-- Amala Foods Plc

("Amala" or the "Company")

 

Annual Financial Report 2022

 

Amala Foods Plc (LON: DISH), a cash shell company, is pleased to announce the publication of the Annual Financial Report for the Year Ended 31 March 2022 which is below this announcement.  The Annual Report will also shortly be available via the National Storage Mechanism.

The Directors would like to highlight on page 10 that the Independent Auditors state "In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included challenging the directors' going concern assessment and the key underlying assumptions, assessing the likelihood of a Reverse Takeover completing within the next 12 months, ascertaining the company's latest financial position and their committed costs over the next 12 months and considering the terms of the convertible loan notes in issue at the date of this report."

The going concern period is the period of twelve months following the publication of the Annual Financial Report.

In order to conserve cash and to ensure that the proceeds of £405,000 Convertible Loan Notes as announced previously have the best prospect of resulting in a Reverse Takeover, the Directors have agreed to not receiving any remuneration for the period prior to and during the period of suspension and until a successful transaction achieves a Reverse Takeover.  The Directors are actively seeking to identify new opportunities for the company.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION EU 596/2014 ("MAR").

 

 

Enquiries:

 

Jonathan Morley-Kirk, Non-Executive Chairman

jmk@bluebirdmv.com

 

 

 

COMPANY INFORMATION

 

Directors                                                              Aidan Bishop                                     Executive Director                              

                                                                             Jonathan Morley-Kirk                         Non-executive Chairman

                                                                              Celia Li                                              Non-executive Director*

                               

Company Secretary                                          Roger Matthews                                  

                                                                               

 

Registered office of the Company              1st Floor, Woodford House

Peter Street

St Helier JE2 4SP

Jersey

 

 

Independent Auditor                                     PKF Littlejohn LLP

                                                                        15 Westferry Circus

Canary Wharf

London E14 4HD               

               

 

Bankers                                                           eWealthGlobal Group Limited

                                                                        17 Broad St

St Helier

Jersey JE2 3RR                                  

 

* appointed 17 March 2023

                                               

 

CONTENTS

 

 

 

Chairman's Report                                                                                                                                                                              3

Report of the Directors                                                                                                                                                                       4

Strategic Report                                                                                                                                                                                   9

 

 

Independent Auditor's Report to the Members of Amala Foods PLC                                                                                       10

Statement of Comprehensive Income                                                                                                                                            14

Statement of Financial Position                                                                                                                                                       15

Statement of Changes in Equity                                                                                                                                                      16

Cash Flow Statement                                                                                                                                                                         17

Notes to the Accounts                                                                                                                                                                         18

 

 

 

CHAIRMAN'S REPORT

 

The new financial year opened with new optimism for the Company despite the global pandemic continuing to have a significant impact to daily life and business in the Philippines where its new early-stage plant-based business was located, named Amala Foods Inc ("AFI").  

 

AFI commenced a research and development phase within a purpose-built facility and was able to create several beta products during the period that were tested with a select number of restaurants with a view to further research and product development.  Whilst the early indications were encouraging it was evident that the Company would require significant further funding to progress to the stage of full commerciality with the potential for profitability.

 

By year end, the Directors had taken the decision to not invest further in AFI given the potential new path ahead for the Company. After the period the Company announced the execution of a Share Purchase Agreement (SPA) with Terra Rara UK Ltd, with one of the conditions precedent being that the Company dispose of any interest in AFI.  Due to the Company having not advanced sufficient funds to reach the first equity hurdle in AFI, the Company was not entitled to be reimbursed for the funds advanced. The funds advanced in the year were written off to the statement of comprehensive income in the year ended 31 March 2022.

 

The Company raised GBP 210,000 via a placing in December 2021 for general working capital purposes. 

 

In February 2022, the Company signed a non-binding term sheet with Terra Rara UK Ltd, a mining company, that could have led to a transaction that would have been considered a Reverse Takeover.  Whilst the future isn't quite clear at this point for the Company, the Directors remain committed to seeking paths that will create value for shareholders.  Terra Rara UK Ltd held Rare Earth Elements (REE) exploration assets via two subsidiaries in Angola and Uganda.  These exploration assets are located in close proximity to advanced stage REE exploration assets held by other mining companies.  The Company intended to acquire 100% of the share capital of Terra Rara UK Ltd subject to regulatory approvals and if it had been successful the acquisition price paid would have represented 55% of the enlarged share capital. 

 

After the period, the Company announced the execution of a Share Purchase Agreement (SPA) with Terra Rara UK Ltd and requested a suspension of the listing.  The listing was suspended on 23 May 2022.  The Company announced the termination of the proposed transaction with Terra Rara UK Ltd after the period on 17 March 2023.  This decision was taken due to identified administrative issues relating to some of the mining assets of Terra Rara following further due diligence. Terra Rara are seeking to develop mining exploration assets in two countries in Africa, where due diligence is lengthy and complex.  The Directors are actively seeking to identify new opportunities for the Company with a view to identifying and completing a successful transaction resulting in a Reverse Takeover.

 

The Directors have agreed to not receiving any remuneration for the period prior to and during the period of suspension and until a successful transaction reaches the stage of a Reverse Takeover.  The Company announced after the period raising GBP 405,000 of Convertible Loan Notes to fund a transaction leading to a Reverse Takeover. 

 

The Directors consider the Company to be a shell company. After the period, Ms Celia Li was appointed to the Board as a Non-Executive Director.  It is my sincere hope that after a challenging couple of the years, that a path to generate value for shareholders will be realised. 

 

 

 

 

 

 

Jonathan Morley-Kirk

Chairman

31 March 2023

 

 

 

 

 

 

REPORT OF THE DIRECTORS

 

The Directors present the report together with the audited accounts of the Company for the year ended 31 March 2022.

 

The Company

 

Amala Foods Plc is registered (registered number 121041) and domiciled in Jersey. It was incorporated on 11 April 2016.

 

Principal Activity and Business Review

 

The Company's principal activity during the year ended 31 March 2022 was a cash shell company.  The Company signed a non-binding term sheet with a mining company towards the end of the year with a view to a potential transaction that would constitute a Reverse Takeover that resulted in the execution of a Share Purchase Agreement after the year.  The proposed transaction was also terminated after the period.  The Directors are actively seeking new opportunities that will lead to a Reverse Takeover.

 

Results and Dividends

 

The results of the Company for the year ended 31 March 2022 show a loss before taxation of GBP 1,090,841 (2021 loss before taxation of GBP 2,480,423).

 

The Directors do not recommend the payment of a dividend for the period ended 31 March 2022 (2021: GBP Nil).

 

The Directors note that during the year, the Company's last subsidiary, BigDish UK Ltd, was struck off and therefore the Company had no subsidiaries with trading activity in the year ended 31 March 2022. As a result, the Company has prepared single entity financial statements. The comparatives stated in the primary statements are that of the single entity and are unaudited since no single entity financial statements were presented within the 2021 consolidated financial statements.

 

Carbon Dioxide Emissions

 

At the current stage of development, carbon dioxide emissions are negligible and it is not practical to be able to accurately measure the entity's emissions and energy usage. At the appropriate time, the Company intends to actively monitor carbon dioxide emissions and will devise strategies to reduce emissions where possible and ensure applicable reporting thereon.

 

Future Developments

 

The Company's future developments are outlined in the Strategic Report section and in the Post Balance Sheet events (refer note 18 of the audited accounts).

 

Going Concern

 

The Company entered into a Deed of Standstill with a creditor to reprofile outstanding debt to a reduced amount of GBP 690,000 that would convert to shares at the re-admission price upon a Reverse Takeover and that no interest will accrue and for all existing warrants to be cancelled upon a Reverse Takeover. Should a Reverse Takeover not take place by 22 September 2023 then the creditor may call upon cash repayment.

 

Furthermore, after the balance sheet date, the Company announced that it raised GBP 405,000 in Convertible Loan Notes that would be largely utilised to fund a transaction leading to a Reverse Takeover. These Convertible Loan Notes are automatically converted into shares upon a Reverse Takeover.  However, the holders of the convertible loan notes may call upon cash repayment between April 2023 and the end of June 2023 should there be no Reverse Takeover .

 

Having prepared and reviewed cashflow forecasts, the Directors have ascertained that further finance will need to be raised should the convertible loans be required to be repaid in cash in the next 12 months. The Directors are confident that should the convertible loan notes, in part or in full, require repayment then they would be able to raise sufficient funds to be able to make such repayments whilst still funding the Company's forecasted expenditure. However, as completion of a reverse takeover by the required dates and thus avoiding cash repayment of the convertible loan notes is not guaranteed and given the requirement to raise further funds in such an event, next 12 months, they acknowledge that a material uncertainty relating to going concern exists.

 

Post year-end, the Directors have agreed to not receiving any remuneration due to them as at 31 March 2022 and for their services provided during the period of the suspension of the listing and until a successful transaction is completed that results in a Reverse Takeover.

 

The accounts have therefore been prepared on a going concern basis. The auditors make reference to going concern by way of a material uncertainty within their audit report.

 

Principal Risks and Uncertainties

 

The principal business risks that have been identified are as below.

 

Transaction Risk

 

There is no guarantee that a suitable transaction will be identified and will be successfully completed, resulting in a Reverse Takeover.  Even if a transaction is successful, there is no guarantee that the Directors will be successful in managing the new business and derive the value that is hoped.  Should a transaction not complete, once identified, then the Directors will need to invest further time and resources in identifying another suitable target company.

 

Funding Risk

 

The Company has not yet achieved profitability and is therefore reliant on periodically raising finance to fund its expenditure. There can be no guarantees that additional capital will be available when required.  Whilst the Company raised GBP 405,000 in Convertible Loan Notes after the period, there is no guarantee that further capital will be available if and when required to complete a transaction that will result in a Reverse Takeover or that further capital will be available to fund an enlarged group after the completion of a transaction.    The Directors have taken steps to conserve cash including not receiving any remuneration until there is a successful Reverse Takeover.

 

Key Personnel Risk

 

The Company is dependent on the experience and abilities of its Directors. Whilst the Company does not expect any of the Directors to leave the Company, if such individuals were to leave the Company, and the Company was unable to attract suitable experienced personnel, it could have a negative impact on the future prospects of the Company.

 

Corporate Governance

 

The Company is registered in Jersey. There is no applicable regime of corporate governance to which the directors of a Jersey company must adhere over and above the general fiduciary duties and duties of care, skill and diligence imposed on such directors under Jersey law. As a Jersey company and a company with a Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code. The Directors have responsibility for the overall corporate governance of the Company and recognise the need for appropriate standards of behaviour and accountability.

 

The Directors are committed to the principles underlying best practice in corporate governance and have regard to certain principles outlined in the UK Corporate Governance Code to the extent they are considered appropriate for the Company given its size, early stage of operations and complexities.

 

Internal Control

 

The Directors acknowledge they are responsible for the Company'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 Company 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 Company has well established procedures which are considered adequate given the size of the business. The Company is at an early stage in its development and directors and senior management are directly involved in approving all significant investment and expenditure decisions of the Company and its subsidiaries.

 

Audit Committee

 

The Company has established an Audit Committee with delegated duties and responsibilities. The Audit Committee is responsible, amongst other things, for making recommendations to the Board on the appointment of auditors and the audit fee, monitoring and reviewing the integrity of the Company's accounts and any formal announcements on the Company's financial performance as well as reports from the Company's auditors on those accounts.  The Audit Committee includes only Jonathan Morley-Kirk, which the Board has deemed is reasonable for the time being but will be expanded once growth allows it.

 

Events after the Reporting Period

 

Refer note 18 to the audited accounts.

 

 

Company Directors (served during the year)

 

	Position	Appointment Date	Audit Committee	Remuneration Committee
Jonathan Morley-Kirk	Non-Executive Chairman	16 April 2016
Aidan Bishop	Executive Director	16 April 2016	-	-

 

Note: Celia Li was appointed as a Non-Executive Director on 17 March 2023 and will join the Remuneration Committee.

 

Role of the Board

 

The Board sets the Company's strategy, ensuring that the necessary resources are in place to achieve the agreed strategic priorities, and reviews management and financial performance. It is accountable to shareholders for the creation and delivery of strong, sustainable financial performance and monitoring the Company's affairs within a framework of controls which enable risk to be assessed and managed effectively. The Board also has responsibility for setting the Company's core values and standards of business conduct and for ensuring that these, together with the Company's obligations to its stakeholders, are widely understood throughout the Company.

 

Directors Remuneration

 

The remuneration of the Executive Director is fixed by the Remuneration Committee, which comprises of the Non-Executive Director. The Remuneration Committee is responsible for reviewing and determining the Company policy on executive remuneration and the allocation of long-term incentives to executives and employees. The remuneration of Non-Executive Directors is determined by the Board. In setting remuneration levels, the Company seeks to provide appropriate reward for the skill and time commitment required in order to retain the right caliber of Director at an appropriate cost to the Company.

 

The remuneration paid to, or receivable by, Directors in respect of 2022 and 2021 in relation to the period of their appointment as Director is GBP 140,000 (2021 - GBP 150,000). All amounts are short term in nature. The directors did not receive any remuneration in the form of share based payments, post-employment benefits, termination benefits or other long-term benefits in the year ended 31 March 2022 (2021 - none).  The Directors have agreed to not receive any remuneration due for the period prior to and during the suspension of the listing and until a transaction is completed that leads to a Reverse Takeover.

 

	31 Mar 2022 (GBP)	31 Mar 2021 (GBP)
Executive Directors
Aidan Bishop	120,000	120,000
Non-executive Directors
Jonathan Morley-Kirk	20,000	20,000
Simon Perrée*	-	10,000
Total Remuneration	140,000	150,000

·     Resigned 24 September 2020. No termination benefits were paid.

 

Monza Capital Ventures Limited, which is associated with Aidan Bishop, held 55,018,687 shares in the Company at 31 March 2022 and 31 March 2021 (representing, 12.4% and 14.7% ownership of the Company at 31 March 2022 and 31 March 2021 respectivley). Jonathan Morley-Kirk held no shares in the Company at 31 March 2022 and 31 March 2021. Aidan Bishop held 16,267,462 share options at 31 March 2022 and 2021 and Jonathan Morley-Kirk held 444,444 share options at 31 March 2022 and 2021.

 

Share Capital

 

At 31 March 2022 the issued share capital of the Company stood at 443,620,823 - with 70,000,000 new shares having been issued during the period (refer note 15 to the audited accounts).

 

 

Substantial Shareholders (unaudited)

 

At 31 March 2022 the following had notified the Company of disclosable interests in 5% or more of the nominal value of the Company's shares.

 

	Number	%
Fiske Nominees Limited*	125,192,082	28.2%
Hargreaves Lansdowne (Nominees) Limited Interactive Investor Services Nominees Limited	72,226,646 40,071,269	16.3% 9.0%

 

  *  Includes 55,018,687 shares held by Monza Capital Ventures Limited, which is associated with Aidan Bishop. Monza Capital Ventures Limited continued to hold 55,018,687 shares at the date of this Annual Report.

 

Employees

 

The Company has a policy of equal opportunities throughout the organisation and is proud of its culture of diversity and tolerance.

 

Disclosure of Information to Auditor

 

So far as the Directors are aware, there is no relevant audit information of which the company's auditor is unaware; and each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

 

The Directors conrm to the best of their knowledge that:

 

·    the nancial statements, prepared in accordance with the relevant nancial reporting framework, give a true and fair view of the assets, liabilities, nancial position and prot or loss of the Company;

·    the strategic report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face; and

·    the annual report and accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

 

Auditor Appointment

 

The Company's auditor, PKF Littlejohn LLP, was initially appointed on 23 March 2020. It is proposed by the Board that they be reappointed as auditors at the forthcoming AGM. The auditors have expressed their willingness to continue in oce.

 

Statement of Directors Responsibilities

 

The Directors are responsible for preparing the Annual Report and the accounts in accordance with applicable laws and regulations. The Directors have prepared the accounts for each financial period which present fairly the state of affairs of the Company and the profit or loss of the Company for that period.

 

The Directors have chosen to use the UK-adopted International Accounting Standards ("UK-adopted IAS") in preparing the Company's accounts.

 

International Accounting Standard 1 requires that accounts present fairly for each financial period the Company's financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board's 'Framework for the preparation and presentation of accounts. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable International Financial Reporting Standards.

 

A fair presentation also requires the Directors to:

 

·    consistently select and apply appropriate accounting policies;

·    present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

·    make judgements and accounting estimates that are reasonable and prudent;

·    provide additional disclosures when compliance with the specific requirements in UK-adopted IAS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; 

·    state that the Company has complied with UK-adopted IAS, subject to any material departures disclosed and explained in the accounts; and 

·    prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

 

The Directors are also required to prepare accounts in accordance with the rules of the London Stock Exchange for companies trading securities on the Stock Exchange.

 

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company, for safeguarding the assets, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of accounts.

 

Financial information is published on the Company's website. The maintenance and integrity of this website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may occur to the accounts after they are initially presented on the website.

 

Legislation in Jersey governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.

 

Directors' Responsibility Statement

 

The Directors confirm to the best of their knowledge:

 

·       The Company's accounts have been prepared in accordance with UK-adopted IAS and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company.

·       The annual report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that they face.

 

This Directors' Report was approved by the Board of Directors on 30 March 2023 and is signed on its behalf.

 

By Order of the Board

 

 

 

 

 

Jonathan Morley-Kirk

Chairman

31 March 2023

 

 

STRATEGIC REPORT

 

The Company was mainly focused during the year on AFI, who were engaged in research and development of plant-based products in the Philippines.  

 

COVID-19 continued to have a significant impact and AFI had to make significant adjustments resulting from restrictions imposed by the pandemic.  Substantial progress was made in research and development and several beta products were tested in selected restaurants with a view to further research and development.  The Company noted that AFI was able to make speedy progress at low cost when compared to similar companies at the same stage early of development.  However, it was noted that significant further funding would be required in order for AFI to advance beyond research and development to commercialisation. 

 

The Directors made the decision by year-end to not invest further in AFI after the execution of a term sheet with Terra Rara UK Ltd (see below) set the Company on a new strategic path.  After the period, the Company entered into a Share Purchase Agreement with Terra Rara UK Ltd, with one of the conditions precedent being that the Company have no interest in AFI.  The Company did not reach the required threshold to earn equity in AFI and as such was not entitled to be reimbursed for funds advanced to date to AFI. The prepaid consideration was written off in full.

 

The capital markets remained difficult for new funding and the Directors considered further strategic changes in order to create value for shareholders.  Towards the end of the year the Company signed a non-binding term sheet with Terra Rara UK Ltd, a mining company, with Rare Earth Elements (RRE) exploration projects in Africa. This progressed to the Company entering into an agreement to acquire 100% of the share capital of Terra Rara UK Ltd that would lead to a Reverse Takeover.  As a result, the Company's listing was suspended in order that a regulatory process could begin. The Company announced after the period that the proposed transaction with Terra Rara UK Ltd was terminated due to identified administrative issues relating to some of the mining assets following further due diligence. The Company now intends to seek new opportunities and identify a potential transaction that will result in a Reverse Takeover.

 

The Directors consider the Company to be a cash shell company under the Listing Rules 5.6.5A R.

 

Key Performance Indicators

 

The Company intends to identify a suitable target company with the aim of entering into a transaction, resulting in a Reverse Takeover.  Whilst the Directors had expected that the proposed transaction with Terra Rara UK Ltd would have achieved this objective the potential transaction was terminated.  The Directors will seek to identify other suitable target companies that could be in any sector and once identified will undertake a due diligence process.

 

 

 

Aidan Bishop

Executive Director

31 March 2023

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AMALA FOODS PLC

 

Opinion

We have audited the financial statements of Amala Foods Plc (the 'company') for the year ended 31 March 2022 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted International Accounting Standards ("UK-adopted IAS").

In our opinion, the financial statements:

·      give a true and fair view of the state of the company's affairs as at 31 March 2022 and of its loss for the year then ended; and

·      have been properly prepared in accordance with UK-adopted IAS.

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.

Other matter

As at 31 March 2021, the Company had one fully owned subsidiary and thus was part of a group and prepared consolidated financial statements for the year ended 31 March 2021 which were audited. However, as the Company is registered in Jersey, no Company Statement of Comprehensive Income, Company Statement of Financial Position, Company Statement of Changes in Equity or Company Cash Flow Statement were included in the consolidated financial statements for the year ended 31 March 2021 and no individual financial statements were prepared and audited. In the year ended 31 March 2022, the company's subsidiary was dissolved and therefore individual financial statements have been prepared. As a result, the comparative figures are unaudited.

Material uncertainty related to going concern

We draw attention to note 2.3 in the financial statements, which indicates that the Company incurred a net loss of £1,090,841 during the year ended 31 March 2022, is in a net current liability position of £598,127 as at 31 March 2022 and should the Company not complete a reverse takeover by the maturity dates of the convertible loan notes in issued, which fall on various dates between April and September 2023, then they could be required to settle the convertible loan notes in issue in cash and would be dependent on raising further finance in order to fund such repayment. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, 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.

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included challenging the directors' going concern assessment and the key underlying assumptions, assessing the likelihood of a Reverse Takeover completing within the next 12 months,  ascertaining the company's latest financial position and their committed costs over the next 12 months and considering the terms of the convertible loan notes in issue at the date of this report.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Our application of materiality

The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures.

Materiality for the financial statements was set as £28,000 based upon 2.5% of loss before tax. Materiality has been based upon loss before tax given there are a small number of large balances in the Statement of Financial Position and given the focus of management on cost-control in order to remain a going concern.

The performance materiality and the triviality thresholds for the financial statements were set at £21,000 and £1,400 respectively due to our accumulated knowledge of the company and the assessed risk.

We also agreed to report to the Audit Committee any other differences below that threshold that we believe warranted reporting on qualitative grounds.

Our approach to the audit

In designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular we looked at areas involving significant accounting estimates and judgements by the directors and considered future events that are inherently uncertain, such as the recoverable value of loan receivables and the fair value assigned to warrants issued in the year. We also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

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. In addition to the matter described in the Material uncertainty related to going concern section we have determined the matters described below to be the key audit matters to be communicated in our report.

 

Key Audit Matter	How our scope addressed this matter
Carrying value of loan receivables
During the year the company advanced $125k (£95k) to the acquisition target Terra Rara UK Ltd, a company conducting exploration for rare earth metals in Africa. There is a risk that the amounts advanced may not have been classified or correctly accounted for in accordance with IFRS 9 Financial Instruments and thus given the significant carrying value, the financial statements may be materially misstated. As the target is an exploration company there is also risk that the loan receivable may not be fully recoverable and thus materially overstated. Additionally, significant judgement is required by the Directors in assessing whether any expected credit losses are required to be recognised. In addition, during the year a loan receivable was settled via the receipt of shares in the Company previously held by the borrower. There is a risk that the settlement of this loan and receipt of the Company's own shares has not been accounted for in accordance with IAS 32 and IFRS 9. See note 9, 10 & 18 for further details in respect of these balances and the post-year end termination of the proposed transaction and note 3.2 for the judgements made by the directors when conducting their expected credit loss model review.	Our work in respect of this risk included, but was not limited to: ·      Obtaining the loan agreement with Terra Rara UK Ltd and reviewing to ascertain the key terms of the agreement; ·      Ensuring that that loan receivable has been correctly classified in accordance with IFRS 9; ·      Vouching the advance of funds to Terra Rara to bank statements; ·      Ensuring that any interest income earned in respect of both loans has been correctly accounted for; ·      Obtain management's IFRS 9 expected credit loss model assessment in respect of both loan receivables. Review and challenge the key assumptions and judgements made and consider the accuracy and completeness of any such charge recognised; and ·      In relation to the loan with Poppyflower Investments Ltd, obtaining the settlement agreement, vouching the receipt of shares and ensuring that the settlement has been treated in accordance with IAS 32 and IFRS 9.   The directors assessed at the year-end that the loan receivable is recoverable in full owing to the fact that the directors did not identify any events or developments that took place in the month between the advancing of funds and 31 March 2022 that reduced their confidence in the likelihood of full recovery. In addition, it was noted that repayment of the loan was not called upon on or prior to 31 March 2022 as at year-end the directors were in the process of negotiating the terms of the Share Purchase Agreement signed in May 2022. Whilst the loan has yet to be recovered post year-end and the proposed acquisition of Terra Rara UK Ltd has been terminated, which the directors assess as being a non-adjusting post balance sheet event, following conversations with the directors are confident that the balance will be recovered in full albeit it should be noted that if it is not recovered then the amount will need to be impaired. It was assessed that the termination of the deal was a non-adjusting event as no such conditions were in existence at 31 March 2022 since the terms of the Share Purchase Agreement were still being negotiated. The loan due from Poppyflower was settled in full during the year via the transfer of shares in the Company. The loan receivable was therefore extinguished and the shares taken into treasury.

Other information

The other information comprises the information included in the annual financial report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual financial report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:

·      adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or

·      the financial statements are not in agreement with the accounting records and returns; or

·      we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

·      We obtained an understanding of the company and the sector in which it operates to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussion with management, independent research of the Companies (Jersey) Law 1991 and our accumulated knowledge and experience of the industry.

·      We determined the principal laws and regulations relevant to the company in this regard to be those arising from the Financial Conduct Authority (FCA) Listing Rules and Disclosure and Transparency Rules, and the Companies (Jersey) Law 1991.

·      We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the company with those laws and regulations. These procedures included, but were not limited to:

o  Discussions with management regarding compliance with laws and regulations by the company;

o  Reviewing board minutes; and

o  Reviewing regulatory news announcements made.

·      We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that there was potential for management bias in relation to the assessment of the recoverability of the loan receivables. We addressed this by challenging the assumptions and judgements made by management. Please refer to the Key audit matters section of our report for further detail.

·      As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with our engagement letter dated 1 March 2023.  Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

 

 

 

 

Joseph Archer (Engagement Partner)                                                                                                            15 Westferry Circus

For and on behalf of PKF Littlejohn LLP                                                                                                                      Canary Wharf

Statutory Auditor                                                                                                                                                          London E14 4HD

STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2022 and 31 March 2021

                                                                                                                                                                                               

                                31 Mar 2021

31 Mar 2022         (unaudited)

                                                                                                                Note                                       GBP                        GBP

 

Administrative expenses                                                                                                                   (357,656)              (603,313)

Impairment                                                                                           9                                              (204,656)              (1,762,865)

Share based payments expense                                                     17                                           (332,232)              (116,915)

 

 

Interest income                                                                                                                                    9,707                      22,083

Loan note interest                                                                                                                               (206,004)              (19,413)

 

 

Income tax expense                                                                           8                                              -                               -              

 

 

Earnings per share:

Basic and diluted loss per share (GBP)                                          15                                           (0.0028)                 (0.0069)

 

The accompanying accounting policies and notes form an integral part of these accounts.

 

 

 

 

STATEMENT OF FINANCIAL POSITION

At 31 March 2022

                                                                                                                                                                                               

                                31 Mar 2021

31 Mar 2022         (unaudited)

                                                                                                                Note                                       GBP                        GBP

 

Current assets

 

Trade and other receivables                                                             10                                           94,675                   229,924

 

                                                                                                                                                                114,542                 335,483

Current liabilities

 

Trade and other payables                                                                 12                                           (85,132)                 (97,602)

Borrowings                                                                                           12                                           (627,537)              (200,000)

 

 

Net (liabilities)/assets                                                                                                                       (598,127)              37,881

 

Equity

 

Issued share capital                                                                            15                                           6,488,490              6,455,154

Retained earnings*                                                                                                                             (8,801,332)           (7,723,415)

Other reserves                                                                                     14                                           1,714,715              1,306,142

 

 

The accompanying accounting policies and notes form an integral part of these accounts.

 

These accounts were approved and signed by the Chairman.

 

 

 

 

 

Jonathan Morley-Kirk

Chairman

31 March 2023

STATEMENT OF CHANGES IN EQUITY

At 31 March 2022

                                                                                               

                                                                                                                Share         Retained            Other                      Total                                                                                                                            Capital       Earnings            reserves                Equity

                                                                                        Note               GBP            GBP                    GBP                        GBP

 

Loss for the period                                                                                -                    (2,480,243)      -                             (2,480,243)

 

Total comprehensive income for the period                                  -                     (2,480,243)      -                              (2,480,243)

 

Share options reserves                                                                        -                    -                          120,818                120,818

Shares to be issued reserve                                                               -                    -                          (10,073)                (10,073)

Issue of new ordinary shares (net)                              15               482,174        -                         -                              482,174

Share based payments                                                                        -                    116,915            (116,915)             -

Translation reserve                                                                               -                     78,698             (78,698)                -

 

 

 

 

Loss for the period                                                                                -                    (1,090,841)      -                             (1,090,841)

 

Total comprehensive income for the period                                  -                     (1,090,841)       -                              (1,090,841)

 

Share based payments - options                                                       -                     -                         27,884                   27,884

Shares to be issued reserve                                                               -                     -                         89,265                   89,265

Share based payments - warrants                                                    -                     -                         304,348                 304,348

Expired warrants                                                                                   -                    12,924              (12,924)                 -

Issue of new ordinary shares (net)                              15               33,336          -                         -                               33,336

 

 

 

The accompanying accounting policies and notes form an integral part of these accounts.

 

 

 

 

CASH FLOW STATEMENT

For the year ended 31 March 2022 and 31 March 2021            

                               

                                31 Mar 2021

31 Mar 2022         (unaudited)

                                                                                                                                Note                       GBP                        GBP

 

 

Cash paid to suppliers & employees                                                                                                              (242,645)              (501,945)

 

 

Cash flows from investing activities

 

Investments in Amala Foods Inc                                                                                                      (204,656                )               -

Loan issued                                                                                                                                          (94,675)                 -

 

 

Cash flows from financing activities

 

Loan received                                                                                                                                      246,284                 200,000

Cash received from loan receivable                                                                                                               -                               50,000

Net proceeds from share capital issue                                                                                           210,000                 -

 

 

Net decrease in cash                                                                                                                        (85,692)                 (251,945)

 

 

Cash and cash equivalents at start of period                                                                                                105,559                 357,504

Cash and cash equivalents at end of the period                                          14                           19,867                   105,559

 

There have been significant non-cash transactions relating to the settlement of operating and financial liabilities in the period.

 

All shares issued in the year to 31 March 2021 were to settle operating and financial liabilities (refer notes 13 and 15).

 

In the year ended 31 March 2022, the Company received 3,700,00 shares into treasury in full and final settlement of a loan receivable of GBP 239,961. The Company transferred 7,092,617 shares held in treasury to creditors to settle liabilities in the year ended 31 March 2022.

 

The accompanying accounting policies and notes form an integral part of these accounts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE ACCOUNTS

For the year ended 31 March 2022

1. GENERAL INFORMATION

 

Amala Foods Plc ('Company') is a public company limited by shares. It was incorporated on 11 April 2016 and is registered (registered number 121041) and domiciled in Jersey. The Company's ordinary shares are on the Official List of the UK Listing Authority in the standard listing section of the London Stock Exchange (reference DISH).

 

 

2. BASIS OF PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

 

The Company's accounts have been prepared in accordance with UK-adopted International Accounting Standards at 31 March 2022.

 

The accounts are prepared under the historical cost convention unless otherwise stated in the accounting policies.

 

The accounts are presented in GB Pounds ('GBP'), which is the functional currency of the Company and are rounded to the nearest pound.

 

During the year, the Company's last subsidiary, BigDish UK Ltd, was struck off and therefore at the year-end the Company had no subsidiaries. As a result, the Company has prepared single entity financial statements. The comparatives stated in the primary statements are that of the single entity and are unaudited since no single entity financial statements were presented within the 2021 consolidated financial statements.

 

Certain amounts included in the accounts involve the use of judgement and/or estimation. Judgements, estimations and sources of estimation uncertainty are discussed in note 3.

 

2.1 In issue and effective for periods commencing on 01 April 2021

 

No new standards, amendments or interpretations, effective for the first time for the financial year beginning on or after 1 April 2021 have had a material impact on the Company.

 

Standards in issue but not yet effective

 

The Directors do not believe that the adoption of those standards, amendments and interpretations which have been recently issued or revised but are not yet effective will have a material impact on the Company.

 

2.3 Going Concern

 

The Company has the following loans, which total GBP 627,537 at 31 March 2022 (31 March 2021, GBP 200,000):

31 Mar 2022         31 Mar 2021

GBP                        GBP

 

 

The Company made a loss in the year of GBP 1,0187,902. At 31 March 2022, the cash held was GBP 19,867 and the Company had current liabilities of GBP 712,669.

 

The Company entered into a Deed of Standstill with a creditor to reprofile outstanding debt to a reduced amount of GBP 690,000 that would convert to shares at the re-admission price upon a Reverse Takeover and that no interest will accrue and for all existing warrants to be cancelled upon a Reverse Takeover. Should a Reverse Takeover not take place by 22 September 2023 then the creditor may call upon cash repayment.

 

Furthermore, after the balance sheet date, the Company announced that it raised GBP 405,000 in Convertible Loan Notes that would be largely utilised to fund a transaction leading to a Reverse Takeover. These Convertible Loan Notes are automatically converted into shares upon a Reverse Takeover.  However, the holders of the convertible loan notes may call upon cash repayment between April and the end of June 2023 should there be no Reverse Takeover or chose for interest to accrue on the loans.

 

Having prepared and reviewed cashflow forecasts, the Directors have ascertained that further finance will need to be raised should the convertible loans be required to be repaid in cash in the next 12 months. The Directors are confident that should the convertible loan notes, in part or in full, require repayment then they would be able to raise sufficient funds to be able to make such repayments whilst still funding the Company's forecasted expenditure. However, as completion of a reverse takeover by the required dates and thus avoiding cash repayment of the convertible loan notes is not guaranteed and given the requirement to raise further funds in such an event, next 12 months, they acknowledge that a material uncertainty relating to going concern exists.

 

Post year-end, the Directors have agreed to not receiving any remuneration due to them as at 31 March 2022 and for their services provided during the period of the suspension of the listing and until a successful transaction is completed that results in a Reverse Takeover.

 

The accounts have therefore been prepared on a going concern basis. The auditors make reference to going concern by way of a material uncertainty within their audit report.

 

 

3. JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND SOURCES OF ESTIMATION UNCERTAINTY

 

Certain amounts included in the accounts involve the use of judgement and/or estimation. These are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience. However, judgements and estimations regarding the future are a key source of uncertainty and actual results may differ from the amounts included in the accounts. Information about judgements and estimation is contained in the accounting policies and/or other notes to the accounts. The key areas are summarised below.

 

3.1 Share based payments

 

Judgement is required when determining the fair value of options and warrants issued under the scope of IFRS 2 (refer note 17 of the audited accounts) as a number of the inputs are subjective.  Management have determined that Black-Scholes model was the most appropriate models to be used for the valuation of the warrants issued in the year.

 

3.2 Recoverable value of loan receivable

 

The amounts advanced to Terra Rara UK Ltd during the year have been classified as a loan receivable under IFRS 9 and therefore the Directors have had to consider the recoverable value of this balance by applying the expect credit loss approach. When applying this approach, the Directors have been required to make judgements regarding the likelihood of the recovery of the balance. The Directors have assessed that in the short time period between the advancing of the funds and the year-end, no events or developments have been noted to suggest that the likelihood of recovery decreased in this period and therefore the Directors have assessed the balance to be fully recoverable. Though the proposed acquisition of Terra Rara was terminated post year-end, the Directors assessed this to be a non-adjusting and therefore no adjustments were made to the carrying value of the loan receivable.

 

3.3 Recoverable value of prepaid consideration

 

During the year the Company advanced funds to Amala Food Inc under a joint venture agreement. As the threshold to allow the Company to convert the funds advanced into shares had not been reached at the year end, the balance was deemed to be prepaid consideration and as such, in accordance with IFRS 9, the Directors were required to assess the recoverability of the loan.

 

The joint venture agreement stipulated that amounts advanced to Amala Foods Inc which totalled less than said threshold were not eligible to be reimbursed. As this threshold was not reached during the year and since the Directors had made the decision as at 31 March 2022 to not advance any further funds, the Directors assessed the balance to not be recoverable and thus impaired the full balance.

 

3.4 Post year-end settlement of convertible loan notes

 

The convertible loan notes issued prior to 31 March 2022 and those issued post year-end are due for repayment in cash within 12 months of the approval date of these financial statements should a Reverse Takeover not take place by the dates noted within the underlying agreements.

 

Should the Reverse Takeover not take place by the specified dates, the Directors have made the judgement that the Company would be able to settle the convertible loan notes in cash by deferring payment until such a point that they were able to raise the requisite funds.

 

 

 

4. ACCOUNTING POLICIES

 

The principal accounting policies are as determined below.

 

4.1 Financial assets

 

Financial assets are classified as either financial assets at amortised cost, at fair value through other comprehensive income or at fair value through profit or loss depending upon the business model for managing the financial assets and the nature of the contractual cash flow characteristics of the financial asset.

 

A loss allowance for expected credit losses is determined for all financial assets, other than those at FVPL, at the end of each reporting period. The Company applies a simplified approach to measure the credit loss allowance for trade receivables using the lifetime expected credit loss provision.

 

The lifetime expected credit loss is evaluated for each trade receivable taking into account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of any other relevant and current observable data. The Company applies a general approach on all other receivables classified as financial assets. The general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition.

 

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

 

4.2 Foreign currency translation

 

Functional and presentational currency

 

The functional currency of the Company is GBP in the reporting period as it is the currency which most affects each company's revenue, costs and financing. The Company's presentation currency is the GBP.

 

Transactions and balances

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at reporting period end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement.

 

4.3 Cash and cash equivalents

 

Cash and cash equivalents are defined as cash on hand, demand deposits and short term highly liquid investments and are measured at cost which is deemed to be fair value as they have short-term maturities.

 

4.4 Financial liabilities

 

Financial liabilities include convertible loans and trade and other payables. In the statement of financial position these items are included within Current liabilities. Financial liabilities are recognised when the Company becomes a party to the contractual agreements giving rise to the liability. Interest related charges are recognised as an expense in Finance costs in the income statement unless they meet the criteria of being attributable to the funding of construction of a qualifying asset, in which case the finance costs are capitalised.

 

Trade and other payables and convertible loans are recognised initially at their fair value and subsequently measured at amortised costs using the effective interest rate, less settlement payments.  Convertible loans issued in the year are classified as a financial liability as there is a contractual obligation to pay cash that the issuer cannot avoid, the exceptions in IAS 32.16A-D are not met and that it is not a derivative.

 

The Company derecognises financial liabilities when the Company's obligations are discharged, cancelled or have expired.

 

4.5 Income taxes

 

Current income tax liabilities comprise those obligations to fiscal authorities in the countries in which the Company carries out operations and where it generates its profits. They are calculated according to the tax rates and tax laws applicable to the financial period and the country to which they relate. All changes to current tax assets and liabilities are recognised as a component of the tax charge in the income statement.

 

Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amount of assets and liabilities in the consolidated accounts with their respective tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects taxes or accounting profit.

 

Deferred tax liabilities are provided for in full. Deferred tax assets are recognised when there is sufficient probability of utilisation. Deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.

 

4.6 Segmental Reporting

 

An operating segment is a component of the Company engaged in revenue generation activity that is regularly reviewed by the Chief Operating Decision Maker (CODM) for the purposes of allocating resources and assessing financial performance. The CODM is considered to be the Board of Directors.  

 

The Company's operating segments are based on geographical location and determined solely as Jersey (refer note 5).

 

4.7 Share capital and unissued share capital

 

Financial instruments issued by the Company are treated as equity only to the extent that they do not meet the definition of a financial liability. The Company's ordinary shares are classified as equity and have no par value. Costs directly associated with the issue of shares are charged to share capital.

 

Where the Company has a contractual right to issue a fixed number of shares to settle a fixed liability it recognises unissued share capital pending the issue of shares.

 

Treasury shares are held by the Company at no par value and are adjusted through share capital for receipts and disbursements.

 

4.8 Provisions, contingent liabilities and contingent assets

 

Other provisions are recognised when the present obligations arising from legal or constructive commitment, resulting from past events, will probably lead to an outflow of economic resources from the Company which can be estimated reliably.

 

Provisions are measured at the present value of the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the balance sheet date. All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

 

4.9 Share-based payments and valuation of share options and warrants  

 

The calculation of the fair value of equity-settled share-based awards requires assumptions to be made regarding future events and market conditions. These assumptions include the future volatility of the Company's share price. These assumptions are then applied to a recognised valuation model in order to calculate the fair value of the awards.

 

Where employees, directors or advisers are rewarded using share-based payments, the fair value of the employees', directors' or advisers' services are determined by reference to the fair value of the share options/warrants awarded. Their value is appraised at the date of grant and excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). In some instances, warrants issued in association with the issue of Convertible Loan Notes also represent share-based payments and a share-based payment charge is calculated for these instruments.

 

In accordance with IFRS 2, a charge is made to the statement of comprehensive income for all share-based payments including share options based upon the fair value of the instrument used. A corresponding credit is made to other reserves, in the case of options/warrants awarded to employees, directors, advisers and other consultants.

 

If service conditions or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options/warrants expected to vest. Non-market vesting conditions are included in assumptions of the number of options / warrants that are expected to become exercisable, and hence reflected in the share-based payment charge.

 

Estimates are subsequently revised, if there is any indication that the number of share options/warrants expected to vest differs from previous estimates. No adjustment is made to the expense or share issue cost recognised in prior periods if the number of share options ultimately vest differs from previous estimates.

 

Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, up to the nominal value of the shares issued, are allocated to share capital.

 

 

Where share options are cancelled, this is treated as an acceleration of the vesting period of the options. The amount that otherwise would have been recognised for services received over the remainder of the vesting period is recognised immediately within the Statement of Comprehensive Income.

 

All goods and services received in exchange for the grant of any share-based payment are measured at their fair value.

 

 

5. SEGMENTAL REPORTING 

 

The Company's operating segments are based on geographical location and determined solely as Jersey

 

 

6. LOSS FOR THE PERIOD BEFORE TAX

 

                                                                                                                                                                31 Mar 2022         31 Mar 2021

                                                                                                                                                                GBP                        GBP

 

Loss for the period has been arrived at after charging:

                                                                                                               

Auditors remuneration                                                                                                                      34,000                   31,000  

Directors remuneration                                                                                                                      140,000                 150,000

Share based payments expense                                                                                                     332,232                 116,915

Write off of prepaid consideration to AFI                                                                                        204,656                 -              

 

 

7. REMUNERATION

 

7.1 Remuneration of Management Personnel and Employees

 

In accordance with IAS 24 - Related party transactions, all Executive and Non-executive Directors, who are the Company's key management personnel, are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. Details of Directors Remuneration is outlined in the Report of the Directors.

 

                                                                                                                                                31 Mar 2022         31 Mar 2021

GBP                        GBP

 

Directors emoluments during the period*                                                                      140,000                 150,000

 

The average number of Employees during the period was made up as follows:

	31 Mar 2022	31 Mar 2021
Directors	2	3
Average during the period	2	3

 

 

 

8. TAXATION

 

 

The Company is taxed at the standard rate of income tax for Jersey companies which is 0%. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

 

	31 Mar 2022 GBP	31 Mar 2021 GBP
Current tax charge	-	-
Deferred tax charge Total tax charge	- -	- -

 

The tax charge for the period can be reconciled to the loss per the income statement as follows:

 

	31 Mar 2022 GBP	31 Mar 2021 GBP
Loss before taxation	1,090,841	2,480,243
Jersey Corporation Tax at 0%	-	-
Total tax charge *	-	-

 

* No deferred tax asset has been recognised as jersey having a 0% corporation tax, which means the there are no unutilised tax losses

 

 

9. INVESTMENTS & IMPAIRMENTS

 

 

BigDish UK Ltd ceased trading due to the COVID-19 pandemic and was officially dissolved as of 24 August 2021.

 

The investment in the subsidiaries were fully impaired at the year ended 31 March 2021.

 

In the year ended 31 March 2022, the Company entered into a joint venture agreement with Amala Foods Inc, advancing GBP 204,656 (USD 227,488) in the year. This agreement stated that up to 70% of the share capital of Amala Food Inc could be purchased by the Company for consideration of USD 1,000,000 but USD 333,333 was required to be advanced by the Company before they would be entitled to receive any shares in Amala Food Inc. It also stated that if the Company decided not to advance funds equal to or exceeding that threshold then those funds advanced would not be reimbursed to the Company.

 

As at the year-end, this threshold had not been met and the Directors did not intend to advance any further funds to Amala Food Inc post year-end due to signing a term sheet with Terra Rara UK Ltd. This set the Company on a path to a new strategic direction that resulted in the signing of a Share Purchase Agreement. That led to the suspension of the Company's listing in order for a regulatory process to commence that if successful would have resulted in a Reverse Takeover. One of the conditions precedent to the Share Purchase Agreement was that the Company should have no interest in AFI.  The Directors assessed therefore that this prepaid consideration was not recoverable and therefore impaired the balance in full (see note 6).

 

The changes in business structure have generated the following impairment losses:

 

	31 Mar 2022 GBP	31 Mar 2021 GBP
Write off of Investments in BigDish companies - UK and the Philippines	-	1,762,865
Write off of prepaid consideration - AFI	204,656	-
Total tax charge *	204,656	1,762,865

 

 

10. TRADE AND OTHER RECEIVABLES

                                                                                                                                                                               

   31 Mar 2022                31 Mar 2021

                                                                                                                                                   GBP                               GBP

 

 

Loan receivables at 31 March 2022 relates to USD 125,000 loaned to Terra Rara UK Ltd on 22 February 2022 with a 1 year term and carries a 0.5% interest rate.

Loan receivables at 31 March 2021 relates to a GBP 250,000 loan due from Poppyflower Investments Ltd, made in December 2019 at an interest rate of 10% to be utilised for the corporate and marketing development of BigDish.  GBP 50,000 was repaid during the year ended 31 March 2021.  The loan balance was settled in the year ended 31 March 2022 in full via the transfer of 3,700,000 shares in the Company held by the borrower. These shares were taken into treasury.

 

 

11. CASH AND CASH EQUIVALENTS

                                                                                                                                                                               

31 Mar 2022         31 Mar 2021

                                                                                                                                                GBP                        GBP

 

 

Cash is only held at substantial banks with high credit ratings.

 

 

12. TRADE AND OTHER PAYABLES

 

Current Liabilities

                                                                                31 Mar 2022                31 Mar 2021

                                                                                                                                                GBP                        GBP

 

Trade payables                                                                                                                    27,243                   97,602

Accruals                                                                                                                                                57,889                   -

Borrowings                                                                                                                           627,537                 200,000

 

The borrowings are a short-term loan to be used for working capital purposes with an interest rate of 7.5%.  The repayment terms were negotiated and extended to Q1 2022.  The Company drew down GBP 250,000 against the loan in the year ended 31 March 2022 and recognised GBP 177,537 of loan re-negotiation and interest chargers in the year. 9,728,720 warrants were issued during the year ended 31 March 2021 in relation to the loan and re-negotiated in the year ended 31 March 2022 - refer note 17 of the audited accounts. The share based payment of GBP 304,438 related to the loan and the issue of 43,478,260 warrants at 1.15p with an expiry date of 16 July 2015 are detailed in note 17 of the audited accounts. The repayment terms were further negotiated in the year ended 31 March 2022.  No additional warrants were issued to the convertible loan note holders as a result of the renegotiated repayment terms. The note holders may call upon cash repayment should there be no Reverse Takeover - refer note 18 of the audited accounts.

 

 

 

13. FINANCIAL INSTRUMENTS

 

13.1 Financial Assets at amortised cost

                                                                                                                                                31 Mar 2022         31 Mar 2021

                                                                                                                                                GBP                        GBP

 

Trade and other receivables                                                                                             94,675                   229,924

Cash and cash equivalents                                                                                               19,867                   105,559

 

 

13.2 Financial Liabilities at amortised cost

31 Mar 2022         31 Mar 2021

                                                                                                                                                GBP                        GBP

 

Current liabilities - trade payables and accruals                                                          85,132                   97,602  

Current liabilities - loans                                                                                                   627,537                 200,000

               

 

 

13.3 Liquidity Risk

 

The Company monitors constantly the cash outflows from day to day business and monitors long term liabilities to ensure that liquidity is maintained.

 

13.4 Interest Rate Risk

 

At the balance date the Company does not have any long-term variable rate borrowings. The Directors do not consider the impact of possible interest rate changes based on current market conditions to be material to the net result for the year or the equity position at the year ended 31 March 2022 or the period ended 31 March 2021.

 

13.5 Foreign Currency Risk

 

The Company is infrequently exposed to transaction foreign exchange risk due to transactions not being matched in the same currency. This is managed, where possible and material, by the Company retaining monies received in base currencies in order to pay for expected liabilities in that base currency. The Company currently has no currency hedging in place.

 

The Directors do not consider the impact of possible foreign exchange fluctuations to be material to the net result for the year or the equity position at the year-end for either the year ended 31 March 2022 or period ended 31 March 2021.

 

The Company's exposure to financial assets and financial liabilities is as shown in the following tables:

 

Financial Assets	31 Mar 2022 GBP	31 Mar 2021 GBP
GB Pounds	19,867	335,483
US Dollar	94,675	-
Balance at end of period	114,452	335,483

 

 

 

Financial Liabilities - Current	31 Mar 2022 GBP	31 Mar 2021 GBP
GB Pounds	712,669	297,602
Balance at end of period	712,669	297,602

 

 

13.6 Credit Risk

 

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. In order to minimise this risk, the Company endeavours only to deal with companies which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the value of the outstanding amounts as follows:

 

                                                                                                                                                31 Mar 2022         31 Mar 2021

                                                                                                                                                GBP                        GBP

 

 

Trade and other receivables                                                                                             94,675*                  229,924

Cash and cash equivalents                                                                                               19,867                   105,559

 

 

* USD 125,000

 

Credit risk on cash and cash equivalents is considered to be acceptable as the counterparties are substantial banks with high credit ratings. All receivables are current assets and due within 12 months. The Company has assessed the expected credit losses as GBP Nil for the years ended 31 March 2022 and 2021.

 

 

14. CAPITAL MANAGEMENT

 

For the purposes of the Company's capital management, capital includes called up share capital, share-based payments for options, share-based payments for warrants and equity reserves attributable to the equity holders of the Company as reflected in the Statement of Financial Position.

 

The Company's capital management objectives are to ensure that the Company's ability to continue as a going concern, and to provide an adequate return to shareholders.

 

The Company manages the capital structure through a process of constant review and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares, adjust dividends paid to shareholders, return capital to shareholders, or seek additional debt finance.

 

The nature of the Company's equity reserves is:

 

·    Reserves - including warrants, options and shares to be issued reserves related to the value of equity that investors have secured as part of their funding provided to the Company and that management has agreed to issue for settlement of remuneration; and

·    Retained surplus / accumulated losses - comprise the Company's cumulative accounting profits and losses since inception.

 

 

14.1 Reserves

	31 Mar 2022 GBP	31 Mar 2021 GBP
Share options reserve Warrants reserve Shares to be issued reserve*	977,617 381,159 355,939	949,733 89,733 266,676
Balance at end of period	1,714,715	1,306,142

 

The Company will settle outstanding liabilities to directors and employees under the salary sacrifice scheme. The Directors Remuneration balances due are reflected in Shares to be issued reserve through the Company's salary sacrifice scheme.

 

 

15. SHARE CAPITAL

 

15.1 Share Capital

                                                                                                31 Mar 2022                                         31 Mar 2021

                                                                                                Number*                               GBP                        Number*                               GBP

 

Opening balance                                                                 373,620,823         6,455,154              348,950,355         5,972,980

Ordinary shares - new shares issued during                                70,000,000           210,000                 24,670,468           482,174

the period

Other adjustment**                                                             -                               (176,664)              -                               -              

 

 

*  Number of shares issued and fully paid

** Reflects changes to treasury shares in the year ended 31 March 2022 - including the receipt of 3,700,000 shares in settlement of the outstanding loan, the issuance of 2,332,617 to settle unissued shares at 31 March 2021 and the issuance of 4,760,000 shares to settle liabilities incurred in the year ended 31 March 2022.

 

The shares have no par value. At 31 March 2022, the Company held 19,607,383 treasury shares.

 

15.2 Earnings Per Share

	31 Mar 2022        GBP	31 Mar 2021 GBP
Basic and diluted earnings per share (GBP)	(0.0028)	(0.0069)
Loss used to calculate basic and diluted earnings per share	(1,090,841)	(2,480,423)
Weighted average number of shares used in calculating basic and diluted earnings per share	395,483,837	359,353,945

 

Basic earnings per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding and shares to be issued during the period.

 

In 2022 and 2021, the potential ordinary shares were anti-dilutive as the Company was in a loss making position and therefore the conversion of potential ordinary shares would serve to decrease the loss per share from continuing operations. Where potential ordinary shares are anti-dilutive a diluted earnings per share is not calculated and is deemed to be equal to the basic earnings per share. The warrants and options noted in note 17 could potentially dilute EPS in the future.

 

 

16. RELATED PARTY TRANSACTIONS

                                                                                                                                                               

The Company owes GBP 166,000 to Aidan Bishop at 31 March 2022 (2021 - GBP 69,000). The Company owes GBP 35,000 to Jonathan Morley-Kirk at 31 March 2022 (2021 - GBP 15,000). These debts are unsecured and interest free.  The balances are held in the Shares to be issued reserve in accordance with the Company's salary sacrifice scheme. After the period the Directors have agreed to not receive any remuneration due and will not receive any further remuneration until a Reverse Takeover is achieved.

During the year ended 31 March 2022, following the entering into the joint venture agreement between the Company and Amala Foods Inc, Aidan became a director of Amala Foods Inc. This position carried no remuneration or other benefits. See note 9 for details of transactions between the Company and Amala Foods Inc.

 

During the year ended 31 March 2021 3,720,169 shares were issues to Monza Capital Ventures Ltd, a party associated with Aidan Bishop, in lieu of shares due to Aidan Bishop under the salary sacrifice scheme.

 

 

17. SHARE OPTIONS AND WARRANTS

 

17.1 Share Warrants

 

Warrants are denominated in Sterling and are issued for services provided to the Company or as part of the acquisition of a subsidiary.

 

In the year ended 31 March 2022 the Company recognised Share Based Payments expenses of GBP 304,348 in respect of warrants (31 March 2021, GBP 105,936).

 

In the year ended 31 March 2022, the Company issued 43,478,260 warrants at an exercise price of 1.15p in relation to the short-term funding.

 

The warrants outstanding and exercisable at 31 March 2022 are:

 

Exercise price	No. issued	No. exercised	No. lapsed or re-negotiated	No. outstanding and exercisable	Expiry date
Issued in the year ended 31 Mar 2019
4.50p	2,654,585	-	(2,654,585)	-	01 August 2021
Issued in the year ended 31 Mar 2021
1.35p	4,324,320	-	-	4,324,320	19 October 2023
1.10p	5,404,400	-	-	5,404,400	19 November 2023
Issued in the year ended 31 Mar 2022
1.15p	43,478,260	-	-	43,478,260	16 July 2025
Balance at end of period	55,861,565	-	(2,654,585)	53,206,980

 

The warrants were fair valued using a Black Scholes model, based on the following parameters - risk free rate 0.9% (2021, 2.1%), volatility of 110% for 4 years (2021, 50%).

17.2 Share Options   On 31 July 2018 and 19 February 2019 share options were granted by the Company to an employee, non-executive directors, executive directors and senior managers within the Company. The details of the Options are outlined in detail in the Company's Annual Financial Report to 31 March 2021.   Under the provisions of IFRS 2 a charge is recognised for those share options and awards under the share plan issued. The estimate of the fair value of the services received is measured based on the Black-Scholes model for share options granted under the executive and discretionary share option schemes. The Monte-Carlo model was used to calculate the fair value of the performance share plan awards.   The contractual life of the share options is used as an input into this model. Expectations of early exercise are incorporated into the model. The vesting period reflects the terms and conditions of the contracts.   The Company recognised a GBP 27,884 share based payments charge on the year ended 31 March 2022 in respect of options issued in previous periods.       17.3 Share Awards   In the period ended 31 March 2019, the Company entered into an agreement with a number of employees to issue a total of 599,156 shares at a price equal to the admission price in two years' time should the employees in questions still be employed by the Company.   With the individuals still being employed at the two-year anniversary and thus the share awards being due to be issued in the current year, the Company recognised a share based payment expense totalling GBP 26,962 in the year ended 31 March 2021. Although due, the shares had not been issued to those employees as at 31 March 2022 and thus the fair value of these share awards is included within other reserves.

 

 

18. EVENTS AFTER THE REPORTING PERIOD

 

The Company entered into a Share Purchase Agreement with Terra Rara UK Ltd on 23 May 2022 with a view to a transaction that would constitute a Reverse Takeover with resulted in the Company's listing being suspended on the same day. The Company announced on 17 March 2023 that the proposed acquisition of Terra Rara UK Ltd was terminated. The Directors determine this to be a non-adjusting event due to their being no indication as at 31 March 2022 that the transaction would be  terminated and therefore no adjustments have been made to the balance due from Terra Rara UK Ltd as at 31 March 2022 as a result of this subsequent event.

 

The Company entered into a Deed of Standstill with a creditor to reprofile outstanding debt to a reduced amount of GBP 690,000 that would convert to shares at the re-admission price upon a Reverse Takeover and that no interest will accrue and for all existing warrants to be cancelled upon a Reverse Takeover.

 

The Company announced on 17 March 2023 that GBP 405,000 had been raised via Convertible Loan Notes to fund a transaction leading to a Reverse Takeover.  The Convertible Loan Notes will automatically convert to shares upon a successful Reverse Takeover at a 50% discount to the Readmission should a Reverse Takeover be achieved by April 2023 and will be repayable in cash if not.

 

The Directors agreed to receive no remuneration that was due as at the date of suspension and have agreed not to accrue any remuneration until a Reverse Takeover has been successfully completed.

 

The Company announced on 17 March 2023 the appointment of Celia Li to the Board as a Non-Executive Director.