share are identical
as the effect of the exercise of share options and warrants would be to
decrease the loss per share and therefore deemed anti-dilutive. Details of
share options and warrants that could potentially dilute earnings per share in
future periods are set out in Note 16.
10 INTANGIBLE ASSETS
GROUP Development Costs Total
£'000 £'000
At 30 June 2019 2,570 2,570
Additions 96 96
At 30 June 2020 2,666 2,666
Additions 107 107
At 30 June 2021 2,773 2,773
No amortisation has been recognised on development costs to date as the assets
are still in the development stage and the related products are not yet ready
for sale. As such, the value-in-use calculations to support the carrying value
of development costs is directly reliant on the availability of future capital
funding in order to achieve product accreditation and enter into commercial
production.
The recoverable amount of the above cash generating unit has been determined
based on value-in-use calculations and includes revenue from stirling
application in marine, Inspirit Charger (boiler technology), waste recycling
and Hydrogen application activities. The value-in-use calculations use cash
flow projections based on financial budgets approved by Management covering a
five year period. They key estimates in the value-in-use calculation are:
Growth rate - Nonlinear year on year increases based on directors' estimations
following discussion with a number of potential partners.
Discount rate - 30%
11 PROPERTY, PLANT AND EQUIPMENT
GROUP Plant and Equipment Fixtures and fittings Motor Vehicles Total
COST £'000 £'000 £'000 £'000
As at 30 June 2019 81 15 1 97
Additions 3 - - 3
As at 30 June 2020 84 15 1 100
Additions 2 - - 2
As at 30 June 2021 86 15 1 102
DEPRECIATION
As at 30 June 2019 47 11 1 59
Charge for year 6 - - 6
As at 30 June 2020 53 11 1 65
Charge for year 6 1 - 7
As at 30 June 2021 59 12 1 72
NET BOOK VALUE
As at 30 June 2021 27 3 - 30
As at 30 June 2020 31 4 - 35
12 INVESTMENT IN SUBSIDIARIES
COMPANY 2021 2020
SHARES IN GROUP UNDERTAKINGS: £'000 £'000
At 1 July 2,440 2,440
Increase in loan to subsidiary 75 207
Provision against the loan balance outstanding (75) (207)
A 2,440 2,440
Included in the above is an amount of £3,046,513 (2020: £2,961,446) relating
to the amount due to the Company by its subsidiary Inspirit Energy Limited. A
provision of £3,046,513 (2020: £2,961,446) has been set against this loan
balance outstanding.
Investments in Group undertakings are recorded at cost, which is the fair
value of the consideration paid.
Details of Subsidiary Undertakings are as follows:
Name of subsidiary Registered address Registered capital Proportion of share capital held Nature of business
Inspirit Energy Limited** c/o Niren Blake LLP 2nd Floor, Solar House, 915 High Road, London, England, Ordinary shares 100% Product development
N12 8QJ
Company No.07160673 £15,230
Somemore Limited Global Investment Strategy Uk Ltd, 2(nd) Floor, London Wall Buildings, London, Ordinary shares 100% Dormant
EC2M 5PP
Company No.07152291 £1
Dissolved 12 January 2021
*** Inspirit Energy Limited (Co No 07160673) is entitled and has taken
exemption under section 479a of the Companies Act 2006. No members of Inspirit
Energy Limited have required the company to obtain an audit of its accounts
for the year in question in accordance with section 476 of the Companies Act
2006
13 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Corporation tax* 24 41 - -
VAT recoverable 13 8 7 3
Other receivables - - - 1
37 49 7 4
*The Corporation tax repayable relates to the R&D tax claim receivable
from HMRC.
The Directors consider that the carrying amount of receivables is
approximately equal to their fair value and under IFRS 9 that they are held at
amortised cost
14 CASH AND CASH EQUIVALENTS
GROUP COMPANY
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Cash and cash equivalents 561 128 554 126
The Directors consider the carrying amount of cash and cash equivalents
approximates to their fair value.
All of the Group and Company's cash and cash equivalents are held with
institutions with an AA credit rating.
15 SHARE CAPITAL AND SHARE PREMIUM
Number of ordinary shares Number of deferred shares Ordinary shares Deferred shares New Deferred B shares Share premium Total
£ £ £ £ £
At 30 June 2019 1,420,806,859 400,932 14,208 396,923 1,406,599 11,335,656 13,153,386
Issue of New Shares 1,482,976,188 - 148,298 - - 1,027,702 1,176,000
Issue costs - - - - - (20,625) (20,625)
At 30 June 2020 2,903,783,047 400,932 162,506 396,923 1,406,599 12,342,733 14,308,761
Issue of New Shares 1,367,857,139 - 136,786 - - 620,714 757,500
Issue costs - - - - - (30,000) (30,000)
At 30 June 2021 4,271,640,186 400,932 299,292 396,923 1,406,599 12,933,447 15,036,261
Both the Deferred shares and the New Deferred B shares have no voting rights.
On 6 June 2018, the Company announced that members, at a General meeting on
the same day, had approved the completion of a Capital Reorganisation which
comprised the sub-division of shares whereby each existing Ordinary Share of
0.1 pence each in the capital of the Company was sub-divided into 1 New
Ordinary Shares of 0.001 pence each and 1 Deferred B Share of 0.099 pence
each. This resulted in 1,420,806,859 New Ordinary Shares and 1,420,806,859
Deferred B Shares in issue.
16 SHARE BASED PAYMENTS
Share options and warrants can be granted to selected Directors and
third-party service providers.
Share options and warrants outstanding at the end of the year have the
following expiry dates and exercisable prices:
Weighted Average Exercise Price Options and warrants Weighted Average Exercise Price Options and warrants
2021 2020
At 1 July 605,044,429 0.0488 1,500,000
Granted 0.00075 500,000,000 0.0007 603,544,429
Exercised 0.0007 (367,857,139) - -
Lapsed 0.0007 (237,187,290) - -
At 30 June 0.00075 500,000,000 0.0488 605,044,429
Grant date Expiry date Exercise price in £ per share Number of options and warrants Number of options and warrants
2021 2020
26-Apr-11 25-Apr-21 0.0488- - 1,500,000
20-Nov-19 19-Nov-20 0.0007 - 574,258,711
02-Dec-19 01-Dec-20 0.0007 - 27,000,001
24-Dec-19 23-Dec-20 0.0007 - 2,285,717
03-Jun-21* 02-Jun-23 0.00075 500,000,000
0.00075 500,000,000 605,044,429
On 27th May 2021, the Company announced that it had raised a gross amount of
£500,000 through the placing of 1,000,000,000 ordinary shares of 0.001 pence
each in the share capital of the Company at 0.05 pence per Ordinary Share. For
every two Placing Shares they subscribed to, placees will also receive one
warrant over Ordinary Shares valid for 24 months from the date of issue
exercisable at 0.075 pence per Ordinary Share. The warrants awarded did not
fall under the scope of IFRS 2 therefore no share-based payment expense has
been recognised in the year ended 30 June 2021.
TRADE AND OTHER PAYABLES
17
GROUP COMPANY
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Trade payables 54 56 17 16
Other payables 56 - 55 55
Social security and other taxes 46 33 - -
Accrued expenses 255 224 253 219
411 362 325 290
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value.
18 BORROWINGS
GROUP COMPANY
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Current
Drawdown facility (see Note 1 below) 100 100 100 100
Total current borrowings 100 100 100 100
Non-current
Convertible loan notes - - - -
Total non-current borrowings - - - -
Total borrowings 100 100 100 100
Note 1
The Drawdown facility relates to the facility entered into during 2017 with YA
Global Master SPV Limited. The facility is unsecured and carries an implied
interest rate of 10 per cent per annum, repayable in 12 equal monthly
instalments and has now lapsed. The directors are seeking to renew.
On 30 April 2015, the Company issued warrants to subscribe for 9,283,364 new
ordinary shares as part of the unsecured $3,000,000 Debt facility arrangement
with YA Global Master SPV Limited ("YA Global"). The issue of the warrants was
triggered following the drawdown of the initial Tranche 1, being $400,000,
under the terms of the agreement. The terms of the issue of warrants are
governed by the Debt Facility agreement, which specify that for every tranche
drawn down, the Company is required to issue 25% of the value of the drawdown
based on the interbank rate at the nearest possible date and using the average
Volume Weighted Average Price ("VWAP") of the Company for the five trading
days immediately prior the date of the agreement. Based on those terms, were
the Company to drawdown the remaining $2,600,000 they would be required to
issue further warrants to subscribe for an estimated total of 99,622,448 new
ordinary shares. The Directors do not expect to use the remaining facility in
the foreseeable future.
19 FINANCIAL INSTRUMENTS BY CATEGORY
2021 2020
£'000 £'000
FINANCIAL ASSETS AT AMORTISED COST:
Trade and other receivables (excluding prepayments, VAT and corporation tax) - -
Cash and cash equivalents 561 128
FINANCIAL LIABILITIES AT AMORTISED COST:
Trade and other payables 54 89
Borrowings 100 100
The table providing an analysis of the maturity of the non-derivative
financial liabilities has been included in Note 3.
20 ULTIMATE CONTROLLING PARTY
At the date of signing this report the Directors do not consider there to be
one single ultimate controlling party.
21 RELATED PARTY TRANSACTIONS
See note 6 for details of director's remuneration in the year.
During the year, NKJ Associates Ltd, a company in which N Jagatia is a
Director, charged consultancy fees of £40,000 (2020: £40,000). The amount
owed to NKJ Associates Ltd at year end is £72,000 (2020: £62,000).
Amount of fees due to John Gunn at 30 June 2021 was £160,000 (2020:
£150,000) and the amount of fees due to Anthony Samaha at 30 June 2021 was
£18,000 (2020: £6,000).
Both John Gunn and Nilesh Jagatia are Directors of Global Investment Strategy
UK Limited (GIS) and GIS held cash in its Inspirit Energy Holdings Plc's
client account at 30 June 2021 totalling £183,000 (2020: £125,000) and this
balance is included in cash and cash equivalents.
22 EVENTS AFTER THE REPORTING DATE
On 2 November 2021, the company announced that it was in early-stage
discussions with a view to entering into an agreement with a British
certification company Enertek International Ltd. Enertek International have
won several development contracts from the government (BEIS) and have gained a
vast knowledge in developing backward compatible Hydrogen products such as:
domestic and commercial cookers, domestic and commercial heating systems etc.
They have now gained the knowledge which could be very beneficial to Inspirit
in developing a Hydrogen product, with a view of also looking at our existing
products to make them hydrogen powered backwards compatible.
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