The Board recognises that the long-term success of the Company is reliant upon the efforts of employees, regulators and many other stakeholders and has close ongoing relationships with a broad range of its stakeholders.

4.    Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Board recognises the need for an effective and well-defined risk management process and it oversees and regularly reviews the current risk management and internal control mechanisms.

The Company considers risk management to fall into two broad categories, being the investment activity of the Company and the operations of the Company.

(a) The investment risk is considered as part of the appraisal processes and by way of due diligence and ongoing monitoring.

(b) The Company uses internal appraisal and the annual audit to ensure financial risks are evaluated in detail. Board meetings are also used for the directors to raise any issues relating to business risk arising from the Company's business model and operations.

Dealings in the Company's shares are monitored and any dealings must first be approved by the Non-executive Director.

The risk assessment matrix below sets out and categorises key risks, and outlines the mitigating actions which are in place. This matrix is updated as changes arise in the nature of risks or the mitigating actions implemented, and the Board reviews these on a regular basis. The Company has identified the principal risks to the Company achieving its objectives as follows:

The Board considers that an internal audit function is not considered necessary or practical due to the size of the Company and the day-to-day control exercised by the Directors. However, the Board will monitor the need for an internal audit function. The Board has established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.

5.    Maintain the Board as a well-functioning, balanced team led by the Chair

The Board recognises the QCA recommendation for a balance between Executive and Non-executive Directors and the recommendation that there be at least two Independent Non-executives. The Board consists of two directors; one Executive Director and one Non-executive Director. The Board deems the current composition to be sufficient, given the nature and size of the Company. The Board maintains that the Board's compositions will be frequently reviewed as the Company develops.

The Directors of the Company are committed to sound governance of the business, and each devotes sufficient time to ensure this happens. The Board held four Board meetings in the period. All meetings were attended by both Directors. Board meetings cover regular business, investments, finance, and operations.

6.    Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Company believes that the Board as a whole has significant experience in the financial services industry. The Board believes they have the requisite mix of skills and experience to successfully execute the business strategy in order to meet the Company's objectives.

Malcolm Burne - (Executive Director) (date of appointment: 11 October 2021)

Malcolm Burne started his long career with a leading firm of London Stockbrokers as an equities analyst and later became a financial columnist with the Financial Times and other business publications. He has started a number of businesses in the financial, technology and natural resources sectors not only in UK but also Australia, Hong Kong and North America. He has been the architect of a substantial number of SPACS usually targeting new trends and has completed many reverse takeovers. Malcolm has sat on the boards of numerous public companies, including Main Market companies such as GRIT Investment Trust Plc and Golden Prospect. He was a director of Auctus Growth Plc, a Standard List special purpose acquisition company, which acquired HeiQ Materials AG and was re-admitted to Standard List in December 2020. Malcolm is also a founder director of Star Tech NG Plc, a pre-IPO fund in US growth tech. As a corporate financier and venture capital investor Malcolm has a significant investment portfolio of private companies in the new economy and fintech space some of which he is a director representing his shareholding.

Eran Zucker - (Non-Executive Director) (date of appointment: 11 January 2022)

Having joined Peterhouse Capital Limited in 2007, Eran has over 15 years of experience dealing with a range of transactional and advisory work, including company affairs, restructurings, mergers and acquisitions, and IPOs. Eran works with companies in both the UK and international markets, listed on the Standard List, AIM and AQSE Growth Market. Over his career, Eran has been instrumental in advising several reverse takeovers of technology and life sciences companies, including Rule 3 independent advisory, financial advisory for Main Market companies and corporate advisory for a combination of AIM and AQSE Growth Market companies. Starting as an associate at Lion Capital Corporation Limited, Eran Is now a Managing Director at Peterhouse, leading transactions on AIM and the Standard List. With more than 15 years of experience in driving innovation and technology companies to list on the London markets, Eran is well connected to the Israeli innovation ecosystem. Eran holds a Masters in Finance degree from London Business School and First Class Honours degree in Business Studies from Cass Business School, City University London. He is also a combat medic and a trained chef.

7.    Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

The Directors consider that the Company and Board are not yet of a sufficient size and complexity for a full Board evaluation to make commercial and practical sense. The Board acknowledges that it is non-compliant with its processes to evaluate the performance of the Board.

As the Company is a cash shell, the Board deems the current structure to be sufficient.

As the Company grows, it expects to expand the Board and with the Board expansion, re-consider the need for Board evaluation.

In view of the size of the Board, the responsibility for proposing and considering candidates for appointment to the Board as well as succession planning is retained by the Board. All Directors submit themselves for re-election at the AGM at regular intervals.

8.    Promote a corporate culture that is based on ethical values and behaviours

The Board believes that by acting ethically and promoting strong core values it will gain a reputation for honesty and that this will attract business and help the long-term objectives of the Company. As such the Board adopts an open approach to all investors, investment opportunities and all its advisers and service providers.

The Board further considers the activities of and persons involved with potential investee companies as part of its due diligence processes.

The Board places great importance on the responsibility of accurate financial statements and auditing standards which comply with the Auditing Practice Board's (APB's) and Ethical Standards for Auditors.  The Board places great importance on accuracy and honesty, and seeks to ensure that this aspect of corporate life flows through all that the Company does.

A large part of the Company's activities is centred upon an open and respectful dialogue with stakeholders. The Directors consider that the Company has an open culture facilitating comprehensive dialogue and feedback.

9.    Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Board is committed to, and ultimately responsible for, high standards of corporate governance and notes the departure from the Code in terms of independence on the Board. The Board reviews the Company's corporate governance arrangements regularly and expects these to evolve over time, in line with the Company's growth.

The Executive Director is responsible for the day-to-day management of the Company's activities.

The matters reserved for the Board are:

(a)  Defining the long-term strategy for the Company;

(b)  Approving all major investments;

(c)  Approving any changes to the Capital and debt structure of the Company

(d)  Approving the full year and half year results and reports;

(e)  Approving resolutions to be put to the AGM and any general meetings of the Company;

(f)   Approving changes to the Advisory team; and

(g)  Approving changes to the Board structure.

10.  Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Board is committed to maintaining effective communication and having constructive dialogue with its stakeholders. All shareholders are encouraged to attend the Company's Annual General Meeting and the Board discloses the result of General Meetings by way of announcement.

The Company's first annual financial statements will be publicly announced once audited and will also be available on the Company's website and at the Company's registered office.

Information on the Investor Relations section of the Company's website is kept updated and contains details of relevant developments, regulatory announcements, financial reports and shareholder circulars. Shareholders with a specific enquiry can contact us on the website contact page.

The Board, so far as is practicable given the Company's size and stage of its development, has voluntarily adopted the QCA Code as its chosen corporate governance framework. There are certain provisions of the QCA Code which the Company will not adhere to currently, and their adoption will be delayed until such time as the Directors believe it is appropriate to do so. It is anticipated that this will occur concurrently with the Company's first material investment or acquisition.

Following such an acquisition, the Company will seek to develop its corporate governance position and will address key differences to the QCA Code. Specifically, it is anticipated this will include:

i.          the augmentation of the Board with suitably qualified additional executive and non-executive directors including independents;

ii.          the implementation of audit, remuneration and nomination committees with appropriate terms of reference;

iii.         a formalised annual evaluation and review process covering the Board and Committees, including succession planning;

iv.         the publication of KPIs;

v.         the development of a corporate and social responsibility policy; and

vi.         an enhanced risk management and governance framework tailored to the operating assets and strategic direction of the enlarged entity.

Eran Zucker

Non-executive Director

28 April 2023

Statement of Directors' Responsibilities to the members of Milton Capital Plc for the period ended 31 January 2023

Directors' responsibilities

The Directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial period. Under that law they are required to prepare financial statements in accordance with the UK adopted international accounting standards (IAS).

The financial statements are required by law and IAS to present fairly the financial position and performance of the Company; the Companies Act 2006 provides in relation to such financial statements that references in the relevant part of the Act to financial statements give a true and fair view and references to their achieving a fair presentation.

Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the period. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock exchange.

In preparing the Company's financial statements, the Directors are required to:

●       select suitable accounting policies and then apply them consistently;

●       make judgements and estimates that are reasonable and prudent;

●       state whether applicable UK adopted international accounting standards (IAS), in conformity to the Companies Act, been followed, subject to any material departures disclosed and explained in the financial statements.;

●       prepare the financial statements on a going concern basis unless it is inappropriate to assume the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006.  They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Website publication

Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions.  The maintenance and integrity of the Company's website is the responsibility of the Directors.  The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Independent Audit Report to the members of Milton Capital Plc for the period ended 31 January 2023

For the purpose of this report, the terms "we" and "our" denote MHA MacIntyre Hudson in relation to UK legal, professional and regulatory responsibilities and reporting obligations to the members of Milton Capital Plc (the 'Company'). For the purposes of the table on pages 14 to 20 that sets out the key audit matters and how our audit addressed the key audit matters, the terms "we" and "our" refer to MHA MacIntyre Hudson. The relevant legislation governing the Company is the United Kingdom Companies Act 2006.

Opinion

We have audited the financial statements of Milton Capital Plc for the period ended 31 December 2022.

The financial statements that we have audited comprise:

·      the Statement of Profit or Loss and Other Comprehensive Income;

·      the Statement of Financial Position;

·      the Statement of Changes in Equity;

·      the Statement of Cash Flows; and

·      Notes 1 to 16 to the financial statements, including significant accounting policies.

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and UK adopted International Financial Reporting Standards('UK adopted IFRS').

In our opinion the financial statements:

·      give a true and fair view of the state of the Company's affairs as at 31 January 2023 and of the loss for the period then ended;

·      the Company financial statements have been properly prepared in accordance with UK adopted IFRS;

·      have been prepared in accordance with the requirements of the United Kingdom Companies Act 2006.

Our opinion is consistent with our reporting to the Board of Directors.

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 public interest entities, and we have fulfilled our ethical responsibilities in accordance with those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors' use of the going 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:

·      The consideration of inherent risks to the Company's operations and specifically their business model of searching for suitable acquisition targets.

·      The evaluation of how those risks might impact on the available financial resources.

·      Liquidity considerations including examination of cash flow projections for the Company.

·      The evaluation of the base case scenarios and stress scenarios and the respective sensitivities and rationale

·      Viability assessments, including consideration of reserve levels and business plans.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Overview of our audit approach

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those matters 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.

Our application of materiality  

Our definition of materiality considers the value of error or omission on the financial statements that, individually or in aggregate, would change or influence the economic decision of a reasonably knowledgeable user of those financial statements.  Misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Materiality is used in planning the scope of our work, executing that work and evaluating the results. 

Materiality was set at £46,500 which was determined on the basis of 5% of the Company's net assets. Net assets was deemed to be the appropriate benchmark for the calculation of materiality as this is a key area of the financial statements because this is the metric by which the performance and risk exposure of the Company is principally assessed. This is also the metric against which users assess the ability of the Company to continue in its search for suitable acquisition targets.

Performance materiality is the application of materiality at the individual account or balance level, set at an amount to reduce, to an appropriately low level, the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.  

Performance materiality was set at £32,550 which represents 70% of the above materiality levels.

The determination of performance materiality reflects our assessment of the risk of undetected errors existing, the nature of the systems and controls.

 We agreed to report any corrected or uncorrected adjustments exceeding £2,325 to the Board of Directors as well as differences below this threshold that in our view warranted reporting on qualitative grounds. 

The control environment

We evaluated the design and implementation of those internal controls of the Company, which are relevant to our audit, such as those relating to the financial reporting cycle.

Reporting on other information 
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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.

Strategic report and directors report 

In our opinion, based on the work undertaken in the course of the audit: 

·      the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and 

·      the strategic report and the directors' report have been prepared in accordance with applicable legal requirements. 

 In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. 

Directors' remuneration report  

 Those aspects of the director's remuneration report which are required to be audited have been prepared in accordance with applicable legal requirements. 

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 Act 2006 requires us to report to you if, in our opinion: 

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

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

·      certain disclosures of directors' remuneration specified by law are not made; or 

·      the part of the directors' remuneration report to be audited is 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 directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.  

 In preparing the financial statements, the directors are responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or Parent Company or to cease operations, or have no realistic alternative but to do so.  

Auditor 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 

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

Extent to which the audit was considered capable of detecting irregularities, including fraud

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.

These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it.

Identifying and assessing potential risks arising from irregularities, including fraud

The extent of the procedures undertaken to identify and assess the risks of material misstatement in respect of irregularities, including fraud, included the following:

·      We considered the nature of the industry and sector the control environment, business performance including remuneration policies and the Company's own risk assessment that irregularities might occur as a result of fraud or error. From our sector experience and through discussion with the directors, we obtained an understanding of the legal and regulatory frameworks applicable to the Company focusing on laws and regulations that could reasonably be expected to have a direct material effect on the financial statements.

·      We enquired of the directors and management concerning the Company's policies and procedures relating to:

-     identifying, evaluating and complying with the laws and regulations and whether they were aware of any instances of non-compliance;

-     detecting and responding to the risks of fraud and whether they had any knowledge of actual or suspected fraud; and

-     the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.

·      We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur by evaluating management's incentives and opportunities for manipulation of the financial statements. This included utilising the spectrum of inherent risk and an evaluation of the risk of management override of controls.

Audit response to risks identified

In respect of the above procedures:

·      we corroborated the results of our enquiries through our review of the minutes of the Company's board meetings;

·      audit procedures performed by the engagement team in connection with the risks identified included:

-     reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations expected to have a direct impact on the financial statements;

-     testing journal entries, including those posted to unusual account combinations;

-     evaluating the business rationale of significant transactions, and reviewing accounting estimates for bias;

-     enquiry of management around actual and potential litigation and claims;

-     challenging the assumptions and judgements made by management in its significant accounting estimates; and

-     obtaining confirmations from third parties to confirm existence of a sample of balances.

·      we communicated relevant laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Other requirements  

We were appointed by the Directors on 17 March 2023. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 1 years. 

We did not provide any non-audit services which are prohibited by the FRC's Ethical Standard to the Group or the Parent Company, and we remain independent of the Company in conducting our audit.  

Use of our report 

This report is made solely to the Company's members in accordance with Chapter 3 of Part 16 of the Companies Act. 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 for our audit work, for this report, or for the opinions we have formed.

 As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these financial statements form part of the European Single Electronic Format (ESEF) prepared Annual Financial Report filed on the National Storage Mechanism of the UK FCA in accordance with the ESEF Regulatory Technical Standard (('ESEF RTS'). This auditor's report provides no assurance over whether the annual financial report has been prepared using the single electronic format specified in the ESEF RTS. 

Jason Mitchell MBA BSc FCA
(Senior Statutory Auditor) 

for and on behalf of MHA MacIntyre Hudson, Statutory Auditor 

Maidenhead, United Kingdom