TIDMSYME
RNS Number : 1331N
Supply @ME Capital PLC
28 January 2021
Registration number: 03936915
Supply@ME Capital plc (formerly known as Abal Group plc)
Directors' Report and Consolidated Financial Statements
for the Period Ended 31 December 2019
Supply@ME Capital plc (formerly known as Abal Group plc)
Contents
Company Information 3
4 to
Chairman's Statement 6
7 to
Strategic Report 9
10 to
Directors 11
12 to
Directors' Report 15
16 to
Directors' Remuneration 17
18 to
Corporate Governance 25
26 to
Independent Auditor's Report 29
Consolidated Income Statement 30
Consolidated Statement of Financial Position 31
Company Statement of Financial Position 32
Consolidated Statement of Cash Flows 33
Company Statement of Cash Flows 34
Consolidated Statement of Changes in Equity 35
Company Statement of Changes in Equity 36
37 to
Notes to the Financial Statements 59
Supply@ME Capital plc (formerly known as Abal Group plc)
Company Information
Directors Enrico Camerinelli
Susanne Chishti
Dominic White
Alessandro Zamboni
Secretary MSP Corporate Services Limited
27/28 Eastcastle Street
London
W1W 8DH
Company number 03936915
Registered office 27/28 Eastcastle Street
London
W1W 8DH
Auditor Crowe UK LLP
55 Ludgate Hill
London
EC4M 7JW
Solicitors Charles Russell Speechlys LLP
5 Fleet Place
London
EC4M 7RD
Bankers Metro Bank Plc
1 Southampton Row
London
WC1B 5HA
Registrars Neville Registrars Limited
Neville House
Southampton
SO14 2JF
Public Relations Cicero/AMO
3 Pancras Square
London
N1C 4AG
Accountants Azets
Carnac Place
Fareham
PO16 8UY
Investor Relations Walbrook PR Ltd
4 Lombard Street
London EC3V 9HD
Website www.supplymecapital.com
Chairman's Statement
I am pleased to report to you on the Group's activities and its
many changes in the nine months period to 31 December 2019, and in
the subsequent year to date in 2020.
Overview
In the prior year to 31 March 2019 the Group underwent some
fundamental changes culminating on the 5 February 2019, when all of
the Group's former business was sold.
From that date, the former Group known as Imaginatik (comprising
the parent company Imaginatik plc (the "Company") and its wholly
owned subsidiary) changed its name to Abal Group plc and became a
non-trading cash shell seeking new investment opportunities. The
Group was at that date listed on the AIM market and categorised as
an AIM Rule 15 cash shell. As such, it was required to make an
acquisition which constituted a reverse takeover under AIM Rule 14
within six months, or, be re-admitted to trading on AIM as an
investing company under the AIM Rules failing which, the Company's
Ordinary Shares would be suspended from trading.
In the nine months to 31 December 2019 therefore the Company's
only material continuing activity was that of a company continuing
with its overheads as an ongoing quoted company on AIM. On 6 August
2019 the trading in the Company's shares on AIM was suspended since
it had not completed an acquisition or been re-admitted to trading
as an investing company within the time period required.
During the nine months to 31 December 2019 the Company was not
trading and was principally engaged in seeking new investment
opportunities.
On 27 September 2019, the Group however announced that a
conditional share purchase and sale agreement had been reached to
acquire all of the share capital of an Italian company Supply@ME
S.r.l ("Supply@ME" or "SYME"). The transaction was to be effected
by way of a reverse takeover.
Supply@ME is an innovative fintech platform which provides an
Inventory Monetisation service to manufacturing and trading
companies ("Platform"). The Platform aligns Client companies
(manufacturing and trading companies) seeking to monetise part of
their inventory for cash, with Inventory funders (banks, financial
institutions and investment funds). The Inventory funders invest
through the SYME Platform into portfolios of inventory assets.
As at 31 December 2019 this transaction had not completed.
Cancellation of the admission to trading of the Company's ordinary
shares on AIM took effect six months after the suspension, on 7
February 2020, in accordance with AIM Rule 41.
I am delighted to report that Supply@ME Capital (:SYME) was
admitted to the standard list segment of the Official List of the
FCA and to trading on the London Stock Exchange's Main Market for
listed securities after the year end.
On 23 March 2020, Abal Group plc completed the following
transactions:
-- reverse acquisition of Supply@ME S.r.l., a company registered in Italy;
-- placing of 331,604,094 shares; and
-- admission to the Official List and trading on the London Stock Exchange's Main Market.
The transaction was effected by way of the issue of
32,322,246,220 consideration shares to the shareholders of
Supply@ME S.r.l..
The market capitalisation of the Company at Admission at the
Issue Price per share under the Prospectus was GBP227,482,090.
Since Abal Group plc, as a non-trading cash shell company,
effectively had no substance at the date of the transaction, and in
fact Supply@ME S.r.l. was acting as the parent of the Group, the
future consolidated Group has been accounted for as a reverse
acquisition.
Abal Group plc changed its name to Supply@ME Capital plc on 30
March 2020.
Change of Year End
The Group's principal operating subsidiary is Supply@ME S.r.l.
which has a year end of 31 December. The Company has changed its
year end from 31 March to 31 December to align all the Group
companies' year ends.
Business review
As outlined above, following the sale of the Group's business in
the previous financial period, the Group had been principally
engaged in seeking new investment opportunities.
In our 31 March 2019 Consolidated Statement of Comprehensive
Income, prepared according to IFRS accounting standards, we were
required to show separately the results of the Group's discontinued
operations from its continuing operations. As a result of the sale
of the business in the previous period, there is no revenue
associated with continuing operations in either the period to 31
December 2019 or the previous period.
Discontinued operations
On 5 February 2019 the Group sold all of its business and assets
for an initial cash consideration of $1.7m (about GBP1.3m) together
with the potential for further deferred consideration of up to
approximately $0.8m (about GBP0.6m) subject to achieving certain
conditions
Total revenues for the 10 months period prior to the sale of the
business on 5 February 2019 were GBP2.3m.
Continuing operations
Following the sale of all the business and assets in February
2019, the Group became a cash shell. The sale agreement provided
that all employees transferred to the purchaser.
The only material continuing activity of the Group after the
sale was that of a company seeking new investment
opportunities.
Financial overview
In summary, from a financial viewpoint, the Group had
transformed successfully from a trading Group, to a cash shell
listed on AIM, and now, subsequent to this year end, to a Group
admitted to the Official List as a Main Market company, standard
segment, trading on the London Stock Exchange.
In the period to 31 December 2019 the Company raised no new
funds from the issue of new ordinary shares (2019: GBP1.2m). At the
2019 period-end cash balances were GBP0.08m (2019: GBP0.8m).
Current business activity
1. Inventory Funding Programme
The Supply@ME Platform aligns Client companies (manufacturing
and trading companies) seeking to monetise part of their inventory
for cash, with Inventory funders (banks, financial institutions and
investment funds). The Inventory funders invest through the
Platform into portfolios of inventory assets through one of three
routes:
i) Open-Funding
Open-Funding is raising capital for Inventory Monetisation
through securitisation vehicles or other third party funding
facilities.
Client companies in this funding model are sourced by Supply@ME
via its commercial partners.
ii) Captive-Funding
Captive-Funding is gathering financing through a strategic
"captive" relationship with a bank. The bank (the "Bank"), located
in Europe, is in the process of being acquired by a partnership
between the Company's shareholder The AvantGarde Group S.p.A., and
the investment fund "Industry 4.0" managed by Quadrivio Group.
Client companies in this funding model are sourced by Supply@ME,
via its commercial partners, and the Bank.
iii) Self-Funding
Self-Funding is gathering financing through banks and other
institutions ("Self-Funders") that also offer the Inventory
Monetisation service direct to their customers, such that the banks
and their client base can benefit from the systems, assessment and
monitoring processes of Supply@ME's Platform.
Client companies in this funding model are sourced by the
Self-Funders.
2. Client Company Origination
The pipeline of Client companies continues to grow and now
includes mid-cap and large-cap businesses from Italy, the UK and
UAE.
Gross origination of Client companies increased 30% between
September 2020 and the end of December 2020.
Value (Euro) 31.3.20 30.6.20 30.9.20 31.12.20
Gross origination([1]) 1.22bn 1.43bn 1.64bn 2.13bn
Number of client companies 82 97 142 165
3. Business expansion
UK. Notwithstanding the continued uncertainties surrounding
Brexit, the Company is working to make the UK a key hub for its
Inventory Monetisation service as well as a "pivot" for
cross-border monetisation operations (ideal for large corporates
with inventory in a number of global locations).
MENA regions. With the support of the Funding Specialist
announced on 3 November 2020, the approval process of the Shariah
compliant version is now complete.
Marketing of the first Shariah compliant investment product is
in planning, highlighting, amongst other features, the value of the
recent co-operation agreement signed with Lenovo Financial
Services.
.
US. The Company and The Trade Advisory are progressing with the
development of a first pilot Inventory Monetisation operation
within the retail sector and are also evaluating an opportunity to
deliver an innovative inventory "in transit" monetisation
model.
Dominic White
Non-Executive Chairman
27 January 2021
Strategic Report for the Period Ended 31 December 2019
Strategic plans during the year
The Group's strategy has changed significantly during the two
financial reporting periods to 31 December 2019.
At the start of the previous financial reporting period year,
the Group was well established as a leading player in the global
innovation market. The Group had a suite of technology and
consultancy products used by blue chip clients, mainly in North
America and Europe.
In January 2019, there was a change in strategy and the Group
announced its intention to sell all its business and assets, and
this sale was completed in February 2019.
From the date of the sale of the business the Group became a
cash shell that was seeking new investment opportunities.
These endeavours culminated successfully after the year end and
on 23 March 2020 the Group successfully raised funds through a
placing, issued consideration shares to secure the acquisition of
Supply@ME S.r.l. via a reverse takeover and gained admission to the
Official List as a Main Market company, standard segment, trading
on the London Stock Exchange.
Financial report
All the Group's business and assets were sold in the previous
financial reporting period for GBP1.3m.
The sale generated a consolidated profit on disposal of GBP1.0m
(2018: GBPNil).
Group revenues for the nine months financial period ending 31
December 2019 were GBPNil (2019: 12 months GBP2.3m, all
discontinued activities).
Consolidated loss for the period GBP0.68m (2019: loss GBP0.4m,
of which GBP0.7 loss was from continuing activities and a profit of
GBP0.3 from discontinued activities)
Consolidated loss per share - basic and diluted 0.71 pence
(2019: loss 0.71 pence)
Investment in intangible assets GBPNil (2019; GBP0.2m)
Net proceeds of share issues GBPNil (2019: GBP1.2m)
Net cash absorbed in period GBP0.7m (2019: generated
GBP0.7m)
Cash balances at year-end GBP0.08m (2019: GBP0.8m)
Part of the re- nancing arrangements in the previous financial
reporting period included the issue of a convertible unsecured loan
note for GBP90,000, and a warrant was issued for options to acquire
new ordinary shares. In January 2019, the conversion option for the
loan note was exercised. This conversion resulted in a debt for
equity swap plus the issue of another warrant for options to
acquire further shares. At the period end, these two warrants were
outstanding and have been included in the Balance Sheet liabilities
at a combined valuation of GBP48,000 (2019: GBP53,000).
KPIs
As all the Group's business and assets have been sold in the
previous financial reporting period, in February 2019, it is no
longer appropriate to report detailed year-end KPIs for the
business.
After the sale of the business, the Group became a cash shell
looking for new investment opportunities. At the year end point,
the two main KPIs were identifying and securing new investment
opportunities and maintaining suf cient cash balances for the
continuing operations until arrangements for a new investment had
been completed.
After the year-end, in March 2020, the Group successfully raised
funds through a placing, issued consideration shares to secure the
acquisition of Supply@ME S.r.l. and was admitted to the Official
List as a Main Market company, standard segment, trading on the
London Stock Exchange.
Risks and uncertainties
The two main risks at the year-end were maintaining suf cient
cash resources to be a going concern and securing an appropriate
new investment. The directors were closely involved in monitoring
frequently these risks and the delivery of appropriate solutions on
a timely basis.
Subsequent to the year end, following the British government's
decision to invoke Article 50 on 29 March 2017 (and consequent
changes to the exit date), the UK left the European Union on 31
January 2020.
At this stage, the nature of the relationship for financial
services between the UK and the remaining European Union countries
following Brexit has yet to be agreed and negotiations with the
European Union on the terms of Brexit have demonstrated the
difficulties that exist in reaching such an agreement. Depending on
the terms of the negotiations, the UK could also lose access to the
single European Union market and to the global trade deals
negotiated by the European Union on behalf of its members. Such a
decline in trade could affect the attractiveness of the UK as a
global investment centre and, as a result, could have a detrimental
impact on economic growth in the country. Furthermore, regardless
of the form of any withdrawal agreement, there are likely to be
changes in the legal rights and obligations of commercial parties
across all industries following Brexit, and British regulatory
requirements once outside the European Union could be subject to
significant change.
Although the Group will not operate exclusively in Britain and,
accordingly, the Group's success could be offset by general
economic developments in other geographies, negative developments
in, or the general weakness of, the British economy may negatively
affect the financial conditions of the Group.
Covid-19 Pandemic
Subsequent to the year end, a further major risk has arisen. The
recent outbreak of COVID-19 has resulted and will continue to
result in significant economic disruption in all jurisdictions the
business operates in. There is uncertainty around the timing and
severity of continuing local restrictions which may impact the
company's ability to continue to trade effectively. There is also
uncertainty over the timing of sufficient rollout of a suitable
vaccine which impacts the time frame of the economic uncertainty.
The Directors will continue to proactively monitor the situation in
the relevant jurisdictions and continue to develop their systems
and protocols to ensure employees are safe and customer service
continues as uninterrupted as possible. Further information is
included in the Directors report.
Strategic Outlook
As well as completing the first Open-Funding securitisation
transaction, the Company expects to have delivered on
Captive-Funding and Self-Funding initiatives by the end of the
first quarter of 2021.
There is a large and growing international addressable market
for inventory funding. Supply@ME is aiming for its Inventory
Monetisation Platform to be the leading fintech operator in the
sector. We expect the number of Client companies being sourced and
monetised to continue to grow rapidly, in direct proportion to the
funding available.
The model is highly scalable as can be seen by the availability
of partners in the UK, Middle East and US to join with the Company
to develop an international Platform. In 2021 Supply@ME aims to
have started operations in each of these regions.
Directors' statement under section 172 (1) of the Companies Act
2006
Section 172 (1) of the Companies Act obliges the Directors to
promote the success of the Company for the benefit of the Company's
members as a whole.
This section specifies that the Directors must act in good faith
when promoting the success of the Company and in doing so have
regard (amongst other things) to:
1. the likely consequences of any decision in the long term,
2. the interests of the Company's employees,
3. the need to foster the Company's business relationship with
suppliers, customers and others,
4. the impact of the Company's operations on the community and
environment,
5. the desirability of the Company maintaining a reputation for
high standards of business conduct, and
6. the need to act fairly as between members of the Company.
The Directors believe they have acted in the way they consider
most likely to promote the success of the Company for the benefit
of its members as a whole, as required by Section 172 (1) of the
Companies Act 2006.
At this time, the Board believes that it is compliant with all
ten Principles of the QCA Code. More information can be found on
pages 18-25.
Approved by the Board and signed on its behalf by
Alessandro Zamboni
Director
27 January 2021
Directors
The current board comprises four directors, whose details are
set out below:
Dominic White - appointed 23 March 2020
Mr White has invested in public markets and private equity for
25 years. He has acquired and managed more than GBP3 billion of
assets across Europe and held board positions at a number of public
companies including KCR Residential, REIT Plc, Eight Capital
Partners Plc and Limitless Earth Plc, as well as at international
investment institutions such as Security Capital European and
Henderson Global Investors.
He is a member of the Institute of Chartered Financial
Analysts.
Susanne Chishti - appointed 23 March 2020
Ms Chishti brings over 20 years of financial expertise,
board-level experience focused on organisational governance, and a
strong understanding of the small/medium size enterprise market.
Her experience draws on 14 years in banking with senior positions
at Morgan Stanley, Lloyd's Banking Group and Deutsche Bank.
As CEO of FINTECH Circle she is an award winning entrepreneur
and global expert in financial technology, new business models and
a bestselling Editor of The FINTECH Book Series published by
Wiley.
Enrico Camerinelli - appointed 23 March 2020
Mr. Camerinelli is a Supply Chain specialist. He takes part in
projects launched by the United Nations Economic Commission for
Europe, the World Bank, the World Trade Board, and the Council of
Supply Chain Management Professionals relating to Supply Chain
finance and research.
He regularly attends major industry events as invited guest
speaker.
Alessandro Zamboni - appointed 23 March 2020
Mr Zamboni is a director who specializes in the financial
services industry and related strategic and digital operating
models.
Since 2008, he has been managing the delivery and the sales
operations of a consulting company specialising in Regulatory &
Internal Controls for Banks and Insurance Firms.
Mr Zamboni founded The AvantGarde Group, parent company of
Supply@ME S.r.l., in 2014.
Other directors in the year
Simon Charles (Non-Executive Director) - resigned 23 March
2020
Chairman of Audit Committee and Remuneration Committee
Mr Charles is joint senior equity partner at the City of London
firm of solicitors Marriott Harrison LLP, having joined the firm in
March 2004. He is a qualified solicitor in England and Wales and
has substantial experience advising private and public companies
and investors in both a corporate and legal capacity. Mr. Charles
had worked closely with the Company for a number of years. Prior to
joining Marriott Harrison LLP, Mr. Charles worked in the corporate
finance department at Numis Securities Limited, where he advised
both AIM quoted and Main Market companies as a nominated advisor
and sponsor.
John Treacy (Non-Executive Director) - resigned 23 March
2020
Mr Treacy is a London based experienced small cap financier who
specialises in working with growing companies. He qualified as a
solicitor in the London office of a major international law firm
where he specialised in Capital Markets and Merger &
Acquisitions. From there he moved to practice corporate finance in
the advisory teams of several prominent UK brokerages where he
acted as an adviser to a number of AIM companies and advised on
numerous IPOs, acquisitions, debt restructurings and placings.
Shawn Taylor FCA (Non-Executive Director) - resigned 5 September
2019
Mr Taylor joined Imaginatik in September 2005 and maintained
responsibility for financial systems and processes. Shawn also had
responsibility for the routine financial controls, management
accounting, forecasting and budgeting procedures, treasury
management, foreign exchange control, corporate governance
compliance and the management of human resources.
He has significant experience as a public company Chief
Financial Officer and has led companies through growth phases
having previously been Chief Financial Officer of HIT Entertainment
PLC from 1997 to 2001 and Content Film PLC from 2001 to 2004.
Board committees
In the financial reporting period to 31 December 2019 as the
Group was non-trading, the board did not establish an audit
committee nor a remuneration committee. In the previous reporting
period, Mr Charles chaired the audit committee and was a member of
the remuneration committee together with another director who
resigned in the previous reporting period.
Directors' Report for the Period Ended 31 December 2019
The directors present their report and the consolidated
financial statements for the period ended 31 December 2019.
Results and dividends
The consolidated statement of comprehensive income is set out on
page 25 and shows the results for the year.
The loss before tax for the period was GBP685,000 (2019 -
GBP374,000 loss).
The directors do not recommend the payment of a dividend.
Principal activity
During the period to 31 December 2019 the Group did not trade
and was categorised as an AIM Rule 15 cash shell.
Directors' of the Group
The directors, who held office during the period, and
subsequently, together with current directors are as follows:
Mr Enrico Camerinelli (appointed 23 March 2020)
Mrs Susanne Chishti (appointed 23 March 2020)
Mr Dominic White (appointed 23 March 2020)
Mr Alessandro Zamboni (appointed 23 March 2020)
Mr Simon Charles (resigned 23 March 2020)
Mr Shawn Taylor (resigned 5 September 2019)
Mr John Treacy (resigned 23 March 2020)
Matters covered in the Strategic Report
Future developments and principal risks and uncertainties are
disclosed in the Strategic Report.
Foreign exchange risk
Prior to the sale of the business in February 2019, there were
foreign exchange risks arising because the Group had operations
located in various parts of the world whose functional currency is
not the same as the functional currency in which the Group
companies were operating. The Group's policy was, where possible,
to allow entities to settle liabilities in their functional
currency with the cash generated from their own operations in that
currency.
Since the sale of the business there have been no foreign
exchange risks.
More details on nancial instruments management objectives and
policies are mentioned within note 22.
IFRS
We have prepared our financial statements in accordance with
International Financial Reporting Standards as adopted by the EU
(IFRS).
Political and charitable donations
No political or charitable donations were made during the
period.
Directors' interests
The directors who held office during the period and their
interests in the ordinary shares of the Company were as
follows:
At 31 December 2019 At 31 March 2019
Ordinary shares Ordinary shares
Simon Charles 315,371 315,371
John Treacy Nil Nil
Shawn Taylor 85,185 85,185
Attendance at board and committee meetings
As the Company was not trading during the period there were no
audit committee or remuneration committees in place.
The Non-executive directors met on an ad hoc basis to further
the interests of the Company by seeking an appropriate investment
opportunity and to ensure there were sufficient funds for the
Company to continue until such an investment was found.
Going concern
For the reasons set out below, the Directors consider that it is
appropriate to adopt the going concern basis in preparing these
nancial statements.
At the year-end the Group had cash balances of GBP81,000 (2019;
GBP771,000) and other net current liabilities of GBP390,000 (2019:
other net liabilities GBP395,000). The Group has posted a loss for
the year after tax of GBP685,000 (2019: loss of GBP374,000) and
retained losses were GBP14,675,000 (2019: GBP15,207,000).
The Group has historically met its nancing requirements through
the regular placing of new shares, raising in the year a net cash
amount of GBPNil (2019: GBP1,217,000).
At the year end the Group was a cash shell listed on AIM that
was seeking new investment opportunities.
Since the year end, the Group has successfully been admitted to
trading as a Main Market company, standard segment, trading on the
London Stock Exchange having also issued placing shares with gross
proceeds of GBP2,240,000 (net proceeds of GBP 1,440,000).
The Group is now fully trading and not reliant upon share issues
to continue in business.
The Directors have reviewed the forecast cashflows for the next
12 months and consider the Group to be a going concern.
The cashflow forecasts are based on the enlarged group following
the reverse acquisition in March 2020 and therefore relate to
cashflows arising from the groups Fin Tech platform that focusses
on inventory monetisation facilities. The Directors have prepared
the forecast using their best estimates however the company is in
its start up phase and therefore they have identified the following
uncertainties in the model.
The ability of the group to acquire inventory is reliant on
investment funding being received, whilst the group is in advanced
negotiations with several interested partners no investment has
been secured, if no investment is secured the group cannot acquire
inventory and generate the service fee income.
In addition the group has a portfolio of interested customers,
with some having signed term sheets. The cashflow model assumes a
growth in customer base in line with the interest that has been
received in the product but there is uncertainty over the ability
of the group to be able to secure these new customers.
On the basis of the above matters the directors have a material
uncertainty in relation to its going concern status. The Directors
have prepared scenario based models which include adjustments for
the uncertainties noted and additional cost saving measures that
could be implemented if there is a delay in the revenue generation.
On the basis of these scenarios and that they are in advanced
negotiations with potential investors and there has been
significant interest in the product the Directors consider it
appropriate to prepare the financial statements on a going concern
basis. These financial statements do not include any adjustments
that may be required if the going concern status was not considered
appropriate.
Streamlined Energy and Carbon Reporting (SECR)
The Companies Act 2006 (Strategic Report and Directors' Report)
Regulations 20131 require quoted companies to report their annual
emissions and an intensity ratio in their Directors' Report.
There is a de minimis exception for organisations consuming less
than 40MW of energy per year in the UK. As a consequence of the
Group being principally dormant in the period, the Directors have
taken advantage of this exception and has not therefore included an
energy and carbon report.
Impact of the global pandemic
As noted on 1 July 2020 in the Interim Statement to 31 March
2020 and mentioned in numerous announcements since, the Board has
monitored closely the impact of COVID-19 on business
operations.
Impact on Client companies
SYME's Client company customer base remains strong and the
demand for inventory monetisation continues to grow. The number of
Client companies being originated by SYME has grown each quarter
since the Reverse Take Over in March 2020. Increasingly, following
COVID-19, many businesses are consciously choosing to build
inventory to avoid supply chain shortages and subsequent loss of
trade, rather than keep stock levels low. This is positive
development for SYME's business model as it expects that Client
companies internationally will look to monetise these higher
volumes of stock held.
Impact on Inventory funders
The impact of COVID-19 on Inventory funders, that is the
investors through the SYME Platform into the inventory portfolios,
has been more difficult to interpret.
Interest rates are at historic lows which means that investors
are getting lower returns on capital compared to previous years
when higher interest rates were the norm. SYME's new inventory
asset class will offer a strong relative margin compared to
interest rates on a risk adjusted basis. However, investors are
undoubtedly more cautious and taking longer to make decisions. Time
to close transactions, not only in Inventory funding, but across
the investment spectrum, has increased.
The three to four month delay that SYME announced in July 2020
to its initial end September 2020 forecast to complete the first
Inventory Monetisation has been the result.
We are positive about the performance of the Company in the
coming months as we expect the first securitisation transaction to
close and the Captive Bank to launch as announced in the Trading
Update of 30 November. The re-opening of the global economies as
the uncertainty caused by COVID-19 dissipates will undoubtedly also
help.
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing
the Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have elected to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. 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 of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required
to:
-- select suitable accounting policies and apply them consistently;
-- make judgements and accounting estimates that are reasonable
and prudent;
-- state whether applicable International Financial Reporting
Standards (IFRSs) as adopted by the European Union have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and the
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and the Company and enable
them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Group and the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information. The directors confirm that there is no relevant
information that they know of and of which they know the auditor is
unaware.
Approved by the Board on 27 January 2021 and signed on its
behalf by:
Alessandro Zamboni
Director
Directors' Remuneration
In the financial reporting period to 31 December 2019 as the
Group was non-trading, the board did not establish a remuneration
committee.
In the previous reporting period when the Group was actively
trading up to the date of the sale of its business, Mr Charles was
a member of the remuneration committee together with another
director who resigned in the previous reporting period.
The following policies were therefore only relevant in relation
to the year ended 31 March 2019 :
Responsibilities
The remuneration committee was responsible for the determination
of the remuneration policy of the Group's executive directors and
senior executives.
Composition
Until his resignation on 4 June 2018, Mr Matt Cooper (a former
director) chaired the remuneration committee and Mr Charles was a
member. After Mr Cooper resigned on 4 June 2018, Mr Charles chaired
the remuneration committee and was the only member. Mr Treacy also
became a member of the Committee from 8 November 2018 until the
sale of the Group's business in February 2019.
Directors' appointment agreement
The contracts entered into by the Non-Executive Director
required 3 months' notice of termination on either side.
Remuneration of non-executive directors
The remuneration for the non-executive directors was determined
by the board as a whole and consisted of fees for their services in
connection with board and board committee meetings and, where
relevant, for additional services such as chairing a board
committee. They were not eligible for pension scheme membership and
did not participate in any bonus scheme.
Non-executive directors did not participate in decisions about
their own remuneration.
Executive remuneration policy
Prior to the sale of the business in February 2019 when all
executives left the Company, the Group followed the following
policies.
The committee endeavoured to offer competitive remuneration
packages which were designed to attract, retain and provide
appropriate incentives to executive directors and senior executives
with the experience and necessary skills to operate and develop the
Group's business to their maximum potential, thereby delivering the
highest level of return for the shareholders.
Consistent with this policy, bene ts packages awarded to
executives were intended to be competitive and comprise a mix of
non-performance-related and performance-related remuneration
designed to provide appropriate incentives to them, but not to
detract from the goals of corporate governance.
Remuneration components for executive directors:
Remuneration packages were reviewed each year to ensure that
they were in line with the Group's business objectives. No director
participated in decisions about their own remuneration package.
The main components in determining pay were as follows:
Basic salary/fees and bene ts
The basic annual salary was subject to an annual review which
took into account the performance of the Group and the individual.
Bene ts comprised the provision of private healthcare
insurance.
Annual performance-related bonus
Demanding annual performance targets, which were consistent with
both the short and long term objectives for the business, were set
for executive directors which had to be achieved before the bonus
was payable.
Executive share options schemes
Share options were granted to executive directors to encourage
them to deliver sustained, long term growth. Except in exceptional
circumstances, the value of options granted in any year did not
exceed two and a half times basic salary.
Directors' detailed emoluments
The emoluments of the directors of the group were as
follows:
Salary Period ended 31 December 2019 Total Year ended 31 March 2019 Total
GBP'000 GBP'000 GBP'000
S K Taylor 27 27 219
S Charles 3 3 25
J Treacy 15 15 25
45 45 517
======= =================================== ==============================
Interests in share options
In the previous reporting period the following directors held
share options over the ordinary shares of the Company:
Number of share options Exercise price Grant date
S K Taylor 770 252.00p 22 November 2012
39,781 67.36p 17 December 2013
98,417 37.50p 22 December 2014
6,253 48.80p 14 December 2015
80,000 16.25p 13 September 2016
70,000 17.50p 28 September 2017
To assist with comparisons, all share options in the table above
have been adjusted for the 1 for 10 consolidation carried out on 29
June 2018.
After an initial two year's qualification period 50% of the
options were exercisable at any time up to the tenth anniversary of
the date of grant. The remaining 50% of the options were
exercisable between the third and tenth anniversaries of grant.
The mid-market price of the Company's shares at 31 December 2019
was GBPNil as it was suspended from trading at that time (2019:
0.685p)
All the above share options lapsed in August 2019, six months
after the sale of the business.
Corporate Governance
Statement of current Compliance with the QCA Corporate
Governance Code
As Chairman of the current Board of Directors of Supply@ME
Capital plc ("SYME", "We", or the "Company/Group" as the context
requires), it is my responsibility to ensure that SYME has both
sound corporate governance and an effective Board. My
responsibilities include leading the Board effectively, overseeing
the Company's corporate governance model, and ensuring that good
information flows freely between Executives and Non-Executives in a
timely manner.
SYME has decided to adopt the Quoted Companies Alliance
Corporate Governance (QCA Code). This report follows the structure
of these guidelines and explains how we have applied the guidance.
We will provide annual updates on our compliance with the QCA Code.
The Board considers that the Group complies with the QCA Code so
far as it is practicable having regard to the size, nature and
current stage of development of the Company, and will disclose any
areas of non-compliance in the text below.
SYME understands that application of the QCA Code supports the
Company's medium to long-term success whilst simultaneously
managing risks and providing an underlying framework of commitment
and transparent communications with stakeholders. We are committed
to monitoring and promoting a socially responsible corporate
culture, illustrated through internal policies and external
stakeholder engagement.
As a Main Market company, standard segment, trading on the
London Stock Exchange) This information needs to be reviewed
annually and our website includes this information.
Dominic White
Non-Executive Chairman
Principle 1.
Establish a strategy and business model which promote long-term
value for shareholders.
The Company plans to continue its growth both organically and
potentially through acquisitions, expanding its range of services,
as well as expanding into new vertical and geographic markets. The
Company's strategy and business model, as well as the competitive
landscape, are explained in detail in the LSE Standard List
Admission Document dated 4 March 2020 and can be found on the
Company's website.
Principle 2.
Seek to understand and meet shareholder needs and
expectations.
Dominic White, (Non-Executive Chairman) and Alessandro Zamboni
(Chief Executive Officer) are the key shareholder liaison contacts
alongside the Company's Financial Advisers. In addition, Susanne
Chishti is the Senior Independent Non-Executive Director, whom
shareholders are encouraged to contact if there are any concerns
about matters relating to related party transactions and wider
corporate governance.
The Group seeks to maintain and enhance good relations with its
shareholders. The Company's interim and annual reports will be
supplemented by capital market presentations and through public
announcements to the market on corporate, technological and
financial progress.
The Board will actively engage with shareholders at least three
times a year. Meetings will be held following results announcements
and are either one-to-one or group meetings with institutional and
high net worth investors. Another forum for meeting shareholders is
the AGM, to which all shareholders will be invited to attend and
spend time with management. In addition, the Company will seek to
respond to shareholder queries sent to its designated shareholder
email address: shareholders@supplymecapital.com .
The Company's financial and investor relations advisers help to
provide the Board with investor feedback after investor
presentations and meetings, as well as calls with shareholders
following key items of news flow. Via communication with the
Company's advisers, and investment analysts, together with
Regulatory News Service announcements and the Company's Annual
Report, the Board gauges investor sentiment, sets expectations and
communicates the Company's intentions.
Where feedback is received directly from shareholders or
shareholder advisory groups, for example relating to voting
intentions on general meeting motions, this will be brought to the
attention of and discussed by the Board and the key Company
investor liaisons will discuss with investors their reasons for
voting and if necessary work with these and other investors to
determine an appropriate course of action for the benefit of all
shareholders.
Principle 3.
Take into account wider stakeholder and social responsibilities
and their implications for long-term success.
The Board considers the interests of shareholders and all
relevant stakeholders in line with section 172 of the Companies Act
2006. Engaging with our stakeholders strengthens our relationships
and helps us make better business decisions to deliver on our
commitments. The Board is regularly updated on wider stakeholder
engagement feedback to stay abreast of stakeholder insights into
the issues that matter most to them and our business, and to enable
the Board to understand and consider these issues in
decision-making. Details of how we seek to understand and meet
shareholder needs and expectations are set out at Principle 2,
above.
For its wider group of stakeholders, the Company intends to
engage with these via:
-- Face-to-face briefings for staff to update on the Company's
progress and developments;
-- Email updates for staff regarding developments;
-- Releasing public updates via the RNS service;
-- Regular meetings with key customers and commercial
partners.
Stakeholder feedback is passed to Senior Management via the
relevant team member as appropriate.
Principle 4.
Embed effective risk management, considering both opportunities
and threats, throughout the organisation.
The Board has established a risk management process for
identifying, assessing and mitigating the principal risks and
uncertainties facing the Group. The Company's risk register will be
considered by the Board on a quarterly basis, with ad hoc reviews
conducted as required. More detail about the identified principal
risks and uncertainties can be found in the Admission Document on
the Group's website. The Board is responsible for establishing and
maintaining the Company's system of internal financial controls and
the Audit Committee assists the Board in discharging its duties
relating to internal financial controls. Internal financial control
systems are designed to meet the particular needs of the Company
and the risk to which it is exposed, and by its very nature can
provide reasonable, but not absolute, assurance against material
misstatement or loss.
Areas of focus for internal financial controls include strategic
planning, approval of annual budgets, regular monitoring of
performance against budget (including full investigation of
significant variances), control of capital expenditure and ensuring
proper accounting records are maintained. The Directors will
continue to reassess internal financial controls as the Company
expands further. It is the Board's policy to ensure that the
management structure and the quality and integrity of the personnel
are compatible with the requirements of the Group.
The Company's auditors will be encouraged to raise comments on
internal control in their management letter following their audit,
and the points raised and actions arising will be monitored through
to completion by the Audit Committee.
Principle 5.
Maintaining the Board as a well-functioning, balanced team led
by the Chair.
The Board consists of the Non-Executive Chairman, the Chief
Executive and two additional Non-Executive Directors. The
biographical details of the Board members can be found in the
Admission Document and on the Company's Website.
The Board has determined that Enrico Camerinelli (Aged 57) and
Susanne Chishti (Aged 48) are independent in character and judgment
and satisfy the independence criteria under the QCA Code. Susanne
Chishti has also been appointed as Senior Independent Non-Executive
Director.
The Board is typically expected to meet monthly in order to,
amongst other things, approve financial statements, dividends and
significant changes in accounting practices and key commercial
matters.
The Directors commit the requisite amount of time to their
respective roles to ensure that they discharge their individual and
collective responsibilities in an effective manner. The Company has
effective procedures in place to monitor and deal with conflicts of
interest.
The Board is supported by an Audit Committee, a Remuneration
Committee and a Nomination Committee. Further details of which are
set out on the Company's website.
Future annual reports will include details of the number of
Board and Committee meetings taken place each year. Until the first
Annual Report is released, this is an area where the Company will
not be fully compliant with the QCA's principles.
Principle 6.
Ensure that between them the Directors have the necessary
up-to-date experience, skills and capabilities.
The Board considers its overall size and current composition to
be suitable and have an appropriate balance of sector, financial
and public markets skills and experience as well as an appropriate
balance of personal qualities and capabilities. The structure, size
and composition of the Board based upon the skills, knowledge and
experience required will be regularly reviewed to ensure the Board
operates effectively.
In order to develop their skills and keep up to date with market
developments and corporate governance matters, the Board will
receive training as required. All directors are also able to take
independent professional advice in the furtherance of their duties,
if necessary, at the Company's expense.
Biographies for each of the directors, including details on
their experience and skills, are set out on the Company's
website.
Principle 7.
Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement.
The Board's effectiveness and the individual performance of
Directors are considered regularly by the Board on an informal
basis, via feedback to the Chairman. Directors are encouraged to
provide feedback on all areas of the board efficacy, having due
regard to the balance of skills, experience, independence and
knowledge contributed by members of the Board, as well as the
successful operation of the Board as a unit, its diversity and
other factors relevant to its effectiveness. As the Board has just
recently been established, there is presently no formal process for
independent review of directors' performance.
Principle 8.
Promote a culture that is based on ethical values and
behaviours.
The Board believes that the promotion of a corporate culture
based on sound ethical values and behaviours is essential to
maximising shareholder value.
The executive team engenders open and positive interactions with
a key focus on innovation, creative solutions and collective
responsibility. These cultures are fostered throughout the
business.
The Company's policies set out its zero-tolerance approach
towards any form of modern slavery, discrimination or unethical
behaviour relating to bribery, corruption or business conduct.
Principle 9.
Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.
Whilst the Board is collectively responsible for defining
corporate governance arrangements, the Chairman is ultimately
responsible for corporate governance. The governance structures
within the Company have been assessed by the Board and are
considered appropriate for the size, complexity and risk profile of
the Company. This will be reviewed by the Board to ensure
governance arrangements continue to be appropriate as the Company
changes over time.
The Board is expected to typically meet bi-monthly to set the
overall direction and strategy for the Group and to review
operational and financial performance. The Board and its Committees
will receive appropriate and timely information prior to each
meeting: and a formal agenda will be produced for each meeting, and
Board and committee papers are distributed several days before
meetings take place. Any director may challenge Company proposals
and decisions are taken democratically after discussion. Any
director who feels that any concern remains unresolved after
discussion may ask for that concern to be noted in the minutes of
the meeting, which are then circulated to all directors. Any
specific actions arising from such meetings are agreed by the Board
or relevant Committee and then followed up by the Company's
management. The Company Secretary is responsible for ensuring that
Board procedures are followed and applicable rules and regulations
are complied with.
There is a formal schedule of matters reserved for the decision
of the Board that covers the key areas of the Company's affairs.
The schedule includes:
-- Determining the Company's overall strategy and direction;
-- Establishing and maintaining controls, audit processes and
risk management policies to ensure they counter
identified risks and that the Company operates efficiently;
-- Ensuring effective corporate governance;
-- Approving budgets and reviewing performance relative to those
budgets;
-- Approving financial statements;
-- Approving material agreements and non-recurring projects;
-- Approving senior and Board appointments.
Each member of the Board has clearly defined roles and
responsibilities. The role of the Chairman is to lead the Board,
with responsibility for overall corporate governance, and to ensure
it is operating effectively in approving and monitoring the
strategic direction of the Company. The role of the Chief Executive
is to propose strategic direction to the Board and to execute the
approved strategy by leading the executive team in managing the
Company's business. The role of the Non-Executive Directors is to
act as a sounding board for the Chairman and a source of reciprocal
feedback for other members of the Board and shareholders, where
required. The Board is supported by an Audit Committee and
Remuneration Committee, further details of which are set out on the
Company's website. At present, the Company does not produce formal
Audit Committee or Remuneration Committee reports for the purposes
of the annual report, given the size and scale of the Company's
current operations. The Board however continually review this
position and at such time as it is deemed appropriate to do so,
will include formal Audit and Remuneration Committee reports in the
Company's annual report.
Principle 10.
Communicate how the Company is governed and is performing by
maintaining a dialogue with shareholders and other relevant
stakeholders.
The Company is committed to open communications with all its
shareholders. Communication will be primarily through the Company's
website, the annual report and accounts, Regulatory announcements,
the AGM and one-to-one meetings with large existing or potential
new shareholders. All shareholders will receive a copy of the
annual report and an interim report at the half year is available
on the Company's website.
Future Annual Reports will include Audit and Remuneration
Committee reports. Until the Company's first Annual Report is
released, this is an area where the company is not fully compliant
with the QCA's principles of corporate governance.
The Group sold all of its business and business assets in
February 2019, and from that date until the year-end the Group was
a cash shell seeking new investments opportunities.
Prior to the sale of its business, the system of internal
control was structured around an assessment and prioritisation of
the various risks to the business. The control environment was
designed to address particularly those risks that the board
considered to be material to the business, in safeguarding the
assets against unauthorised use or disposition and maintaining
accurate records which produced up to date and reliable information
for management of the business and reporting.
The board reviewed the effectiveness of the system of internal
control for the accounting period and the period to the date of
approval of the nancial statements.
Prior to the sale of its business, the key features of the
Group's systems of internal control were as follows:
an ongoing process of risk assessment to identify,
evaluate and manage business risks;
management structure with clearly defined responsibilities
and authority limits;
a comprehensive system of reporting financial
results to the board; and
appraisal and authorisation of capital expenditure.
The Group did not operate an internal audit function. At the
audit committee meetings, the Chief Financial Officer reported on
internal controls and a programme of work to ensure systems and
processes were continuously improved.
Remuneration report Responsibilities
Prior to the sale of its business, the remuneration committee
was responsible for the determination of the remuneration policy of
the group's executive directors and senior executives.
Directors' service contracts
Prior to the sale of its business, the service contracts entered
into by the Chief Financial Officer required six months' notice of
termination on either side and the service contract of the Chief
Executive Officer required six months' notice of termination on
either side.
Remuneration of non-executive directors
The remuneration for the non-executive directors was determined
by the board as a whole and consisted of fees for their services in
connection with board and board committee meetings and, where
relevant, for additional services such as chairing a board
committee. They were not eligible for pension scheme membership and
did not participate in any bonus scheme.
Non-executive directors did not participate in decisions about
their own remuneration.
Executive remuneration policy
Prior to the sale of the business, the following policies for
executive remuneration were in operation, but ceased to be relevant
when the Group became a cash shell:
The committee endeavoured to offer competitive remuneration
packages which were designed to attract, retain and provide
appropriate incentives to executive directors and senior executives
with the experience and necessary skills to operate and develop the
Group's business to their maximum potential, thereby delivering the
highest level of return for the shareholders.
Consistent with this policy, bene ts packages were awarded to
executives that were intended to be competitive and comprised a mix
of non-performance-related and performance-related remuneration
designed to provide appropriate incentives to them, but not to
detract from the goals of corporate governance.
Remuneration components for executive directors:
Remuneration packages were reviewed each year to ensure that
they were in line with the Group's business objectives. No director
participated in decisions about their own remuneration package.
The main components in determining pay were as follows: Basic
salary/fees and bene ts.
The basic annual salary was subject to an annual review which
took into account the performance of the Group and the individual.
Bene ts comprised the provision of private healthcare
insurance.
Annual performance-related bonus:
Demanding annual performance targets, which were consistent with
both the short and long term objectives for the business, were set
for executive directors which had to be achieved before the bonus
was payable.
Executive share options schemes:
Share options were granted to executive directors to encourage
them to deliver sustained, long term growth. Except in exceptional
circumstances, the value of options granted in any year did not
exceed two and a half times basic salary.
Matters reserved for the board
The board had a formal written schedule of matters reserved for
its review and approval; this schedule included those matters
described in The role of the board and its committees section as
well as those in the following table.
Category Examples
==========================================================
Strategy and Extension of the Group's activities into new business
management or geographic areas; cessation of the operation
of all or any material part of the Group's business.
==========================================================
Structure and Changes relating to the Group's capital structure;
capital major changes to the Group's corporate or management
and control structure; changes to the Company's
listing or its status as a plc.
==========================================================
Financial reporting Approval of the following: annual report and accounts,
and controls preliminary announcements of results, significant
changes in accounting policies or practices, treasury
policies, certain unbudgeted capital or operating
expenditure; declaration or recommendation of
dividends; review and approval of expenditure
authorisation limits.
======================= ==========================================================
Contracts Contracts in the ordinary course of business material
strategically or by reason of size; contracts
not in the ordinary course of business; major
investments.
==========================================================
Communication Approval of resolutions, circulars, prospectuses
and press releases concerning matters decided
by the board.
==========================================================
Board membership Changes to the structure, size and composition
and other appointments of the board; ensuring adequate succession planning
for the board and senior management; board appointments;
selection of the chair and the chief executive;
appointment of the senior independent director;
membership and chairs of board committees; continuation
in office of directors; appointment or removal
of the company secretary; appointment, reappointment
or removal of the external auditor to be put to
shareholders for approval.
======================= ==========================================================
Remuneration Approving the remuneration policy for the directors;
determining the initial remuneration of the non-executive
directors; introduction of new share incentive
plans or major changes to existing plans.
======================= ==========================================================
Delegation of Division of responsibilities between the chair
authority and the chief executive; establishing board committees
and approving their terms of reference.
==========================================================
Corporate governance Undertaking any formal and rigorous review of
the board's own performance, that of its committees
and individual directors, and the division of
responsibilities; determining the independence
of non-executive directors; review of the Group's
overall corporate governance arrangements; authorising
conflicts of interest where permitted by the Company's
articles of association.
======================= ==========================================================
Policies and Approval of the following: compliance with the
procedures AIM Rules and aspects of the Market Abuse Regulation,
company's insider list manual, dealing code, anti-bribery
policy, whistleblowing policy and health and safety
policy.
======================= ==========================================================
Roles and responsibilities
The former Chair was responsible for leading the board and
regularly liaising with the Chief Executive
Prior to the sale of the business, the Chief Executive Of cer
was responsible for proposing objectives and strategy to the board,
implementing strategy and policy approved by the board and leading
and managing the management team.
Executive directors had particular roles and responsibilities in
relation to the day to day running of the business.
Non-executive directors had the role of scrutinising the
performance of management in attaining goals, participating in
Board discussion on setting strategies and objectives. Also,
bringing their knowledge, expertise and contacts to help with
development of the Company's business.
Following the sale of the business in February 2019, the board's
main focus was identifying suitable investment opportunities.
Attendance at board and committee meetings in the period
As the Company was not trading during the period there were no
audit committee or remuneration committees in place.
The Non-executive directors met on an ad hoc basis during the
period to further the interests of the Company by seeking an
appropriate investment opportunity and to ensure there were
sufficient funds for the Company to continue until such an
investment was found.
Attendance at Board and committee meetings in the year to 31
March 2019
Board Audit Remuneration
Number of meetings 28 1 1
Meetings Attended:
Simon Charles 27/28 1 1
Shawn Taylor 26/28 1 1
John Treacy 7/7 - -
Independence
Simon Charles was identi ed as the group's Independent Director.
He was available to shareholders who wished to raise any concerns
that they have been unable to resolve through other channels and to
attend meetings between management and major investors. The Board
had concluded that Simon Charles was independent throughout the
year. Simon Charles is a partner in Marriot Harrison, the former
legal advisors to the Company and also held a small number of
shares. However transactions with Marriot Harrison and his
interests in shares were considered to be too small to affect his
independence and legal services had been tendered and decided on by
the other directors.
Balance and size
Following the sale of the business and business assets in
February 2019, the Company went through a period of transition. It
was anticipated that there would be further appointments as part of
any signi cant transaction to provide the right balance of numbers,
independence and breadth of expertise.
Nominations and appointments
There was no nominations committee, the process of nominating
and appointing new directors was undertaken by the whole Board led
by the Chair. Senior executive appointments were made by the chief
executive after consulting the chair.
The AIM Rules required new directors to undergo a vetting
process carried out by the Company's NOMAD which also covered
awareness of the AIM Rules, MAR, Companies Acts and other laws and
regulations.
An executive director was provided within an initial education
about the Company, its processes and procedures.
The Articles of Association require each director appointed
during the year to seek re-appointment at a General Meeting
thereafter re-election after no more than three years. Therefore,
the Board considered it inappropriate that non-executive directors
were appointed for a xed term as recommended by the Code.
Time commitment
The executive directors were expected to devote substantially
all of their time and ability to their duties. The non- executive
directors were expected to devote about 12 days each year to the
Company's business.
Service contracts and letters of Appointment
Copies of all contracts of employment and letters of appointment
were available for inspection at the Company's registered
office.
Performance evaluation
Prior to the sale of its business, the Chief Executive Of cer
conducted an annual appraisal of the executive director(s) and
senior managers.
Insurance cover for directors and officers
The Company maintained, at its own expense, insurance cover in
respect of legal action against its directors and officers.
Risk
The board oversaw risk.
Until the sale of the business in February 2019, the chief
executive had overall responsibility for implementing strategy and
leading the business. In advance of each board meeting the
executive produced and circulated Key Performance Indicators and
other information to enable critical business components to be
monitored.
The key risks were shown within the Strategic Report.
Shareholder Relations
The Company maintained a website www.abalplc.com which contained
a section for investors including all announcements made on the
Stock Exchange RNS system, financial results, information about
shares, directors and the Company's constitution. The annual Report
and Account was sent to all shareholders.
The notice of the AGM was sent to shareholders at least 21 clear
days before the Meeting.
Independent Auditor's Report to the Members of Supply@ME Capital
plc (formerly known as Abal Group plc)
Opinion
We have audited the financial statements of Supply@ME Capital
plc (the "Company") for the period ended 31 December 2019 which
comprise the Consolidated Statement of Comprehensive Income,
Consolidated and Parent Statement of Financial Position,
Consolidated and Parent Statement of Changes in Equity and
Consolidate and Parent Statement of Cash Flows and notes to the
financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied
in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 December 2019 and of its loss for the period then
ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards as adopted by the European Union;
-- 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 Company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw your attention to Note 2 which indicates the existence
of uncertainties in relation to assumptions about future trading
that support the going concern basis of preparation. As stated in
Note 2, these events or conditions, along with other matters as set
forth in Note 2 indicate that a material uncertainty exists that
may cast significant doubt on the company's ability to continue as
a going concern. Our opinion is not modified in respect of this
matter
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall
materiality for the financial statements as a whole to be
GBP36,000, based on approximately 5% of the net loss before tax for
the period.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment.
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration.
We agreed to report to it all identified errors in excess of
GBP1,800. Errors below that threshold would also be reported to it
if, in our opinion as auditor, disclosure was required on
qualitative grounds.
Overview of the scope of our audit
At the period end Supply@ME Capital plc is the only component
included in the scope of the audit. Its location is London, United
Kingdom.
Extent to which the audit is capable of detecting
irregularities, including fraud
We design our procedures so as to obtain sufficient appropriate
audit evidence that the financial statements are not materially
misstated due to non-compliance with laws and regulations or due to
fraud or error.
We are not responsible for preventing non-compliance and cannot
be expected to detect non-compliance with all laws and regulations
- this responsibility lies with management.
Based on our understanding of the Company and industry,
discussions with management and the Audit Committee we identified
financial reporting standards, and Companies Act 2006 as having a
direct effect on the amounts and disclosures in the financial
statements.
Our audit procedures included:
-- enquiry of management about the Company's policies,
procedures and related controls regarding compliance with laws and
regulations and if there are any known instances of
non-compliance;
-- examining supporting documents for all material balances, transactions and disclosures;
-- review of the Board of directors and the Audit Committee minutes;
-- enquiry of management about litigations and claims and
inspection of relevant correspondence
-- evaluation of the selection and application of accounting
policies related to subjective measurements and complex
transactions;
-- analytical procedures to identify any unusual or unexpected relationships;
-- testing the appropriateness of journal entries recorded in
the general ledger and other adjustments made in the preparation of
the financial statements;
-- review of accounting estimates for biases.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that some material misstatements of the financial
statements may not be detected, even though the audit is properly
planned and performed in accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly
significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized
schemes designed to conceal it, including deliberate failure to
record transactions, collusion or intentional misrepresentations
being made to us.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included 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.
During the period the business was a shell company which only
incurred administrative expenditure, therefore we do not consider
there to be any Key audit matters identified other than the
material uncertainty relating to going concern.
Our audit procedures in relation to these matters were designed
in the context of our audit opinion as a whole. They were not
designed to enable us to express an opinion on these matters
individually and we express no such opinion.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. 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 the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion based on the work undertaken in the course of our
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 directors' report and strategic 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 Company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the strategic report or
the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the financial statements and the part of the directors'
remuneration report to be audited 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 the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement set out on page14 the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
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.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by management to audit the financial
statements for the period ending 31 December 2019. Our total
uninterrupted period of engagement is 1 period, covering the period
ending 31 December 2019.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Company and we remain independent of the
Company in conducting our audit.
Our audit opinion is consistent with the additional report to
the board.
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.
Leo Malkin
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
27 January 2021
Consolidated Income Statement for the Period Ended 31 December
2019
Period ended
31 December Year ended
2019 31 March 2019
Continuing operations Note GBP 000 GBP 000
Revenue - -
Cost of sales - -
------------ --------------
Gross profit - -
Administrative expenses (725) (726)
Other operating income 7 40 69
------------ --------------
Operating loss 8 (685) (657)
Finance costs 10 - (42)
------------ --------------
Loss before tax (685) (699)
Income tax receipt 11 - -
------------ --------------
Loss for the period/year from continuing
operations (685) (699)
------------ --------------
Discontinued operations
Loss for the period/year from discontinued
operations 4 - 325
------------ --------------
Total comprehensive loss for the period/year (685) (374)
============ ==============
Profit/(loss) attributable to:
Owners of the company (685) (374)
============ ==============
Earnings per share - Basic and diluted
- Profit/(Loss) Pence Pence
From continuing operations 12 (0.68) (1.32)
Total 12 (0.68) (0.71)
The notes on pages 37 to 59 form an integral part of these
financial statements.
(Registration number: 03936915) As at 31 December As at 31 March
Consolidated Statement of Financial 2019 2019
Position as at 31 December 2019 Note GBP 000 GBP 000
Assets
Current assets
Trade and other receivables 16 67 121
Cash and cash equivalents 81 771
----------------- --------------
148 892
----------------- --------------
Total assets 148 892
================= ==============
Equity and liabilities
Equity
Share capital 17 4,767 4,767
Share premium 9,599 9,599
Other reserves - 1,217
Retained losses (14,675) (15,207)
----------------- --------------
Equity attributable to owners of the
Company (309) 376
----------------- --------------
Current liabilities
Trade and other payables 19 409 463
Derivative financial instruments 18 48 53
----------------- --------------
Total liabilities 457 516
----------------- --------------
Total equity and liabilities 148 892
================= ==============
Approved by the Board on 27 January 2021 and signed on its
behalf by:
.........................................
Mr Alessandro Zamboni
Director
The notes on pages 37 to 59 form an integral part of these
financial statements.
(Registration number: 03936915) As at 31 December As at 31 March
Company Statement of Financial Position 2019 2019
as at 31 December 2019 Note GBP 000 GBP 000
Assets
Current assets
Trade and other receivables 16 67 121
Cash and cash equivalents 81 771
----------------- --------------
148 892
----------------- --------------
Total assets 148 892
================= ==============
Equity and liabilities
Equity
Share capital 17 4,767 4,767
Share premium 9,599 9,599
Other reserves - 1,217
Retained earnings (14,675) (15,207)
----------------- --------------
Total equity (309) 376
----------------- --------------
Current liabilities
Trade and other payables 19 409 463
Derivative financial instruments 18 48 53
----------------- --------------
Total liabilities 457 516
----------------- --------------
Total equity and liabilities 148 892
================= ==============
The Company has taken advantage of the exemption under S408 of
the Companies Act 2006 and has not presented its own statement of
comprehensive income. Of the consolidated result for the period
ended 31 December 2019 a loss of GBP685,000 (2019 - loss of
GBP493,000) is attributable to the Company.
Approved by the Board on 27 January 2021 and signed on its
behalf by:
.........................................
Mr Alessandro Zamboni
Director
The notes on pages 37 to 59 form an integral part of these
financial statements.
Period ended
31 December Year ended
Consolidated Statement of Cash Flows 2019 31 March 2019
for the Period Ended 31 December 2019 Note GBP 000 GBP 000
Cash flows from operating activities
Loss for the year (685) (374)
Adjustments to cash flows from non-cash
items
Depreciation, amortisation and impairments 8,9 - 203
Profit on sale of business 4 - (935)
Share based payment transactions - (35)
Derivative financial instrument 18 - 34
Income tax credit 11 - (141)
Interest 10 - 8
------------ --------------
(685) (1,240)
Working capital adjustments
Decrease in trade and other receivables 16 54 156
Decrease in trade and other payables 19 (59) (512)
------------ --------------
Cash absorbed by operations (690) (1,596)
Finance costs 10 - (8)
Income taxes received 11 - 141
------------ --------------
Net cash flow from operating activities (690) (1,463)
------------ --------------
Cash flows from investing activities
Proceeds from sale of business 4 - 1,207
Acquisition of intangible assets 15 - (205)
------------ --------------
Net cash flows from investing activities - 1,002
------------ --------------
Cash flows from financing activities
Proceeds from issue of ordinary shares,
net of issue costs - 1,171
------------ --------------
Net (decrease)/increase in cash and
cash equivalents (690) 710
Cash and cash equivalents at 1 April
2019 / 1 April 2018 771 61
------------ --------------
Cash and cash equivalents at 31 December
2019 / 31 March 2019 81 771
============ ==============
The notes on pages 37 to 59 form an integral part of these
financial statements.
Period ended
31 December Year ended
Company Statement of Cash Flows for 2019 31 March 2019
the Period Ended 31 December 2019 Note GBP 000 GBP 000
Cash flows from operating activities
Loss for the year (685) (493)
Adjustments to cash flows from non-cash
items
Depreciation, amortisation and impairments 8,9 - 203
Profit on sale of business 4 - (935)
Share based payment transactions - (35)
Derivative financial instrument 18 - 34
Income tax credit 11 - (141)
Interest 10 - 8
------------ --------------
(685) (1,359)
Working capital adjustments
Change in intercompany balance - 119
Decrease in trade and other receivables 16 54 156
Decrease in trade and other payables 20 (59) (512)
------------ --------------
Cash absorbed by operations (690) (1,596)
------------ --------------
Finance costs - (8)
Income taxes received 11 - 141
------------ --------------
Net cash flow from operating activities (690) (1,463)
------------ --------------
Cash flows from investing activities
------------ --------------
Proceeds from sale of business 4 - 1,207
Acquisition of intangible assets 15 - (205)
------------ --------------
Net cash flows from investing activities - 1,002
------------ --------------
Cash flows from financing activities
Proceeds from issue of ordinary shares,
net of issue costs - 1,171
Net (decrease)/increase in cash and
cash equivalents (690) 710
------------ --------------
Cash and cash equivalents at 1 April
2019 / 1 April 2018 771 61
------------ --------------
Cash and cash equivalents at 31 December
2019 / 31 March 2019 81 771
============ ==============
The notes on pages 37 to 59 form an integral part of these
financial statements.
Consolidated Statement of Changes in Equity Share capital Share premium Other reserves Retained earnings Total
for the Period Ended 31 December 2019 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 April 2018 4,765 8,350 1,252 (14,814) (447)
------------- ------------- -------------- ----------------- --------
Conversion of debt to equity - - - (19) (19)
Employee share-based payment options - - (35) - (35)
Issue of share capital 2 1,249 - - 1,251
------------- ------------- -------------- ----------------- --------
Transactions with owners 2 1,249 (35) (19) 1,197
Loss for the year and total comprehensive
income - - - (374) (374)
------------- ------------- -------------- ----------------- --------
At 31 March 2019 4,767 9,599 1,217 (15,207) 376
------------- ------------- -------------- ----------------- --------
Share capital Share premium Other reserves Retained earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 April 2019 4,767 9,599 1,217 (15,207) 376
------------- ------------- -------------- ----------------- --------
Other comprehensive income - - - - -
Employee share-based payment options - - (1,217) 1,217 -
------------- ------------- -------------- ----------------- --------
Transactions with owners - - (1,217) 1,217 -
Loss for the period and total comprehensive
income - - - (685) (685)
------------- ------------- -------------- ----------------- --------
At 31 December 2019 4,767 9,599 - (14,675) (309)
============= ============= ============== ================= ========
The notes on pages 37 to 59 form an integral part of these
financial statements.
Company Statement of Changes in
Equity for Share capital Share premium Other reserves Retained earnings Total
the Period Ended 31 December 2019 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 April 2018 4,765 8,350 1,252 (14,695) (328)
------------- ------------- -------------- ----------------- -----------------
Conversion of debt to equity - - - (19) (19)
Employee share-based payment
options - - (35) - (35)
Issue of share capital 2 1,249 - - 1,251
------------- ------------- -------------- ----------------- -----------------
Transactions with owners 2 1,249 (35) (19) 1,197
Loss for the year and total
comprehensive
income - - - (493) (493)
------------- ------------- -------------- ----------------- -----------------
At 31 March 2019 4,767 9,599 1,217 (15,207) 376
------------- ------------- -------------- ----------------- -----------------
Share capital Share premium Other reserves Retained earnings Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
At 1 April 2019 4,767 9,599 1,217 (15,207) 376
------------- ------------- -------------- ----------------- --------
Other comprehensive income - - - - -
Employee share-based payment options - - (1,217) 1,217 -
------------- ------------- -------------- ----------------- --------
Transactions with owners - - (1,217) 1,217 -
Loss for the period and total comprehensive
income - - - (685) (685)
------------- ------------- -------------- ----------------- --------
At 31 December 2019 4,767 9,599 - (14,675) (309)
============= ============= ============== ================= ========
The notes on pages 37 to 59 form an integral part of these
financial statements.
Notes to the Financial Statements for the Period Ended 31 December 2019
1 General information
The Company is a public company limited by share capital
incorporated and domiciled in England. The address of its
registered of ce is 27/28 Eastcastle Street, London WlW 8DH. The
Company's ordinary shares are traded on the Main Market of the
London Stock Exchange.
The Company has adopted the requirements of International
Financial Reporting Standards (IFRS) and IFRIC interpretations
endorsed by the European Union (EU) and those parts of the
Companies Act 2006 applicable to companies reporting under IFRS.
The nancial statements have been prepared under the historical cost
convention, except for the treatment of share options, and are in
accordance with applicable accounting standards.
These nancial statements have been prepared in accordance with
the accounting policies set out below, which have been consistently
applied to all the years presented. These accounting policies
comply with applicable IFRS and IFRIC interpretations issued and
effective at the time of preparing these statements.
2 Accounting policies
Going concern
For the reasons set out below, the Directors consider that it is
appropriate to adopt the going concern basis in preparing these
nancial statements.
At the year-end the Group had cash balances of GBP81,000 (2019;
GBP771,000) and other net current liabilities of GBP390,000 (2019:
other net liabilities GBP395,000). The Group has posted a loss for
the year after tax of GBP685,000 (2019: loss of GBP374,000) and
retained losses were GBP14,675,000 (2019: GBP15,207,000).
The Group has historically met its nancing requirements through
the regular placing of new shares, raising in the year a net cash
amount of GBPNil (2019: GBP1,217,000).
At the year end the Group was a cash shell listed on AIM that
was seeking new investment opportunities.
Since the year end, the Group has successfully been admitted to
trading as a Main Market company, standard segment, trading on the
London Stock Exchange having also issued placing shares with gross
proceeds of GBP2,240,000 (net proceeds of GBP 1,440,000).
The Group is now fully trading and not reliant upon share issues
to continue in business.
The Directors have reviewed the forecast cashflows for the next
12 months and consider the Group to be a going concern.
The cashflow forecasts are based on the enlarged group following
the reverse acquisition in March 2020 and therefore relate to
cashflows arising from the groups Fin Tech platform that focusses
on inventory monetisation facilities. The Directors have prepared
the forecast using their best estimates however the company is in
its start up phase and therefore they have identified the following
uncertainties in the model.
The ability of the group to acquire inventory is reliant on
investment funding being received, whilst the group is in advanced
negotiations with several interested partners no investment has
been secured, if no investment is secured the group cannot acquire
inventory and generate the service fee income.
In addition the group has a portfolio of interested customers,
with some having signed term sheets. The cashflow model assumes a
growth in customer base in line with the interest that has been
received in the product but there is uncertainty over the ability
of the group to be able to secure these new customers.
On the basis of the above matters the directors have a material
uncertainty in relation to its going concern status. The Directors
have prepared scenario based models which include adjustments for
the uncertainties noted and additional cost saving measures that
could be implemented if there is a delay in the revenue generation.
On the basis of these scenarios and that they are in advanced
negotiations with potential investors and there has been
significant interest in the product the Directors consider it
appropriate to prepare the financial statements on a going concern
basis. These financial statements do not include any adjustments
that may be required if the going concern status was not considered
appropriate.
Impact of the global pandemic
As noted on 1 July 2020 in the Interim Statement to 31 March
2020 and mentioned in numerous announcements since, the Board has
monitored closely the impact of COVID-19 on business
operations.
Impact on Client companies
SYME's Client company customer base remains strong and the
demand for inventory monetisation continues to grow. The number of
Client companies being originated by SYME has grown each quarter
since the Reverse Take Over in March 2020. Increasingly, following
COVID-19, many businesses are consciously choosing to build
inventory to avoid supply chain shortages and subsequent loss of
trade, rather than keep stock levels low. This is a positive
development for SYME's business model as it expects that Client
companies internationally will look to monetise these higher
volumes of stock held.
Impact on Inventory funders
The impact of COVID-19 on Inventory funders, that is the
investors through the Platform into the inventory portfolios, has
been more difficult to interpret.
Interest rates are at historic lows which means that investors
are getting lower returns on capital compared to previous years
when higher interest rates were the norm. SYME's new inventory
asset class will offer a strong relative margin compared to
interest rates on a risk adjusted basis. However, investors are
undoubtedly more cautious and taking longer to make decisions. Time
to close transactions, not only in Inventory funding, but across
the investment spectrum, has increased.
The three to four month delay that SYME announced in July 2020
to its initial end September 2020 forecast to complete the first
Inventory Monetisation has been the result.
We are positive about the performance of the Company in the
coming months as we expect the first securitisation transaction to
close and the Captive Bank to launch as announced in the Trading
Update of 30 November. The re-opening of the global economies as
the uncertainty caused by COVID-19 dissipates will undoubtedly also
help.
Basis of consolidation
The Group nancial statements consolidate those of the Company
and all its subsidiary undertakings drawn up to 31 December 2019.
Subsidiaries are entities over which the Group has control. Control
comprises an investor having power over the investee and is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power.
The Company has taken advantage of the exemption under S408 of
the Companies Act 2006 and has not presented its own statement of
comprehensive income.
New and revised accounting standards and interpretations
A number of relevant new standards are effective for annual
periods beginning as noted below, for which earlier application is
permitted. However, the Group has not adopted the new or amended
standards in preparing these nancial statements. The following
amended standards and interpretations are not expected to have a
signi cant impact on the Group's nancial statements:
Standard and interpretations Effective for annual
periods beginning
on or after
Conceptual Framework in IFRS Standards 1 January 2020
IAS 1 Presentation of Financial Statements 1 January 2020
IAS 8 Accounting Policies, Changes in Accounting 1 January 2020
Estimates and Errors
IFRS 3 Business combinations 1 January 2020
IFRS 9 Financial Instruments 1 January 2020
IAS 39 Financial Instruments: Recognition 1 January 2020
and Measurement
IFRS 7 Financial Instruments: Disclosure 1 January 2020
IAS 1 Presentation of Financial Statements 1 January 2022
Pro t and loss on discontinued operations
A discontinued operation is a component of the Group that has
been disposed of. Pro t and loss from discontinued operations
comprises the post-tax pro t or loss of the discontinued operation
and the post-tax gain or loss recognised on disposal of that
component.
Revenue recognition
Prior to the sale of the business in February 2019, revenue was
measured at the fair value of the consideration received or
receivable net of sales related taxes. Income for the group was
derived from two sources:
Technology and Consultancy.
These sources are service based rather than through the sale of
goods. IFRS 15 has been applied fully retrospectively without the
need to adjust prior period amounts. The policies for income
recognition in respect of each of the different sources of income
were such that income was recognised by reference to the stage of
completion of the transaction at the end of the reporting period.
In applying the income recognition policies below where there was a
requirement for a contract to be signed, income was recognised in
accordance with the policy when the contract had been signed or
persuasive evidence that an arrangement existed.
a) Consulting:
Performance obligations are the delivery of solutions as de ned
in the project contract. Delivery of these performance obligations
are measured by the consultants' time spent to date on the project
as a percentage of the total consultant's time planned for the
completion of the project. On this basis, the income and labour
expense relating to a consulting contract are recognised in the
month in which the consulting takes place, and usually are
recognised evenly over the term of the contract. Two key judgements
are the planned time at the outset for the completion of each
project, and the early recognition of any project that is likely to
over-run and so may require a contract loss reserve.
b) Technology:
The performance obligations are the provision of the customer's
selection of integrated services from our suite of technology-based
services over an agreed contract term. The contract term is
typically one year but may be longer or shorter than this period.
Each customer's service plan for the contract period integrates
access to the relevant parts of the group's suite of proprietary
software together with hosting services provided by the group and
customer maintenance support. At the end of the contract period,
the customer no longer has access to the software and other
services. Income arising from the provision of these integrated
services are recognised evenly over the period of the contract once
an agreement has been signed or persuasive evidence of an
arrangement exists. Third party costs in respect of the suite of
technology products are spread over the period covered by the
suppliers' invoices for their services. Internal labour costs are
expensed as incurred for the development of the technology
products, for all pre-contract time commitments, and for the
maintenance support during the contract period.
Leases
IFRS 16 Leases became effective for annual periods beginning on
or after 1 January 2019 and the company elected to adopt it on a
prospective basis. The directors have considered the impact of this
new standard in the preparation of these financial statements. At
this time, the Group does not have any material lease arrangements
and therefore no adjustments are considered necessary as a result
of this new standard.
Defined contribution pension obligation
Contributions to the group's de ned contributions pension scheme
are charged to pro t or loss in the period in which they become
payable.
Property, plant and equipment
Prior to the sale of all the business and business assets in
February 2019, all property, plant and equipment were stated at
cost less subsequent depreciation and impairment. The costs of the
property, plant and equipment was their purchase price plus any
incidental costs of acquisition. Depreciation commences at the
point the asset is brought into use.
If there is any indication that an asset's value is less than
it's carrying amount an impairment review is carried out. Where
impairment is identi ed an asset's value is reduced to re ect
this.
The residual values and useful economic lives of xed assets are
reviewed by management on an annual basis and revised to the extent
required.
Depreciation
Depreciation is provided to write off the cost, less estimated
residual values, of all property, plant and equipment equally over
their expected useful lives. It is calculated at the following
rates: Leasehold improvements - over the life of the lease, and
Fixtures, ttings and equipment at 33% per annum.
Intangible assets
The following was applicable prior to the sale of the business
and all business assets in February 2019:
Software licences
The costs of signi cant groups of software licences are
capitalised and then amortised over the useful economic lives of
the software concerned. Amortisation is charged to administrative
expenses.
The cost of intangible assets is their purchase price plus any
incidental costs of acquisition. Amortisation begins from the time
the asset is brought into use.
Research and development
The cost of research is charged to the statement of
comprehensive income in the period in which it is incurred.
Development expenditure is capitalised only if the Company can
demonstrate the following conditions:
- The technical feasibility of completing the intangible asset
so that it will be available for use or sale.
- Its intention to complete the intangible asset and use or sell
it.
- Its ability to use or sell the intangible asset.
- How the intangible asset will generate probable future
economic bene ts.
- The availability of adequate technical, nancial and other
resources to complete the development and to use or
sell the intangible asset
- Its ability to measure reliably the expenditure attributable
to the intangible asset during its development.
Development costs not meeting the criteria for capitalisation
are expensed in the period in which they are incurred. The cost of
an internally generated intangible asset comprises all directly
attributable costs, including labour costs, necessary to create,
produce, and prepare the asset to be capable of operating in the
manner intended by management. Until completion of the development
project, the assets are subject to impairment testing only.
Amortisation commences when the asset is brought into use and is
shown within 'Administrative Expenses' on the consolidated
statement of comprehensive income.
Amortisation
Amortisation is provided on intangible assets to write off the
cost, less any estimated residual value, over their expected useful
economic life as follows:
Amortisation method and
Asset class rate
Software 20% to 33% per annum
Development costs 20% per annum
Impairment
At the end of each accounting period the Group assess the
recoverable amounts of intangible assets. Where there is an
indication of impairment an impairment loss is recognised for the
amount by which the assets carrying value exceed its recoverable
amount. Impairment losses are recognised in the profit and
loss.
Tax
The tax expense for the period comprises current tax. Tax is
recognised in pro t or loss, except that a change attributable to
an item of income or expense recognised as other comprehensive
income is also recognised directly in other comprehensive
income.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the nancial statements and the
corresponding tax bases used in the computation of taxable pro t
and is accounted for using the statement of nancial position
liability method. Deferred tax liabilities are generally recognised
for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable pro ts
will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable
pro t nor the accounting pro t.
The carrying amount of deferred tax assets is reviewed at each
statement of nancial position date and reduced to the extent that
it is no longer probable that suf cient taxable pro ts will be
available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset
realised based on tax rates that have been enacted or substantively
enacted at the statement of nancial position date. Deferred tax and
current tax are charged or credited to pro t or loss, except when
it relates to items charged or credited in other comprehensive
income or directly to equity, in which case the deferred tax is
also recognised in other comprehensive income or equity
respectively.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and other
short-term highly liquid investments that are readily convertible
to a known amount of cash and are subject to an insignificant risk
of change in value.
Share options
Where equity-settled share options are awarded to employees, the
fair value of the options at the date of grant is charged to profit
or loss over the vesting period. Non-market vesting conditions are
taken into account by adjusting the number of equity instruments
expected to vest at each statement of financial position date so
that, ultimately, the cumulative amount recognised over the vesting
period is based on the number of options that eventually vest.
Market vesting conditions are factored into the fair value of the
options granted. As long as all other vesting conditions are
satisfied, a charge is made irrespective of whether the market
vesting conditions are satisfied. The cumulative expense is not
adjusted for failure to achieve a market vesting condition.
Where the terms of an equity-settled award are modified or a new
award is designated as replacing a cancelled or settled award, the
cost based on the original award terms continues to be recognised
over the original vesting period. In addition, an expense is
recognised over the remainder of the new vesting period for the
incremental fair value of any modification, based on the difference
between the fair value of the original award and the fair value of
the modified award, both as measured on the date of the
modification. No reduction is recognised if this difference is
negative. Where an equity-settled award is cancelled, it is treated
as if it had vested on the date of cancellation, and any cost not
yet recognised in the income statement for the award is expensed
immediately. Any compensation paid up to the fair value of the
award at the cancellation or settlement date is deducted from
equity, with any excess over fair value being treated as an expense
in the income statement. The Group has no cash settled share-based
payments.
Where share warrants are issued, the fair values of the options
are accounted for through Other Reserves until exercised or
lapsed.
Foreign currency transactions and balances
The presentational currency of the group and functional currency
of the trading entities is Sterling. Transactions entered into by
group entities in a currency other than the currency of the primary
economic environment in which they operate (their "functional
currency") are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are
translated at the rates ruling at the statement of financial
position date. Exchange differences arising on the retranslation of
unsettled monetary assets and liabilities are recognised
immediately in profit or loss.
Employee benefits
The Company accounts for employee benefits in accordance with
IAS 19. Under IAS 19 there is a requirement to recognise the
monetary value of employee benefits accruing but not yet settled,
typically holiday pay. There is a requirement to account for the
value of the liability for employee benefits to be paid in the
future for services provided up to the reporting date.
Financial assets
Classification
Financial assets currently comprise trade and other receivables,
cash and cash equivalents.
Recognition and measurement
Loans and receivables
Loans and receivables are mainly contractual trade receivables
and are non-derivative nancial assets with xed or determinable
payments that do not have a signi cant nancial component and are
not quoted in an active market. Accordingly, trade and other
receivables are recognised at undiscounted invoice price. A reserve
for credit risk is made at the beginning of each transaction and
adjusted subsequently through pro t and loss.
Cash and cash equivalents
Cash and other short-term deposits in the Statement of Financial
Position comprise cash at banks and in hand and short-term deposits
with an original maturity of three months or less and where there
is an insignificant risk of changes in value. In the consolidated
cash flow statement, cash and cash equivalents consist of cash and
cash equivalents as defined above.
Financial liabilities
Classification
Financial liabilities comprise trade and other payables,
convertible loan notes and derivative financial instruments.
Recognition and measurement
Trade and other payables
Trade and other payables are initially recognised at fair value
less transaction costs and thereafter carried at amortised
cost.
The Group's derivative nancial instruments are a convertible
loan note that was both issued and then cleared in the year by a
debt for equity swap, and warrants were issued with options to
acquire shares that are accounted for at fair value, with changes
in value taken through pro t and loss. The release of the fair
value discount on the debt for equity swap has been taken direct to
retained earnings.
Equity
Equity comprises the following:
"Issued capital" represents the nominal value of equity
shares.
"Share premium" represents the excess over nominal value of the
fair value of consideration received for equity shares net of
expenses of the share issue.
"Other reserves" represents equity-settled share-based employee
remuneration until such share options are exercised.
"Retained losses" represents retained losses.
Critical judgements and significant accounting estimates
Prior to the sale of the business and business assets in
February 2019, all of the following statements are applicable.
After that date, the Group is a cash shell that is operating as a
listed holding company seeking new investment opportunities, and
the following statements have only limited applicability. In
determining and applying accounting policies, judgement is often
required in respect of items where the choice of speci c policy,
accounting estimate or assumption to be followed could materially
affect the reported results or net asset position of the Group
should it later be determined that a different choice would be more
appropriate. The most signi cant areas where judgement and
estimates have been applied are as follows:
Judgements
The value of the awards under the modi ed and new employee share
option scheme and warrants for share options were measured, in
accordance with IFRS 2, by reference to their fair value at the
date on which they were granted or issued. Judgement was required
in determining the most appropriate valuation model (see Note
18).
At the end of each accounting period the Group assesses the
recoverable amounts of intangible assets. Where there is an
indication of impairment an impairment loss is recognised for the
amount by which the assets carrying value exceed its recoverable
amount. Impairment losses are recognised in the pro t and loss.
The cost of an internally generated intangible asset comprises
all directly attributable costs necessary to create, produce, and
prepare the asset to be capable of operating in the manner intended
by management. Until completion of the development project, the
assets are subject to impairment testing only. Amortisation
commences upon completion of the asset and is shown within
'Administrative Expenses' on the consolidated statement of
comprehensive income.
At the end of each period all contracts with customers are
reviewed for contracts loss reserves.
At the end of each accounting period, the Group assess its
ability to continue for a period of at least 12 months from the
date the nancial statements are approve, by reviewing budgets and
forecasts for future trading years (as noted above in Note 2).
An assessment is made whether derivative nancial instruments on
issue are debt or equity (see Note 18).
Estimates
Signi cant assumptions were necessary in arriving at the inputs
into the valuation model for modi ed and new share option
arrangements (see Note 18).
3 Segmental reporting - continuing and discontinued operations
In February 2019 the Group sold all of its business and assets.
Consequently, disclosure of segmental information is no longer
appropriate, and instead the Group's results are reported
separately under headings for the Group's continuing operations as
a holding company and for the discontinued operations.
4 Discontinued operations
In February 2019, the Group disposed of the technology and
consultancy operating segments, which formed the Group's trading
activity operations. The results of the discontinued operations,
which have been included in the consolidated income statement, were
as follows:
Period ended 31 December 2019 Year ended 31 March 2019
GBP 000 GBP 000
Revenue - 2,297
Expenses - (3,048)
----------------------------- ------------------------
Loss before tax - (751)
Tax expense relating to profit before tax of discontinued
operations - 141
----------------------------- ------------------------
Loss after tax - (610)
----------------------------- ------------------------
Profit on sale of business and assets - 935
----------------------------- ------------------------
Tax on profit on sale of business and assets - -
----------------------------- ------------------------
Net gain attributable to discontinued operations - 325
============================= ========================
The carrying amount of assets and liabilities sold and profit on
disposal may be summarized:
Period ended Year ended
31 December 31 March
2019 2019
GBP 000 GBP 000
Property, plant and equipment - 13
Intangible assets - 1,059
Other net liabilities - (721)
-------------- -----------
Net assets/(liabilities) sold - 351
Disposal proceeds (Cash GBP1,240,000
Deferred consideration GBP46,000 - no
fair value adjustment required for contingent
consideration) - 1,286
-------------- -----------
Profit on disposal - 935
-------------- -----------
Contracts with customers:
The Group presents the following disclosures in accordance with
IFRS 15 for all the contracts with customers that were sold in
February 2019:
The cash (consumed) by the discontinued operations prior to
disposal may be summarised:
Period ended Year ended
31 December 31 March
2019 2019
GBP 000 GBP 000
Operating activities - (303)
Investing activities - (192)
-------------- -----------
Cash consumed - (495)
-------------- -----------
Analysis of revenue from customers - 2019: 9 months (2019: 10
months):
Period ended Year ended
31 December 31 March
2019 2019
GBP 000 GBP 000
Technology contracts - over time basis - 1,962
Consultancy contracts - point in time
basis - 335
-------------- -----------
Total revenue - 2,297
-------------- -----------
Impairment losses for contract related assets - 2019: 9 months
(2019: 10 months):
Period ended Year ended
31 December 31 March
2019 2019
GBP 000 GBP 000
Reserve for impairment losses - -
------------- -----------
Contract balances
Opening Closing
Balances Balances
GBP 000 GBP 000
Period ended 31 December 2019:
Receivables:
Non-current - -
Current - -
Contract assets - -
Contract liabilities - deferred income - -
Contract loss reserve - -
Year ended 31 March 2019:
Receivables:
Non-current 341 -
Current 459 -
Contract assets - -
Contract liabilities - deferred income 2,918 -
Contract loss reserve 6 -
Revenue recognised in the reporting period that was included in
the contract liability balance at the beginning of the period were
GBPNil (2019: GBP2,918,000).
Revenue recognised in the reporting period from performance
obligations satis ed in the previous period were GBPNil (2019:
GBPNi1).
The majority of customers were large multi-national entities and
the contract terms with these customers require payment in advance
of the delivery of contract obligations. Contract liabilities -
deferred income relate to performance obligations that are unsatis
ed at the end of the reporting period. These amounts are expected
to be recognized in the following year.
5 Staff costs
The aggregate payroll costs (including directors' remuneration)
were as follows:
Period ended Year ended
31 December 31 March 2019
2019 GBP 000
GBP 000
Wages and salaries 45 1,398
Social security costs 5 141
Other short-term employee benefits 3 59
Pension costs, defined contribution scheme - 15
Redundancy costs - 204
Share-based payment expenses - (35)
------------ --------------
53 1,782
============ ==============
After the sale of the business in February 2019, there were no
full-time employees.
The average number of persons employed by the Group (including
directors) during the year, analysed by category was as
follows:
Period ended
31 December Year ended
2019 31 March 2019
No. No.
Administration and support 3 23
============ ==============
6 Key management personnel
Key management compensation
Period ended Year ended
31 December 31 March 2019
2019 GBP 000
GBP 000
Salaries and other short-term employee
benefits 50 506
Loss of office - 182
Post-employment benefits - 6
------------ --------------
50 694
============ ==============
Retirement benefits are accruing to no Company directors under a
defined contribution scheme (2019: one).
The directors' emoluments are shown in the remuneration report
on page 15.
As all full-time employees left the Group following the sale of
the business in February 2019, for the period to 31 December 2019,
the Directors of the Company are considered to be the key
management personnel.
7 Other operating income
The analysis of the Group's other operating income for the
period is as follows:
Period ended 31 December 2019 Year ended 31 March 2019
GBP 000 GBP 000
Sub lease rental income 40 66
============================= ========================
8 Operating loss
Arrived at after charging/(crediting)
Period ended 31 December 2019 Year ended 31 March 2019
GBP 000 GBP 000
Depreciation expense - 10
Amortisation expense - 196
Foreign exchange (gains) / losses 6 161
Operating lease expense - property 52 151
============================= ========================
9 Auditors' remuneration
Period ended 31 December 2019 Year ended 31 March 2019
GBP 000 GBP 000
Fees payable to the Company's auditor for the audit of the
Company's annual accounts 20 40
Fees payable to the Company's auditor and its associates for
other services:
Audit of the accounts of subsidiaries - -
Tax advisory services - 4
----------------------------- ------------------------
20 44
============================= ========================
10 Finance income and costs
Period ended 31 December 2019 Year ended 31 March 2019
GBP 000 GBP 000
Finance costs
Interest - 8
Movement - fair value derivative financial instruments - 34
Total - 42
============================= ========================
11 Income tax
Tax credited in the income statement
Period ended Year ended
31 December 31 March 2019
2019 GBP 000
GBP 000
Current taxation
UK corporation tax - discontinued operations
- Note 4 - (141)
============ ==============
The tax on loss before tax for the period is less than (2019 -
less than) the standard rate of corporation tax in the UK of 19%
(2019 - 19%).
The differences are reconciled below:
Period ended Year ended
31 December 31 March 2019
2019 GBP 000
GBP 000
Loss before tax (685) (374)
============ ==============
Corporation tax at standard rate (130) (71)
Increase (decrease) from effect of capital
allowances depreciation - 2
Effect of revenues exempt from taxation - (197)
Effect of expenses not deductible in determining
taxable profit (tax loss) 106 49
Increase (decrease) from effect of tax
incentives - 29
Tax decrease from utilisation of tax losses - 154
Other tax effects for reconciliation between
accounting profit and tax expense (income) - 1
Increase (decrease) in UK and foreign current
tax from unutilised tax losses - 33
Increase (decrease) in UK and foreign current
tax from R&D tax credits received relating
to prior periods - (141)
------------ --------------
Increase in tax losses carried forward
which were unutilised in the current year 24 -
------------ --------------
Total tax credit - (141)
============ ==============
At 31 December 2019 the company had unutilised tax losses of
GBP9,000 (31 March 2019: GBP1,000). A deferred tax asset of
GBP2,000 (31 March 2019: GBPnil) has not been recognised due to the
uncertainty around the timing of the availability of taxable income
to utilise the losses.
12 Earnings per share
The calculation of the Basic earnings per share (EPS) is based
on the loss attributable to equity holders of the parent for the
year from continuing operations of GBP685,000 (2019 - loss
GBP699,000) and a pro t on discontinued operations of GBPnil (2019
- profit GBP325,000) giving a net total loss for the year of
GBP685,000 (2019 - loss of GBP374,000) and on a weighted average
number of ordinary shares in issue of 101,094,276 (2019 -
52,989,928).
The diluted EPS for the continuing operations and the diluted
EPS in total (and in the prior year) were the same as the Basic EPS
as they were all losses. In the prior year, the diluted EPS for the
discontinued operations is a pro t of 0.57p. For the calculation of
the diluted EPS for the discontinued operations, the pro t used was
the same as for the Basic EPS, and the Basic weighted average
number of shares was increased by 4,428,860 shares in respect of
the outstanding share options and convertible loan note. At 31
March 2019, 7,946,158 options were excluded because their effect
would have been anti-dilutive. The average mark value of the shares
for the purposes of calculating the dilutive effect was based on
quoted market prices for the year during which the options were
outstanding.
13 Investments
Group
Details of undertakings
Details of the investments in which the group holds 20% or more
of the nominal value of any class of share capital are as
follows:
Proportion of voting rights and shares
held
Undertaking Country of incorporation Holding 2019 2019
Subsidiary undertakings
Abal (Goswell) Limited England and Wales Ordinary shares 100% 100%
The business and assets of Abal (Goswell) Limited were sold in
February 2019, and at the year end the company was dormant.
14 Property, plant and equipment
Group and Company
Leasehold Fixtures and
improvements fittings Equipment Total
GBP 000 GBP 000 GBP 000 GBP 000
Cost or valuation
At 1 April 2018 50 62 385 497
Disposal of business (50) (62) (385) (497)
------------- ------------ --------- --------
At 31 March 2019 - - - -
------------- ------------ --------- --------
At 1 April 2019 - - - -
Disposals - - - -
------------- ------------ --------- --------
At 31 December 2019 - - - -
------------- ------------ --------- --------
Depreciation
At 1 April 2018 48 62 364 474
Charge for year 1 - 9 10
Disposal of business (49) (62) (373) (484)
------------- ------------ --------- --------
At 31 March 2019 - - - -
------------- ------------ --------- --------
At 1 April 2019 - - - -
Charge for the year - - - -
------------- ------------ --------- --------
At 31 December 2019 - - - -
------------- ------------ --------- --------
Carrying amount
At 31 December 2019 - - - -
============= ============ ========= ========
At 31 March 2019 - - - -
============= ============ ========= ========
15 Intangible assets
Group and Company
Software Development costs Total
GBP 000 GBP 000 GBP 000
Cost or valuation
At 1 April 2018 409 1,842 2,251
Additions 7 198 205
Disposal of business (416) (2,040) (2,456)
-------- ----------------- --------
At 31 March 2019 - - -
-------- ----------------- --------
At 1 April 2019 - - -
Additions - - -
-------- ----------------- --------
At 31 December 2019 - - -
-------- ----------------- --------
Amortisation
At 1 April 2018 378 945 1,323
Amortisation charge 26 167 196
Disposal of business (404) (1,112) (1,516)
-------- ----------------- --------
At 31 March 2019 - - -
-------- ----------------- --------
At 1 April 2019 - - -
Amortisation charge - - -
-------- ----------------- --------
At 31 December 2019 - - -
-------- ----------------- --------
Carrying amount
At 31 December 2019 - - -
======== ================= ========
At 31 March 2019 - - -
======== ================= ========
16 Trade and other receivables
Group Company
As at 31 December 2019 As at 31 March 2019 As at 31 December 2019 As at 31 March 2019
GBP 000 GBP 000 GBP 000 GBP 000
Prepayments - 45 - 45
Other receivables 67 76 67 76
---------------------- ------------------- ---------------------- -------------------
Total current trade and
other receivables 67 121 67 121
====================== =================== ====================== ===================
17 Share capital and reserves
Allotted, called up and fully paid shares
As at 31 December 2019 As at 31 March 2019
No. 000 GBP 000 No. 000 GBP 000
Ordinary shares of GBP0.00002
(2019: GBP0.00002) each 101,094 2 101,094 2
Deferred shares of GBP0.04000
each 63,084 2,523 63,084 2,523
2018 Deferred shares
of GBP0.01000 (2019:
GBP0.01000) each 224,194 2,241 224,194 2,241
388,372 4,767 388,372 4,767
=========== =========== ========== =========
Share premium account
This reserve records the consideration premium for shares issued
at a value that exceeds their nominal value, less any costs
incurred relating directly to the issue of these shares.
Other reserve account
This account acts as the share option reserve, and records both
the charges to the profit with respect to unexercised employee
share options and the fair values for outstanding share
warrants.
As at 31 December As at 31 March
2019 2019
GBP 000 GBP 000
Reserve for granted employee share options - 1,217
----------------- --------------
- 1,217
================= ==============
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and restrictions:
The Ordinary shares carry rights to participate in dividends
and distributions declared by the Company and each share carries
the right to one vote at any general meeting. There are no rights
of redemption attaching to the Ordinary shares.
Deferred shares have the following rights, preferences and restrictions:
The deferred shares carry no rights to receive any dividend
or distribution and carry no rights to vote at any general meeting.
On a return of capital the Deferred shareholders are entitled
to receive the amount paid up on them after the Ordinary shareholders
have received GBP100,000,000 in respect of each share held by
them. The Company may purchase all or any of the Deferred shares
at an appropriate consideration of GBP1.
2018 Deferred shares have the following rights, preferences
and restrictions:
The deferred shares carry no rights to receive any dividend
or distribution and carry no rights to vote at any general meeting.
Allotted, called up and fully paid
shares
As at 31 December 2019 As at 31 March 2019
No. 000 GBP 000 No. 000 GBP 000
At 1 April 388,372,275 4,767 287,277,999 4,765
Sub-division - - 224,193,710 -
Consolidation - - (201,774,339) -
Issued in the period/year - - 78,674,905 2
------------------ ----------- -------------------- ----------
At 31 December/31 March 388,372,275 4,767 388,372,275 4,767
================== =========== ==================== ==========
18 Share-based payments, convertible loan notes and derivative
financial instruments
(1) Enterprise management scheme
Scheme details and movements
During the period the Group operated an approved Enterprise
management scheme, an approved Incentive stock option agreement and
an unapproved share option scheme.
For all schemes, options vest provided the employee who has been
granted the option remains employed by the group at the earliest
date that they may exercise the option. Each director or employee
may exercise 50% of the options granted to them between two and ten
years after the date of the grant. The remainder may be exercised
between three and ten years after the date of the grant. Options
are forfeited if the employee leaves the Company before the options
vest. The options will be settled by the issue and allotment of
fully paid ordinary shares.
Following the sale of the business, all options lapsed in August
2019.
The movements in the number of share options during the year
were as follows:
As at 31 As at 31 March
December 2019 2019
No. No.
Outstanding, start of period 1,362,632 2,494,386
Granted during the period - -
Forfeited during the period - (1,131,754)
Lapsed during the period (1,362,632) -
Outstanding, end of period - 1,362,632
Exercisable, end of period - 533,631
=============== ==============
The movements in the weighted average exercise price of share
options during the year were as follows:
As at 31 As at 31 March
December 2019 2019
Outstanding, start of period 23.5290p 30.9190p
Granted during the period - -
Forfeited during the period - 37.2230p
Lapsed during the period 23.5290p -
Outstanding, end of period - 23.5290p
Exercisable, end of period - 33.5260p
=============== ==============
Outstanding share options at year end:
As at 31 December 2019 As at 31 March 2019
Number of options Exercise price Number of options Exercise price
- - 73,936 67.36p
- - 3,753 25.20p
- - 135,376 37.50p
- - 51,567 48.80p
- - - 28.80p
- - 538,000 16.25p
- - - 13.75p
- - 560,000 17.50p
----------------- -----------------
- 1,362,632
================= =================
The weighted average remaining contractual life is nil years
(2019: 5.95 years).
The cost of options granted is spread over the option vesting
period. The release for the year in relation to options held during
the year is GBP1,216,965 (2019: release GBP35,304).
Fair value of options granted
There were no new options granted in the period (2019 - nil).
The fair value of the new options in prior years were calculated
using the Black-Scholes-Merton model. The cancelled options had
fully vested prior to cancellation. The inputs into the model were
as follows:
2018 2017 2016 2015
Volatility 100% 100% 88% 88%
Expected 10 years 10 years 10 years 10 years
life
Share price
* 17.50p 16.25p 48.80p 37.50p
Exercise
price * 17.50p 16.25p 48.80p 37.50p
Dividend
yield 0% 0% 0% 0%
Risk-free
rate 0.25% 0.25% 2% 2%
* Restated for the share consolidation in June 2018.
External independent experts were used in determining the
expected volatility. The figure used was determined by calculating
the historical volatility of the share price of companies
considered by the experts to be comparable to the Company.
(2) Convertible loan notes and derivative financial
instruments
During the year to 31 March 2019, a convertible loan note was
issued, and then cleared by a debt for equity swap also in the year
ended 31 March 2019. In addition two warrants for options to
acquire shares were outstanding that arose as detailed below. These
are outstanding at 31 December 2019 and have a fair value of
GBP48,000 (31 March 2019: GBP53,000). Further details are included
below.
At the year-end, there were two warrants outstanding for options
to acquire shares with a combined year-end fair value of GBP48,000
(31 March 2019:GBP53,000). The valuation of the warrants and
further detail to the transactions may be summarised as
follows:
(i) In October 2018, following a placing of shares at 1.1p, a
warrant was issued for 7,272,727 options to acquire shares,
exercisable for 3 years at 1.1p per share option or, if lower, the
5 day average price on AIM prior to exercising the option. The
year-end fair value of these warrants is 0.42p (31 March 2019:
0.39p) per option to acquire a share and has been calculated using
the Black-Scholes model, and the year-end AIM listed share price of
0.85p (31 March 2019: 0.68p) giving a total fair value of GBP31,000
(31 March 2019: GBP35,000) for all these options to acquire shares.
The other inputs into the model were volatility 111% (31 March
2019: 111%), dividend yield 0% (31 March 2019: 0%), and risk free
rate of 2.1% (31 March 2019: 2.1%).
(ii) In October 2018, a 3 year unsecured convertible loan note
('CLN') for GBP90,000 was issued. The terms of the CLN was an
interest rate of 7.5% pa, and the conversion repayment option was
in two parts - the issue of shares to repay the principal amount of
the loan, and a warrant with the option to purchase additional
shares. If the conversion option was exercised, the ordinary shares
for the loan repayment would be issued a price of 1.1p or, if
lower, the 5 day average price on AIM prior to exercising the
conversion option. The warrant was for a number of options to
acquire shares equal to half the number of shares issued for the
repayment of the loan. The terms of the warrant were for 3 years
and an exercise price of 1.1p or, if lower, the 5 day average price
on AIM prior to exercising the warrant option. In January 2019, the
conversion option was exercised. For the repayment of the loan
8,181,818 ordinary shares were issued at a price of 1.1p. On
conversion, warrants were issued for options to acquire 4,090,909
shares, and these warrants were outstanding at both 31 March 2019
and 31 December 2019. For accounting purposes, the CLN on issue was
attributed a fair value of GBP69,000 by discounting the loan
repayments at an unsecured interest rate of 18%. As the Group had
no other comparable unsecured borrowings, higher or lower interest
rates might have been applied to calculate the discount factor, but
these would not change materially the fair value of the CLN.
The gain on issue was credited to pro t and loss. On exercising
the conversion option in January 2019, the release of the GBP19,000
difference between the carrying value of the loan and the legal
value was credited direct to retained earnings. At the time of
exercising this conversion option, the fair value of share warrants
was GBP33,000 and these warrants were revalued at the year ended 31
December 2019 using the same basis and factors outlined in the
previous paragraph 18(2)(i), and giving a total value for these
warrants of GBP17,000 (31 March 2019: GBP18,000). The movement in
the fair value was credited to pro t and loss.
19 Trade and other payables
Group Company
As at 31 December 2019 As at 31 March 2019 As at 31 December 2019 As at 31 March 2019
GBP 000 GBP 000 GBP 000 GBP 000
Trade payables 304 65 304 65
Accrued expenses 58 318 58 318
Social security and other
taxes 3 39 3 39
Outstanding defined
contribution pension costs - 1 - 1
Other payables 44 40 44 40
---------------------- ------------------- ---------------------- -------------------
409 463 409 463
====================== =================== ====================== ===================
20 Pension and other schemes
Defined contribution pension scheme
The Group operates a defined contribution pension scheme. The
assets of the scheme are held separately from those of the Group
and Company in an independently administered fund. The pension cost
charge represents contributions payable by the group to the
fund.
The total pension charge for the year represents contributions
payable by the Group to the scheme and amounted to GBPNil (2019:
GBP15,000).
Contributions totalling GBPnil (2019: GBP500) were payable to
the scheme at the end of the year and are included in
creditors.
21 Commitments
Group
Capital commitments
There are no material capital commitments at the year end (2019:
GBPNil).
Other financial commitments
As at 31 December 2019 the group had non-cancellable operating
leases relating to three properties occupied by the group as set
out below:
As at 31 December 2019 As at 31 March 2019
Land and buildings Land and buildings
Minimum future payments: GBP 000 GBP 000
Due within one year - 35
Later than one year and not later than five years - -
---------------------- -------------------
- 35
====================== ===================
22 Financial instruments
Financial assets - Group and Company
Carrying value Fair value
As at 31 December 2019 As at 31 March 2019 As at 31 December 2019 As at 31 March 2019
GBP 000 GBP 000 GBP 000 GBP 000
Cash and cash equivalents 81 771 81 771
Trade receivables -
non-current - - - -
Trade receivables -
current - - - -
Other receivables -
current 46 46 - 46
127 817 81 817
====================== =================== ====================== ===================
Valuation methods and assumptions: The directors believe that
the fair value of all financial assets approximates to the carrying
value - see Note 16 for further details about trade
receivables.
Financial liabilities - Group and Company
Carrying value Fair value
As at 31 December 2019 As at 31 March 2019 As at 31 December 2019 As at 31 March 2019
GBP 000 GBP 000 GBP 000 GBP 000
Financial liabilities at
amortised cost:
Trade and other payables 348 105 348 105
====================== =================== ====================== ===================
Fair value
As at 31 December 2019 As at 31 March 2019
GBP 000 GBP 000
Financial liabilities at
fair value through profit
and loss:
Derivative financial
instruments 48 53
====================== ===================
Valuation methods and assumptions: The directors believe that
the fair value of trade and other payables approximates to the
carrying value - see note 18 for further details of the fair value
of derivative financial instruments.
Risk management
Until the sale of the business in February 2019, the Group was
exposed through its operations to the following nancial risks:
credit risk, foreign exchange risk; and liquidity risk.
In common with all other businesses, the Group was exposed to
risks that arose from its use of nancial instruments. This note
describes the Group's former objectives, policies and processes for
managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented
throughout these nancial statements. There have been no substantive
changes in the Group's exposure to nancial instrument risks, its
objectives, policies and processes for managing those risks or the
methods used to measure them from previous periods unless otherwise
stated in this note.
Principal nancial instruments
The principal nancial instruments used by the Group, from which
nancial instrument risk arises, were as follows:
- trade receivables;
- cash at bank; and
- trade and other payables.
General objectives, policies and processes
The board had overall responsibility for the determination of
the Group's risk management objectives and policies and, whilst
retaining ultimate responsibility for them, it had delegated the
authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the
Group's nance function. The board received monthly reports from the
chief Financial Of cer through which it reviewed the effectiveness
of the processes put in place and the appropriateness of the
objectives and policies it had set. The overall objective of the
board was to set polices that sought to reduce risk as far as
possible without unduly affecting the Group's competitiveness and
exibility. Further details regarding these policies are set out
below.
Interest rate risk
At present the directors do not believe that the Group has
significant interest rate risk and consequently does not hedge
against such risk. Cash balances earn interest at variable
rates.
The Group's financial assets as at 31 December 2019 comprised
cash at bank of GBP81,000 (2019: GBP771,000). Interest is paid on
cash at floating rates in line with prevailing market rates.
Sensitivity analysis
At 31 December 2019, had the LIBOR 1 MONTH rate increased by 1%
with all other variables held constant, the increase in interest
receivable on financial assets would amount to approximately
GBP1,000 (2019 - GBP1,000). Similarly a 1% decrease in the LIBOR 1
MONTH rate with all other variables held constant would result in a
decrease in interest receivable on financial assets of
approximately GBP1,000 (2019 - GBP1,000).
Credit risk and impairment
Credit risk is the risk of nancial loss to the group if a
customer or a counterparty to a nancial instrument fails to meet
its contractual obligations. The Group is mainly exposed to credit
risk from credit sales. It is Group policy, implemented locally, to
assess the credit risk of new customers before entering contracts.
Such credit ratings take into account local business practices. The
Group has a credit policy under which each new customer is analysed
individually for creditworthiness before the Group's standard
payment and delivery terms and conditions are offered.
Credit risk also arises from cash and cash equivalents and
deposits with banks and nancial institutions. To manage this, the
Group has made sure that they use reputable banks.
Until the sale of the business in February 2019, the Group's
chief nancial of cer monitored the utilisation of the credit limits
regularly.
Foreign exchange risk
Foreign exchange risk arose because the Group had operations
located in various parts of the world whose functional currency was
not the same as the functional currency in which the Group
companies were operating. Although its global market penetration
reduced the Group's operational risk in that it had diversified
into several markets, the Group's net assets arising from such
overseas operations were exposed to currency risk resulting in
gains or losses on retranslation into sterling. Only in exceptional
circumstances would the group consider hedging its net investments
in overseas operations as generally it did not consider that the
reduction in foreign currency exposure warranted the cash flow risk
created from such hedging techniques.
The group's policy was, where possible, to allow group entities
to settle liabilities denominated in their functional currency
(primarily US dollars or pound sterling) with the cash generated
from their own operations in that currency. Where group entities
had liabilities denominated in a currency other than their
functional currency (and had insufficient reserves of that currency
to settle them) cash already denominated in that currency was,
where possible, transferred from elsewhere within the group.
Currency profile
Financial assets
- Cash Sterling: GBP77,000 (2019 - GBP670,000)
- Cash US dollar: GBP4,000 (2019 - GBP101,000)
- Trade receivables Sterling: GBPnil (2019 - GBPnil)
- Trade receivables US dollar: GBPnil (2019 - GBPnil)
- Trade receivables Euro: GBPnil (2019 - GBPnil)
Financial liabilities
- Trade payables Sterling: GBP304,000 (2019 - GBP51,000)
- Trade payables US dollar: GBPnil (2019 - GBP15,000)
- Trade payables Euro: GBPnil (2019 - GBPnil)
Sensitivity analysis
At 31 December 2019, if Sterling had strengthened by 10% against
USD with all other variables held constant, profit before tax for
the year would have been approximately GBPnil (2019 - GBP12,000
higher), mainly as a result of foreign exchange losses on
translation of USD denominated cash and cash equivalents and trade
receivables, compensated by foreign exchange gains on translation
of USD denominated trade payables and deferred revenues.
Conversely, if Sterling had weakened by 10% against USD with all
other variables held constant, profit before tax for the year would
have been approximately GBPnil (2019 - GBP12,000 lower).
Liquidity risk
Liquidity risk arises from the Group's management of working
capital and the finance charges and principal repayments on its
debt instruments. It is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall
due.
The Group's policy is to ensure that it will always have
sufficient cash to allow it to meet its liabilities when they
become due.
The board received rolling 12-month cash flow projections on a
regular basis as well as information regarding cash balances. At
the statement of financial position date, these projections
indicated that the group expected to have sufficient liquid
resources to meet its obligations under all reasonably expected
circumstances.
There were no undrawn facilities at 31 December 2019 or 31 March
2019.
Capital risk management
Capital management
The Group's capital management objectives are to ensure the
Group is appropriately funded to continue as a going concern and to
provide an adequate return to shareholders commensurate with risk.
The Group defines capital as being total shareholder's equity. The
Group has no external debt finance and hence gearing is not
measured. The Group's capital structure is periodically reviewed
and, if appropriate, adjustments are made in the light of expected
future funding needs, changes in economic conditions, financial
performance and changes in Group structure.
The Group adheres to the capital maintenance requirements as set
out in the Companies Act.
Capital for the reporting periods under review is summarised as
follows:
- Total equity: GBP(309,000) (2019: GBP376,000)
- Cash and cash equivalents: GBP81,000 (2019: GBP771,000)
23 Related party transactions
Shawn Taylor, Simon Charles and John Treacy are all related
parties by virtue of their directorships during the period. The
directors' emoluments are shown in the remuneration report on page
16. At the period end GBPNil (2019: GBP30,000) was outstanding.
Simon Charles is a partner in Marriott Harrison LLP, legal
advisors to the Company. During the period the Company incurred
legal fees and disbursements with Marriott Harrison LLP amounting
to GBP82,782 (2019 - GBP126,222). At the year-end GBPNil (2019 -
GBP20,154) was outstanding.
John Treacy was a director and shareholder of YTC Consultancy
Services Limited ("YTC"). During the period the Company incurred
consultancy fees and disbursements with YTC amounting to GBP71,675
(2019 - GBP126,222). At the year-end GBP56,500 (2019 - GBP20,154)
was outstanding.
John Treacy was a director of Eight Capital Partners Plc, the
largest shareholder in the Company at the time.
The following transactions occurred during the period and at the
end of the year the following amounts were due to related parties.
The Company made purchases of services from Abal (Goswell) Limited
in the period totalling GBPNil (2019 - GBP15,000). At 31 March 2019
Abal (Goswell) Limited owed the Company GBPNil (2019 - GBPNil).
24 Controlling party
At 31 December 2019 the Directors do not believe that a
controlling party exists.
Following the transaction disclosed in note 25, the directors
believe that the board of directors control the Company.
25 Subsequent events
On 23 March 2020, Supply@ME Capital plc completed the following
transactions, details of which are disclosed in the prospectus
dated 4 March 2020:
- reverse acquisition of Supply@ME S.r.l., a company registered
in Italy;
- placing of 331,604,094 shares; and
- admission to the Official List and trading on the London Stock
Exchange's Main Market.
The transaction was effected by way of the issue of
consideration shares. Due to Supply@ME Capital plc effectively
having no substance, and in fact Supply@ME S.r.l. was acting as the
parent of the Group, the consolidated Group is to be accounted for
as a capital reorganisation rather than a business combination.
Future financial statement will be prepared on the basis that
Supply@ME S.r.l. is the accounting acquirer and Supply@ME Capital
plc the accounting acquiree.
In December 2019, a novel strain of coronavirus ("COVID-19")
surfaced in Wuhan, China, and has spread around the world, with
resulting business and social disruption around the world. COVID-19
was declared a Public Health Emergency of International Concern by
the World Health Organization on 30 January 2020. Further
information regarding the impact Covid-19 on the operations of the
business is included in the Directors' Report.
[1] "Gross origination" includes all client companies that have
signed an NDA, a term sheet, or are in or have completed the
onboarding process.
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