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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.001 | 10.00% | 0.011 | 0.01 | 0.012 | 0.011 | 0.01 | 0.01 | 78,088,470 | 10:14:17 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Air Heat & Condition Eq-whsl | 0 | -260k | 0.0000 | N/A | 628.72k |
TIDMINSP
RNS Number : 8756X
Inspirit Energy Holdings PLC
23 December 2019
23 December 2019
Inspirit Energy Holdings Plc
("Inspirit" or "the Company")
ANNUAL REPORT AND ACCOUNTS FOR THE YEARED 30 JUNE 2019
NOTICE OF ANNNUAL GENERAL MEETING
Inspirit Energy Holdings Plc today announces its audited results for the year ended 30 June 2019 (the "Accounts").
Copies of the Company's Annual Report and Accounts will be sent to shareholders along with a Notice of AGM and will be available on the Company's website www.inspirit-energy.com today.
The AGM will be held at 2(nd) Floor, 2 London Wall Buildings, London EC2M 5PP at 11 am on 30 January 2020.
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.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
More information on Inspirit Energy can be seen at: www.inspirit-energy.com
Inspirit Energy Holdings plc John Gunn, Chairman and CEO +44 (0) 207 048 9400 Beaumont Cornish Limited www.beaumontcornish.com (Nominated Advisor) Roland Cornish / James Biddle +44 (0) 207 628 3396 Global Investment Strategy UK Ltd (Broker) Samantha Esqulant +44 (0) 207 048 9045
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.
Extracts of the Accounts
CHAIRMAN'S STATEMENT
FOR THE YEARED 30 June 2019
INTRODUCTION
This financial year, Inspirit Energy Holdings plc has maintained its focus on the commercialisation of the Group's micro combined heat and power ("mCHP") boilers and Sterling Engine applications in other sectors.
COMMERCIALISATION AND PROGRESS
During the period, the Group continued to advance its microCHP boiler (the "Charger") closer towards the goal of commercialisation. To this end, improvements to the design of the Group's Stirling engine technology, including simplification as part of the process and meeting the challenges in new technology development, sourcing cheaper materials and efficiency re-redesign, resulted in further delays to the certification process. However, the delays have brought about vast improvements and efficiencies that has led the Charger to obtain peak electrical output in excess of 6.4kW of electricity during a running cycle of 2,000 hours against the unit's previous output of 3.0kW, whist maintaining 15kW thermal output and a 20% reduction in the size of the appliance to below 800mm.
As mentioned previously, 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.
The Group is also embarked upon multiple applications for the Stirling technology and developed schematics for several sterling engine applications including: Inspirit Marine, Inspirit Solar, Inspirit Cooler and Inspirit Motor/ Generator. The Group are looking at licensing the Stirling technology for these various applications.
The drawdown facility that the company had with YA Global Master SPV Limited lapsed during the year and the company has had an offer of extending the facility. The director's will consider this next year after successful outcome on their trial unit.
OUTLOOK
The operating board and I believe that the progress over the last year has been very positive. Whilst we remain well positioned in the microCHP boiler technology market, ongoing 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 2020.
With the continued growth demand for electric cars, the board are currently setting up an automotive division to utilise the sterling engine to provide a source of power to charge electric motor cars. The Group will also focus on Marine and other application of the sterling technology.
Inspirit Energy is at a pivotal point in its direction as an R&D company and has identified different applications however, 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
23 December 2019
STRATEGIC REPORT
FOR THE YEARED 30 June 2019
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 2019.
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 6.4 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.
In addition to the above strategy, the Company has also been working on the application of the Stirling engine technology in difference sectors and these sectors including solar, renewable and refrigeration and licensing this technology accordingly.
DEVELOPMENTS DURING THE YEAR
The Company embarked on multiple applications for the Stirling technology and have developed schematics for the following projects
-- Inspirit Marine - currently in discussion with a large car/marine engine manufacturer to develop a unit for the shipping industry with current output of 11.68kw.
-- Inspirit Solar - In-house design, incorporating the new development of our Stirling engine -- Inspirit Cooler - Refrigeration system
-- Inspirit Motor/ Generator - designed in line with the Inspirit Charger to start the unit and convert electrical output to the grid.
BOARD CHANGES
None.
RESULTS AND DIVIDS
The Group made a loss after taxation of GBP239,000 (2018: loss of GBP953,000) and Net assets were GBP1,459,000 (2018: GBP1,698,000).
The Directors do not propose a dividend for the year to 30 June 2019 (2018: GBPnil).
KEY PERFORMANCE INDICATORS
The key performance indicators used by the Board to monitor the performance of the Group, are set out below:
PLC S 30 June 30 June 2019 2018 ------------------------------------ ------------ ------------ Net asset value GBP1,459,000 GBP1,698,000 Net asset value - fully diluted per share 0.10p 0.15p Closing share price 0.0275p 0.05p Market capitalisation GBP390,722 GBP710,403 ------------------------------------ ------------ ------------
KEY RISKS AND UNCERTAINTIES
Early stage product development carries a high level of risk and uncertainty, although the rewards can be outstanding. At this stage, there is a common risk associated with all pioneering technologically advanced companies in their requirement to continually invest in research and development. The Group has already made significant investments in addressing opportunities in the renewable energy sector.
Other risks and uncertainties within the Group are detailed in principle 4 of the Corporate Governance Report.
GOING CONCERN RISK
The Group requires financing to fund its operations through to revenue generation. There is the risk that the Group will not have access to sufficient funds to achieve this. The Group seek to mitigate through forecast preparation and monitoring.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The principal financial risk faced by the Group is liquidity risk. The Group's financial instruments included borrowings and cash which it used to finance its operations. At the year end, borrowings did not include any borrowings supplied from the Group's principal bank, Barclays Bank Plc. More information is given in Note 3 to the Financial Statements. The Group has no significant concentrations of credit risk.
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are to safeguard the Group's and Company's ability to continue its activities and bring its products to market. Capital is defined based on the total equity of the Company. The Company monitors its level of cash resources available against future planned activities and may issue new shares in order to raise further funds from time to time.
MANAGEMENT AND KEY PERSONNEL
The risk of high turnover of staff and other specialist staff recruitment issues and this would have an impact on operation and reputation. The Board provides recognition and support for well performing existing employees and has Implemented and monitors robust health and safety measures at the workplace.
TECHNOLOGY RISK
The Group's success is dependant on its technology and management's ability to market it successfully. There is the risk that the technology could become obsolete or a rival could develop an improved alternative. Management seek to mitigate this by constantly seeking to improve the product, closing watching its competitors and employing skilled personnel.
ASSESSMENT OF BUSINESS RISK
The Board regularly reviews operating and strategic risks. The Group's operating procedures include a system for reporting financial and non-financial information to the Board including:
-- reports from management with a review of the business at each Board meeting, focusing on any new decisions/risks arising;
-- reports on the performance of investments; -- reports on selection criteria of new investments; -- discussion with senior personnel; and -- consideration of reports prepared by third parties.
Details of other financial risks and their management are given in Note 3 to the financial statements.
ON BEHALF OF THE BOARD
N Jagatia
Director
23 December 2019
REPORT OF THE DIRECTORS
FOR THE YEARED 30 June 2019
The Directors present their annual report on the affairs of the Group and Company, together with the audited financial statements for the year ended 30 June 2019.
PRINCIPAL ACTIVITIES
The principal activity of the Group and Company is that of development and commercialisation of the mCHP boiler and application of the sterling technology in other sectors.
Details of the Group's principal activity can be found in the Strategic Report.
DIRECTORS
The Directors who held office in the period up to the date of approval of the Financial Statements and their beneficial interests in the Company's issued share capital at the beginning and end of the accounting year were:
Number of Number of share options and ordinary shares warrants ----------- ------------------------ -------------------- 30 June 30 June 30 June 30 June 2019 2018 2019 2018 ----------- ----------- ----------- --------- --------- J Gunn 439,696,246 439,696,246 - - N Jagatia 2,000,000 2,000,000 - - A Samaha - - - -
INDEMNITY OF OFFICERS
The Company maintains appropriate insurance cover against legal action brought against its Directors and officers.
RESEARCH AND DVELOPMENT
For details of the development activities undertaken in the year, please refer to principle 1 of the Corporate Governance Report.
BOARD OF DIRECTORS
The Board is responsible for strategy and performance, approval of major capital projects and the framework of internal controls. To enable the Board to discharge its duties, all Directors receive appropriate and timely information. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring the Board procedures are followed and that applicable rules and regulations are complied with.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority. In addition to the publication of an annual report and an interim report, there is regular dialogue with shareholders and analysts. The Annual General Meeting is viewed as a forum for communicating with shareholders, particularly private investors. Shareholders may question the Executive Chairman and other members of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's system of internal control and for reviewing the effectiveness of these systems. The risk management process and systems of internal control are designed to manage rather than eliminate the risk of the Group failing to achieve its strategic objectives. It should be recognised that such systems can only provide reasonable and not absolute assurance against material misstatement or loss. The Group has well established procedures which are considered adequate given the size of the business.
MATTERS COVERED IN THE STRATEGIC REPORT
The business review, results, review of KPI's and future developments are included in the Strategic Report and Chairman's Statement.
GOING CONCERN
As at 30 June 2019 the Group had a cash balance of GBP40,000 (2018: GBP45,000), net current liabilities of GBP304,000 (2018: net current liabilities of GBP97,000) and net assets of GBP1,459,00,000 (2018: GBP1,698,000). The Group raises money for development, capital projects and working capital purposes as and when required and has raised GBP300,000 pre expenses post year end. The Group has also successfully reduced its core spend during the year whilst still managing to move its projects forward and is in negotiations to renew its expired drawdown facility. There can be no assurance that the Group's projects will become fully developed and reach commercialisation nor that there will be sufficient cash resources available to the Group to do so. Notwithstanding the loss and cash outflows incurred in the year and the requirement for further funds to become available, the Directors have a reasonable expectation that the Group will be able to manage its funds to continue in operational existence whilst moving its project towards commercialisation. The Group therefore continues to adopt the going concern basis in preparing the Annual Report and Financial Statements. Further details on the Directors assumption and their conclusion thereon are included in Note 2 to the financial statements.
EVENTS AFTER THE REPORTING DATE
On 18 November 2019, the Company announced that it had raised GBP300,000 through the placing of 249,999,998 ordinary shares of 0.001 pence each in the share capital of the Company at 0.12 pence per Ordinary Share.
On 25 November 2019, the Company announced that it had received conversion notices from the Convertible Loan Notes (CLN's) issued on 4 May 2018. The Company issued 1,148,571,422 Ordinary Shares at a price of 0.07p per Ordinary Share with an admission date of 29 November 2019. GBP41,000 CLN's remained outstanding at this date.
On 5 December 2019, the Company announced that it had received conversion notices from the Convertible Loan Notes (CLN's) issued on 4 May 2018. The Company issued 54,000,002 Ordinary Shares at a price of 0.07p per Ordinary Share with an admission date of 10 December 2019. GBP3,200 CLN's remained outstanding at this date.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the directors have prepared the group and parent company financial statements in accordance with International 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 parent company and of the profit or loss of the group and the parent company for that period. In preparing these financial statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable 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 group and the parent company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the parent company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the parent company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The Company is compliant with AIM Rule 26 regarding the Company's website. See www.inspirit-energy.com.
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
A resolution that PKF Littlejohn LLP be re-appointed will be proposed at the annual general meeting. PKF Littlejohn LLP have indicated their willingness to continue in office.
ON BEHALF OF THE BOARD
N Jagatia
Director
23 December 2019
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 June 2019
2019 2018 Note GBP'000 GBP'000 ---------------------------------- ----- ---------- -------- CONTINUING OPERATIONS: Revenue - - Administrative expenses (264) (545) Impairment of development asset 10 - (424) OPERATING LOSS (264) (969) Finance costs - (4) LOSS BEFORE INCOME TAX (264) (973) Income tax credit 8 25 20 ---------------------------------- ----- ---------- -------- NET LOSS AND TOTAL COMPREHENSIVE LOSS FOR THE YEAR ATTRIBUTABLE TO THE OWNERS OF THE PARENT (239) (953) ---------------------------------- ----- ---------- -------- EARNINGS PER SHARE - Basic and diluted earnings per share 9 (0.017p) (0.07p) ----- ---------- -------- (attributable to owners of the parent) ---------------------------------- ----- ---------- --------
STATEMENT OF FINANCIAL POSITION
FOR THE YEARED 30 June 2019
Company Number: 05075088 GROUP COMPANY ------------------ ---------------------- 2019 2018 2019 2018 Note GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------ ----- -------- -------- --------- --------- NON-CURRENT ASSETS Intangible assets 10 2,570 2,401 - - Property, plant and equipment 11 38 45 - - Investment in subsidiaries 12 - - 2,440 2,440 2,608 2,446 2,440 2,440 ------------------------------ ----- -------- -------- --------- --------- CURRENT ASSETS Trade and other receivables 13 63 415 9 346 Cash and cash equivalents 14 40 45 38 41 ------------------------------ ----- -------- -------- --------- --------- 103 460 47 387 ------------------------------ ----- -------- -------- --------- --------- TOTAL ASSETS 2,711 2,906 2,487 2,827 ------------------------------ ----- -------- -------- --------- --------- EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT Share capital 15 1,818 1,818 1,818 1,818 Share premium 15 8,185 8,185 8,185 8,185 Merger reserve 3,150 3,150 3,150 3,150 Share option reserve 16 3 3 3 3 Reverse acquisition reserve (7,361) (7,361) - - Retained losses (4,336) (4,097) (11,852) (11,428) ------------------------------ ----- -------- -------- --------- --------- TOTAL EQUITY 1,459 1,698 1,304 1,728 ------------------------------ ----- -------- -------- --------- --------- NON-CURRENT LIABILITIES Borrowings 18 845 845 845 845 ------------------------------ ----- -------- -------- --------- --------- 845 845 845 845 ------------------------------ ----- -------- -------- --------- --------- CURRENT LIABILITIES Trade and other payables 17 307 263 238 154 Borrowings 18 100 100 100 100 ------------------------------ ----- -------- -------- --------- --------- 407 363 338 254 TOTAL LIABILITIES 1,252 1,208 1,183 1,099 ------------------------------ ----- -------- -------- --------- --------- TOTAL EQUITY AND LIABILITIES 2,711 2,906 2,487 2,827 ------------------------------ ----- -------- -------- --------- ---------
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 GBP424,000 (2018: loss of GBP723,000).
These Financial Statements were approved by the Board of Directors on 23 December 2019 and were signed on its behalf by
N Jagatia
Director
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 June 2019
Attributable to the owners of the parent -------------------------------------------------------------------------------------- Share Share Share Merger Reverse Retained Total capital premium option reserve acquisition losses Equity reserve reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ------------------------- --------- --------- --------- --------- ------------- --------- -------------- BALANCE AT 30 June 2017 1,568 8,144 206 3,150 (7,361) (3,347) 2,360 ------------------------- --------- --------- --------- --------- ------------- --------- -------------- Loss for the year - - - - - (953) (953) -------------- TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - - (953) (953) ------------------------- --------- --------- --------- --------- ------------- --------- -------------- Share issues 250 41 - - - - 291 Share options lapsed - - (203) - - 203 - ------------------------- --------- --------- --------- --------- ------------- --------- -------------- TRANSACTIONS WITH OWNERS RECOGNISED DIRECTLY IN EQUITY 250 41 (203) - - 203 291 ------------------------- --------- --------- --------- --------- ------------- --------- -------------- BALANCE AT 30 June 2018 1,818 8,185 3 3,150 (7,361) (4,097) 1,698 ------------------------- --------- --------- --------- --------- ------------- --------- -------------- Loss for the year - - - - - (239) (239) -------------- TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - - (239) (239) ------------------------- --------- --------- --------- --------- ------------- --------- -------------- TRANSACTIONS - - - - - - - WITH OWNERS RECOGNISED DIRECTLY IN EQUITY ------------------------- --------- --------- --------- --------- ------------- --------- -------------- BALANCE AT 30 June 2019 1,818 8,185 3 3,150 (7,361) (4,336) 1,459 ------------------------- --------- --------- --------- --------- ------------- --------- --------------
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 June 2019
Attributable to equity shareholders --------------------------------------------------------------- Share Share Merger Share Retained Total capital premium Reserve option losses Equity reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 --------------------- --------- --------- --------- --------- --------- -------- BALANCE AT 30 June 2017 1,568 8,144 3,150 206 (10,908) 2,160 --------------------- --------- --------- --------- --------- --------- -------- Loss for the year - - - - (723) (723) --------- TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - (723) (723) --------------------- --------- --------- --------- --------- --------- -------- Share issues 250 50 - - - 300 Share issue costs - (9) - - - (9) Share options lapsed in the year - - - (203) 203 - --------- TRANSACTIONS WITH OWNERS RECOGNISED DIRECTLY IN EQUITY 250 41 - (203) 203 291 --------------------- --------- --------- --------- --------- --------- -------- BALANCE AT 30 June 2018 1,818 8,185 3,150 3 (11,428) 1,728 --------------------- --------- --------- --------- --------- --------- -------- Loss for the year - - - - (424) (424) --------- TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - - - (424) (424) --------------------- --------- --------- --------- --------- --------- -------- TRANSACTIONS - - - - - - WITH OWNERS RECOGNISED DIRECTLY IN EQUITY --------------------- --------- --------- --------- --------- --------- -------- BALANCE AT 30 June 2019 1,818 8,185 3,150 3 (11,852) 1,304 --------------------- --------- --------- --------- --------- --------- --------
STATEMENT OF CASH FLOWS
FOR THE YEARED 30 June 2019
GROUP COMPANY ------------------ ------ -------------------- 2019 2018 2019 2018 Note GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------ ----- -------- -------- ------------ -------- CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax (264) (973) (424) (723) Depreciation 7 9 - - Finance expense 4 - 4 Impairment of development 424 - - costs Interco loan provision - - 207 318 Tax credit 25 - - - Decrease/(increase) in trade and other receivables 352 (241) 273 (224) Increase/(decrease) in trade and other payables 44 (183) 85 (178) NET CASH GENERATED FROM / (USED IN) OPERATING ACTIVITIES 164 (960) 141 (803) CASH FLOWS FROM INVESTING ACTIVITIES Development costs (169) (157) - - Increase in loan to subsidiary - - (143) (318) NET CASH (USED IN)/GENERATED FROM INVESTING ACTIVITIES (169) (157) (143) (318) ------------------------------ ----- -------- -------- ------------ -------- CASH FLOWS FROM FINANCING ACTIVITIES Gross proceeds from issue of shares - 300 - 300 Share issue costs - (9) - (9) Gross proceeds from new debt - 845 - 845 Finance costs paid - (4) - (4) ------------------------------ ----- -------- -------- ------------ -------- NET CASH GENERATED FROM FINANCING ACTIVITIES - 1,132 - 1,132 ------------------------------ ----- -------- -------- ------------ -------- NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (5) 15 (2) 11 Cash and cash equivalents at the beginning of the year 45 30 40 30 CASH AND CASH EQUIVALENTS AT THE OF THE YEAR 15 40 45 38 40 ------------------------------ ----- -------- -------- ------------ --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 June 2019
1 GENERAL INFORMATION The principal activity of Inspirit Energy Holdings plc during the period was that of developing and commercialising the mCHP boiler and other applications of the sterling technology. These financial statements show the consolidated results of the Group for the year ended 30 June 2019 together with the comparative results for the year ended 30 June 2018. 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 financial statements have been prepared in accordance with applicable International Financial Reporting Standards ("IFRS") and IFRS Interpretations Committee (IFRS IC) as adopted and endorsed by the European Union ("EU") and with the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention and are presented in GBP Pound Sterling, rounded to the nearest 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 financial statements are disclosed in Note 4. GOING CONCERN The financial statements have been prepared on the going concern basis. The mCHP boiler development project has not yet reached commercialisation and as such the Group and Company are not generating revenues. An operating loss and cash outflows are expected in the 12 months subsequent to the date of these financial statements and therefore the Group will need to manage its cash resources appropriately. The drawdown facility has expired and the Directors are in discussions about its potential renewal. Based on the board approved forecasts which includes consideration of all relevant matters, the Directors have a reasonable expectation that the Group and the Company has access to adequate resources to continue in existence for the foreseeable future and therefore they continue to adopt the going concern basis of accounting in preparing these financial statements. The forecasts include continued focus on cash management and, if required, accruing Directors fees without seeking to accelerate potential revenue streams as well as Director guarantees over the settlement of certain liabilities and deferral of their remuneration. There can be no assurance
that the Group's projects will ever be fully developed or reach commercialisation. 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 2019. Subsidiaries are entities over which the Group has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group obtains and exercises control through voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the company controls another entity. The cost of acquisition is measured as the fair value of the assets acquired, equity instruments issued and liabilities incurred or assumed at the date of exchange. Acquisition related costs are expensed as incurred. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. STATEMENT OF COMPLIANCE The following new standards and amendments to standards and interpretations have been issued but are not yet effective and not early adopted. None of these are expected to have a significant effect on the financial statements of the Group and Company: Effective for periods beginning on or after IFRIC 23 Uncertainty over Income 1 January 2019 Tax Treatments IFRS 10 Consolidated Sale or Contribution of 1 January 2019 Financial Statements Assets between an Investor and IAS 28 (amendments) and its Associate or Joint Venture IFRS 16 Leases 1 January 2019 Annual Improvements 2015 - 2017 Cycle 1 January 2019 to IFRS Standards SEGMENTAL REPORTING Developing and commercialising the mCHP boiler and its related technology is the only activity in which the Group is engaged and is therefore considered as the only operating / reportable segment. The Group currently only operates in the UK. The financial information therefore of the single segment is the same as that set out in the Group Statement of Comprehensive Income, Group Statement of Financial Position. CURRENT AND DEFERRED INCOME TAX The tax credit 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 credit is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company's subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to or recoverable from the tax authorities. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES New standards, amendments and interpretations adopted by the Group and Company The Group and Company have applied the following standards and amendments for the first time for its annual reporting period commencing 1 July 2018: * IFRS 9 Financial Instruments; * IFRS 15 Revenue from Contracts with Customers; and * Annual improvements 2014-2016 cycle. Impact of adoption of IFRS 9 The classification and measurement requirements of IFRS 9 have been adopted with effect from the date of initial application on 1 July 2018. However, the adoption of IFRS 9 has had no impact on the Group and Company. 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 Group and Company'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". 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. INTANGIBLE ASSETS - DEVELOPMENT COSTS Development costs relate to expenditure on the development of the mCHP boiler technology. Development costs incurred on the project are capitalised when all the following conditions are satisfied: * completion of the intangible asset is technically feasible so that it will be available for use or sale * the Group intends to complete the intangible asset and use or sell it * the Group has the ability to use or sell the intangible asset * the intangible asset will generate probable future economic benefits * there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and * the expenditure attributable to the intangible asset during its development can be measured reliably. Directly attributable costs that are capitalised as part of the product include any employee costs directly related to the development of the asset and appropriate expenditure which directly furthers the development of the project. Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period. IMPAIRMENT OF NON-FINANCIAL ASSETS Assets that have an indefinite useful life, are not subject to amortisation and are tested annually for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. See note 4 for more information on the impairment assessment performed by management. FINANCIAL ASSETS a) CLASSIFICATION The Group classifies its financial assets as loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. LOANS AND RECEIVABLES Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the Statement of Financial Position date. These are classified as non-current assets. The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the Statement of Financial Position. b) RECOGNITION AND MEASUREMENT Financial assets are initially measured at fair value plus transactions costs. Loans and receivables are subsequently carried at amortised cost using the effective interest method, except for short term receivables. c) IMPAIRMENT OF FINANCIAL ASSETS The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired. A financial asset, or a group of financial assets, is impaired, and impairment losses are incurred, only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a "loss event"), and that loss event (or events) has an impact on the estimated future cash flows of the financial asset, or group of financial assets, that can be reliably estimated. The criteria that the Group uses to determine that there is objective evidence of an impairment loss include: * significant financial difficulty of the issuer or obligor; * a breach of contract, such as a default or delinquency in interest or principal repayments; * the disappearance of an active market for that financial asset because of financial difficulties; * observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio; or * for assets classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost. ASSETS CARRIED AT AMORTISED COST The amount of impairment is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset's original effective interest rate. The asset's carrying amount is reduced, and the loss is recognised in the Statement of Comprehensive Income. As a practical expedient, the Group may measure impairment on the basis of an instrument's fair value using an observable market price. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the Statement of Comprehensive Income. CASH AND CASH EQUIVALENTS In the consolidated Statement of Cash Flows, cash and cash equivalents comprise cash in hand and deposits held at call with bank FINANCIAL LIABILITIES Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instruments. Financial liabilities are initially measured at fair value, net of transactions costs. They are subsequently measured at amortised cost using the effective interest method. Financial liabilities are derecognised when the Group or Company's contractual obligations expire, are cancelled or are discharged. SHAREHOLDERS' EQUITY Equity comprises the following: * "Share capital" represents the nominal value of equity shares. * "Share premium" represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue. * "Share option reserve" represents the cumulative cost of share based payments. * "Merger reserve" and "Reverse Acquisition reserve" represents historical reserves formed upon previous Business Combinations entered into by the Company that fall outside the scope of IFRS 3. * "Retained losses" represents retained losses. BORROWINGS Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of Comprehensive Income over the period of the borrowings, using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. BORROWINGS COSTS Borrowing costs are recognised in profit or loss in the period in which they are incurred. SHARE BASED PAYMENTS The Group operates equity-settled, share-based schemes, under which it receives services from employees or third-party suppliers as consideration for equity instruments (options and warrants) of the Group. The Group may also issue warrants to share subscribers as part of a share placing. The fair value of the equity-settled share based payments is recognised as an expense in the Statement of Comprehensive Income or charged to equity depending on the nature of the service provided or instrument issued. The total amount to be expensed or charged is determined by reference to the fair value of the options granted: * including any market performance conditions; * excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and * including the impact of any non-vesting conditions (for example, the requirement for employees to save). In the case of warrants the amount charged to equity is determined by reference to the fair value of the services received if available. If the fair value of the services received is not determinable, the warrants are valued by reference to the fair value of the warrants granted as described previously. Non-market vesting conditions are included in assumptions about the number of options or warrants that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of Comprehensive Income or equity as appropriate, with a corresponding adjustment to a separate reserve in equity. When the options are exercised, the Company issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium. 3 FINANCIAL RISK MANAGEMENT The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Group's risk
management is coordinated by the Board of Directors, and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial markets. The main risks the Group is exposed to through its financial instruments are market risk (including market price risk), credit risk and liquidity risk. MARKET PRICE RISK The Group's exposure to market price risk mainly arises from potential movements in the pricing of its products. The Group manages this price risk within its long-term strategy to grow the business and maximise shareholder return. CREDIT RISK The Group's financial instruments that are subject to credit risk are cash and cash equivalents and loans and receivables. The credit risk for cash and cash equivalents is considered negligible since the counterparties are reputable financial institutions. The Group's maximum exposure to credit risk is GBP103,000 (2018: GBP460,000) 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 2 and Over Carrying Group 1 year years 5 years 5 years Total value At 30 June 2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 -------------------------- --------- --------- --------- --------- --------- --------- Trade and other payables 307 - - - 307 307 Borrowings 100 845 - - 945 945 --------------------------------------------- --------- --------- --------- --------- --------- --------- At 30 June 2018 -------------------------- --------- --------- --------- --------- --------- --------- Trade and other payables 263 - - - 236 236 Borrowings 100 845 - - 945 945 --------------------------------------------- --------- --------- --------- --------- --------- ---------
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;
-- to support the Group's growth; and -- to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of Financial Statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. IMPAIRMENT OF DEVELOPMENT COSTS AND INVESTMENT IN SUBSIDIARIES The Group tests annually whether development costs and investments in the subsidiaries, which have a carrying value of GBP2,570,000 and GBP2,440,000 respectively (2018: GBP2,401,000 and GBP2,440,000 respectively) have suffered any impairment in accordance with the accounting policy as stated in Note 2. 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 2019 review management has concluded that no impairment is required. The value-in-use calculations require management to estimate future cash flows expected to arise from the cash generating unit, once commercial production is achieved, and apply a suitable discount rate in order to calculate present value. These calculations require the use of estimates. See Note 10 for further details
.Following other sources of products interest during the year, management have focussed the value-in-use calculations on licensing sales rather than product sales. This has been done as management consider that the revenues are more near term in nature and note that it uses the same core developed technology. Given the product's nature, the core estimates have remained broadly consistent with an increase in gross margin given the shift in focus to licensing which is consider will provide a higher margin than product sales.
5 DIRECTOR'S AND KEY MANAGEMENT PERSONNEL EMOLUMENTS 2019 2018 GBP'000 GBP'000 ----------------------------------------------------- --------- ------- Aggregate emoluments 134 122 Social security costs - - ----------------------------------------------------- --------- ------- 134 122 ------------------------------------------------------------------------ --------- ------- Short Term Other Total Total Name of director Benefits Benefits 2019 2018 GBP'000 GBP'000 GBP'000 GBP'000 -------------------------- ------------ ----------- --------- ------- J Gunn 80 - 80 80 N Jagatia 30 - 30 28 A Samaha 12 - 12 2 S Gunn* 12 - 12 12 --------------------------------------------- ------------ ----------- --------- ------- 134 - 134 122 --------------------------------------------- ------------ ----------- --------- ------- *Key Management Personnel
The number of Directors who contributed to pension schemes during the year was nil (2018: nil).
6 EMPLOYEE INFORMATION 2019 2018 GBP'000 GBP'000 ---------------------------------------- ----------------------- ---------------------- Wages and salaries 149 185 Social security costs 14 8 163 193 ----------------------------------------------------------- ----------------------- ---------------------- In addition to the above a total of GBP148,000 (2018: GBP114,000) wages and salaries for employees has been included in Development costs. Average number of persons employed (including executive directors): 2019 2018 Number Number ---------------------------------------- ----------------------- ---------------------- Office and management 3 6 ----------------------------------------------------------- ----------------------- ---------------------- COMPENSATION OF KEY MANAGEMENT PERSONNEL There are no key management personnel other than those disclosed in Note 5. 7 LOSS FOR THE YEAR Loss for the year is arrived at after charging: 2019 2018 GBP'000 GBP'000 ------------------------------------------------ -------- -------- S Salaries and wages (Note 6) 163 193 A Audit and other fees 18 19 Operating lease rent 9 17 Depreciation 7 8 ------------------------------------------------------------------- -------- -------- AUDITOR'S REMUNERATION During the year the Group obtained the following services from the Company's auditor: 2019 2018 GBP'000 GBP'000 ------------------------------------------------ -------- -------- Fees payable to the Company's auditor for the audit of the parent company and the Group financial statements 18 19 8 Taxation GROUP 2019 2018 GBP'000 GBP'000 Deferred tax - - Current tax (25) (20) --------------------------------- ------- ------- Total current tax / (credit) (25) (20) --------------------------------- ------- ------- The tax on the Group's loss before tax differs from the theoretical amount that would arise using the average rate applicable to losses of the consolidated entities as follows: 2019 2018 GBP'000 GBP'000 ------------------------------------------------------ -------- ------- Loss before tax from continuing operations (239) (953) ------------------------------------------------------ -------- ------- Loss before tax multiplied by rate of corporation tax in the UK of 19% (2018: 19%) (45) (181) Tax effects of: Expenses not deductible for tax purposes 45 108 Unrelieved tax losses carried forward - 73 Research and development tax credit (25) (20) ------------------------------------------------------ -------- ------- Total tax (25) (20) ------------------------------------------------------ -------- -------
The Group has excess management expenses of approximately GBP5,000,000 (2018: GBP4,800,000), capital losses of GBP150,000 (2018: GBP150,000) and non-trade financial losses of approximately GBP119,000 (2018: 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.
9 EARNINGS PER SHARE Earnings per ordinary share has been calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of shares in issue during the year. The calculations of both basic and diluted earnings per share for the year are based upon the loss for the year of GBP239,000 (2018: GBP953,000). The weighted number of equity shares in issue during the year was 1,420,806,859 (2018: 1,359,376,947). In accordance with IAS 33, basic and diluted earnings per share are identical as the effect of the exercise of share options and warrants would be to decrease the loss per share and therefore deemed anti-dilutive. Details of share options and warrants that could potentially dilute earnings per share in future periods are set out in Note 16. 10 INTANGIBLE ASSETS GROUP Development Total Costs GBP'000 GBP'000 At 30 June 2017 2,668 2,668 Additions 157 157 Impairment (424) (424) At 30 June 2018 2,401 2,401 Additions 169 169 At 30 June 2019 2,570 2,570 ------------------ --- ------------- --------
No amortisation has been recognised on development costs to date as the assets are still in the development stage and the related products are not yet ready for sale. As such, the value-in-use calculations to support the carrying value of development costs is directly reliant on the availability of future capital funding in order to achieve product accreditation and enter into commercial production.
The recoverable amount of the above cash generating unit has been determined based on value-in-use calculations and includes revenue from sterling application in marine and waste recycling activities . The value-in-use calculations use cash flow projections based on financial budgets approved by Management covering a six-year period. They key estimates in the value-in-use calculation are:
Growth rate - Nonlinear: year on year increase based on director estimations
Discount rate - 30%
Gross margin average - 37%
The calculations are not sensitive to probable changes in the key assumptions.
11 PROPERTY, PLANT AND EQUIPMENT GROUP Plant and Equipment Fixtures Motor Vehicles and fittings Total COST GBP'000 GBP'000 GBP'000 GBP'000 ------------------- --------------------- --------------- ---------------- --------- As 30 June 2017 81 15 1 97 Additions - - - - ------------------- --------------------- --------------- ---------------- --------- As 30 June 2018 81 15 1 97 Additions - - - - As at 30 June 2019 81 15 1 97 DEPRECIATION ------------------- --------------------- --------------- ---------------- --------- As at 30 June 2017 34 9 1 34 Charge for year 7 1 - 8 --------------------------------------- --------------------- --------------- ---------------- --------- As at 30 June 2018 41 10 1 52 Charge for year 6 1 - 7 As at 30 June 2019 47 11 1 59
NET BOOK VALUE ------------------- --------------------- --------------- ---------------- --------- As at 30 June 2019 34 4 - 38 As at 30 June 2018 40 5 - 45 --------------------------------------- --------------------- --------------- ---------------- ---------
No Property, Plant and Equipment is held in the parent company.
12 INVESTMENT IN SUBSIDIARIES COMPANY 2019 2018 SHARES IN GROUP UNDERTAKINGS: GBP'000 GBP'000 ----------------------------------------------- ------- ------- At 1 July 2,440 2,440 Increase in loan to subsidiary 207 318 Provision against the loan balance outstanding (207) (318) ------------------------------------------------------------------- ------- ------- 2,440 2,440 ------------------------------------------------------------------- ------- -------
Included in the above is an amount of GBP2,885,000 (2018: GBP2,742,000) relating to the amount due to the Company by its subsidiary Inspirit Energy Limited. A provision of GBP2,885,000 (2018: GBP2,742,000) has been set against this loan balance outstanding.
Investments in Group undertakings are recorded at cost, which is the fair value of the consideration paid.
Details of Subsidiary Undertakings are as follows:
Proportion Registered of share capital Nature of Name of subsidiary Registered address capital held business -------------------- ------------------- --------------- ----------------- ------------------- Inspirit Energy c/o Niren Blake Ordinary shares 100% Product development Limited** Llp 2nd Floor, GBP15,230 Company No.07160673 Solar House, 915 High Road, London, England, N12 8QJ Somemore Limited Global Investment Ordinary shares 100% Dormant Company No.07152291 Strategy Uk GBP1 Ltd, 2(nd) Floor, London Wall Buildings, London, EC2M 5PP Inspirit Energy 2nd Floor 2 Ordinary shares 100% Dormant Consultancy Limited London Wall GBP100 Company no 11190342 Buildings, London Wall, London, United Kingdom, EC2M 5PP -------------------- ------------------- --------------- ----------------- -------------------
*** Inspirit Energy Limited ( Co No 07160673) company is entitled and has taken exemption under section 479a of the Companies Act 2006. No members of Inspirit Energy Limited have required the company to obtain an audit of its accounts for the year in question in accordance with section 476 of the Companies Act 2006
13 TRADE AND OTHER RECEIVABLES GROUP COMPANY 2019 2018 2019 2018 GBP'000 GBP'000 GBP'000 GBP'000 ------------------------ ------- ------- ------- ------- Corporation tax* 46 58 - - VAT recoverable 6 7 3 5 Other receivables 5 340 - 335 Prepayments and accrued income 6 10 6 6 -------------------------------------------- ------- ------- ------- ------- 63 415 9 346 -------------------------------------------- ------- ------- ------- -------
*The Corporation tax repayable relates to the R&D tax claim receivable from HMRC.
The Directors consider that the carrying amount of receivables is approximately equal to their fair value and under IFRS 9 that they are held at amortised cost)
.
14 CASH AND CASH EQUIVALENTS GROUP COMPANY 2019 2018 2019 2018 GBP'000 GBP'000 GBP'000 GBP'000 -------------------------- ------- ------- ------- ------- Cash and cash equivalents 40 45 38 41 ---------------------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.
All of the Group and Company's cash and cash equivalents are held with institutions with an AA credit rating.
15 SHARE CAPITAL AND SHARE PREMIUM Number Number Ordinary Deferred New Deferred Share Total of ordinary of deferred shares shares B shares premium shares shares GBP GBP GBP GBP GBP ---------------- -------------- ------------ ------------ --------- ------------- ----------- ----------- At 30 June 2017 1,170,806,859 400,932 1,170,807 396,923 - 11,295,421 12,863,151 --------------------- -------------- ------------ ------------ --------- ------------- ----------- ----------- Issue of new shares 250,000,000 - 250,000 - - 50,000 300,000 Capital Reorganisation - - (1,406,599) - 1,406,599 - - Issue costs - - - - - (9,765) (9,765) ------------ --------- ------------- ----------- ----------- At 30 June 2018 1,420,806,859 400,932 14,208 396,923 1,406,599 11,335,656 13,153,386 --------------------- -------------- ------------ --------- ------------- ----------- ----------- At 30 June 2019 1,420,806,859 400,932 14,208 396,923 1,406,599 11,335,656 13,153,386 --------------------- -------------- ------------ ------------ --------- ------------- ----------- -----------
Both the Deferred shares and the New Deferred B shares have no voting rights.
On 6 June 2018, the Company announced that members, at a General meeting on the same day, had approved the completion of a Capital Reorganisation which comprised the sub-division of shares whereby each existing Ordinary Share of 0.1 pence each in the capital of the Company was sub-divided into 1 New Ordinary Shares of 0.001 pence each and 1 Deferred B Share of 0.099 pence each. This resulted in 1,420,806,859 New Ordinary Shares and 1,420,806,859 Deferred B Shares in issue.
16 SHARE BASED PAYMENTS Share options and warrants can be granted to selected Directors and third-party service providers. There have been no options issued in the year and no share based payment charge has been recognised. Share options and warrants outstanding at the end of the year have the following expiry dates and exercisable prices: Weighted Average Weighted Average Exercise Price Options and Exercise Price Options and 2019 warrants 2018 warrants At 1 July 0.0488 1,500,000 0.0067 10,783,364 Granted - - - - Exercised - - - - Lapsed - - 0.0090 (9,283,364) At 30 June 0.0488 1,500,000 0.0488 1,500,000 ---------------------------------- ---------------- -------------- ----------------- ----------------- Exercise price in GBP per Number of options Number of options Grant date Expiry date share and warrants and warrants 2019 2018 25 April 26 April 2011 2021 0.0488 1,500,000 1,500,000 0.0488 1,500,000 1,500,000
---------------------------------- ---------------- -------------- ----------------- ----------------- 17 TRADE AND OTHER PAYABLES GROUP COMPANY 2019 2018 2019 2018 GBP'000 GBP'000 GBP'000 GBP'000 -------------------------- --------------------- ------- ------- ------- Trade payables 50 58 8 29 Other payables 85 152 85 86 Social security and other taxes 25 31 - 18 Accrued expenses 147 22 145 21 ----------------------------------------------- --------------------- ------- ------- ------- 307 263 238 154 ----------------------------------------------- --------------------- ------- ------- -------
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
18 BORROWINGS GROUP COMPANY 2019 2018 2019 2018 GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------ -------- -------- -------- -------- Current Drawdown facility (see Note 1 below) 100 100 100 100 Total current borrowings 100 100 100 100 -------------------------------------------------- -------- -------- -------- ---------- Non-current Convertible loan notes (Note 2 below) 845 845 845 845 -------------------------------------------------- -------- -------- -------- ---------- Total non-current borrowings 845 845 845 845 -------------------------------------------------- -------- -------- -------- ---------- Total borrowings 945 945 945 945 -------------------------------------------------- -------- -------- -------- ----------
Note 1
The Drawdown facility relates to the facility entered into during 2017 with YA Global Master SPV Limited. The facility is unsecured and carries an implied interest rate of 10 per cent per annum, repayable in 12 equal monthly instalments and has now lapsed. The directors are seeking to renew.
On 30 April 2015, the Company issued warrants to subscribe for 9,283,364 new ordinary shares as part of the unsecured $3,000,000 Debt facility arrangement with YA Global Master SPV Limited ("YA Global"). The issue of the warrants was triggered following the drawdown of the initial Tranche 1, being $400,000, under the terms of the agreement. The terms of the issue of warrants are governed by the Debt Facility agreement, which specify that for every tranche drawn down, the Company is required to issue 25% of the value of the drawdown based on the interbank rate at the nearest possible date and using the average Volume Weighted Average Price ("VWAP") of the Company for the five trading days immediately prior the date of the agreement. Based on those terms, were the Company to drawdown the remaining $2,600,000 they would be required to issue further warrants to subscribe for an estimated total of 99,622,448 new ordinary shares. The Directors do not expect to use the remaining facility in the foreseeable future. On 25 April 2018, YA Global entered into an agreement for Convertible Loan Notes ("CLNs) which converted GBP100k of the existing drawdown into CLNs (see note 2).
Note 2
In May 2018, the Company raised GBP530,000 in cash from private investors through the issue of Convertible Loan Notes and converted existing debt due to Related Parties (as further detailed below) and other third-party debt valued at GBP315,000 into the CLNs. The principal amount of the CLNs are convertible at the higher of either 0.07p per Ordinary Share of 0.1p each (the "Ordinary Shares" or "Existing Ordinary Shares" and subject to the Capital Reorganisation as set out below) or a discount of 25 per cent. to the previous trading day's closing market share price. The CLNs are interest free, convertible at the Company's option and, in the ordinary course, only are repayable by the Company in Ordinary Shares following a conversion notice. Any Ordinary Shares issued on conversion of the CLNs will rank pari passu with existing Ordinary Shares. Conversion of the CLNs is subject to a restriction that no conversion shall take place in circumstances where as a result of the conversion the Noteholder or any party deemed to be acting in concert with such Noteholder, as defined in the Takeover Code, would own more than 29.9% of the issued share capital of the Company or otherwise trigger a requirement for the Noteholder to make a general offer for the Company pursuant to Rule 9 of the Takeover Code. The CLNs will not be admitted to trading on AIM or any other exchange.
Majority of the CLN's were converted on 29 November 2019 and 3rd December 2019. As at the date of the approval of these Financial Statements the value of CLN's that remain outstanding is GBP3,200.
19 FINANCIAL INSTRUMENTS BY CATEGORY 2019 2018 GBP'000 GBP'000 --------------------------------------------------------------- ------- ------- FINANCIAL ASSETS - LOANS AND RECEIVABLES: --------------------------------------------------------------- ------- ------- Trade and other receivables (excluding prepayments, VAT and corporation tax) 5 340 Cash and cash equivalents 40 45 ----------------------------------------------------------------------------------- ------- ------- FINANCIAL LIABILITIES AT AMORTISED COST: --------------------------------------------------------------- ------- ------- Trade and other payables 282 232 Borrowings 945 945 ----------------------------------------------------------------------------------- ------- ------- The table providing an analysis of the maturity of the non-derivative financial liabilities has been included in Note 3. 20 ULTIMATE CONTROLLING PARTY At the date of signing this report the Directors do not consider there to be one single ultimate controlling party. 21 RELATED PARTY TRANSACTIONS See note 6 for details of director's remuneration in the year. During the year, NKJ Associates Ltd, a company in which N Jagatia is a Director, charged consultancy fees of GBP30,000 (2018: GBP28,000). The amount owed to NKJ Associates Ltd at year end is GBP32,000 (2018: GBP4,000). 22 EVENTS AFTER THE REPORTING DATE On 18 November 2019, the Company announced that it had raised GBP300,000 through the placing of 249,999,998 ordinary shares of 0.001 pence each in the share capital of the Company at 0.12 pence per Ordinary Share. On 25 November 2019, the Company announced that it had received conversion notices from the Convertible Loan Notes (CLN'S) issued on 4 May 2018. The Company issued 1,148,571,422 Ordinary Shares at a price of 0.07p per Ordinary Share with an admission date of 29 November 2019. GBP41,000 CLN's remained outstanding at this date. On 5 December 2019, the Company announced that it had received conversion notices from the Convertible Loan Notes (CLN's) issued on 4 May 2018. The Company issued 54,000,002 Ordinary Shares at a price of 0.07p per Ordinary Share with an admission date of 10 December 2019. GBP3,200 CLN's remained outstanding at this date.
These results are audited, however the information does not constitute statutory accounts as defined under section 434 of the Companies Act 2006. The consolidated statement of financial position at 30 June 2019 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended have been extracted from the Group's 2019 statutory financial statements. Their report was unqualified and contained no statement under sections 498(2) or (3) of the Companies Act 2006.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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