Results for the year ended 30 September 2021
17/03/2022 12:10
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RNS Number : 1537F S-Ventures PLC 17 March 2022
17 March 2022
S-Ventures PLC
("S-Ventures" or the "Company")
Audited results for the year ended 30 September 2021.
S-Ventures, which invests in, acquires and grows businesses in the natural
wellness, food-tech and organic snacking sector, is pleased to announce the
audited results of the Company for the year ended 30 September 2021.
Highlights
· IPO and subsequent fundraisings totalling £6.7 million, including £3.7
million fundraising in May 2021 and a further £3m raised post period end in
December 2021
· Admission to listing on AQSE Growth Market ("Aquis") in September 2020
(ticker: SVEN) and admission to trading on the US OTCQB Venture Market in May
2021 (ticker: SVTPF) to provide access for US investors
· Acquisition of 75.1% of We Love Purely Limited (January 2021), a healthy
snacking company selling a range of plantain flavoured crisps under the
Purely Plantain Chips brand
· Acquisition of 75.1% of Ohso Chocolate Limited in February 2021, a UK-based
manufacturer of luxury Belgian chocolate bars with encapsulated probiotics
· Acquisition of 100% of Pulsin Limited in July 2021, a plant-based nutrition
company, excelling in plant-based nutrition technology, manufacturing and
sales, with a focus on healthy protein bars, nutritional snacks and Keto bars
· Investment in 50% of Vegan Punk Ventures Ltd (August 2021), a healthy foods
company developing plant-based meat and fish alternatives that promote both
healthy living and sustainable agriculture
· Key appointments to the Board of David Mitchell as Chairman, a highly
experienced entrepreneur and private investor, and Bhanu Choudhrie, a renowned
investor with a wealth of experience in private and public markets
· Strong appointments as advisors to the Board of Andrew Jennings, a food
industry and M&A specialist and formerly MD of Kraft Foods/Mondelez UK and
Julien Machot, Managing Partner of VERSO Capital
· Continued growth in the pipeline of potential attractive candidate businesses
for investment, S-Ventures has benefitted both from its own growing reputation
and also a challenging environment for growing businesses
· Operational focus on building revenue and operational synergies from
wholly-owned/controlled subsidiaries, maintaining a lean cost base while
making investments enabling growth
Financial Highlights
16 months ended
30 September 2021
Revenue £1.5m
Profit / (Loss) from operations £(1.0)m
Profit / Loss after tax £(0.8) m
EPS / LPS (0.76) p
Cash * £0.2 m
*A further £3m was raised post year end
The businesses acquired and the sector operated in can be summarised as
follows:-
Company: Date Acquired Stake Business
We Love Purely Limited 22 January 2021 75.1% Plantain flavoured crisps
Ohso Chocolate Limited 16 February 2021 75.1% Probiotic chocolate
Pulsin Limited 23 July 2021 100% Protein bars
Vegan Punk Limited Incorporated 3 June 2021 50% Plant based foods
Commenting, Scott Livingston, CEO of S-Ventures, said: "This is the first set
of audited results since our Company's successful listing on the Aquis Growth
Market. I am delighted with the progress that has been made since our listing,
which has continued into the current year. With the excellent support from our
shareholders, we have the means to take advantage of the high quality
opportunities available to us to both develop our fast growing brands in the
natural and organic consumer space, and complete further acquisitions. I look
forward to reporting on the Company's further progress in the months to come."
Enquiries:
S-Ventures PLC
Scott Livingston (Chief Executive Officer) +44 (0) 1932 400 224
Robert Hewitt (Chief Financial Officer)
AQSE Corporate Adviser and Broker:
VSA Capital Limited +44 (0) 20 3005 5000
Andrew Raca/Pascal Wiese - Corporate Finance
Andrew Monk - Corporate Broking
IFC Advisory (Financial PR) + 44 (0) 20 3934 6630
Graham Herring
Tim Metcalfe
Florence Chandler
About S-Ventures
S-Ventures is listed on UK AQUIS Exchange (Ticker Code "SVEN"). The Company
seeks to identify investment opportunities in the health & wellness,
organic food and wellbeing sectors within the UK and Europe, adding value by
providing capital and expertise to the target companies. The experience and
operational skills of the Board led by Scott Livingstone (CEO) are intended to
act as an accelerator to smaller brands that have a strong foundation and
platform but may lack the skills and capital. The main objectives are to cross
fertilise opportunities between the target companies and to scale the
individual entities and look for exit opportunities and/or synergistic
collaborations and through scaling we seek to create significant value for
all stakeholders. Since listing on AQSE in September 2020, the Company has
acquired significant interests in six companies.
CHAIRMAN'S STATEMENT
The Board is delighted to present the Company's first set of audited results
for the period from incorporation on 6 July 2020 to 30 September 2021. Since
listing on the AQSE Growth Market in September 2020, the Company has made
rapid progress acquiring majority stakes in three fast growing companies and
investing in two more. Its ability to identify targets and complete
transactions has resulted in the Company being able to raise significant
investment funds at attractive prices.
Investment strategy and target markets
S-Ventures looks to identify investment opportunities in the health &
wellness, organic food and wellbeing sectors within the UK and Europe. The
Company plans to add value by adding capital and expertise to the target
companies. The experience and operational skills of the Board are intended to
act as an accelerator to smaller brands that have a strong foundation and
platform but may lack specific skills and capital. The main objectives will be
to cross fertilise opportunities between the target companies and to scale the
individual entities and look for exit opportunities and or synergistic
collaborations. We believe that scaling can create significant value creation
for all stakeholders.
Acquisitions and investments
S-Ventures listed on Aquis in September 2020 and the Company has been actively
building its portfolio through acquisitions and investments. Excellent
progress has been made, including:
· Acquisition of 3.3% stake in Coldpress Food Limited in September 2020 and a
convertible loan allowing S-Ventures to increase its holding to 6.2% on
conversion. In November 2020, the Company invested a further £75,000 into
Coldpress via a secured convertible loan note which, if exercised, would
convert so as to increase S-Ventures' shareholding to 8.6%.
· Acquisition of 75.1% interest in We Love Purely Limited in January 2021.
· Acquisition of 75.1% interest in Ohso Chocolate Ltd in February 2021.
· Acquisition of 100% interest in Pulsin Limited in July 2021.
· Acquisition of 50% stake in Vegan Punk Ventures Limited (trading as "Plant
Punk") in August 2021 and agreement to invest up to £100,000 in loans.
Further details on the acquisitions and investments are set out in the Chief
Executive's report below. Since the year end, the Board has continued to
review a number of attractive potential opportunities.
Board and advisory board strengthened
In April 2021, the Company announced the appointment of Bhanu Choudhrie as a
non-executive director to help to grow S-Venture's business as it seeks to
acquire and grow in the organic snacking and wellness consumer brands sector.
Bhanu runs and operates a private equity and family office business spanning
the world in a wide range of sectors including hotels, banking, aviation,
property and technology. Bhanu's experience in M&A, private equity and
capital raising on the public markets in both the UK and USA will prove
invaluable for the development of S-Ventures in the future
In September 2021, Andrew Jennings joined S-Ventures as an advisor to the
Board. Andrew is an inspiring business leader highly respected for strategic
thinking, pragmatism and delivering progressive organisational change. With a
track record of positive results, Andrew was instrumental in the successful
growth of Pulsin Limited prior to its recent acquisition by S-Ventures.
Andrew has worked extensively across multi-category operations encompassing
sweet snacks, chilled foods, and ambient grocery, including more than eight
years as board director of Kraft Foods / Mondelez UK, where he was latterly
Managing Director, steering the UK business from £0.4 billion to £2 billion
per annum turnover through growth and acquisition.
In addition, Andrew has been involved in European and Global strategy for many
years encompassing M&A, including the £11bn acquisition of Cadbury.
Andrew's experience and expertise across the sector will be an invaluable
asset to the future growth and success of S-Ventures PLC.
In November 2021, Julien Machot joined the Company's advisory board. Julien is
the Managing Partner of VERSO Capital, an asset manager focused on alternative
assets, including private equity, venture capital especially in food
technology and agri-technology, and real estate. Julien started his career as
an entrepreneur in the field of management education, building a successful
company across 14 European countries. In 2012, Julien sold his company and
started his career in Private Banking in Switzerland where he worked for
Mirabaud and for EFG Bank. Since 2017, following the launch of VERSO Capital,
he has invested in high-profile food technology companies including Impossible
Foods, EAT Just, and TurtleTree Labs. To date, Julien has invested over USD
400 million while expanding VERSO Capital operations in Switzerland,
Liechtenstein, the United Arab Emirates and offshore in the British Virgin
Islands with its own regulated professional mutual fund.
Summary
The Company's first year as a public company has been one of rapid and
significant progress. The successful listing on Aquis has provided a suitable
platform for the Company to complete a series of acquisitions and investments
in wellness and wellbeing branded goods and services. The Board is
particularly grateful to its shareholders that supported its growth
aspirations as the Company goes from strength to strength. The pipeline of
opportunities remains considerable as the Board looks to continue to invest in
exciting brands in the natural and organic consumer space. The Board is
excited about the future prospects of the business and looks forward to
updating shareholders on progress in due course.
David Mitchell
Non-executive Chairman
16 March 2022
CHIEF EXECUTIVE OFFICER'S REPORT
The Board is pleased to report on its annual results for the period ended 30
September 2021. This has been a significant period in the Company's evolution
as it has listed on the Aquis exchange, achieved two equity fundraises,
completed three meaningful acquisitions and two exciting investments whilst
continuing to review potential attractive candidates for further investment or
acquisition. There currently exists an exciting market opportunity to acquire
or invest in developing food and consumer businesses and enhance operations
through a centralised resource, marketing and distribution function.
Since the launch of the Company, S-Ventures has completed five acquisitions or
investments as it looks to identify further investment opportunities in the
health and wellness, organic food and wellbeing sectors with the UK and
Europe. A further investment was made post balance sheet in acquiring the
business and assets of Livias' Health Foods.
Acquisitions
Pulsin
The Company acquired a 100% interest in Pulsin Limited in July 2021.
Pulsin (pulsin.co.uk) is a well-established and highly respected plant-based
nutrition company, excelling in plant-based nutrition technology,
manufacturing and sales, with a focus on healthy protein bars, nutritional
snacks and Keto bars.
Pulsin formulates and produces high quality plant-based products under its own
brands as well as for third parties, many of which are household names, from
its specialised facilities in Gloucester. Pulsin had gross sales of
approximately £7.05m in the twelve months to 30 April 2021 and approximately
£1.2m of net debt as at that date.
A brand with an emphasis on feel-good nutrition, the range features
award-winning snack bars, protein powders,
keto products and shakes packed full of nutritional goodness and super ingredients. Pulsin's award-winning range
of tasty snack bars, protein powders, keto products and shakes are packed full
of feel-good nutritional goodness and balanced with the right amount of super
ingredients to power you through the day and keep you fuller for longer.
Pulsin range is gluten free and suitable for vegetarians, with the majority
being plant based too. Pulsin never uses artificial ingredients,
preservatives or palm oil. Available at most large retailers such
as Sainsbury's, Tesco, Boots, Asda, Holland & Barrett and Ocado.
Ohso Chocolate
In February 2021, the Company acquired 75.1% of Ohso Chocolate Ltd (ohso.com).
Ohso is UK-based brand specialising in luxury Belgian chocolate with added
live cultures (probiotics) via a unique micro-encapsulation process. It is
proven that this delivers live cultures to the gut three times more
effectively than probiotic yoghurts.
We Love Purely
The Company acquired a 75.1% interest in We Love Purely Limited in January
2021 (welovepurely.com).
Purely is a UK-based plantain chip brand with an emphasis on sustainability
and natural ingredients. Available at many leading stores including Holland
& Barrett, Ocado, Selfridges, Harvey Nichols, Harrods and Planet
Organic.
Post Balance Sheet events
On 17 February 2022, we acquired the business and assets of Livias Health
Foods Limited from its administrators for an initial price of £355,000.
This business will be taken on by Pulsin to continue and develop Liviais range
of indulgent treats. (www.livias.co.uk).
Investments
Coldpress Food
S-Ventures acquired a 3.3% stake in Coldpress Food Ltd in September 2020 and
also provided a convertible loan allowing it to increase its holding to 6.2%
on conversion. In November 2020, the Company invested a further £75,000 into
Coldpress via a secured convertible loan note which, if exercised, would
convert so as to increase our shareholding to approximately 10%
(cold-press.com).
Coldpress Foods provides all-natural support to non-stop, frenetic lifestyles
by providing Europe's first Range of Vitamin Fortified, Super Juices &
Smoothies.
Plant Punk
S-Ventures acquired a 50% stake in Vegan Punk Ventures Limited (trading as
"Plant Punk") in August 2021 and has agreed to invest up to £100,000 in loans
(plantpunkfoods.com)
The 100% plant-based meat alternative with zero compromise: premium taste yet
60% less calories and fat than their competitors. Plant Punk doesn't use any
processed ingredients, only sustainable plant-based ingredients created using
low impact production processes.
Plant Punk was started by award-winning chef Dave Ahern and Batwoman star
Wallis Day to disrupt beliefs that vegan food has to be bland or
ultra-processed. Dave began developing a 100% plant-based burger that actually
tastes good and does good by using ingredients that are easily obtained,
well-studied and sustainable.
Combining Wallis's vision with Dave's expertise, the ZeroBeef burger was born
using a unique process that could be scaled up to meet demand with a
low-impact production process.
OTCQB Venture Market
In May 2021, S-Ventures PLC announced that its shares have been approved to
trade on the US OTCQB Venture Market ("OTCQB") with trading commencing on 26
May 2021 under ticker symbol SVTPF. We believe that trading on the OTCQB will
provide enhanced investor benefits, including easier access in the US, and
greater liquidity due to a broader reach of investors. A market maker has been
appointed in the US to support the OTCQB trading.
Current trading
Since the balance sheet date the company has streamlined operations, as
follows:
· Shortly before the year end, we took additional warehousing space near the
Pulsin premises. Since then we have been re-organising the business to allow
us to handle all the group's current logistics needs efficiently. It was
fully operational from early January 2022;
· Closed operational centres previously owned by Ohso Chocolate and We Love
Purely;
· Restructured teams to deploy their strength to benefit of all brands
Outlook
The investment thesis central to S-Ventures is strengthened in the current
environment. The long-term structural trends in favour of health and
wellness and, particularly, healthy foods and beverages remain intact. We
expect the near-term macroeconomic environment to be challenging with input
cost inflation and potential erosion of disposable incomes. Near-term
headwinds for the economy will likely present S-Ventures with potentially
further compelling opportunities. The Board's stance, with the benefit of a
strong balance sheet, is to remain alert for opportunities, while maintaining
a cautious approach to execution.
Scott Livingston
Chief Executive Officer
16 March 2022
FINANCIAL REVIEW
Introduction:
This first period of operation has been very busy during which we have
obtained an AQSE listing and also an US OTCQB listing in the US. Since
incorporation, we have arranged new funding totalling £3.7m and we had
acquired 3 businesses and invested in a further two, which we do not control,
by September 2021. A further £3m has been raised post year end.
As the business is in an initial growth phase, we anticipated that our first
year would be loss making. The Group made a loss of £849k on Group sales
(post acquisition) of £1.5 million.
Special features of this reported loss include acquisition costs of £153k and
initial unrecurring listing costs amounting to £80k. No tax will be payable.
The directors do not propose to declare a dividend. The resultant loss
represents a 0.76p loss per share in issue at the end of the financial period.
Comment on performance of our owned businesses:
We Love Purely - The sales of plantain flavoured crisps has been growing
steadily. The main sales channels being trade and grocery channels, helped by
its recently introduced new format products.
Sales in 9 months to September were £215k compared with £74k in the previous
12 months. Further growth is planned this year with the introduction of new
products later in the year.
Ohso Chocolate - Sales of chocolate bars infused with probiotics held up well
in the year although it was difficult to forge new trade accounts; most of the
business relying on online channels. The range has been refreshed recently
with a new 85g bar - which we consider is more attractive to trade channels.
Sales in the year to September were some £288k compared with £292k in the
prior year. Of this £190k fell in the post acquisition period.
Pulsin - The consolidated accounts only reflect the sales between 23 July and
30 September. This was a hectic post acquisition period during which we have
had to start to restructure the logistics approach of the business which
impacted on the sales in the period.
Sales for the last 12 months amounts to some £6.4m of which £1.1m are
reflected in these group accounts. The business launched a range of new
products in the period shortly before the acquisition which, together with
other products in the pipeline, give us confidence in the future trading of
this business.
Re-Organisation Plans
The acquisition of Pulsin has provided opportunities to start rolling out the
Board's philosophy of sharing skills and resources around the group. The key
points of this re-organisation are:-
· Group logistics functions at a new warehouse taken for the business of Pulsin
which became fully operational from January 2022.
· This allowed us to close the operational units of We Love Purely and Ohso
Chocolate thereby grouping all the logistics functions together.
· Group new product development skills
· As the business all have similar channels to market, we are planning to group
much of the sales activity.
Cash flow and cash position:
Since the launch of the group, funding for the group activities has come from
shareholder monies. Post the balance sheet date, a further £3m in new equity
has been raised to provide additional working capital. The expected
improvement in trading of our Group companies during the coming year should
provide opportunities to take up appropriate bank loans and working capital
facilities.
Robert Hewitt
Chief Financial Officer
16 March 2022
Group Strategic Report for the Period 6 July 2020 to 30 September 2021
PRINCIPAL RISKS AND UNCERTAINTIES
Foreign Exchange
The Group does not hedge its foreign exchange exposures. We Love Purely buys
most of its stock in US Dollars and Ohso Chocolate has no foreign exchange
exposures. As regards, Pulsin, much of its risk is naturally hedged by having
both EU suppliers and Customers.
Key Suppliers
Both We Love Purely and Ohso Chocolate are very dependent on key suppliers:-
We Love Purely - a single overseas supplier
Ohso Chocolate - two suppliers; one for the new products and one for the older
and smaller items.
Significant Customers
The Group is not overly dependent on any one customer.
Brexit / Covid
Pulsin was affected by Brexit issues associated with importing and exporting
and labelling in early January. Since then all members of the Group have seen
the impact of Covid on both sales channels and also its impact on logistics -
especially the need to book in shipments to customers.
Other
All our business carry appropriate insurance covers for product liability and
other risks.
SECTION 172(1) STATEMENT
The directors are well aware of their duty under section 172 of the Companies
Act 2006 to act in the way which they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its members as
a whole, and in doing so have regard (amongst other matters) to:
· the likely consequences of any decision in the long term;
· the interests of the Company's employees;
· the need to foster the Company's business relationships with suppliers,
customers and others;
· the impact of the Company's operations on the community and the environment;
· the desirability of the Company maintaining a reputation for high standards of
business conduct, and
· the need to act fairly as between members of the Company (the "Section 172 (1)
Matters").
Induction materials provided on appointment include an explanation of
directors' duties, and the board is regularly reminded of the Section.172(1)
Matters, including as a rolling agenda item at every main board meeting.
ON BEHALF OF THE BOARD:
R D Hewitt - Director
Date:16 March 2022
Report of the Directors for the Period 6 July 2020 to 30 September 2021
The directors present their report with the financial statements of the
company and the group for the period 6 July 2020 to 30 September 2021.
INCORPORATION
S-Ventures PLC was incorporated on 6 July 2020 and commenced trading on the
same date.
DIVIDENDS
No dividends will be distributed for the period ended 30 September 2021.
FUTURE DEVELOPMENTS
Details of the Group's future developments are contained in the Strategic
report.
EVENTS SINCE THE END OF THE PERIOD
Information relating to events since the end of the period is given in the
notes to the financial statements.
DIRECTORS
The directors who have held office during the period from 6 July 2020 to the
date of this report are as follows:
B Choudhrie - appointed 13 April 2021
N A D'Onofrio - appointed 6 July 2020
R D Hewitt - appointed 6 July 2020
S P Livingston - appointed 6 July 2020
D M Mitchell - appointed 22 September 2020
A J B Phillips - appointed 6 July 2020
REMUNERATION COMMITTEE REPORT
The Remuneration Committee has responsibility for determining, within the
agreed terms of reference, the Group's policy on the remuneration packages of
the Company's Chairman, and the executive directors and such other members of
the senior management as it is designated to consider. The Remuneration
Committee also has responsibility for determining (within the terms of the
Group's policy and in consultation with the Chairman of the board and/or the
Chief Executive Officer) the total individual remuneration package for each
executive director and other senior managers (including bonuses, incentive
payments and share options or other share awards). The remuneration of
non-executive directors is a matter for the independent board. No director or
manager will be allowed to partake in any discussions as to their own
remuneration. In exercising this role, the directors shall have regard to the
recommendations put forward in the relevant QCA Guidelines.
In the year to 30 September 2021, the Remuneration Committee consisted of the
Non Executive Chairman and two non-executive directors: David Mitchell, Nick
D'Onofrio and Bhanu Choudhrie. The Remuneration Committee is convened not less
than twice a year and otherwise as required. The Committee met twice during
the period ended 30 September 2021.
Directors' Remuneration Policy:
The Committee takes into account both Group and individual performance, market
value and sector conditions in determining director and senior employee
remuneration. The Committee has maintained a policy of paying salaries
comparable with peer companies in the sector in order to attract and retain
key personnel.
For the first part of the period under review, these costs were kept very low
reflecting the Group strategy of building for the future. In future periods,
salary costs are likely to rise.
Directors remuneration for period ended 30 September 2021:
Remuneration Salary Pension Benefits Bonus Total
Scott Livingston 53,333 - 883 20,000 74,217
Robert Hewitt 26,667 - - 10,000 36,667
Non- executive directors Fees Accrued
David Mitchell £12,000
Alex Phillips £13,000
Nick D'Onofrio £13,000
Bhanu Choudhrie £6,000
Service Contracts and non-executive directors' Letters of Appointment
The executive directors have rolling contracts that are terminable on 12
months' notice. These contracts are not fixed term and will be reviewed
annually. The non-executive directors have agreements entitling them to fees
of £12,000 pa. Fees of £1,000 per month were accrued for services provided
in the current year.
Directors' interests as at 30 September 2021
Ordinary shares directly held % Of Issued Share Capital Warrants at 25p
Options
Scott Livingston 47,749,108 42.6% 1,896,603 -
Robert Hewitt 2,287,756 2.0% 16,670 -
David Mitchell 1,869,000 1.7% - -
Alex Phillips 2,746,000 2.4% -
Nick D'Onofrio 2,710,000 2.4% - -
Bhanu Choudhrie - - - -
Number of shares in issues at 30 September 2021 111,377,947
Number in issue at date of this 117,391,340
report
During the year, Scott Livingston has sold 1,000,000 shares further to an
Orderly Market agreement entered into with Peterhouse Capital upon the initial
listing. Similarly, a person connected to Scott Livingston has sold a further
1,020,000 shares in the period to 30 September 2021.
Share Options
Share Options dependent on sales performance were granted to the vendors of We
Love Purely Limited and Ohso Chocolate Limited when the businesses were
acquired. At the date of this report, these options amounted to 2,407,528
granted at 9p each, the share price when the businesses were acquired. The
position regarding warrants and options in issue is as
follows:-
As at 30 Sept 21 Date of this Report
Shares in issue 111,377,947 117,391,340
Warrants for shares 3,987,800 4,910,271
Options based on performance 2,407,528 2,407,528
Diluted number of shares 117,773,275 124,709,139
Percentage of Warrants and Options in expanded equity 5.4% 5.9%
Shareholder Approval of Directors' Remuneration Report
Shareholders are asked to approve this directors' Remuneration Report for the
period ended 30 September 2021 at the forthcoming Annual General Meeting. This
resolution is advisory in nature.
ENGAGEMENT WITH EMPLOYEES
It is the Company's policy not to discriminate between employees or potential
employees on any grounds. Full and fair consideration is given to the
recruitment, training and promotion of disabled people and, should staff
become disabled during the course of their employment, efforts are made to
provide appropriate re-training.
ENGAGEMENT WITH KEY STAKEHOLDERS
The key stakeholders for the Group are customers, distributors, suppliers,
employees, shareholders and the community and environment in which we live.
Whilst interactions take place at all levels of the Group, the directors are
aware of the importance of the relationships with key stakeholders and
feedback is utilised wherever possible to sustain these relationships in order
to drive the long term success of the business.
ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS
We do not need to report under this regulation as we are not listed on main
market or AIM and our size is below the relevant thresholds. However, we
intend to prepare and publish this data in our next year's report.
STATEMENT OF CORPORATE GOVERNANCE ARRANGEMENTS
Introduction:
We are pleased to introduce the Corporate Governance Report for the period
ended 30 September 2021. As an AQSE quoted company, we recognise the
importance of sound corporate governance in supporting and delivering the
strategy of the Company and its subsidiaries (together the "Group"). This
involves managing the Group in an efficient manner for the benefit of its
shareholders and other stakeholders whilst maintaining a corporate culture
which is consistent with our values.
The Company adopted the QCA Corporate Governance Code ("QCA Code") on its
initial listing. The Company's Corporate Governance Statement is available to
view on the Company's website at www.s-venturesplc.com
The board of directors is responsible for the long-term success of the Company
and, as such, devises the Group strategy and ensures that it is implemented.
The board is determined that the Company protects and respects the interests
of all stakeholders and in particular, is very focused upon creating the right
environment for its employees. We want a happy workplace and we want our
employees to be fully and properly rewarded and to feel that they are an
integral part of the S-Ventures family. A reward structure is under discussion
which we hope to implement during the coming year, which includes the grant of
share options, enabling members of staff to participate in the growth of the
Company, as appropriate.
We want our suppliers, who are an essential part of the Company, to also feel
part of the S-Ventures family and we work closely with them to ensure that
this is the case. Above all, the Company wishes to ensure that shareholders
obtain a good return on their investment and that the Company is managed for
the long-term benefit of all shareholders and other stakeholders. Appropriate
Corporate Governance procedures will ensure that that is the case and reduce
the risk of failure.
The Development of the Corporate Governance Code for S-Ventures
The QCA sets out 10 principles which the Board is working on to expand into an
effective document to cover all areas of the Group's business. However, as the
Group is presently young and has only recently made significant acquisitions
this is still a work in progress. Once completed, the principles will be
published on the Company's website.
The Group has a clear mandate to optimise the allocation of resources to
support its development and growth plans seeking to maintain a balance between
its resources and maintaining robust corporate governance practices. As the
Group evolves, the Board is committed to enhancing the Company's policies and
practices appropriate for the size and maturity of its business and
organisation.
Set out below are the Group's corporate governance practices for the year
ended 30 September 2021.
1. Business strategy: The business model involves seeking out strong brands
or products with a clear market message within the wellness sector. To date
this has meant focusing on the healthy snacks market. Conscious of present
trends in plant based foods, the products should be both better for the
consumer and also have a better carbon and / or health benefit than competing
products. By being at the forefront of these trends, the Board considers
that shareholder value will be promoted.
2. Shareholder needs: other than promoting growth and thus shareholder value,
we seek to develop ways of communicating effectively with our shareholders to
ensure we are developing appropriately. As the Group grows this will become
more important; for the time being, this is achieved by information on our
website, press notices and the full presentation of our Annual accounts.
3. Wider responsibilities, such as social responsibility: With both our
existing and new products, our teams are focused on bringing products to
market using responsibly sources raw materials and packaging materials.
4. Risk Management: We consider risk management at two levels. Firstly, we
ensure that all our products are made to appropriate and up to date food
hygiene standards. Secondly, we have implemented reporting and management
systems appropriate to a Group of our size at both the operating company level
and main board level. We have ensured that the group carries appropriate
insurance covers.
Secondly, the main Board has set up committees which include directors for:
Investment decisions, and Remuneration. Whilst the Investment Committee sifts
possible targets, all offers are approved by the full Board. An Audit
committee will be operated in the coming year.
5. The Board: The Board members, who are listed on page 1, have a wide range
of business skills that they bring to bear in managing the Group's affairs.
Dring our first year of operation, we have been constrained in setting up
physical meetings, but the use of Zoom and Teams has allowed the Board to
liaise on a regular basis.
During the period ended 30 September 2021, there have been 14 Board meetings
plus a further 3 on single issues.
For the coming year, we have instigated a more rigorous timetable for meetings
from formal main Board, to business reviews of each unit and strategic
planning events involving the whole Group.
The full Board meetings have a formal structure covering recent developments,
finance and funding issues, acquisition policies and progress together with
any shareholder or exchange issues reported by our advisors or which need to
be passed on to them.
6. Communications: The Group communicates its governance by regular updates to
the market, including this Governance report and will shortly be adding this
report to our website.
The board recognises that the AGM is an important opportunity to meet private
shareholders. Each substantially separate issue is the subject of a separate
resolution at the AGM and all shareholders have the opportunity to put
questions to the board. All board directors will endeavour to attend AGMs and
answer questions put to them which may be relevant to their responsibilities.
In addition, the directors are available to listen informally to the views of
shareholders immediately following the AGM. For each vote, the number of proxy
votes received for, against and withheld is announced at the meeting. The
results of the AGM are published on the Company's corporate website.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Group Strategic Report, the
Report of the Directors 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 elected to prepare the
financial statements in accordance with International Financial Reporting
Standards as adopted by the UK. 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 company and the group and of
the profit or loss of the group for that period. In preparing these financial
statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state that the financial statements comply with IFRS;
- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company's and the group's transactions and
disclose with reasonable accuracy at any time the financial position of the
company and the group 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 company and the group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as
defined by Section 418 of the Companies Act 2006) of which the Group's
auditors are unaware, and each director has taken all the steps that he ought
to have taken as a director in order to make himself aware of any relevant
audit information and to establish that the Group's auditors are aware of that
information.
AUDITORS
The auditors, PKF Littlejohn LLP, will be proposed for re-appointment at the
forthcoming Annual General Meeting.
ON BEHALF OF THE BOARD:
R D Hewitt - Director
Date: 16 March 2022
Independent Auditors Report to Members of S-Ventures PLC
Opinion
We have audited the financial statements of S-Ventures Plc (the 'parent
company') and its subsidiaries (the 'group') for the period ended 30 September
2021 which comprise the Consolidated Income Statement, The Consolidated
Statement of Comprehensive Income, the Consolidated and Company Statements of
Financial Position, the Consolidated and Company Statements of Changes in
Equity, the Consolidated and Company Statements 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's affairs as at 30 September 2021 and of the group's
loss for the period 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;
· Obtaining cash flow forecasts, management accounts, and budgets from
management for a period of at least 12 months from the date of signing the
financial statements to give an indication of the expected financial returns
in future months;
Reviewing documents for reasonableness by comparing forecasts to actual
results;
· Considering the current available financial headroom and confirm existence,
legality and enforceability of any financial support arrangements including
post period end fundraising exercises;
· Reviewing correspondence with bankers and meeting minutes for any references
to financial difficulties; and
· Continuing to review RNS releases and discussed subsequent events and future
plans with management.
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
We apply the concept of materiality both in planning and performing the audit,
and evaluating the effect of misstatements on our audit and on the financial
statements. For the purposes of determining whether the financial statements
are free from material misstatements, we define materiality as the magnitude
of misstatement that makes it probable that the economic decisions of a
reasonably knowledgeable person, relying on the financial statements, would be
changed or influenced. We also determine a level of performance materiality
which we use to assess the extent of testing needed to reduce to an
appropriate level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality for the financial statements as a
whole. When establishing our overall audit strategy, we determined a magnitude
of uncorrected misstatements that we judged would be material for the
financial statements as a whole.
We determined materiality for the group to be £63,400, with performance
materiality of £38,000. We agreed with the Board that we would report all
audit differences in excess of £3,170, as well as differences below that
threshold that, in our view, warranted reporting on qualitative grounds.
Materiality was determined on the basis of 7.5% of the Group's loss before
tax, which we believe to be of particular relevance to the Group in their
first period of operations.
We determined materiality of the parent company to be £45,000, with a
performance materiality of £27,000. We agreed with the Board that we would
report all audit differences in excess of £2,250, as well as differences
below that threshold that, in our view, warranted reporting on qualitative
grounds. Materiality was determined on the basis of 70% of group overall
materiality. We have used this benchmark as the group is in its start-up
phase, it is incurring costs relating to acquisitions of businesses in natural
wellness, food-technology and organic snacking sector, which are key to
shareholders. Net assets of the company were also considered important but
would have lead to a materiality in excess of that acceptable for the group
audit.
Our approach to the audit
The group includes the listed Parent company and subsidiaries. We tailored the
scope of our audit to ensure that we performed enough work to be able to give
an opinion on the financial statements as a whole, taking into account the
structure of the group and the Company, the accounting processes, and the
industry in which they operate. We have audited all significant components
from the dates of each acquisition.
As part of our planning, we assessed the risk of material misstatement
including those that required significant auditor consideration at the
component and group level. In particular, we looked at areas of estimation,
for example in respect of the valuation of inventory. Procedures were then
performed to address the risk identified and for the most significant assessed
risks of misstatement, the procedures performed are outlined below in the key
audit matters section of this report. We re-assessed the risks throughout the
audit process and concluded the scope remained the same as at planning.
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 our scope addressed this matter
Carrying value of investment in subsidiaries and intra-group receivables
(Parent Company) (as disclosed in notes 13 and 15)
The carrying value of the Parent Company's investment in subsidiaries and Our work in this area included:
intra-group receivables is material at period end.
• Obtaining management's impairment review for all investments and
The recoverability of these balances is ultimately dependent on the challenging the assumptions made to third party evidence and our understanding
subsidiaries being able to generate returns from their underlying assets in of the business;
order to settle the receivables. The recoverability and valuation of these
amounts is therefore a risk as they might be impaired • Reviewing the value of the net investment and intra-group
receivables in subsidiaries against the underlying assets and challenging the
judgements/estimates used by management to assess the recoverability of
investments and intra-group receivables
• Reviewing latest subsidiary accounts to confirm the period-end
financial position and performance against budgets and forecasts;
• Analysing subsequent events in support of the budgets to
determine reliability of management's budgeting process.
We note that the recoverability of the Company' investments relies on the
Directors' assertion that operations within the subsidiaries will become more
profitable once Group synergies have been enacted.
Inventory Valuation (Group) (as disclosed in note 14)
Inventory represents a material balance within the financial statements Our work in this area included:
(£1.32m 30 September 2021).
• Attending stock takes of subsidiaries to ensure that the stock
There is a risk that the inventory does not exist period end and inventory is exists and the recording of stock quantities is complete;
therefore misstated in the financial statements. There is also a risk that
that stock is not valued at the lower of cost and NRV. • Considering the appropriateness of the inventory system;
• Following up the stocktake attendance by confirming that counted
items are correctly included on the final stock sheets and that any
discrepancies arising are resolved;
• For a sample of stock items, testing the valuation of finished
goods against post period end selling prices to confirm that the net
realisable value is greater than cost;
• For a sample of raw materials, testing stock items to purchase
invoices to ensure that stock is recorded at the appropriate costs.
• Tracing the allocation of overheads costs to finished goods by
agreeing the elements of the calculation to the appropriate accounting records
such as labour costs.
We have obtained sufficient and appropriate audit evidence over the valuation
of inventory.
Acquisition of subsidiaries
The parent entity has acquired a number of subsidiaries during the period. Our work is this area included:
There is a risk that the accounting treatment applied by management is not in
accordance with the criteria of and IFRS 3.
• Reviewing the sale and purchase agreements for investments
purchased during the period;
There is a risk that the consideration payable is not conducted on an arm's • Agreeing the level of consideration to supporting documentation,
length basis, and thus either generating a higher goodwill balance or a including the valuation of any deferred or contingent consideration;
significant bargain purchase recognised in the profit and loss account.
• Review management's accounting treatment and policy applied for
each acquisition to ensure it is in accordance with IFRS.
• Reviewing calculations of goodwill occurring on the acquisition
of subsidiaries and ensuring recognition is in accordance with IFRS;
• Reviewing and critically assessing management's impairment
assessment for the goodwill and intangible fixed assets arising from the
acquisition.
• Considering whether there are other indications of impairment in
the value of the investments acquired during the period; and
• Ensuring disclosures in the financial statements are
appropriate.
We have obtained sufficient and appropriate audit evidence over the accounting
for acquisitions of subsidiaries. We note that the PPA review in relation to
the allocation of intangible assets acquired by the Group within the new
subsidiaries was not completed at the period end and that resulting
re-allocations of Goodwill to intangible assets will occur within the
financial statements for the following year.
Other information
The other information comprises the information included in the Consolidated
Financial Statements, other than the financial statements and our auditor's
report thereon. The directors are responsible for the other information
contained within the Consolidated Financial Statements. 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 period 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 their 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, application of cumulative audit knowledge and experience of the
sector.
· We determined the principal laws and regulations relevant to the group and
parent company in this regard to be those arising from Companies Act 2006,
Aquis Rules for Issuers, Disclosure and Transparency Rules, UK Corporate
Governance Code, UK employment rules, UK tax legislation, and The Food
Standards Agency (FSA).
· We designed our audit procedures to ensure the audit team considered whether
there were any indications of non-compliance by the group and parent company
with those laws and regulations. These procedures included, but were not
limited to:
o Enquiries of management, review of minutes, review of legal / regulatory
correspondence.
· We also identified the risks of material misstatement of the financial
statements due to fraud. We considered, in addition to the non-rebuttable
presumption of a risk of fraud arising from management override of controls.
· 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, judgement and assumptions for evidence of bias; and evaluating the
business rationale of any significant transactions that are unusual or outside
the normal course of business. In this context we view the significant
estimates as being the key assumptions underlying the valuation of
investments.
· We considered the above procedures at group as well as component levels.
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.
Alistair Roberts (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
Date: 16 March 2022
Consolidated Statement of Profit or Loss
for the Period 6 July 2020 to 30 September 2021*
Notes £
CONTINUING OPERATIONS
Revenue 1,525,810
Cost of sales (1,104,952)
GROSS PROFIT 420,858
Other operating income 31,376
Distribution costs (158,962)
Administrative expenses (1,259,905)
Finance costs 5 (54,720)
Finance income 5 16,499
Share of loss of associates (600)
LOSS BEFORE INCOME TAX 6 (1,005,454)
Income tax 7 156,079
LOSS FOR THE PERIOD (8479,375)
Loss attributable to: Owners of the parent
(784,896)
Non-controlling interests (64,479)
(849,375)
Earnings per share expressed in pence per share:
9
Basic and diluted (0.76)
*The notes form part of these financial statements
Consolidated Statement of Comprehensive Income
for the Period 6 July 2020 to 30 September 2021*
£
LOSS FOR THE PERIOD
(849,375)
OTHER COMPREHENSIVE INCOME -
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD
(849,375)
Total comprehensive income attributable to: Owners of the parent
(784,896)
Non-controlling interests (64,479)
(849,375)
*The notes form part of these financial statements
Consolidated Statement of Financial Position 30 September 2021*
Notes £
ASSETS
NON-CURRENT ASSETS
Goodwill 10 6,274,953
Owned
Intangible assets 11 54,381
Property, plant and equipment 12 1,219,583
Right-of-use
Property, plant and equipment 12, 21 1,693,925
Investments 13 30,238
Deferred tax 22 198,913
9,471,993
CURRENT ASSETS
Inventories 14 1,219,876
Trade and other receivables 15 2,122,044
Tax receivable 27,228
Cash and cash equivalents 16 154,697
3,523,845
TOTAL ASSETS 12,995,838
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 17 111,378
Share premium 18 6,107,386
Share based payment reserve 18 40,024
Warrant reserve 18 25,000
Equity component of
convertible debt 18 2,57,528
Contingent equity settled
consideration for investment 18 34,484
Retained earnings 18 (784,896)
7,365,904
Non-controlling interests (76,810)
TOTAL EQUITY 7,489,094
LIABILITIES
NON-CURRENT LIABILITIES 2,321,945
Financial liabilities - borrowings Interest bearing loans and borrowings 20
CURRENT LIABILITIES 1,979,226
Trade and other payables 19
Financial liabilities - borrowings
Bank overdrafts 20 260,769
Interest bearing loans and borrowings 20 537,277
Tax payable 407,527
3,184,799
TOTAL LIABILITIES 5,506,744
TOTAL EQUITY AND LIABILITIES 12,995,838
*The notes form part of these financial statements
Company Statement of Financial Position
30 September 2021*
Notes £
ASSETS
Property, plant and equipment 12 4,430
Investments 13 7,041,213
Deferred Tax 22 56,367
7,102,010
CURRENT ASSETS
Trade and other receivables 15 956,183
Cash and cash equivalents 16 107,586
1,063,769
TOTAL ASSETS 8,165,779
EQUITY SHAREHOLDERS' EQUITY
Called up share capital
17 111,378
Share premium 18 6,107,386
Share based payment reserve 18 40,024
Equity component of
convertible debt 18 2,057,528
Contingent equity settled
consideration for investment 18 34,484
Retained earnings 18 (498,419)
TOTAL EQUITY 7,852,381
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 19 313,398
TOTAL LIABILITIES 313,398
TOTAL EQUITY AND LIABILITIES 8,165,779
*The notes form part of these financial statements
Consolidated Statement of Changes in Equity
for the Period 6 July 2020 to 30 September 2021*
Share based payment
Called up Retained earnings Share premium reserve
share capital
£ £ £ £
Changes in equity
Issue of share capital 111,378 - 6,107,386 -
Total comprehensive loss - (784,896) - -
Share warrants issued - - - 25,000
111,378 (784,896) 6,107,386 25,000
Acquisition of non-controlling
interest - - - -
Balance at 30 September 2021 111,378 6,107,386
(784,896) 25,000
Equity component of convertible debt Contingent equity settled consideration for investment Total Non-controlling interests Total equity
£ £ £ £ £
Changes in equity
Issue of share capital - - 6,218,764 - 6,218,764
Total comprehensive loss - - (784,896) (64,480) (879,311)
Share warrants issued - - 25,000 - 25,000
Equity component of convertible debt issued
2,057,528 - 2,057,528 - 2,057,528
Contingent equity-settled consideration for subsidiary
- 34,484 34,484 - 34,484
2,057,528 34,484 7,565,904 (64,480) 7,501,424
Acquisition of non-controlling
interest - - - (12,330) (12,330)
Balance at 30 September 2021 2,57,528 7,565,904 7,489,094
34,484 (76,810)
*The notes form part of these financial statements
Company Statement of Changes in Equity
for the Period 6 July 2020 to 30 September 2021*
Share based payment
Called up Retained earnings Share premium reserve
share capital
£ £ £ £
Changes in equity
Issue of share capital 111,378 - 6,107,386 -
Total comprehensive income - (498,419) - -
Warrants issued 25,000
Share options issued - - - 15,024
Balance at 30 September 2021 111,378 (498,419) 40,024
6,107,386
Contingent equity
Equity
component of convertible settled consideration for
Total
debt investment equity
£ £ £
Changes in equity
Issue of share capital - - 6,218,764
Total comprehensive income - - (498,419)
Share options issued - - 15,024
Share warrants issued - - 25,000
Equity component of convertible debt issued
2,057,528 - 2,057,528
Contingent equity-settled consideration for subsidiary
- 34,484 34,484
Balance at 30 September 2021 2,057,528 7,852,381
34,484
*The notes form part of these financial statements
Consolidated Statement of Cash Flows
for the Period 6 July 2020 to 30 September 2021*
Notes £
Cash flows from operating activities
Cash generated from operations 1 (1,279,446)
Interest paid (3,551)
Lease interest paid (12,785)
Tax paid (3,913)
Net cash from operating activities (1,299,695)
Cash flows from investing activities
Purchase of goodwill (2,349,131)
Purchase of intangible fixed assets (5,510)
Purchase of tangible fixed assets (110,690)
Purchase of fixed asset investments (30,838)
Sale of tangible fixed assets 1,669
Interest received 14,644
Net cash from investing activities (2,479,856)
Cash flows from financing activities
Payment of lease liabilities 135,445
Payment of Bank Loans (62,835)
Amount withdrawn by directors (44,879)
Share issue 3,645,748
Net cash from financing activities 3,673,479
Decrease in cash and cash equivalents Cash and cash equivalents at beginning (106,072)
of period
2 -
Cash and cash equivalents at end of period
2 (106,072)
Major Non Cash Transactions
During the period ended 30 September 2021, loan notes of £2,057,000 were
issued to the vendors of Pulsin Limited as part of purchase consideration. The
company issued 3,281,866 shares at 9p per share, totalling £295,367, to the
vendors of Ohso chocolate Limited and 1,529,266 shares at 9p per share,
totaling £137,634, to the vendors of We Love Purely Limited as part of the
purchase consideration.
10m share warrants were issued as part of a share issue during the period. A
further 1,487,800 warrants with an exercise price of 2 pence each and 743,900
with an exercise price of 4 pence each were issued in lieu of professional
fees
The company granted 2,407,528 share options to employees with an exercise
price of 9 pence each under an Enterprise Management Incentive Scheme
The remainder of non cash transactions are not considered material.
Notes to the Consolidated Statement of Cash Flows
for the Period 6 July 2020 to 30 September 2021
1. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
£
Loss before income tax (1,005,454)
Depreciation and amortisation charges 86,334
Share based payments 40,024
Profit on disposal of fixed assets (3,432)
Loan written off to subsidiary director 32,424
Finance costs 25,276
Finance income (16,499)
(841,327)
Share of loss of associates 600
Increase in inventories (32,301)
Increase in trade and other receivables (771,521)
Increase in trade and other payables 365,103
Cash generated from operations (1,279,446)
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statement of Cash Flows in respect of cash and
cash equivalents are in respect of these Statement of Financial Position
amounts:
Period ended 30 September 2021
30.9.21
£
Cash and cash equivalents 154,697
Bank overdrafts (260,769)
(106,072)
Company Statement of Cash Flows for the Period 6 July 2020 to 30 September
2021
Notes £
Cash generated from 1 (1,107,591)
operations
Interest paid (29,445)
Net cash from operating activities (1,137,036)
Cash flows from investing activities
Purchase of tangible fixed assets (5,201)
Purchase of fixed asset investments (2,410,669)
Interest received 14,664
Net cash from investing activities (2,401,206)
Cash flows from financing activities
Share issue 3,645,748
Net cash from financing activities 3,645,748
Increase in cash and cash equivalents Cash and cash equivalents at beginning 107,506
of period
2 -
Cash and cash equivalents at end of period 2 107,506
Major Non Cash Transactions
During the period ended 30 September 2021, loan notes of £2,057,000 were
issued to the vendors of Pulsin Limited as part of purchase consideration. The
company issued 3,281,866 shares at 9p per share, totalling £295,367, to the
vendors of Ohso chocolate Limited and 1,529,266 shares at 9p per share,
totaling £137,634, to the vendors of We Love Purely Limited as part of the
purchase consideration.
10m share warrants were issued as part of a share issue during the period. A
further 1,487,800 warrants with an exercise price of 2 pence each and 743,900
with an exercise price of 4 pence each were issued in lieu of professional
fees
The company granted 2,407,528 share options to employees with an exercise
price of 9 pence each under an Enterprise Management Incentive Scheme
The remainder of non cash transactions are not considered material.
Notes to the Company Statement of Cash Flows
for the Period 6 July 2020 to 30 September 2021
1. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH
GENERATED FROM OPERATIONS
£
Loss before income tax (554,786)
Depreciation charges 771
Share based payments 40,024
Finance costs 29,445
Finance income (15,638)
(500,184)
Increase in trade and other receivables (812,734)
Increase in trade and other payables 205,327
Cash generated from operations (1,107,591)
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statement of Cash Flows in respect of cash and
cash equivalents are in respect of these Statement of Financial Position
amounts:
Period ended 30 September 2021
30.9.21
£
Cash and cash equivalents 107,506
Notes to the Consolidated Financial Statements
for the Period 6 July 2020 to 30 September 2021
1. STATUTORY INFORMATION
S-Ventures PLC is a private company, registered in England and Wales. The
company's registered number and registered office address can be found on the
General Information page. The Company's shares are traded on AQSE (ticker
SVEN).
2. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards and IFRIC interpretations and with those parts
of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements are presented in pounds sterling because that is the
currency of the primary economic environment in which the Group operates.
The annual financial statements have been prepared on the historical cost
basis, except for certain financial assets and liabilities which are carried
at fair value or amortised cost as appropriate.
New standards and interpretations not yet adopted
Title of Standard or Interpretation Effective for accounting periods beginning on or after
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate 1 January 2021
Benchmark Reform
Amendments to IFRS 16 Leases -Covid 19 - Related Concessions beyond 30 June 1 April 2021
2021
Amendments to IFRS 3 References to Conceptual Framework 1 January 2022
Amendments to IAS 16 Proceeds before intended use 1 January 2022
Amendments to IAS 37 Onerous Contracts - Cost of Fulfilling a contract 1 January 2022
Annual Improvements to IFRS Standards 2018-2020 Cycle 1 January 2022
(Amendments to IFRS 1, IFRS 9, IFRS 16, IAS 41)
Amendment to IFRS 17 Initial Application of IFRS 17 and IFRS 9 - Comparative 1 January 2023
Information
Amendments to IAS 1Classification of Liabilities as Current or Non-current 1 January 2023
Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising 1 January 2023
from a Single Transaction
The effect of these new and amended Standards and Interpretations which are in
issue but not yet mandatorily effective is not expected to be material.
Going concern
The Directors have concluded that it is reasonable to adopt a going concern
basis in preparing the financial statements. This is based on a reasonable
expectation that the Group has adequate resources to continue in operational
existence for at least twelve months from the date of signing of these
accounts. The Group made a statutory loss of £879k and has net assets in the
first period of trade to 30 September 2021.
There were significant one-off costs with the listings and business
acquisitions in this period. The subsidiaries were acquired towards the end of
the accounting period and the directors have plans to streamline group
operations across the group, to increase productivity and save costs and there
is expected to be a significant growth in group turnover. The company raised
an additional £3m in capital after the balance sheet date. The Group's cash
flow forecasts show that the Group will be able to operate comfortably and
meet its liabilities as they fall due for the next twelve months.
Therefore, the directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for at least twelve
months from the date of signing of these accounts and have concluded that it
is appropriate to adopt a going concern basis in preparing the financial
statements.
Basis of consolidation
Where the company has control over an investee, it is classified as a
subsidiary. The company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the company and
its subsidiaries as if they formed a single entity. Intercompany transactions
and balances between group companies are therefore eliminated in full. All
subsidiaries have a reporting date of 30 September 2021.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the statement of financial
position, the acquiree's identifiable assets and liabilities are initially
recognised at their fair values at the acquisition date.
The results of acquired operations are included in the consolidated statement
of comprehensive income from the date on which control is obtained. They are
deconsolidated from the date on which control ceases.
Associates
Associates are all entities over which the Group has significant influence but
not control or joint control. This is generally the case where the Group holds
between 20% and 50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting.
Under the equity method of accounting, the investments are initially
recognised at cost, including any directly attributable transaction costs, and
adjusted thereafter to recognise the Group's share of the post-acquisition
profits or losses of the investee in profit or loss. The Group's share of
movements in other comprehensive income of the investee are recognised in
other comprehensive income. Dividends received or receivable from associates
are recognised as a reduction in the carrying amount of the investment.
Where the Group's share of losses in an equity accounted investment equals or
exceeds its interest in the. entity, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the
other entity.
Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, described in Note 5,
the Directors are required to make judgments, estimates and assumptions about
the carrying amounts of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
Critical judgments and sources of estimation uncertainty, that have the most
significant effect on the amounts recognised in the financial statements are
as follows:
Financial assets and liabilities are designated upon inception to various
classifications. The designation determines the method by which the financial
instruments are carried on the balance sheet subsequent to inception and how
changes in value are recorded. The designation may require the Company to make
certain judgments. In particular with regard to the convertible loan notes,
which are convertible at the parent company's discretion.
Judgements is also required regarding the incremental borrowing rate to apply
to leasehold assets to discount the cash flows to present value.
Estimating fair value for share based payment transactions requires determination of the
most appropriate valuation model, which is dependent on the terms and
conditions of the grant of share options and warrants. This estimate also
requires determination of the most appropriate inputs to the valuation model
including the expected life, volatility and dividend yield and making
assumptions about them. The assumptions used for estimating fair value for
share based payment transactions are disclosed in Note 25.
Contingent consideration, resulting from business combinations, is valued at
fair value at the acquisition date as part of the business combination. The
determination of fair value is based on key assumptions including estimation
of the level of sales compared to the performance target.
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of
Directors that makes strategic decisions.
Revenue recognition
Turnover is recognised at the fair value of the consideration received or
receivable for goods and services provided in the normal course of business,
and is shown net of VAT and other sales related taxes. The fair value of
consideration takes into account trade discounts, settlement discounts and
volume rebates.
Revenue from the sale of goods is recognised when the significant risks and
rewards of ownership of the goods have passed to the buyer (usually on
dispatch of the goods), the amount of revenue can be measured reliably, it is
probable that the economic benefits associated with the transaction will flow
to the entity and the costs incurred or to be incurred in respect of the
transaction can be measured reliable.
Grants
Grant income during the year has been accounted for using the accruals
model. The grants are recognised in income within the period the costs to
which the grant is related are incurred. Grant income for the period totals
£31,376 and is included within Other operating income.
Goodwill
Goodwill represents the excess of the cost of a business combination over the
Group's interest in the fair value of identifiable assets and liabilities
acquired. Cost comprises the fair value of assets given, liabilities assumed,
and equity instruments issued, plus the amount of any non-controlling in the
acquiree. Contingent consideration is included in cost at its acquisition date
fair value.
Goodwill is not amortised but it is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be
impaired, and is carried at cost less accumulated impairment losses.
Intangible assets acquired separately
Intangible assets acquired separately from a business are recognised at cost
and are subsequently measured at cost less accumulated amortisation and
accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives on the following bases:
Development costs 10 years
Intellectual property 5 years
Property, plant and equipment
Depreciation is provided at the following annual rates in order to write off
each asset over its estimated useful life or, if held under a finance lease,
over the lease term, whichever is the shorter.
Leasehold additions - 15% on reducing balance
Plant and machinery - 33% on cost, 25% on cost and 20% on cost
Fixtures and fittings - 33% on cost, 20% on cost and 20% on reducing balance
Computer equipment - 33% on cost, 33% on reducing balance and 25% on cost
Financial instruments
Financial instruments are recognised in the company's balance sheet when the
company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in
the financial statements, when there is a legally enforceable right to set off
the recognised amounts and there is an intention to settle on net basis or to
realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are
initially measured at transaction price including transaction costs and are
subsequently carried at amortised cost using the effective interest method
unless the arrangement constitutes a financing transaction, where the
transaction is measured at the present value of the future receipts discounted
at a market rate of interest. Financial assets classified as receivable within
one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument
is any contract that evidences a residual interest in the assets of the
company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present
value of the future payments discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the
effective interest rate method. Trade creditors are obligations to pay for
goods or services that have been acquired in the ordinary course of business
from suppliers. Amounts payable are classified as current liabilities if
payment is due within one year or less. If not, they are presented as
non-current liabilities. Trade creditors are recognised initially at
transaction price and subsequently measured at amortised cost using the
effective interest method.
Compound instruments and borrowings
The component parts of compound instruments are classified separately as
financial liabilities and equity in accordance with the substance of the
contractual agreement. At the date of issue, the fair value of the liability
component is estimated using the prevailing market interest rate for similar
debt instruments. This amount is recorded as a liability on an amortised cost
basis until extinguished upon conversion or at the instrument's maturity date.
The equity component is determined by deducting the amount of the liability
component from the fair value of the compound instrument as a whole. This is
recognised and included in equity and is not subsequently remeasured.
For convertible debt where the parent has the option to convert the loan
principal into shares at its discretion, the principal is included within
equity. The only element that the company has an obligation to settle in cash
is the interest element, which is included in liabilities.
Inventories
Inventories are stated at the lower of cost and estimated selling price less
costs to complete and sell. Cost comprises direct materials and, where
applicable, direct labour costs and those overheads that have been incurred in
bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of
the carrying amount of stocks over its estimated selling price less costs to
complete and sell is recognised as an impairment loss in profit or loss.
Reversals of impairment losses are also recognised in profit or loss.
Taxation
Current taxes are based on the results shown in the financial statements and
are calculated according to local tax rules, using tax rates enacted or
substantially enacted by the statement of financial position date.
Deferred tax is recognised in respect of all material timing differences that
have originated but not reversed at the statement of financial position date.
Research and development
Research expenditure is written off against profits in the year in which it is
incurred. Identifiable development expenditure is capitalised to the extent
that the technical, commercial and financial feasibility can be demonstrated.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at
the rates of exchange ruling at the statement of financial position date.
Transactions in foreign currencies are translated into sterling at the rate of
exchange ruling at the date of transaction. Exchange differences are taken
into account in arriving at the operating result.
Leases
The Group recognises lease liabilities in relation to leases other than leases
of low-value assets and short-term leases (shorter than twelve months). The
lease liability is initially recognised at the present value of the lease
payments which have not yet been made and subsequently measured under the
amortised cost method. The initial cost of the right-of-use asset comprises
the amount of the initial measurement of the lease liability, lease payments
made prior to the lease commencement date, initial
direct costs and the estimated costs of removing or dismantling the underlying asset per the conditions of
the contract.
Where ownership of the right-of-use asset transfers to the lessee at the end
of the lease term, the right-of-use asset is depreciated over the asset's
remaining useful life. If ownership of the right-of-use asset does not
transfer to the lessee at the end of the lease term, depreciation is charged
over the shorter of the useful life of the right-of-use asset and the lease
term.
Employee benefit costs
The group operates a defined contribution pension scheme. Contributions
payable to the group's pension scheme are charged to the income statement in
the period to which they relate.
Share Based Payments
The Group operates a number of equity-settled, share-based schemes, under
which the entity receives services from employees or third-party suppliers as
consideration for equity instruments (options and warrants) of the Group. The
fair value of the third-party suppliers' services received in exchange for the
grant of the options is recognised as an expense in the Statement of
Comprehensive Income or charged to equity depending on the nature of the
service provided. The value of the employee services received is expensed in
the Income Statement and its value is determined by reference to the fair
value of the options granted:
• including any market performance conditions;
• Recognising 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).
Non-market vesting conditions are included in assumptions about the number of
options 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 Income Statement 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 when the options
are exercised.
3. SEGMENTAL REPORTING
For the purpose of IFRS 8, the Chief Operating Decision Maker takes the form
of the board of directors. The Directors are of the opinion that the business
of the Group focused on four reportable segments as follows:
• Parent company Corporate and Administrative, including activities of raising
finance and seeking new investment opportunities, all based in the UK; and
• The 3 subsidiary undertakings' businesses:
We Love Purely Limited (Plantain flavoured crisps )
Ohso Chocolate Limited (Probiotic chocolate)
Pulsin Limited (Plant based foods)
The segmental information is shown below:
Corporate and Administrative Pulsin Ohso Chocolate We Love Purely Total
Revenue 11,535 1,128,258 168,193 217,825 1,525,810
Operating loss before tax (554,786) (130,285) (198,278) (121,503) (1,004,853)
Segment total assets (net of investments in subsidiaries) 283,639 4,799,576 352,729 227,192 6,720,885
Segment liabilities (283,639) (4,799,576) (352,729) (70,800) (5,506,744)
4. EMPLOYEES AND DIRECTORS
£
Wages and salaries 503,575
Social security costs 40,952
Other pension costs 6,853
551,380
The average number of employees during the period was 39.
Directors' remuneration for the period was £110,884. There were no directors
pension contributions in the period. The highest paid director received
£74,217 remuneration in the period.
5. NET FINANCE COSTS
£
Finance income:
Deposit account interest 14,664
Interest on directors loan
account 1,835
16,499
Finance costs:
Bank loan interest 3,551
Other loan interest 34,471
Hire purchase 12,785
Leasing 3,913
54,720
Net finance costs 38,221
6. LOSS BEFORE INCOME TAX
The loss before income tax is stated after charging/(crediting):
£
Cost of inventories recognised as expense 1,104,952
Depreciation - owned assets 69,416
Depreciation - assets on hire purchase contracts 13,434
Profit on disposal of fixed assets (3,432)
Patents and licences amortisation 205
Development costs amortisation 3,277
Foreign exchange differences 6,020
7. AUDITORS REMUNERATION
During the year the Group obtained the following services from their auditors:
Fees payable to the Group's auditor in relation
to the audit of the consolidated financial statements 50,000
Fees payable to the Group's auditor for other advisory services 69,827
119,827
8. INCOME TAX
The tax credit in the profit and loss account is comprised as follows:
Current year tax £
Research and development credit 7,608
Deferred tax movement 148,471
Total credit 156,079
Loss before tax (1,005,454)
Loss before Tax Calculated at the UK Standard of tax at 19% (191,036)
Tax effects of:
Expenses not deductible for tax 47,929
Research and development enhanced deduction (5,635)
Deferred tax credit (148,742)
Research and development credit (7,608)
Total tax credit for the period (156,350)
The group has total losses available to carry forward by the group are
£1,975,221.
9. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares.
Reconciliations are set out below.
Earnings Weighted average number of shares Per-share amount pence
Basic and diluted EPS
Earnings attributable to ordinary shareholders (849,375) 111,377,946 (0.76)
10. GOODWILL
The tax credit in the profit and loss account is comprised as follows:
Group £
COST
Additions 6,274,953
At 30 September 2021 6,274,953
NET BOOK VALUE
At 30 September 2021 6,274,953
11. INTANGIBLE ASSETS
Group Patents and licences
Development costs Website costs Totals
£ £ £ £
COST
Additions 3,107 2,756 2,000 5,107
At 30 September 2021 3,107 52,756 2,000 57,863
AMORTISATION
Amortisation for period 205 3,277 - 3,482
At 30 September 2021 205 3,277 - 3,482
NET BOOK VALUE
At 30 September 2021 2,902 49,479 2,000 54,381
12. PROPERTY, PLANT AND EQUIPMENT
Group
Right of
Use Asset Short
Leasehold Plant and
leasehold additions machinery
COST £ £ £
Additions 1,707,359 75,793 1,026,877
Disposals - - (1,701)
At 30 September 2021 1,707,359 75,793 1,025,176
DEPRECIATION
Charge for period 13,434 7,354 55,144
Eliminated on disposal - - (3,464)
At 30 September 2021 13,434 7,354 51,680
NET BOOK VALUE
At 30 September 2021 1,693,925 68,439 973,496
Fixtures and fittings Computer equipment Totals
£ £ £
COST
Additions 18,053 167,136 2,995,218
Disposals - (1,019) (2,720)
At 30 September 2021 18,053 166,117 2,992,498
DEPRECIATION
Charge for period 581 6,337 82,850
Eliminated on disposal - (396) (3,860)
At 30 September 2021 581 5,941 78,990
NET BOOK VALUE
At 30 September 2021 17,472 160,176 2,913,508
Company
Computer
equipment
COST £
Additions 5,201
At 30 September 2021 5,201
DEPRECIATION
Charge for period 771
At 30 September 2021 771
NET BOOK VALUE
At 30 September 2021 4,430
13. INVESTMENTS
Group Interest in associate Unlisted investments Totals
£ £ £
COST
Additions 600 30,238 30,838
Share of profit/(loss) (600) - (600)
At 30 September 2021 - 30,238 30,238
NET BOOK VALUE
At 30 September 2021 - 30,238 30,238
Company Shares in group undertakings Unlisted investments Totals
£ £ £
COST
Additions 7,010,975 30,238 7,041,213
At 30 September 2021 7,010,975 30,238 7,041,213
NET BOOK VALUE
At 30 September 2021 7,010,975 30,238 7,041,213
During the year, the company acquired the following subsidiaries, all
incorporated in the United Kingdom:
Subsidiary % owned Date of acquisition Nature of business
We Love Purely Limited 75.1% 22 January 2021 Plantain flavoured crisps
Ohso Chocolate Limited 75.1% 16 February 2021 Probiotic chocolate
Pulsin Limited 100% 23 July 2021 Plant based foods
The following table summarises the consideration paid for the subsidiaries and
the values of the assets and equity assumed at the acquisition date:
Pulsin Limited Ohso Chocolate Limited We Love Purely Limited
Total consideration £ £ £
Cash 2,400,000
Shares issued 2,085,363 137,634 295,368
Loan notes issued 2,057,527
Contingent consideration 34,484
Total consideration 6,577,374 137,634 295,368
Recognised amounts of assets and liabilities acquired
Cash and cash equivalents (67,304) 12,156 8,109
Trade and other receivables 862,928 147,265 25,847
Inventories 1,011,282 113,036 71,891
Intangible assets 52,178 175
Property, plant & equipment 1,158,915 8,078 1,153
Tax liabilities/asset 111,742
Trade and other payables (1,436,385) (232,565) (76,229)
Provisions (47,815)
Borrowings (872,931) (104,777) (23,659)
Total identifiable net assets 772,611 (56,631) 7,112
Minority interest % 0% 24.9% 24.9%
Minority interest in net assets 14,101 (1,771)
Net assets attributable to parent company 772,611 (42,530) 5,341
Goodwill 5,804,763 180,164 290,027
Total consideration 6,577,374 137,634 295,368
In accordance with IFRS 3, the Company will perform a PPA within the 12 months
of fully acquiring the subsidiaries.
14. INVENTORIES
Group
£
Raw materials 441,617
Stocks 517,696
Packaging 260,563
1,219,876
15. TRADE AND OTHER RECEIVABLE
Group Group
£ £
Current:
Trade debtors 1,052,696 -
Amounts owed by group undertakings - 595,236
Amounts owed by participating interests 86,281 86,281
Amounts owed by associates 76,882 76,882
Other debtors 62,976 -
Amount held in Escrow to cover corporation tax liabilities 449,195
Directors' current accounts 44,879 44,879
VAT 144,516 9,456
Prepayments and accrued income 204,619 143,449
2,122,044 956,183
16. CASH AND CASH EQUIVALENTS
Group Company
£ £
Bank accounts 154,697 107,586
17. SHARE CAPITAL AND SHARE PREMIUM
Number of shares - Ordinary Share Capital (£) Share Premium (£) Totals (£)
Issued 2 July 2020 50,000 50,000 - 50,000
Share split 1 September 2020 49,950,000 - - -
Issued 16 September 2020 24,390,000 24,390 626,010 650,400
Issued between 22 January 2021 & 16 February 2021 4,811,132 4,811 428,191 433,002
Issued between 1 April 2021 & 31 May 2021 20,000,000 20,000 2,980,000 3,000,000
Issued 23 July 2021 12,176,814 12,177 2,073,186 2,085,363
At 30 September 2021 111,377,946 111,378 6,107,38 6,218,365
On 2 July 2020, the Company was incorporated and issued 50,000 ordinary shares
of £1 each at par. On 1 September 2020 the 50,000 ordinary £1 shares were
split into 50,000,000 ordinary shares of £0.001 each.
On 16 September 2020, the Company issued 16,260,000 ordinary shares of £0.001
each at a deemed price of £0.02 per share in return for £325,200 . On the
same date, 8,130,000 ordinary shares of £0.001 each were issued at a deemed
price of £0.04 per share in return for £325,200.
Between 22 January and 16 February 2021, the Company issued 3,281,866 ordinary
shares of £0.001 each at a deemed price of £0.09 per share to the owners of
Ohso Chocolate Limited as part of the consideration for the acquisition of
said company. Control of ownership is deemed to have passed on 16 February
2021 when the legal entity's title was transferred.
Between 22 January and 16 February 2021, the Company issued 1,529,266 ordinary
shares of £0.001 each at a deemed price of £0.09 per share to the owners of
We Love Purely Limited as part of the consideration for the acquisition of
said company. Control of ownership is deemed to have passed on 23 Jaunary 2021
when the legal entity's title was transferred.
Between 1 April 2021 and 31 May 2021, the Company issued 20,000,000 ordinary
shares of £0.001 each at a deemed price of £0.15 per share in return for
£3,000,000.
On 23 July 2021, the Company issued 7,000,000 ordinary shares of £0.001 each
at a deemed price of £0.15 per share and issued 5,176,814 ordinary shares of
£0.001 each at a deemed price of £0.20 to the owners of Pulsin Limited as
part of the consideration for the acquisition of said company. Control of
ownership is deemed to have passed on 23 July 2021 when the legal entity's
title was transferred.
18. RESERVES
Group
Retained Earnings (£) Share based payment reserve (£) Equity component of convertible debt (£) Contingent equity settled consideration for investment (£) Totals (£)
Deficit for the period (784,896) (784,896)
Share options issued 15,024 15,024
Warrants issued 25,000 25,000
Equity component of convertible debt issued
2,057,528 2,057,528
Contingent equity-settled consideration for subsidiary
34,484 34,484
At 30 September 2021 (784,896) 40,024 2,057,528 34,484 1,347,140
Company
Retained Earnings (£) Share based payment reserve (£) Equity component of convertible debt (£) Contingent equity settled consideration for investment (£) Totals (£)
Deficit for the period (498,419) (498,419)
Share options issued 15,024 15,024
Warrants issued 25,000 25,000
Equity component of convertible debt issued
2,057,528 2,057,528
Contingent equity-settled consideration for subsidiary
34,484 34,484
At 30 September 2021 (498,419) 40,024 2,057,528 34,484 1,633,617
Share based payment reserve
The share based payment reserve has arisen from the share-based payment charge
for share options issued to group employees. The shares over which the options
were issued are that of the parent company.
It also includes share warrants issued to a supplier of the parent for
services provided.
Contingent consideration reserve
The contingent consideration reserve is the estimated fair value of the
consideration payable to a subsidiary, subject to performance targets, to be
settled by the issue of shares in the parent company.
Equity component of convertible debt reserve
This represents the equity component of convertible loans. The parent has the
option to convert the loan principal into shares at its discretion. Originally
the loan notes were negotiated without a conversion option at the same coupon
rates, so the interest rates would be the same without the conversion option.
Therefore, no discounting is required and the full principal has been
classified as equity. The loan note interest for the current period is
included in accruals.
19. TRADE AND OTHER PAYABLES
Group Company
£ £
Current:
Trade creditors 1,247,050 167,439
Amounts owed to group undertakings - 29,760
Social security and other taxes 94,593 8,013
Other creditors 200,868 -
Accruals and deferred income 407,270 108,186
1,949,781 313,398
20. FINANCIAL LIABILITIES - BORROWINGS
Group Company
£ £
Current:
Bank overdrafts 260,769 -
Bank loans 183,217 -
Leases and hire purchase (see note 21) 354,060 -
798,046 -
Non-current:
Bank loans - 1-2 years 246,141 -
Leases and hire purchase (see note 21) 2,075,804
2,321,945 -
Terms and debt repayment schedule
Group
1 year or less 1-2 years 2-5 years More than 5 years Totals
£ £ £ £ £
Bank overdrafts 260,769 - - - 260,769
Bank loans 183,217 69,446 175,862 833 429,358
Leases and hire purchase 354,060 413,660 969,457 692,687 2,429,864
798,046 483,106 1,145,319 693,520 3,119,991
21. LEASING
Group £
Right-of-use assets
Property, plant and equipment
COST
Additions 1,707,359
DEPRECIATION
Charge for year 13,434
NET BOOK VALUE 1,693,925
Group
Lease liabilities
Minimum lease payments fall due as follows:
Hire purchase liabilities Right-of-use assets Hire purchase liabilities Total Lease and hire-purchase liabilities
£
Gross obligations repayable:
Within one year 211,197 236,515 447,712
Between one and five years 949,479 657,771 1,607,251
More than five years 755,225 755,225
1,915,901 894,286 2,810,188
Finance Charges repayable
Within one year 40,956 52,694 93,650
Between one and five years 148,053 76,081 224,134
More than 5 years 62,538 62,538
251,547 128,775 380,322
Net obligations repayable:
Within one year 170,241 183,819 354,062
Between one and five years 801,426 581,691 1,383,117
More than five years 692,687 692,687
1,664,353 765,511 2,429,866
22. DEFERRED TAX
The deferred tax assets comprise losses carried forward less accelerated
capital allowances. The total Group deferred tax asset, included in debtors at
the balance sheet date is £198,193.
The parent company deferred tax asset at the balance sheet date was £56,367.
23. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES
The following advances and credits to a director subsisted during the period
ended 30 September 2021:
£
S P Livingston
Balance outstanding at start of period -
Amounts advanced 193,388
Amounts repaid (148,509)
Amounts written off -
Amounts waived -
Balance outstanding at end of period 44,879
Loans to directors are subject to Interest at the HMRC beneficial loan rate of
2.25% and are repayable on demand.
24. RELATED PARTY DISCLOSURES
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation.
Loans to directors during the period are disclosed within the Advances,
credits and guarantee note.
Key management personnel are considered to be the directors. Compensation of
the directors is disclosed in note 3.
During the period PVL Sass Limited, a company in which S Livingston and R
Hewitt (both group directors) are directors and shareholders, made sales of
group products totalling £49,939 and was recharged costs from the group
totalling £34,150. As at the balance sheet date, £8,662 was owed to the
group by PVL sass Limited
25. EVENTS AFTER THE REPORTING PERIOD
After the balance sheet date a total of 6,013,393 ordinary shares of £0.001
each have been issued, raising additional equity of £3,025,000 in cash and
£275,000 issues in satisfaction of acquisitions or services. As a result
the share premium has increased by £3.293,987.
This includes the exercise of 1,250,000 warrants at an exercise price of 2p
each.
On 17 February 2022, the business and assets of Livias Health Foods Limited
was acquired from Administration for a cost of £355,000 comprising cash of
£130,000 and 321,429 new ordinary shares priced at 70p each (included in the
above totals). Further consideration of £100,000, comprising cash and
shares, may become due depending on sales performance during 2022.
26. ULTIMATE CONTROLLING PARTY
In the opinion of the directors there is no ultimate controlling party.
27. SHARE-BASED PAYMENT TRANSACTIONS
Movements in the number of options and warrants and their weighted average exercise prices are as follows:
Number of options Weighted average exercise price of options Number of warrants Weighted average exercise price of warrants
Granted during the year 2,407,528 £0.09 2,231,700 £0.03
2,407,928 £0.09 2,231,700 £0.03
Share options
The weighted average remaining contractual life of the options is 10.0 years.
On 16 June 2021, the Company granted 2,407,528 share options to employees with
an exercise price of 9 pence each under an Enterprise Management Incentive
Scheme The Options are exercisable for a period of ten years from 16 June
2021, subject to certain performance conditions being met.
The performance conditions are based on achievement of sales targets in
specific subsidiary undertakings.
Of the share options issued only 1,628,386 were expected to vest based on
performance conditions at the date of grant. These options were valued using
the Black-Scholes option pricing model. The fair value per options granted and
the assumptions used in the calculations were as follows:
Expected annualised volatility 10%
Time to maturity (years) 10
Risk free interest rate 1%
Fair value per option £0.016
On 1 September 2020 1,487,800 warrants with an exercise price of 2 pence each
and 743,900 with an exercise price of 4 pence each were issued in lieu pf
professional fees. The professional fees have been estimated at £25,000,
resulting in a fair value per warrant of £0.011.
The charge in the statement of comprehensive income for the options
share-based payments during the year was £40,024 (£15,024 in relation to
share options and £25,000 in relation to share warrants).
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