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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Inspirit Energy Holdings Plc | LSE:INSP | London | Ordinary Share | GB00B44W9L31 | ORD 0.001P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.0005 | 5.00% | 0.0105 | 0.009 | 0.012 | 0.0105 | 0.01 | 0.01 | 15,267,818 | 09:54:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Air Heat & Condition Eq-whsl | 0 | -260k | 0.0000 | N/A | 628.72k |
From Apr 2019 to Apr 2024
TIDMINSP
RNS Number : 4917A
Inspirit Energy Holdings PLC
28 December 2017
28 January 2017
Inspirit Energy Holdings Plc
("Inspirit" or "the Company")
Audited results for the year ended 30 June 2017 and Notice of AGM
Inspirit Energy Holdings Plc today announces its audited results for the year ended 30 June 2017 (the "Accounts").
Copies of the Company's Annual Report and Accounts will be sent to shareholders and will be available on the Company's website www.inspirit-energy.com today. Further copies may be obtained directly from the Company's Registered Office at Inspirit Energy Holdings plc, 2(nd) Floor, 2 London Wall Buildings, London EC2M 5PP. Extracts of the Accounts are set out below.
The notice of Annual General Meeting ("AGM") will also be posted to shareholders shortly. The AGM will be held at the offices of the Company, 2(nd) floor, 2 London Wall Buildings, London EC2M 5PP on 15 February 2018 at 11 am.
More information on Inspirit Energy can be seen at: www.inspirit-energy.com
Contacts: Inspirit Energy Holdings plc John Gunn, Chairman and CEO +44 (0) 207 048 9400 Beaumont Cornish Limited www.beaumontcornish.com (Nominated Advisor) Roland Cornish / James Biddle +44 (0) 207 628 3396 Peterhouse Corporate Finance (Joint Broker) Lucy Williams / Duncan Vasey +44 (0) 207 469 0930 SVS Securities Plc (Joint Broker) Tom Curran +44 (0) 203 700 0093
About Inspirit Energy Holdings Plc
Inspirit Energy Holdings plc, is developing and commercialising a highly efficient micro combined heat and power (mCHP) boiler for commercial applications. The boiler is specifically designed to meet the challenge of a reduced carbon energy supply and is capable of running on natural gas, LPG and Bio Fuels. The appliance produces hot water (for tap water or central heating) and electrical output simultaneously. The installation can be of single or multiple configuration and its high operating efficiency together with the off-set of electricity costs provides a very attractive investment payback proposition.
Inspirit intends to explore opportunities to license out the underlying technology and the Directors believe that, in some instances, the patents owned by Inspirit may be also used in the development of products other than a mCHP appliance. A prototype of the appliance has been independently tested and shown to be capable of simultaneous generation of up to 15kW thermal and up to 3kW electrical output. Once development of the appliance has been completed and commercialised, the Directors expect that the appliance will initially be marketed in the UK and Europe and eventually worldwide. Additional revenue streams may be possible through product licensing, sales of warranties and further development of the product.
CHAIRMANS'S STATEMENT
FOR THE YEAR ENNDED 30 JUNE 2017
INTRODUCTION
This financial year, Inspirit Energy Holdings plc has maintained its focus in the commercialisation of the Group's micro combined heat and power ("mCHP") boilers.
COMMERCIALISATION AND PROGRESS
During the year, the Group has been working to advance its microCHP boiler towards commercialisation. To this end, improvements to the design of the Group's Stirling engine technology, including simplification as part of the 'design for manufacture' ("DFM") process, have resulted in a peak electrical output up to 3.2kW of electricity against the unit's benchmark output of 3.0kW, whilst maintaining the same fuel input and heat output.
In addition, the Inspirit Charger has a similar footprint to many existing microCHP products but more than double the electrical output, making it a more attractive proposition in its key launch market of commercial plant rooms.
Importantly, this has been achieved without compromising the Group's "Sealed for Life" philosophy which aims to give customers peace of mind and aligns maintenance requirements and skillsets with those of a standard natural gas condensing boiler.
The DFM process is the means by which the manufacturing cost of the technology is reduced through engineering improvements and through improved manufacturability. The DFM process has already yielded several engineering improvements and manufacturing cost reductions and more are expected. Improved manufacturability leverages volume based cost reductions which will be available once commercial production starts. This DFM process remains on going and the Group will update investors once complete.
The ongoing collaboration with CIBSE, the Chartered Institute of Building Services Engineers, a key influencer in our initial target market of commercial plant rooms, is another example of our preparation for commercial launch. Customer confidence in our technology and its performance is a key success factor.
The applicable market for our technology is global, either as a boiler replacement product or as an add-on to an existing commercial plant room. In the UK there are in excess of 20 million gas boilers installed and more than 1.6 million new and replacement domestic gas boilers are installed each year. This is in addition to almost 300,000 commercial boiler installations each year. Europe as a whole has approximately 70 million boilers installed. These are the first markets to which our technology is applicable.
OUTLOOK
The operating board and I believe that the progress over the last year has been positive. Whilst we remain well positioned in the microCHP boiler technology market, on going funding for the development and commercialisation of our product remains a challenge. Accordingly, we continue to manage our resources whilst pushing forward with the product and expect this to continue in 2018.
At the same time, the Board continues to consider its options for the future strategy and funding of its operating subsidiary and will provide investors with an update when this review is complete.
J Gunn
Chairman and Chief Executive Officer
22 December 2017
STRATEGIC REPORT
The Directors present their Strategic Report on Inspirit Energy Holdings plc (the "Company") and its subsidiary undertakings (together the "Group") for the year ended 30 June 2017.
REVIEW OF THE BUSINESS
Inspirit Energy Limited (IEL) is currently pursuing the development and commercialisation of a world-leading micro Combined Heat and Power ("mCHP") boiler for use in commercial and residential markets. The mCHP boiler is powered by natural gas and designed to produce hot water (for domestic hot water or central heating) and a simultaneous electrical output that can be used locally or fed back into the National Grid.
Inspirit Energy's new "British Engineered" mCHP boiler is one of the industry's most powerful and energy efficient mCHP appliances for its size with simultaneous generation of up to 15 kilowatts of thermal output and up to 3 kilowatts of electrical output. The mCHP boiler has been designed to be low maintenance and can be installed by a certified gas-safe tradesman. The appliance's patented engine takes the waste heat from the boiler and converts it efficiently into electricity, first supplying the property where it is installed and then feeding surplus electricity into the National Grid.
DEVELOPMENTS DURING THE YEAR
In May 2017 the Company raised GBP292,500 before expenses through the issue of 234,000,000 new ordinary shares at a price of 0.125 pence per share.
BOARD CHANGES
On 2(nd) June 2017, the Company announced that Mr Neil Luke, the Company's Chief Operating Officer stepped down from the board due to his planned retirement.
RESULTS AND DIVIDS
The Group made a loss after taxation of GBP419,000 (2016: loss of GBP458,000).
The Directors do not propose a dividend for the year to 30 June 2017 (2016: GBPnil).
KEY PERFORMANCE INDICATORS
The key performance indicators used by the Board to monitor the performance of the Company, are set out below:
Hot Features
Premium
PLC S PLC STATISTICS 30 June 30 June
2017 2016
-------------------------------- ------------ ------------
Net asset value GBP2,360,000 GBP2,597,000
Net asset value - fully diluted
per share 0.24p 0.28p
Closing share price 0.14p 0.38p
Market capitalisation GBP1,639,130 GBP3,559,866
-------------------------------- ------------ ------------
KEY RISKS AND UNCERTAINTIES
Early stage product development carries a high level of risk and uncertainty, although the rewards can be outstanding. At this stage there is a common risk associated with all pioneering technologically advanced companies in their requirement to continually invest in research and development. The Group has already made significant investments in addressing opportunities in the renewable energy sector.
The Group has raised funds during the period as discussed in the 'Developments during the year' above. The Directors feel that while this is sufficient for operating forecasts, further funding requirements are necessary to expedite the commercialisation of the micro co-generation boiler.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The principal financial risk faced by the Group is liquidity risk. The Group's financial instruments included borrowings and cash which it used to finance its operations. At the year end, borrowings did not include any borrowings supplied from the Group's principal bank, Barclays. More information is given in Note 3 to the Financial Statements. The Group has no significant concentrations of credit risk.
ASSESSMENT OF BUSINESS RISK
The Board regularly reviews operating and strategic risks. The Group's operating procedures include a system for reporting financial and non-financial information to the Board including:
-- reports from management with a review of the business at each Board meeting, focusing on any new decisions/risks arising;
-- reports on the performance of investments; -- reports on selection criteria of new investments; -- discussion with senior personnel; and -- consideration of reports prepared by third parties.
Details of other financial risks and their management are given in Note 3 to the financial statements.
POST YEAR EVENTS
On 15(th) August 2017, the Company announced that it raised GBP300,000 by issuing 208,333,334 new Ordinary Shares of 0.1p each at a price of 0.12p per Ordinary Share together with a proposed Director's subscription of 41,666,666.
GOING CONCERN
As at 30 June 2017 the Group had a cash balance of GBP30,000 (2016: GBP258,000), net current assets/ liabilities of negative GBP361,000 (2016: positive GBP39,000) and net assets of GBP2,360,000 (2016: GBP2,597,000). The Group continues to incur costs in the development and modification of their products and is pre-revenue.
Therefore the cash flow forecasts for the Group and Company show that further equity and/or borrowings will be required to complete the final development and external testing of the Group's mCHP boilers and bring them into production to get to a cash flow positive position. Although the Directors are confident that further debt or equity can be raised at a valuation acceptable to the Group there is no guarantee this will be the case.
ON BEHALF OF THE BOARD
N Jagatia
Director
22 December 2017
REPORT OF THE DIRECTORS
The Directors present their annual report on the affairs of the Group, together with the audited financial statements for the year ended 30 June 2017.
PRINCIPAL ACTIVITIES
The principal activity of the Group is that of development and commercialisation of the mCHP boiler.
Details of the Group's principal activities can be found in the Strategic Report.
DIRECTORS
The Directors who held office in the period up to the date of approval of the Financial Statements and their beneficial interests in the Group's issued share capital at the beginning and end of the accounting year were:
Number of Number of
ordinary shares share options and warrants
------------------ ------------------------ -----------------------------
30 June 30 June 30 June 30 June
2017 2016 2017 2016
------------------ ----------- ----------- -------------- -------------
J Gunn 439,696,246 370,029,580 - -
N Jagatia 2,000,000 2,000,000 - -
N Luke ( resigned
02/06/2017) 3,300,000 3,300,000 - -
INDEMNITY OF OFFICERS
The Company maintains appropriate insurance cover against legal action brought against its Directors and officers.
CORPORATE GOVERNANCE
The Board has not adopted the UK Corporate Governance Code; this is only a requirement for premium listed companies and the Board does not consider it appropriate for a company of the size and nature of Inspirit Energy Holdings plc. The Board has, however, adopted the requirements of the Corporate Governance Guidelines for Smaller Companies published by the Quoted Companies Alliance, although, until an independent non-executive director is appointed, John Gunn will chair each of the committees.
BOARD OF DIRECTORS
The Board is responsible for strategy and performance, approval of major capital projects and the framework of internal controls. To enable the Board to discharge its duties, all Directors receive appropriate and timely information. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring the Board procedures, are followed and that applicable rules and regulations are complied with.
AUDIT COMMITTEE
The Audit Committee is currently chaired by John Gunn and includes Nilesh Jagatia. The committee provides a forum for reporting by the Group's external auditors. The committee is also responsible for reviewing a wide range of matters, including half-year and annual results before their submission to the Board, and for monitoring the controls that are in force to ensure the integrity of information reported to shareholders. The Audit Committee will advise the Board on the appointment of external auditors and on their remuneration for both audit and non-audit work, and will discuss the nature, scope and results of the audit with the external auditors. The committee will keep under review the cost effectiveness and the independence and objectivity of the external auditors.
The Audit Committee is responsible for ensuring the "right tone at the top" and that the ethical and compliance commitments of management and employees are understood throughout the Group.
REMUNERATION COMMITTEE
The Remuneration Committee is chaired by John Gunn and includes Nilesh Jagatia. The committee is responsible for making recommendations to the Board, within agreed terms of reference, on the Group's framework of executive remuneration and its cost. The Remuneration Committee determines the contract terms, remuneration and other benefits for the executive directors, including performance related bonus schemes and compensation payments. The Board itself determines the remuneration of the non-executive directors.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority. In addition to the publication of an annual report and an interim report, there is regular dialogue with shareholders and analysts. The Annual General Meeting is viewed as a forum for communicating with shareholders, particularly private investors. Shareholders may question the Executive Chairman and other members of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's system of internal control and for reviewing the effectiveness of these systems. The risk management process and systems of internal control are designed to manage rather than eliminate the risk of the Group failing to achieve its strategic objectives. It should be recognised that such systems can only provide reasonable and not absolute assurance against material misstatement or loss. The Group has well established procedures which are considered adequate given the size of the business.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report of the Directors and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the directors have prepared the group and parent company financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU"). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently -- make judgments and accounting estimates that are reasonable and prudent
-- state whether applicable 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 company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and 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 Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The Company is compliant with AIM Rule 26 regarding the Company's website. See www.inspirit-energy.com.
DISCLOSURE OF INFORMATION TO AUDITOR
In the case of each person who was a Director at the time this report was approved:
-- so far as that director is aware there is no relevant audit information of which the Company's auditor is unaware: and
-- that director has taken all steps that the director ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
INDEPENT AUDITOR
The auditors, Welbeck Associates, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
ON BEHALF OF THE BOARD
N Jagatia
Director
22 December 2017
INDEPENT AUDITOR'S REPORT
TO THE MEMBERS OF INSPIRIT ENERGY HOLDINGS PLC
Opinion
We have audited the financial statements of Inspirit Energy Holdings Plc (the 'Company') and its subsidiaries (the "Group") for the year ended 30 June 2017 which comprise the Group income statement, the Group statement of comprehensive income, the Group and Parent Company statements of changes in equity, the Group and Parent Company statements of financial position, the Group and Parent Company statements 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 group's and of the parent company's affairs as at 30 June
2017 and of the group's loss for the year then ended; -- have been properly prepared in accordance with IFRSs as adopted by the European Union; and -- 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 as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 4 in the financial statements, which indicates that the Group incurred a net loss of GBP419k during the year ended 30 June 2017 and, of that date, the Group's current liabilities exceeded its current assets by GBP361k. As stated in note 4, these events or conditions, along with the other matters as set forth in note 4, 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.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How we addressed it
Carrying value of intangible
assets
The capitalisation of We focused on the key assumptions
development costs as relating to future revenue
an intangible asset forecasts, margin expectations
requires the Board of and associated selling costs.
Directors to demonstrate We were able to evaluate the
that six criteria as reasonableness of the Directors'
defined within IAS 38 forecasts and expectations
"Intangible Assets" including the impact upon
have all been met. terminal values by agreeing
At the 30 June 2017, changes in growth assumptions
there is GBP2,668k of to corroborating evidence.
intellectual property We validated the inputs used
capitalised (2016: GBP2,495k) by the Directors to calculate
in the Consolidated the discount rate applied
Statement of Financial by comparing this to a selection
Position. of comparable organisations.
We focused on this area The Directors' key assumptions
because the Directors' for long term growth rates
assessment of whether were also compared to economic
impairment triggers and industry forecasts for
have been identified reasonableness.
that could give rise We assessed, through the performance
to an impairment charge of sensitivity analysis over
in relation to the development the key assumptions above,
costs involved complex the extent of change in those
and subjective judgements assumptions that either individually
and assumptions including or collectively would be required
the progress and future for any potential impairment
performance of the boiler. charges, to have a material
The Directors have prepared impact on the carrying value
impairment assessment of the acquired intangible
models which include assets and goodwill. We also
a number of assumptions. assessed the likelihood of
The assumptions which such changes occurring.
are deemed to be the
most significant in
respect of these models
are related to the estimated
length of revenue streams
and the associated costs.
Clear and full disclosure Our procedures included:
of the facts and the * Assessing the completeness and accuracy of the
Directors' rationale matters covered in the going concern disclosure by
for the use of the going assessing its consistency with the cash flow
concern basis of preparation, forecasts prepared by the Group and the terms of the
including that there loan notes issued.
is a related material
uncertainty, is a key
financial statement
disclosure. Significant We assessed whether the disclosure
judgement is required was balanced, understandable
in assessing the disclosures. and sufficiently prominent,
and referred to there being
a material uncertainty.
Our application of materiality
Materiality for the Group financial statements as a whole was set at GBP71k (2016: GBP78k).
This has been calculated as 3% of the net assets (2016: 3%), which we have determined, in our professional judgment, to be one of the principal benchmarks within the financial statements relevant to members of the Company in assessing financial performance of the Group.
Materiality for the parent company financial statements was set at GBP63k (2016: GBP67k), determined with reference to a benchmark of the net assets of GBP2,103k, of which it represents 3% (2016: 3%).
We report to the Director all corrected and uncorrected misstatements we identified through our audit with a value in excess of GBP3k (2016: GBP4), in addition to other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.
An overview of the scope of our audit
All entities of the group were subject to full scope audit procedures for group and statutory reporting purposes. We did not rely on the work of any component auditors
As part of our planning we assessed the risk of material misstatement including those that required significant auditor consideration at the component and group level. Procedures were then performed to address the risk identified and for the most significant assessed risks of material misstatement, the procedures performed are outlined above in the key audit matters section of this report.
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, based on the work undertaken in the course of the audit:
-- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or -- certain disclosures of directors' remuneration specified by law are not made; or -- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 Auditors' 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.
Jonathan Bradley-Hoare (Senior statutory auditor)
for and on behalf of Welbeck Associates
Chartered Accountants and Statutory Auditor
London, United Kingdom
22 December 2017
GROUP STATEMENT OF COMPREHENSIVE
INCOME 2017 2016
Note GBP'000 GBP'000
----------------------------------- ---- --------- -------
CONTINUING OPERATIONS:
Revenue - -
Administrative expenses 8 (384) (503)
Other losses - net 9 - (23)
OPERATING LOSS (384) (526)
Finance costs 10 (73) (27)
LOSS BEFORE INCOME TAX (457) (553)
Income tax credit 11 38 95
----------------------------------- ---- --------- -------
NET LOSS AND TOTAL COMPREHENSIVE
LOSS FOR THE YEAR (419) (458)
----------------------------------- ---- --------- -------
EARNINGS PER SHARE
- Basic and fully diluted earnings
per share
(attributable to owners of the
parent) 12 (0.04p) (0.06p)
----------------------------------- ---- --------- -------
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the Parent Company Statement of Comprehensive Income.
The loss for the Parent Company for the year was GBP283,000 (2016: GBP807,000).
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to the owners of the parent
Reverse
Share Share Other Merger acquisition Retained Total
capital premium reserves reserve reserve losses Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- --------- ---------- --------- ------------- --------- --------
BALANCE AT 1 July
2015 1,098 7,305 125 3,150 (7,361) (2,371) 1,946
---------------------- --------- --------- ---------- --------- ------------- --------- --------
Loss for the year - - - - - (458) (458)
---------------------- --------- --------- ---------- --------- ------------- --------- --------
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR - - - - - (458) (458)
---------------------- --------- --------- ---------- --------- ------------- --------- --------
Share issues 236 919 - - - - 1,155
Share issue costs - (46) - - - - (46)
Issue of warrants - (81) 81 - - - -
---------------------- --------- --------- ---------- --------- ------------- --------- --------
TRANSACTIONS WITH
OWNERS 236 792 81 - - - 1,109
---------------------- --------- --------- ---------- --------- ------------- --------- --------
BALANCE AT 30 June
2016 1,334 8,097 206 3,150 (7,361) (2,829) 2,597
---------------------- --------- --------- ---------- --------- ------------- --------- --------
Loss for the
year - - - - - (419) (419)
TOTAL
COMPREHENSIVE
INCOME FOR THE
YEAR - - - - - (419) (419)
---------------- ---------------- --------- ----------- --------- -------- ---------------- ------
Share issues 234 58 - - - - 292
Share issue
costs - (11) - - - - (11)
Debt Adjustment (99) (99)
Issue of
warrants - - - - - - -
---------------- ---------------- --------- ----------- --------- -------- ---------------- ------
TRANSACTIONS
WITH
OWNERS 234 47 - - - (99) 182
---------------- ---------------- --------- ----------- --------- -------- ---------------- ------
BALANCE AT 30
June
2017 1,568 8,144 206 3,150 (7,361) (3,347) 2,360
---------------- ---------------- --------- ----------- --------- -------- ---------------- ------
Attributable to equity shareholders
-------------------------------------------------------------------------------
COMPANY
STATEMENT OF
CHANGES IN Share Share Other Retained Total
EQUITY capital premium reserves losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ---------------- --------- ----------- --------- --------------------------
BALANCE AT 30
June 2015 1,098 10,455 125 (9,719) 1,959
----------------- ---------------- --------- ----------- --------- --------------------------
Loss for the
year - - - (807) (807)
----------------- ---------------- --------- ----------- --------- --------------------------
TOTAL
COMPREHENSIVE
INCOME FOR THE
YEAR - - - (807) (807)
----------------- ---------------- --------- ----------- --------- --------------------------
Share issues 236 919 - - 1,155
Share issue
costs - (46) - - (46)
Issue of
warrants - (81) 81 - -
TRANSACTIONS
WITH OWNERS 236 792 81 - 1,109
----------------- ---------------- --------- ----------- --------- --------------------------
BALANCE AT 30
June 2016 1,334 11,247 206 (10,526) 2,261
----------------- ---------------- --------- ----------- --------- --------------------------
Loss for the
year - - - (283) (283)
TOTAL
COMPREHENSIVE
INCOME FOR THE
YEAR - - - (283) (283)
----------------- ---------------- --------- ----------- --------- --------------------------
Share issues 234 58 - - 292
Share issue
costs - (11) - - (11)
Debt adjustment - - - (99) (99)
TRANSACTIONS
WITH OWNERS 234 47 - (99) 182
----------------- ---------------- --------- ----------- --------- --------------------------
BALANCE AT 30
June 2017 1,568 11,294 206 (10,908) 2,160
----------------- ---------------- --------- ----------- --------- --------------------------
STATEMENT OF FINANCIAL
POSITION
Company Number: 05075088 GROUP COMPANY
------------------ -------------------
2017 2016 2017 2016
Note GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ---- --------- ------- --------- --------
NON-CURRENT ASSETS
Intangible assets 13 2,668 2,495 - -
Property, plant and
equipment 14 53 63 - -
Investment in subsidiaries 15 - - 2,440 2,440
2,721 2,558 2,440 2,440
----------------------------- ---- --------- ------- --------- --------
CURRENT ASSETS
Inventories 16 - - - -
Trade and other receivables 17 174 329 122 12
Cash and cash equivalents 18 30 258 30 250
----------------------------- ---- --------- ------- --------- --------
204 587 152 262
----------------------------- ---- --------- ------- --------- --------
TOTAL ASSETS 2,925 3,145 2,592 2,702
----------------------------- ---- --------- ------- --------- --------
EQUITY ATTRIBUTABLE
TO OWNERS OF THE PARENT
Share capital 19 1,568 1,334 1,568 1,334
Share premium 19 8,144 8,097 11,294 11,247
Merger reserve 21 3,150 3,150 - -
Other reserves 21 206 206 206 206
Reverse acquisition
reserve 21 (7,361) (7,361) - -
Retained losses (3,347) (2,829) (10,908) (10,526)
----------------------------- ---- --------- ------- --------- --------
TOTAL EQUITY 2,360 2,597 2,160 2,261
----------------------------- ---- --------- ------- --------- --------
CURRENT LIABILITIES
Trade and other payables 22 366 381 233 274
Borrowings 23 199 167 199 167
----------------------------- ---- --------- ------- --------- --------
565 548 432 441
----------------------------- ---- --------- ------- --------- --------
TOTAL LIABILITIES 565 548 432 441
----------------------------- ---- --------- ------- --------- --------
TOTAL EQUITY AND LIABILITIES 2,925 3,145 2,592 2,702
----------------------------- ---- --------- ------- --------- --------
These Financial Statements were approved by the Board of Directors on 22 December 2017 and were signed on its behalf by:
N Jagatia
Director
STATEMENT OF CASH FLOWS GROUP COMPANY
------------------ ------------------
2017 2016 2017 2016
Note GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ---- --------- ------- --------- -------
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss before tax (457) (553) (283) (807)
Depreciation 11 13 - -
Finance income - - - -
Finance expense 73 27 73 27
Shares issued in settlement
of fees and debt - - - -
Impairment of investment
in subsidiary - - - -
Interco loan provision - - (64) 361
Other adjustments (33) (33)
Decrease/(increase)
in trade and other receivables 192 218 (110) 20
Increase/(decrease)
in trade and other payables 29 62 2 131
CASH (USED BY)/GENERATED
FROM OPERATING ACTIVITIES (185) (233) (415) (268)
CASH FLOWS FROM INVESTING
ACTIVITIES
Increase in development
costs (173) (388) - -
Increase in short term
loans -
Purchases of property,
plant and equipment (1) - - -
Increase in loan to
subsidiary - - 64 (361)
NET CASH FROM INVESTING
ACTIVITIES (174) (388) 64 (361)
-------------------------------- ---- --------- ------- --------- -------
CASH FLOWS FROM FINANCING
ACTIVTIES
Net proceeds from issue
of shares 204 999 204 999
Net repayment of short
term borrowings - (94) - (94)
Finance costs paid (73) (27) (73) (27)
-------------------------------- ---- --------- ------- --------- -------
NET CASH FROM FINANCING
ACTIVITIES 131 878 131 878
-------------------------------- ---- --------- ------- --------- -------
NET (DECREASE)/INCREASE
IN CASH AND CASH EQUIVALENTS (228) 257 (220) 249
Cash and cash equivalents
at the beginning of
the year 258 1 250 1
CASH AND CASH EQUIVALENTS
AT THE OF THE YEAR 18 30 258 30 250
-------------------------------- ---- --------- ------- --------- -------
NOTES TO THE FINANCIAL STATEMENTS
1 GENERAL INFORMATION
The principal activity of Inspirit Energy
Holdings plc during the period was that of
developing and commercialising the mCHP boiler.
These financial statements show the consolidated
results of the Group for the year ended 30
June 2017 together with the comparative results
for the year ended 30 June 2016.
Inspirit Energy Holdings plc is a company
incorporated and domiciled in England and
Wales and quoted on the Alternative Investment
Market of the London Stock Exchange. The address
of its registered office is 2(nd) Floor, 2
London Wall Buildings, London, EC2M 5PP, United
Kingdom.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted
in the preparation of these financial statements
are set out below. These policies have been
consistently applied to all the periods presented,
unless otherwise stated.
BASIS OF PREPARATION
The consolidated financial statements have
been prepared in accordance with applicable
International Financial Reporting Standards
("IFRS") including standards and interpretations
issued by both the International Accounting
Standards Board ("IASB") and the International
Financial Reporting Interpretation Committee
("IFRIC") as adopted and endorsed by the European
Union ("EU"), further to IAS Regulation (EC
1606/2002).
The consolidated Financial Statements have
been prepared under the historical cost convention
and are presented in GBP Pound Sterling, rounded
to the nearest GBP1,000.
The preparation of Financial Statements in
conformity with IFRS requires the use of certain
critical accounting estimates. It also requires
management to exercise its judgement in the
process of applying the Group's accounting
policies. The areas involving a higher degree
of judgement or complexity, or areas where
assumptions and estimates are significant
to the consolidated Financial Statements are
disclosed in Note 4.
GOING CONCERN
The financial statements have been prepared
on the going concern basis.
The Directors have prepared cash flow forecasts
for the Group and Company which reflect the
Group's and Company's forecast cash inflows
and costs.
The Group's activities, together with the
factors likely to affect its future development,
performance and position, are set out in the
Strategic Report. It also includes the Group's
objectives, policies and processes for managing
its business risk objectives, which includes
its exposure to technology, customer and other
operational risks.
It is envisaged by the Directors, who have
formed a judgement at the time of approving
these financial statements, that existing
cash resources together with these forecast
cash inflows will provide adequate funds for
the Group for the foreseeable future. For
this reason the Directors continue to adopt
the going concern basis in preparing the financial
statements.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
BASIS OF CONSOLIDATION
Inspirit Energy Holdings plc, the legal parent,
is domiciled and incorporated in the United
Kingdom.
The Group Financial Statements consolidate
the Financial Statements of Inspirit Energy
Holdings plc and its subsidiary, Inspirit
Energy Limited, made up to 30 June 2017.
Subsidiaries are entities over which the Group
has control. Control is the power to govern
the financial and operating policies of an
entity so as to obtain benefits from its activities.
The Group obtains and exercises control through
voting rights. The existence and effect of
potential voting rights that are currently
exercisable or convertible are considered
when assessing whether the company controls
another entity.
The cost of acquisition is measured as the
fair value of the assets acquired, equity
instruments issued and liabilities incurred
or assumed at the date of exchange. Acquisition
related costs are expensed as incurred. Intercompany
transactions, balances and unrealised gains
on transactions between Group companies are
eliminated. Profits and losses resulting from
inter-company transactions that are recognised
in assets are also eliminated. Accounting
policies of subsidiaries have been changed
where necessary to ensure consistency with
the policies adopted by the Group.
Where necessary, adjustments are made to the
financial statements of subsidiaries to bring
the accounting policies used into line with
those used by the Group.
STATEMENT OF COMPLIANCE
At the date of authorisation of this document,
the following Standards and Interpretations,
which have not been applied in these financial
statements, were in issue, but not yet effective:
* IFRS 9 Financial Instruments
* IFRS 15 Revenue from Contracts with Customers
* IFRS 16 Leases
* IAS 27 (amendments) Equity Method in Separate
Financial Statements
The Directors anticipate that the adoption
of the above Standards and Interpretations
in future periods will have little or no impact
on the financial statements of the Company
when the relevant Standards come into effect
for future reporting periods, although they
have yet to complete their full assessment
in relation to the impact of IFRS 9 and IFRS
15.
SEGMENTAL REPORTING
The accounting policy for identifying segments
is now based on internal management reporting
information that is regularly reviewed by
the chief operating decision maker, which
is identified as the Board of Directors.
In identifying its operating segments, management
generally follows the Group's service lines
which represent the main products and services
provided by the Group. The Directors believe
that the Group's continuing trading operations
comprise one segment.
CURRENT AND DEFERRED INCOME TAX
The tax expense for the period comprises current
tax. Tax is recognised in the Statement of
Comprehensive Income, except to the extent
that it relates to items recognised directly
in equity. In this case the tax is also recognised
directly in other comprehensive income or
directly in equity, respectively.
The current income tax charge is calculated
on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period
in the countries where the Company's subsidiaries
operate and generate taxable income. Management
periodically evaluates positions taken in
tax returns with respect to situations in
which applicable tax regulation is subject
to interpretation. It establishes provisions
where appropriate on the basis of amounts
expected to be paid to the tax authorities.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
FOREIGN CURRENCY TRANSLATION
a) FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the Financial Statements
of each of the Group's entities are measured
using the currency of the primary economic
environment in which the entity operates ("functional
currency").
The consolidated Financial Statements are
presented in Pounds Sterling (GBP), which
is the Company's functional and the Group's
presentation currency.
b) TRANSACTIONS AND BALANCES
Foreign currency transactions are translated
into the functional currency using the exchange
rates prevailing at the dates of the transactions,
or valuation where items are remeasured. Foreign
exchange gains and losses resulting from the
settlement of such transactions, and from
the translation at year-end exchange rates
of monetary assets and liabilities denominated
in foreign currencies, are recognised the
Statement of Comprehensive Income.
Foreign exchange gains and losses relating
to borrowings and cash and cash equivalents
are presented in the Statement of Comprehensive
Income within "Finance Income" or "Finance
Costs". All other foreign exchange gains and
losses are presented in the Statement of Comprehensive
Income within "Other (Losses)/Gains - Net".
OPERATING LEASES
Leases in which a significant portion of the
risks and rewards of ownership are retained
by the lessor are classified as operating
leases.
Payments made under operating leases are charged
to the Statement of Comprehensive Income on
a straight line basis over the period of the
lease.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at
historical cost less depreciation. Historical
cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset's
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with
the item will flow to the Group and the cost
of the item can be measured reliably. The
carrying amount of the replaced part is derecognised.
All other repairs and maintenance are charged
to the Statement of Comprehensive Income during
the financial period in which they are incurred.
Depreciation is calculated to allocate the
cost of each class of asset to their residual
values over their estimated useful lives,
as follows:
* Plant and Equipment - 15% reducing balance
* Fixtures and Fittings - 20% reducing balance
* Motor Vehicles - 5 years, straight line
The assets' residual values and useful lives
are reviewed, and adjusted if appropriate,
at the end of each reporting period.
An asset's carrying amount is written down
immediately to its recoverable amount if the
asset's carrying amount is greater than its
estimated recoverable amount.
Gains and losses on disposals are determined
by comparing the proceeds with the carrying
amount, and are recognised within "Other (Losses)/Gains
- Net" in the Statement of Comprehensive Income.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
INTANGIBLE ASSETS
DEVELOPMENT COSTS
Development costs relate to expenditure on
the development of certain new products and
service projects where the outcome of those
projects is assessed as being reasonably certain
as regards viability and technical feasibility.
Such expenditure is capitalised and amortised
over the expected sales life of the product,
being generally a period not longer than five
years commencing in the year the sales of
the product were first made.
Development costs incurred on specific projects
are capitalised when all the following conditions
are satisfied:
* completion of the intangible asset is technically
feasible so that it will be available for use or sale
* the Group intends to complete the intangible asset
and use or sell it
* the Group has the ability to use or sell the
intangible asset
* the intangible asset will generate probable future
economic benefits
* there are adequate technical, financial and other
resources to complete the development and to use or
sell the intangible asset, and
* the expenditure attributable to the intangible asset
during its development can be measured reliably.
Directly attributable costs that are capitalised
as part of the product include any employee
costs and an appropriate portion of relevant
overheads.
Other development expenditure that does not
meet these criteria is recognised as an expense
as incurred. Development costs previously
recognised as an expense are not recognised
as an asset in a subsequent period.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite useful life,
are not subject to amortisation and are tested
annually for impairment. Assets that are subject
to amortisation are reviewed for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not
be recoverable. An impairment loss is recognised
for the amount by which the asset's carrying
amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's
fair value less costs to sell and value in
use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for
which there are separately identifiable cash
flows (cash-generating units). Non-financial
assets other than goodwill that suffered an
impairment are reviewed for possible reversal
of the impairment at each reporting date.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
FINANCIAL ASSETS
a) CLASSIFICATION
The Group classifies its financial assets
in the following categories: at fair value
through profit or loss and loans and receivables.
The classification depends on the purpose
for which the financial assets were acquired.
Management determines the classification of
its financial assets at initial recognition.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT
OR LOSS
Financial assets at fair value or loss are
financial assets held for trading. A financial
asset is classified in this category if acquired
principally for the purpose of selling in
the short term.
Assets in this category are classified as
current assets if expected to be settled within
12 months; otherwise, they are classified
as non-current.
LOANS AND RECEIVABLES
Loans and receivables are non-derivative financial
assets with fixed or determinable payments
that are not quoted in an active market. They
are included in current assets, except for
maturities greater than 12 months after the
Statement of Financial Position date. These
are classified as non-current assets. The
Group's loans and receivables comprise trade
and other receivables and cash and cash equivalents
in the Statement of Financial Position.
b) RECOGNITION AND MEASUREMENT
Regular purchases and sales of financial assets
are recognised on the trade date - the date
on which the Group commits to purchasing or
selling the asset. Financial assets carried
at fair value through profit or loss is initially
recognised at fair value, and transaction
costs are expensed in the Statement of Comprehensive
Income. Financial assets are derecognised
when the rights to receive cash flows from
the assets have expired or have been transferred,
and the Group has transferred substantially
all of the risks and rewards of ownership.
Financial assets at fair value through profit
or loss are subsequently carried at fair value.
Loans and receivables are subsequently carried
at amortised cost using the effective interest
method.
Gains or losses arising from changes in the
fair value of financial assets at fair value
through profit or loss are presented in the
Statement of Comprehensive Income within "Other
(Losses)/Gains - Net" in the period in which
they arise.
IMPAIRMENT OF FINANCIAL ASSETS
The Group assesses at the end of each reporting
period whether there is objective evidence
that a financial asset, or a group of financial
assets, is impaired. A financial asset, or
a group of financial assets, is impaired,
and impairment losses are incurred, only if
there is objective evidence of impairment
as a result of one or more events that occurred
after the initial recognition of the asset
(a "loss event"), and that loss event (or
events) has an impact on the estimated future
cash flows of the financial asset, or group
of financial assets, that can be reliably
estimated.
The criteria that the Group uses to determine
that there is objective evidence of an impairment
loss include:
* significant financial difficulty of the issuer or
obligor;
* a breach of contract, such as a default or
delinquency in interest or principal repayments;
* the disappearance of an active market for that
financial asset because of financial difficulties;
* observable data indicating that there is a measurable
decrease in the estimated future cash flows from a
portfolio of financial assets since the initial
recognition of those assets, although the decrease
cannot yet be identified with the individual
financial assets in the portfolio; or
* for assets classified as available-for-sale, a
significant or prolonged decline in the fair value of
the security below its cost.
ASSETS CARRIED AT AMORTISED COST
The amount of impairment is measured as the
difference between the asset's carrying amount
and the present value of estimated future
cash flows (excluding future credit losses
that have not been incurred), discounted at
the financial asset's original effective interest
rate. The asset's carrying amount is reduced,
and the loss is recognised in the Statement
of Comprehensive Income. As a practical expedient,
the Group may measure impairment on the basis
of an instrument's fair value using an observable
market price.
If, in a subsequent period, the amount of
the impairment loss decreases and the decrease
can be related objectively to an event occurring
after the impairment was recognised (such
as an improvement in the debtor's credit rating),
the reversal of the previously recognised
impairment loss is recognised in the Statement
of Comprehensive Income.
TRADE AND OTHER RECEIVABLES
Trade receivables are amounts due from customers
for merchandise sold or services performed
in the ordinary course of business. If collection
is expected in one year or less (or in the
normal operating cycle of the business if
longer), they are classified as current assets.
If not they are presented as non-current assets.
Trade receivables are recognised initially
at fair value, and subsequently measured at
amortised cost using the effective interest
method, less provision for impairment.
CASH AND CASH EQUIVALENTS
In the consolidated Statement of Cash Flows,
cash and cash equivalents comprise cash in
hand and deposits held at call with banks.
FINANCIAL LIABILITIES
The Group's financial liabilities comprise
trade payables. Financial liabilities are
obligations to pay cash or other financial
assets and are recognised when the Group becomes
a party to the contractual provisions of the
instruments.
SHAREHOLDERS' EQUITY
Equity comprises the following:
* "Share capital" represents the nominal value of
equity shares.
* "Share premium" represents the excess over nominal
value of the fair value of consideration received for
equity shares, net of expenses of the share issue.
* "Option reserve" represents the cumulative cost of
share based payments.
* "Retained losses" represents retained losses.
TRADE PAYABLES
Trade payables are initially measured at fair
value and are subsequently measured at amortised
cost, using the effective interest rate method.
BORROWINGS
Borrowings are recognised initially at fair
value, net of transaction costs incurred.
Borrowings are subsequently carried at amortised
cost; any difference between the proceeds
(net of transaction costs) and the redemption
value is recognised in the Statement of Comprehensive
Income over the period of the borrowings,
using the effective interest method.
Borrowings are classified as current liabilities
unless the Group has an unconditional right
to defer settlement of the liability for at
least 12 months after the end of the reporting
period.
BORROWINGS COSTS
Borrowing costs are recognised in profit or
loss in the period in which they are incurred.
SHARE BASED PAYMENTS
The Group operates equity-settled, share-based
schemes, under which it receives services
from employees or third party suppliers as
consideration for equity instruments (options
and warrants) of the Group. The Group may
also issue warrants to share subscribers as
part of a share placing. The fair value of
the equity-settled share based payments is
recognised as an expense in the Statement
of Comprehensive Income or charged to equity
depending on the nature of the service provided
or instrument issued. The total amount to
be expensed or charged is determined by reference
to the fair value of the options granted:
* including any market performance conditions;
* excluding the impact of any service and non-market
performance vesting conditions (for example,
profitability or sales growth targets, or remaining
an employee of the entity over a specified time
period); and
* including the impact of any non-vesting conditions
(for example, the requirement for employees to save).
In the case of warrants the amount charged
to equity is determined by reference to the
fair value of the services received if available.
If the fair value of the services received
is not determinable, the warrants are valued
by reference to the fair value of the warrants
granted as described previously.
Non-market vesting conditions are included
in assumptions about the number of options
or warrants that are expected to vest. The
total expense or charge is recognised over
the vesting period, which is the period over
which all of the specified vesting conditions
are to be satisfied. At the end of each reporting
period, the entity revises its estimates of
the number of options that are expected to
vest based on the non-market vesting conditions.
It recognises the impact of the revision to
original estimates, if any, in the Statement
of Comprehensive Income or equity as appropriate,
with a corresponding adjustment to a separate
reserve in equity.
When the options are exercised, the Company
issues new shares. The proceeds received,
net of any directly attributable transaction
costs, are credited to share capital (nominal
value) and share premium.
3 FINANCIAL RISK MANAGEMENT
The Group is exposed to a variety of financial
risks which result from both its operating
and investing activities. The Group's risk
management is coordinated by the Board of Directors,
and focuses on actively securing the Group's
short to medium term cash flows by minimising
the exposure to financial markets.
The main risks the Group is exposed to through
its financial instruments are market risk (including
market price risk), credit risk and liquidity
risk.
MARKET PRICE RISK
The Group's exposure to market price risk mainly
arises from potential movements in the pricing
of its products. The Group manages this price
risk within its long-term strategy to grow
the business and maximise shareholder return.
.
CREDIT RISK
The Group's financial instruments that are
subject to credit risk are cash and cash equivalents
and loans and receivables. The credit risk
for cash and cash equivalents is considered
negligible since the counterparties are reputable
financial institutions.
The Group's maximum exposure to credit risk
is GBP204,000 (2016: GBP587,000) comprising
cash and cash equivalents and loans and receivables.
LIQUIDITY RISK
Liquidity risk arises from the possibility
that the Group might encounter difficulty in
settling its debts or otherwise meeting its
obligations related to financial liabilities.
The Group manages this risk through maintaining
a positive cash balance and controlling expenses
and commitments. The Directors are confident
that adequate resources exist to finance current
operations.
The following table summarises the maturity
profile of the Group's non-derivative financial
liabilities with agreed repayment periods.
The table has been drawn up based on contractual
undiscounted cash flows based on the earliest
repayment date on which the Group can be required
to pay. The table includes both interest and
principal cash flows. To the extent that the
interest flows are floating rate, the undiscounted
amount is derived from the interest rate curves
at the balance sheet date:
Less Between Between
than 1 and 2 and Over Carrying
Group 1 year 2 years 5 years 5 years Total value
At 30 June 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------- --------- --------- --------- --------- ---------
Trade and other
payables 366 - - - 366 366
Borrowings 199 - - - 199 199
---------------------- --------- --------- --------- --------- --------- ---------
At 30 June 2016
------------------ --------- --------- --------- --------- --------- ---------
Trade and other
payables 320 - - - 320 320
Borrowings 167 - - - 167 167
---------------------- --------- --------- --------- --------- --------- ---------
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;
-- to support the Group's growth; and -- to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of Financial Statements in
conformity with IFRSs requires management
to make judgements, estimates and assumptions
that affect the application of policies and
reported amounts of assets and liabilities,
income and expenses. Estimates and judgements
are continually evaluated and are based on
historical experience and other factors including
expectations of future events that are believed
to be reasonable under the circumstances.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Group makes estimates and assumptions
concerning the future. The resulting accounting
estimates will, by definition, seldom equal
the related actual results. The estimates
and assumptions that have a significant risk
of causing a material adjustment to the carrying
amounts of assets and liabilities within the
next financial year are discussed below.
GOING CONCERN
As at 30 June 2017 the Group had a cash balance
of GBP30,000 (2016: GBP258,000), net current
liabilities) / assets of negative GBP361,000
(2016: GBP39,000) and net assets of GBP2,360,000
(2016: GBP2,597,000). The Group continues
to incur costs in the development and modification
of their products and is pre-revenue.
Therefore the cash flow forecasts for the
Group and Company show that further equity
and/or borrowings will be required to complete
the final development and external testing
of the Group's mCHP boilers and bring them
into production to get to a cash flow positive
position. Although the Directors are confident
that further debt or equity can be raised
at a valuation acceptable to the Group there
is no guarantee this will be the case.
IMPAIRMENT OF DEVELOPMENT COSTS AND INVESTMENTS
The Group tests annually whether development
costs and investments in the subsidiaries,
which have a carrying value of GBP2,668,000
and GBP2,440,000, respectively (2016: GBP2,495,000
and GBP2,440,000, respectively), have suffered
any impairment in accordance with the accounting
policy as stated in Note 2.
Investments are reviewed for impairment if
events or changes in circumstances indicate
that the carrying amount may not be recoverable.
When a review for impairment is conducted,
the recoverable amount is determined based
on value in use calculations prepared on the
basis of management's assumptions and estimates.
As a result of their 2017 review management
has concluded that no impairment charge to
the carrying value of investment in subsidiaries
is needed, following the GBP1,800,000 impairment
in 2015. See Note 15 to the Financial Statements.
In respect of development costs, the recoverable
amounts of cash-generating units have been
determined, based on value-in-use calculations.
The value-in-use calculations require the
entity to estimate future cash flows expected
to arise from the cash generating unit and
apply a suitable discount rate in order to
calculate present value. The recoverable amount
of the development costs have been determined,
based on value in use calculations. These
calculations require the use of estimates.
The Directors have concluded that no impairment
charge is necessary.
SHARE BASED PAYMENTS
The Group has previously made awards of options
and warrants over its unissued share capital
to certain Directors and employees as part
of their remuneration package. Certain warrants
have also been issued to shareholders as part
of their subscription for shares and to suppliers
for various services received.
The fair value of options is determined by
reference to the fair value of the options
granted, excluding the impact of any non-market
vesting conditions. In accordance with IFRS
2 'Share Based Payments', the Company has
recognised the fair value of options, calculated
using the Black-Scholes option pricing model.
The Directors have made assumptions particularly
regarding the volatility of the share price
at the grant date in order to reach a fair
value. Further information is disclosed in
Note 20.
5 SEGMENTAL INFORMATION
The Group's primary reporting format is business
segments and its secondary format is geographical
segments. The Group only operates in a single
business and geographical segment. Accordingly
no segmental information for business segment
or geographical segment is required.
6 DIRECTORS' EMOLUMENTS
2017 2016
GBP GBP
-------------------------------------------- ------- -----
Aggregate emoluments 180 187
Social security costs 13 19
------------------------------------------------ ------- -----
193 206
------------------------------------------------ ------- -----
Salary Total Total
Name of director and fees Benefits 2017 2016
GBP GBP GBP GBP
------------------ ------------ ---------- ------- -----
J Gunn 80 - 80 80
N Jagatia 24 - 24 27
N Luke 76 - 76 80
---------------------- ------------ ---------- ------- -----
180 - 180 187
---------------------- ------------ ---------- ------- -----
The Group does not operate a pension scheme and no contributions were paid during the year.
7 EMPLOYEE INFORMATION
2017 2016
GBP GBP
------------------------------ --------- ---------
Wages and salaries 180 187
Social security costs 13 19
193 206
---------------------------------- --------- ---------
In addition to the above a total of GBP141,000
(2016: GBP182,000) wages and salaries for
employees have been included in Development
costs.
Average number of persons employed (including
executive directors):
2017 2016
Number Number
------------------------------ --------- ---------
Office and management 6 7
---------------------------------- --------- ---------
COMPENSATION OF KEY MANAGEMENT PERSONNEL
There are no key management personnel other
than the Directors of the Company (Note 6).
8 LOSS FOR THE YEAR
Loss for the year is arrived at
after charging:
2017 2016
GBP'000 GBP'000
-------------------------------------- -------- --------
S Salaries and wages (Note 7) 193 206
A Audit and other fees 17 17
Operating lease rent 17 17
Depreciation 11 16
------------------------------------------------------- -------- --------
AUDITOR'S REMUNERATION
During the year the Group obtained the following
services from the Company's auditor:
2017 2016
GBP'000 GBP'000
-------------------------------------- -------- --------
Fees payable to the Company's
auditor for the audit of the parent
company and the Group financial
statements 15 15
Fees payable to the Company's
auditor and its associates for
other services:
Taxation compliance services 2 2
Other assurance services - -
------------------------------------------------------- -------- --------
9 OTHER LOSSES
2017 2016
GBP'000 GBP'000
--------------------------------- ------- -------
Financial assets at fair value - -
through profit or loss
Foreign exchange loss on amounts
owing to lenders - 23
------------------------------------- ------- -------
- 23
------------------------------------- ------- -------
The foreign exchange loss noted above represents the movement in the Sterling amount owing to YA Global Master SPV Limited, as a result of the loan being denominated in US Dollars. See Note 23 for further details.
10 FINANCE COSTS
2017 2016
GBP'000 GBP'000
------------------ ------- -------
Interest expense:
Other loans 73 27
----------------------- ------- -------
11 INCOME TAX CREDIT
GROUP 2017 2016
GBP'000 GBP'000
---------------------------------- ------- -------
Current R&D tax credit on loss
for the year (38) (95)
--------------------------------------- ------- -------
(38) (95)
--------------------------------------- ------- -------
The tax on the Group's loss before tax differs
from the theoretical amount that would arise
using the weighted average rate applicable
to losses of the consolidated entities as
follows:
2017 2016
GBP'000 GBP'000
---------------------------------- ------- -------
Loss before tax from continuing
operations (457) (553)
--------------------------------------- ------- -------
Loss before tax multiplied by
rate of corporation tax in the
UK of 19% (2016: 20%) (87) (110)
Tax effects of:
Expenses not deductible for tax
purposes 14 14
Unrelieved tax losses carried
forward 73 96
Research and development tax
credit (38) (95)
--------------------------------------- ------- -------
Total tax (38) (95)
--------------------------------------- ------- -------
The Group has excess management expenses of approximately GBP4,500,000 (2016: GBP4,150,000), capital losses of GBP150,000 (2016: GBP150,000) and non-trade financial losses of approximately GBP119,000 (2016: GBP119,000) to carry forward against future suitable taxable profits. No deferred tax asset has been provided on any of these losses due to uncertainty over the timing of their recovery.
12 EARNINGS PER SHARE
Loss per ordinary share has been calculated
by dividing the loss attributable to equity
holders of the Company by the weighted average
number of shares in issue during the year.
The calculations by both basic and diluted
loss per share for the year are based upon
the loss for the year of GBP419,000 (2016:
GBP458,000). The weighted number of equity
shares in issue during the year was 973,990,421
(2016: 794,406,441).
In accordance with IAS 33, basic and diluted
earnings per share are identical as the effect
of the exercise of share options and warrants
would be to decrease the loss per share and
therefore deemed anti-dilutive. Details of
share options and warrants that could potentially
dilute earnings per share in future periods
are set out in Notes 2.
13 INTANGIBLE ASSETS
GROUP Development
Costs Total
COST GBP'000 GBP'000
-------------------------- ------------ --------
At 30 June 2015 2,107 2,107
Additions 388 388
At 30 June 2016 2,495 2,495
Additions 173 181
At 30 June 2017 2,668 2,676
--------------------------- ---- ------------ --------
ACCUMULATED AMORTISATION
AND IMPAIRMENT
-------------------------- ------------ --------
At 1 July 2015 and 1 July
2016 - -
Impairment charge - -
-------------------------- ------------ --------
At 30 June 2016 and 30
June 2017 - -
-------------------------- ------------ --------
NET BOOK VALUE
-------------------------- ------------ --------
At 30 June 2017 2,668 2,668
At 30 June 2016 2,495 2,495
--------------------------- ---- ------------ --------
No amortisation has been recognised on development costs to date as the assets are still in the development stage and the related products are not yet ready for sale.
The recoverable amount of the above cash generating unit has been determined based on value-in-use calculations. The value-in-use calculations use cash flow projections based on financial budgets approved by Management covering a seven year period. These incorporate potential revenues which are based on project tenders and projected revenue. Given the nature of the work and the visibility of revenue in the future, it is considered appropriate not to extend the cash flow workings beyond this period.
The recoverable amount based on value-in-use exceeded the carrying value above. The impairment review did not identify any impairment for recognition in the current or prior year.
14 PROPERTY, PLANT AND EQUIPMENT
GROUP Plant Fixtures Motor
and Equipment and Vehicles
fittings Total
COST GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------------- ----------- ---------- --------
As 30 June 2015 81 15 1 97
Additions - - - -
--------------------- --------------- ----------- ---------- --------
As 30 June 2016 81 15 1 97
Additions - - - -
As at 30 June 2017 81 15 1 97
DEPRECIATION
--------------------- --------------- ----------- ---------- --------
As at 30 June 2015 15 5 1 21
Charge for year 10 3 - 13
-------------------------- --------------- ----------- ---------- --------
As at 30 June 2016 25 8 1 34
Charge for year 9 1 - 10
As at 30 June 2017 34 9 1 44
NET BOOK VALUE
--------------------- --------------- ----------- ---------- --------
As at 30 June 2017 47 6 - 53
As at 30 June 2016 56 7 - 63
-------------------------- --------------- ----------- ---------- --------
15 INVESTMENT IN SUBSIDIARIES
COMPANY 2017 2016
SHARES IN GROUP UNDERTAKINGS: GBP'000 GBP'000
-------------------------------------- ------- -------
At 1 July 2,440 2,440
Transfer from investments - -
Reverse acquisition - -
Impairment provision - -
-------------------------------------- ------- -------
2,440 2,440
Non-Current loan due from group - -
undertaking
Transfer from current intercompany - -
receivable
Decrease in loan to group undertaking (64) 361
Interest on loan - -
Provision against the loan balance
outstanding 64 (361)
------------------------------------------- ------- -------
2,440 2,440
------------------------------------------- ------- -------
Included in the above is an amount of GBP2,424,000 (2016: GBP2,489,000) relating to the amount due to the Company by its subsidiary Inspirit Energy Limited. A provision of GBP2,424,000 (2016: GBP2,489,000) has been set against this loan balance outstanding.
15 INVESTMENT IN SUBSIDIARIES (continued)
Investments in Group undertakings are recorded at cost, which is the fair value of the consideration paid.
Details of Subsidiary Undertakings are as follows:
Proportion
of share
Country of Registered capital Nature
Name of subsidiary incorporation capital held of business
----------------------- -------------- ---------- ---------- ------------
Inspirit Energy Limited England and Ordinary 100% Product
Wales shares development
GBP15,230
Somemore Limited England and Ordinary 100% Dormant
Wales shares
GBP1
----------------------- -------------- ---------- ---------- ------------
16 INVENTORIES
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
---------------- ------- ------- ------- -------
Work in progress - - - -
---------------- ------- ------- ------- -------
The Directors consider that the carrying amount of inventories is approximately equal to their fair value.
17 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------- ------- ------- -------
Amounts due from
group undertakings* - - - -
Corporation tax** 38 308 - -
VAT recoverable 21 9 15 4
Other Debtors 106 - 101 -
Prepayments and accrued
income 10 12 6 8
----------------------------- ------- ------- ------- -------
175 329 122 12
----------------------------- ------- ------- ------- -------
*The amount due from group undertakings have been included in the Investment in subsidiaries balance. See Note 15 for further details.
**The Corporation tax repayable relates to the R&D tax claim receivable from HMRC.
The Directors consider that the carrying amount of receivables is approximately equal to their fair value.
18 CASH AND CASH EQUIVALENTS
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------- ------- ------- -------
Cash and cash equivalents 30 258 30 250
------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.
All of the Group and Company's cash and cash equivalents are held with institutions with an AA credit rating.
19 SHARE CAPITAL AND SHARE PREMIUM
Number
Number of
of ordinary deferred Share
shares shares * Ordinary shares * Deferred shares premium Total
GBP GBP GBP GBP
----------- ------------- ---------- --------------------- --------------------- ---------- ----------
At 30 June
2015 701,147,289 400,932 701,147 396,923 10,455,230 11,553,300
---------------- ------------- ---------- --------------------- --------------------- ---------- ----------
Issue of
new shares 235,659,570 - 235,660 - 919,341 1,155,001
Issue costs - - - - (45,900) (45,900)
Warrants
issued - - - - (81,000) (81,000)
---------------- ------------- ---------- --------------------- --------------------- ---------- ----------
At 30 June
2016 936,806,859 400,932 936,807 396,923 11,247,671 12,581,401
---------------- ------------- ---------- --------------------- --------------------- ---------- ----------
Issue of
new shares 234,000,000 - 234,000 - 58,500 292,500
Issue costs - - - - (10,750) (10,750)
At 30 June
2017 1,170,806,859 400,932 1,170,807 396,923 11,295,421 12,863,151 ---------------- ------------- ---------- --------------------- --------------------- ---------- ----------
The deferred shares have no voting rights.
In May 2017 the Company issued 234,000,000 new ordinary shares at a price of 0.125 pence per share.
20 SHARE BASED PAYMENTS
Share options and warrants can be granted
to selected Directors and third party service
providers.
Share options and warrants outstanding at
the end of the year have the following expiry
dates and exercisable prices:
Weighted
Weighted Average
Average Exercise Exercise
Price Options Price Options
2017 and warrants 2016 and warrants
At 1 July 0.0067 89,783,364 0.0154 11,429,984
Granted - - 0.0050 79,000,000
Exercised - - - -
Terminated 0.0050 (79,000,000) 0.0300 (646,620)
----------------- ----------------- ------------- ------------- -------------
At 30 June 0.0067 10,783,364 0.0067 89,783,364
----------------- ----------------- ------------- ------------- -------------
Exercise
price Number of Number of
in GBP options options
Grant date Expiry date per share and warrants and warrants
2017 2016
26 April 25 April
2011 2021 0.0488 1,500,000 1,500,000
30 April 29 April
2015 2018 0.0090 9,283,364 9,283,364
20 May 2016 19 May 2017 - - 79,000,000
0.0067 10,783,364 89,783,364
----------------- ----------------- ------------- ------------- -------------
21 OTHER RESERVES
Share Reverse
option Merger acquisition
reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- --------- ------------- --------
1 July 2015 125 3,150 (7,361) (4,086)
------------------------ --------- --------- ------------- --------
Issue of warrants 81 - - 81
------------------------ --------- --------- ------------- --------
30 June 2016 206 3,150 (7,361) (4,005)
------------------------ --------- --------- ------------- --------
Issue of warrants - - - -
------------------- --------- --------- ------------- --------
30 June 2017 206 3,150 (7,361) (4,005)
------------------------ --------- --------- ------------- --------
22 TRADE AND OTHER PAYABLES
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ------- ------- ------- -------
Trade payables 76 193 21 127
Other payables 150 59 111 59
Amount due to related - -
parties - -
Social security and
other taxes 67 68 28 28
Accrued expenses 73 61 73 60
---------------------------- ------- ------- ------- -------
366 381 233 274
---------------------------- ------- ------- ------- -------
The Directors consider that the carrying amount of trade payables approximates to their fair value.
23 BORROWINGS
GROUP COMPANY
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- -------- -------- --------
Current
Drawdown facility
(see Note 1 below) 199 121 199 121
Related party short
term loans (see Note
2 below) 46 46 46 46
---------------------------- -------- -------- -------- ----------
245 167 245 167
---------------------------- -------- -------- -------- ----------
Note 1 The Drawdown facility relates to the facility entered into during the prior year with YA Global Master SPV Limited, showing the remaining balance outstanding at the year end. The facility is unsecured and carries an implied interest rate of 10 per cent per annum, repayable in 12 equal monthly instalments.
On 30 April 2015 the Company issued warrants to subscribe for 9,283,364 new ordinary shares as part of the unsecured $3,000,000 Debt facility arrangement with YA Global Master SPV Limited ("YA Global"). The issue of the warrants was triggered following the drawdown of the initial Tranche 1, being $400,000, under the terms of the agreement. The terms of the issue of warrants are governed by the Debt Facility agreement, which specify that for every tranche drawn down, the Company is required to issue 25% of the value of the drawdown based on the interbank rate at the nearest possible date and using the average Volume Weighted Average Price ("VWAP") of the Company for the five trading days immediately prior the date of the agreement. Based on those terms, were the Company to drawdown the remaining $2,600,000 they would be required to issue further warrants to subscribe for an estimated total of 99,622,448 new ordinary shares. This is based on the Exchange rate as at 30 June 2016 of $1 / GBP0.751 and a VWAP of 0.49p. The Directors do not expect to use the remaining facility in the foreseeable future
24 FINANCIAL INSTRUMENTS BY CATEGORY
The Group's financial instruments comprise
borrowings, cash and cash equivalent, and
various items such as trade receivables and
trade payables. The main purpose of these
financial instruments is to raise finance
for the Group's operations.
IAS 39 categories of financial instruments
included in the Statement of Financial Position
and the headings in which they are included
are as follows:
2017 2016
GBP'000 GBP'000
------------------------------------------ ------- -------
FINANCIAL ASSETS - LOANS AND RECEIVABLES:
------------------------------------------ ------- -------
Trade and other receivables (excluding
prepayments) 175 347
Cash and bank balances 30 258
----------------------------------------------- ------- -------
FINANCIAL LIABILITIES AT AMORTISED
COST:
------------------------------------------ ------- -------
Trade and other payables (excluding
accruals) 160 320
Borrowings 199 167
----------------------------------------------- ------- -------
The table providing an analysis of the maturity
of the non-derivative financial liabilities
has been included in Note 3.
25 OPERATING LEASE COMMITMENTS
The Group leases an office under a non-cancellable
operating lease agreement. The lease term
is for one year and the lease agreement is
renewable at the end of the lease period at
market rate.
The future aggregate minimum lease payments
under non-cancellable operating lease are
as follows:
2017 2016
GBP'000 GBP'000
-------------------------------- ---------- ----------
GROUP:
No later than 1 year 26 26
------------------------------------- ---------- ----------
26 ULTIMATE CONTROLLING PARTY
At the date of signing this report the Directors
do not consider there to be one single ultimate
controlling party.
27 RELATED PARTY TRANSACTIONS
During the year, NKJ Associates Ltd, a company
in which N Jagatia is a Director, charged
consultancy fees of GBP24,000 (2016: GBP27,000).
The amount owed to NKJ Associates Ltd at year
end is GBP2,000 (2016: GBP10,000).
28 EVENTS AFTER THE REPORTING DATE
On 15(th) August 2017, the Company announced
that it raised GBP300,000 by issuing 208,333,334
new Ordinary Shares of 0.1p each at a price
of 0.12p per Ordinary Share together with
a proposed Director's subscription of 41,666,666.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FEEFDAFWSEIE
(END) Dow Jones Newswires
December 28, 2017 08:56 ET (13:56 GMT)
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