Fiinu Regulatory News (BANK)

RNS Number : 5655L

Fiinu PLC

23 April 2024

 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 ('MAR'), which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, until the release of this announcement

 

23 April 2024

Fiinu Plc

("Fiinu", the "Company" or the "Group")

Final Results

 

Fiinu, a fintech group, creator of the Plugin Overdraft®, announces its final results for the year ended 31 December 2023.

 

The Annual Report and Accounts for the year ended 31 December 2023, together with the Notice of Annual General Meeting, will be despatched to shareholders shortly and is available to download from the Company's website at www.fiinuplc.com.  

 

Commenting, Dr. Marko Sjoblom, Chief Executive Officer said:

"Last year was difficult for management, but as we navigate this pivotal moment in our Company's journey, I am buoyed by the progress we are making. We now have a "bank-in-a-box", the liquidity to continue as a going concern and we still believe in the market opportunity, which is ripe and growing, both home and abroad. Looking ahead, we must build upon this momentum and continue to deliver value for our investors. I am committed to making things even better for Fiinu.

"In the short term, as well as continuing to seek interim and conditional funding to allow us to rehire key staff and ultimately re-apply for our banking licence, we will explore new avenues for revenue, such as technology white-labelling and joint venture opportunities. These opportunities, which were always in our strategy, would allow us to generate immediate banking-as-a-service licencing revenue, prove the product market fit and that the technology works but also, pave the way for our long-term ambitions for Fiinu Bank. 

"These initiatives, coupled with our unwavering commitment to financial inclusion, should ultimately drive our Company's share price higher and solidify our position as a disruptor in the banking landscape. With each milestone we achieve and each challenge we overcome; we reaffirm our dedication to creating a brighter, more inclusive financial future for all. " 

Enquiries:
Fiinu Plc Dr. Marko Sjoblom	Tel: +44 (0)1932 629 582
SPARK Advisory Partners Limited (Nomad) Mark Brady / Adam Dawes	Tel: +44 (0) 203 368 3550
SP Angel Corporate Finance LLP (Joint Broker) Bruce Fraser / Ezgi Senturk	Tel: +44 (0) 207 470 0470
Panmure Gordon (UK) Limited (Joint Broker) Stephen Jones / Atholl Tweedie (Corporate Finance) Hugh Rich (Corporate Broking)	Tel: +44 (0)207 886 2500

About Fiinu

 

Fiinu, founded in 2017, is a fintech group, that developed the Plugin Overdraft® which is an unbundled overdraft solution that allows customers to have an overdraft without changing their existing bank. The underlying Bank Independent Overdraft® technology platform is bank agnostic, that therefore enables it to serve all other banks' customers. Open Banking allows Fiinu's Plugin Overdraft® to attach ("plugin") to the customer's existing bank accounts, no matter which bank they may use. Fiinu's vision is built around Open Banking, and it believes that it increases competition and innovation in UK banking.

 

For more information, please visit www.fiinuplc.com

 

 

 

 

 

CHAIR'S STATEMENT

 

Chair Review

As I deliver my second-year statement as Chair of Fiinu Plc, I am buoyed by the resilience and determination of all those who worked so hard to make Fiinu a success amidst very challenging capital market conditions, especially for pre-revenue, financial services startups like Fiinu with novel new products. As stated in recent public announcements, while the team succeeded in getting to a position where we could attest to the Regulators the operational readiness of Fiinu Bank, we were unable to give the Regulators a definitive attestation that we had raised the regulatory capital required to exit mobilisation; consequently, we were left with no choice but to return our banking licence.

 

Despite this setback, we remain steadfast in our commitment to playing our part in revolutionising banking services by providing the underserved with our Plugin Overdraft®. We believe that millions of customers will eventually benefit from this product, which Fiinu remains committed to bringing to the market. I must, however, acknowledge that we still have work to do before reapplying for our banking licence.

 

Being unable to raise exit capital was a huge disappointment and, as a result, we had to resort to a cost-cutting programme to preserve our options. However, I want to acknowledge that it was no small achievement to have been able to attest to the accomplishment of all the other conditions set by the PRA and the FCA to exit mobilisation. As a result of being so close to achieving our most important strategic goal, the Board has stated its intention to continue to pursue our chosen strategy and to seek to raise the required funding to reapply for our banking licence as soon as possible.

 

I would also like to take this opportunity to extend my thanks to the many executive and staff members, as well as the Board members who stepped down at the end of 2023. Their contributions were outstanding. Although the Board is smaller as a result of these departures, we continue to work within a robust governance framework, which I believe has the knowledge and skills to seize the opportunities I am still convinced lie ahead for our Group.

 

Finally, I would like to thank our shareholders for their support which has been a cornerstone of our resilience and to thank them for their patience. I acknowledge that the challenges of accessing capital markets remain and this must weigh heavily on our shareholders' minds, as it does on the Board's, but I ask them for their continued support which is now more crucial than ever.

 

Outlook

As we look towards 2024 and beyond, all those remaining at Fiinu do so with a sense of determination to get firm commitments to providing us with the capital we need to renew our operational readiness to reapply for our banking licence and to becoming authorised to commence trading as quickly as possible. Our vision remains clear and unchanged, and I wish to provide assurance that the Board will be striving to pursue it with vigour on behalf of all our shareholders.

 

David Hopton

Chair

 

 

CHIEF EXECUTIVE'S STATEMENT

 

I remain committed to the principles of our original mission and the vision, which I set as the Founder seven years ago: "The Bank Independent Plugin Overdraft® platform will create a totally new market, an infrastructure where unbundled overdrafts will increase financial fairness and freedom for everyone, everywhere." My unwavering dedication is a testament to our collective belief in the transformative power of our vision. Despite the challenges we faced in 2023, there is still cause for optimism, including but not limited to:

 

1. We now have a "bank-in-a-box". The data room includes over 2,000 pages of relevant regulatory documentation to exit mobilisation and licensable technology infrastructure which could now access more than 100 million bank accounts in the United Kingdom. Fiinu Bank was ready to attest all but one of the conditions (capital missing) set by the PRA and the FCA to exit mobilisation, including an external independent technical audit by Grant Thornton and a technical walk through with Regulators. The submitted and stored banking licence application is over 4,000 pages of documentation. We believe in the future value of this intellectual property, and although we may have written it down in accounting terms, it does not represent a loss of any intellectual property as the bank is in the box.

 

2. We have the liquidity to remain solvent and continue as a going concern. At the 2023 year-end, we had circa £1.3m cash-at-bank. Following the successfully executed cost-cutting programme, we have now reduced our average monthly burn rate below £50k (April 2024 to March 2025) and hence we maintain sufficient cash runway to continue to seek the exit capital required to reapply for our banking licence.

 

 

 

3. We still believe in the market opportunity, which is ripe and growing, both home and abroad. The annual UK unsecured gross lending market is circa £345 billion. There are over 100 million bank accounts, of which, 80 million do not have access to overdraft currently. Our research suggests that circa 29 million consumers would be very likely to add a Plugin Overdraft® to their bank account as long as they didn't need to switch their bank. We want to re-open that market as nearly two-thirds (62%) of the UK adult population with a bank account used some form of overdraft annually prior to the major reform in 2020.

 

Outlook

We believe our solution has the potential to be disruptive for the banking landscape and it will improve financial inclusion for millions of people. Our resilience has been strong to get to where we are today, and we are continuing our efforts to raise the conditional capital to obtain an unrestricted banking licence, but we will also be raising further interim funding to re-establish operational readiness as required.

 

Meanwhile, we will also explore technology licensing, white-labelling and joint venture opportunities, in the UK and overseas. We remain optimistic that we can overcome the challenge of securing additional capital and look forward with excitement to the big picture opportunities that lie ahead.

 

Dr. Marko Sjoblom

Chief Executive Officer

 

GROUP STATEMENT OF TOTAL COMPREHENSIVE INCOME

 

Administrative expenses		12 months ended 31 December 2023 £ (7,223,494)	9 months ended 31 December 2022 £ (8,218,903)
Operating loss		(7,223,494)	(8,218,903)
Finance income		46,176	11,596
Finance costs		(74,840)	(9,970)
Other gains and losses		(1,081,530)	-
Loss before taxation		(8,333,688)	(8,217,277)
Income tax income		16,157	377,879
Loss and total comprehensive loss for the year		(8,317,531)	(7,839,398)

 

Profit for the financial period is all attributable to the owners of the parent company.

 

Total comprehensive income for the period is all attributable to the owners of the parent company.

 

Earnings per share
Basic		(3.06)	(3.31)
Diluted		(3.06)	(3.31)

 

 

 

 

 

 

 

GROUP STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023

 

		2023 £	2022 £
ASSETS
Non-current assets
Intangible assets		-	878,639
Property, plant and equipment		-	276,524
		-	1,155,163
Current assets
Trade and other receivables		236,720	660,078
Current tax recoverable		-	352,879
Cash and cash equivalents		1,310,757	7,045,161
		1,547,477	8,058,118
Total assets		1,547,477	9,213,281
EQUITY
Called up share capital		27,474,724	26,513,186
Share premium account		9,475,486	9,194,313
Own shares		(5,100)	-
Merger reserve		(21,120,782)	(21,120,782)
Shares to be issued		50,000	-
Retained earnings		(15,048,567)	(7,293,795)
Total equity		825,761	7,292,922
Non-controlling interests		-	-
Total equity		825,761	7,292,922
LIABILITIES
Non-current liabilities
Lease liabilities		-	93,425
Current liabilities
Trade and other payables		663,940	1,693,603
Lease liabilities		57,776	133,331
		721,716	1,826,934
Total liabilities		721,716	1,920,359
Total equity and liabilities		1,547,477	9,213,281

 

COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023

 

		2023	2022
		£	£
ASSETS
Non-current assets
Right-of-use assets		-	224,546
Investments		1,785,857	46,482,583
		1,785,857	46,707,129
Current assets
Trade and other receivables		1,262,144	1,801,269
Cash and cash equivalents		5,246	99,078
		1,267,390	1,900,347
Total assets		3,053,247	48,607,476
EQUITY
Called up share capital		27,474,724	26,513,186
Share premium account		28,225,487	27,944,314
Own shares		(5,100)	-
Shares to be issued		50,000	-
Shared based payment reserve		40,218	40,218
Retained earnings		(53,141,837)	(7,093,177)
Total equity		2,643,492	47,404,541
LIABILITIES
Non-current liabilities
Lease liabilities		-	93,425
Current liabilities
Trade and other payables		351,979	976,179
Lease liabilities		57,776	133,331
		409,755	1,109,510
Total liabilities		409,755	1,202,935
Total equity and liabilities		3,053,247	48,607,476

 

As permitted by s408 Companies Act 2006, the Company has not presented its own income statement and related notes. The Company's loss for the year was £46,611,419 (2022 - £752,487 loss).

 

 

 

GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023

 

	Share Capital	Share Premium account	Own shares	Merger Reserve	Shares to be issued	Retained earnings	Total
	£	£	£	£	£	£	£
Balance at 1 April 2022	3,758,184	5,189,313	-	(5,090,626)	-	(4,134,550)	(277,679)
Period ended 31 December 2022
Loss and total comprehensive loss	-	-	-	-	-	(7,839,398)	(7,839,398)
Transactions with owners:
Issue of share capital	4,005,000	4,005,000	-	-	-	-	8,010,000
Share-based payment credit	-	-	-	-	-	4,680,153	4,680,153
Effect of reverse take-over	18,750,002	-	-	(16,030,156)	-	-	2,719,846
Balance at 31 December 2022	26,513,186	9,194,313	-	(21,120,782)	-	(7,293,795)	7,292,922
Period ended 31 December 2023
Loss and total comprehensive loss	-	-	-	-	-	(8,317,531)	(8,317,531)
Transactions with owners:
Issue of share capital	961,538	288,462	-	-	-	-	1,250,000
Shares to be issued	-	-	-	-	50,000	-	50,000
Shares held by employment benefit trust	-	-	(72,209)	-	-	-	(72,209)
Share based payment		(7,289)				562,759	555,470
Fair value movement			67,109				67,109
Balance at 31 December 2023	27,474,724	9,475,486	(5,100)	(21,120,782)	50,000	(15,048,567)	825,761

 

 

COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023

 

	Share Capital	Share Premium account	Revaluation Reserve	Share based payment reserve	Own shares	Shares to be issued	Retained earnings	Total
	£	£	£	£	£	£	£	£
Balance at 1 April 2022	3,758,184	5,189,313	836,265	40,218	-	-	(7,176,955)	2,647,025
Period ended 31 December 2022
Loss and total comprehensive loss	-	-		-	-	-	(752,487)	(752,487)
Transactions with owners:
Issue of share capital	22,755,002	22,755,001		-	-	-	-	45,510,003
Transfer to Revaluation Reserve	-	-	(836,265)	-	-	-	836,265	-
Balance at 31 December 2022	26,513,186	27,944,314	-	40,218	-	-	(7,093,177)	47,404,541
Period ended 31 December 2023
Loss and total comprehensive loss	-	-	-	-	-	-	(46,611,419)	(46,611,419)
Transactions with owners:
Issue of share capital	961,538	288,462	-	-	-	-	-	1,250,000
Shares to be issued	-	-	-	-	-	50,000	-	50,000
Own shares acquired transferred to reserves	-	-	-		(72,209)	-	-	(72,209)
Share based payment	-	(7,289)	-	-	-	-	562,759	555,470
Fair value movement	-	-	-		67,109	-	-	67,109
Balance at 31 December 2023	27,474,724	28,225,487	-	40,218	(5,100)	50,000	(53,141,837)	2,643,492

 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

 

 

31 December 31 December

2023 2022

£ £ £ £

 

Cash flows from operating activities
Cash absorbed by operations			(6,647,178)		(4,497,027)
Income taxes refunded			369,036		120,150
Net cash used in operating activities			(6,278,142)		(4,376,877)
Investing activities
Purchase of intangible assets		-		(849,076)
Purchase of property, plant and equipment		(8,618)		(50,457)
Interest received		46,176		11,596
Net cash generated from (used in) investing activities			37,558		(887,937)
Financing activities
Proceeds from issue of shares		500,000		8,010,000
Net cash acquired on reverse takeover		-		3,577,275
Proceeds from borrowings		1,000,000		500,000
Repayment of borrowings		(750,000)		-
Payment of lease liabilities		(167,929)		(47,533)
Interest paid		(75,891)		(5,137)
Net cash generated from financing activities			506,180		12,034,605
Net (decrease)/increase in cash and cash equivalents			(5,734,404)		6,769,791
Cash and cash equivalents at beginning of year			7,045,161		275,370
Cash and cash equivalents at end of year			1,310,757		7,045,161

 

 

 

COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

 

31 December 31 December

2023 2022

£ £ £ £

 

Cash flows from operating activities
Cash generated from/(absorbed by) operations			649,729		(3,365,399)
Interest paid			-		9,970
Net cash inflow/(outflow) from operating activities			649,729		(3,355,429)
Investing activities
Proceeds from disposal of subsidiaries		-		1,882,500
Purchase of additional capital in subsidiaries		(1,250,000)		(8,982,580)
Repayment of loans		-		1,050,000
Proceeds from disposal of investments		-		951,460
Interest received		9		69,111
Net cash used in investing activities			(1,249,991)		(5,029,509)
Financing activities
Proceeds from issue of shares		500,000		8,010,000
Proceeds from borrowings		1,000,000		500,000
Repayment of borrowings		(750,000	)	-
Payment of lease liabilities		(167,929)		(42,699)
Interest paid		(75,641)		(9,970)
Net cash generated from financing activities			506,430		8,457,331
Net (decrease)/increase in cash and cash equivalents			(93,832)		72,393
Cash and cash equivalents at beginning of year			99,078		26,685
Cash and cash equivalents at end of year			5,246		99,078

 

 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 Material accounting policy information Company information

Fiinu Plc is a public company limited by shares incorporated in England and Wales. The registered office is Ibex House, Baker Street, Weybridge, Surrey, KT13 8AH. The Group's principal activity is a fintech group, including Fiinu 2 Limited and is the developer of the Plugin Overdraft® which is an unbundled overdraft solution that allows customers to have an overdraft with Fiinu Bank without changing their existing bank. The underlying Bank Independent Overdraft ® technology platform is bank agnostic, allowing Fiinu Bank to serve all other banks' customers, subject to raising the required investment and being successful in the re- application for a UK banking licence. Open Banking allows Fiinu's Plugin Overdraft® to attach ("plugin") to the customer's primary bank account, no matter which bank they may use. Fiinu's vision is built around Open Banking, and it believes that it increases competition and innovation in UK banking.

 

This Group consists of Fiinu Plc and all of its subsidiaries.

 

1.1 Accounting convention

The Group's consolidated and the Company's financial statements are prepared in accordance with UK- adopted international accounting standards and the Companies Act 2006 requirements, except as otherwise stated. On publishing the parent company financial statements here together with the consolidated financial statements, the company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual statement of profit and loss. Profit and loss and other comprehensive income and related notes that form a part of these approved financial statements.

 

The financial statements are prepared in sterling, which is the functional currency of the Group. Monetary amounts in these financial statements are rounded to the nearest £.

 

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

 

 

Reverse takeover transactions

 

On 15 June 2022 The Directors of Immediate Acquisition Plc announced that it had entered into a Sale and Purchase Agreement to acquire Fiinu Holdings Ltd which, on account of the relative sizes of the two entities, constituted a reverse takeover under the London Stock Exchange AIM Rules. As a prelude to the acquisition, which completed on 7 July 2023, Immediate Acquisition Plc raised £8.01million in new equity capital. The shares in the enlarged company were then readmitted to trading on the AIM market on 8 July 2022 under its new name of Fiinu plc.

 

Where there has been a reverse takeover, the coming together of the entities does not constitute a business combination and as such the transaction is accounted for as, in substance, a capital reorganisation. The accounting acquirer is different from the legal acquirer. As such, from an accounting perspective, the previous comparatives and any results prior to the reverse takeover have not been presented and the assets and liabilities of the accounting acquirer are recorded in the consolidated financial statements at their pre- combination amounts. The share capital in the consolidated financial statements however, reflects that of the legal acquirer.

 

Fiinu Holdings Ltd has been identified as the accounting acquirer and Fiinu plc, the legal acquirer. The share capital in the consolidated accounts reflects that of the legal acquirer, being Fiinu plc. The comparatives, and any results prior to 8 July 2022 of Fiinu plc have not been presented and the assets and liabilities of the Fiinu Holdings Limited group have been recorded in the consolidated financial statements at their pre-combination amounts.

 

1.2 Basis of consolidation

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

All intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

 

Subsidiaries are consolidated in the Group's financial statements from the date that control commences until the date that control ceases.

 

Acquisitions are accounted for using the acquisition method. the cost of an acquisition is measured at fair value at the date of exchange of the consideration. Identifiable assets and liabilities of the acquired business are recognised at their fair value at the date of acquisition. To the extent that the cost of an acquisition exceeds the fair value of the net assets acquired the difference is recorded as goodwill. Where the fair value of the net assets acquired exceeds the cost of an acquisition the difference is recorded in profit and loss.

 

1.3 Going concern

The financial statements have been prepared on a going concern basis. In assessing going concern, the Directors have considered the current statement of financial position, the financial projections, longer-term strategy of the business and the capital and liquidity plans, including stress tests and plans for future capital injections.

 

During the year, the Group reported that it was facing challenges in raising the full amount of funding required for Fiinu Bank Limited to launch without regulatory restrictions and commence its banking operations in the UK. Accordingly, Fiinu Bank Limited applied to withdraw its banking licence with the aim of re-applying once the Board would be able to attest to the regulators that the funding is secured.

 

Following the withdrawal of the banking licence application, Fiinu Bank changed its name to Fiinu 2 Limited and the Group initiated controlled cost reductions in order to provide additional time to determine the best way forward for shareholders.

 

As at 31 December 2023 the Group had available cash resources of £1.3 million. The Directors have prepared forecasts for a period of at least 12 months from the date of signing of these financial statements. Based on the current projection, the Directors believe that there are sufficient funds for the forecast expenditure for at least the next 12 months. However, it is anticipated that the Group will need to raise capital beyond this period in order to proceed with its operational strategy. This represents a material uncertainty that may cast significant doubt on the Group's and company's ability to continue as a going concern. However, the Directors have a reasonable expectation that this uncertainty can be managed to a successful outcome, and based on that assessment, the Group and Company will have adequate resources to continue in operational existence for the foreseeable future.

 

The financial statements do not reflect any adjustments that would be required to be made if they were to be prepared on a basis other than the going concern basis.

 

 

1.4 Intangible assets other than goodwill

Expenditure on research is recognised as an expense in the period in which it is incurred.

Cost that are directly attributable to the development phase of new customised technologies are recognised as intangible assets provided they meet the following recognition criteria:

 

· completion of the intangible asset is technically feasible so that it will be available for use or sale;

· the Group intends to complete the intangible asset and use or sell it;

· the Group has the ability to use or sell the tangible asset;

· the intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market for the output from the intangible asset or the intangible asset itself, or, if it is to be used internally, the asset will be used in generating such benefits;

· there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

· the expenditure attributable to the intangible asset during its development can be measured reliably.

 

Development costs not meeting the criteria for capitalisation are recognised as expenses as incurred.

 

Amortisation is recognised as an administrative expense in profit or loss on a straight line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for intangible assets are as follows:

 

Research and development not yet in use

 

1.5 Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

 

Cost includes expenditures that are directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

 

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives, leased assets are depreciated over the shorter of the lease term and their useful lives. Depreciation is recognised on the following bases:

 

Leasehold property Over the period of the lease

Office and IT equipment 3-10 years

Plant and equipment 3-7 years

Computers and network equipment 3-5 years or contract term if shorter

 

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit or loss.

 

1.6 Non-current investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

 

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

 

1.7 Borrowing costs

Finance costs comprise interest expense on borrowings including leases which are recognised in profit or loss in the period in which they are incurred.

 

1.8 Impairment of tangible and intangible assets

At each reporting end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

 

1.9 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

 

1.10  Financial assets

Financial assets are recognised in the Group's statement of financial position when the Group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

 

Financial assets held at amortised cost

When any of the above-mentioned conditions for classification of financial assets are not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognised initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

 

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets are not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognised initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

 

Impairment of financial assets

Financial assets carried at amortised cost are assessed for indicators of impairment at each reporting end date.

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

 

For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

 

Derecognition of financial assets

Financial assets are derecognised only 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 to another entity.

 

1.11  Financial liabilities

The Group recognises financial debt when the Group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

 

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

 

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the Group's obligations are discharged, cancelled, or they expire.

 

1.12  Equity instruments

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.

 

Share capital represents the nominal value of shares that have been issued. Share premium includes any premium received on issue of share capital.

Retained losses include retained profits and losses relating to current and prior years and purchases and sales of own shares by the Employee Benefit Trust.

 

All transactions with owners of the parent are recorded separately within equity.

 

1.13  Taxation

The tax expense represents the sum of the current tax and deferred tax.

 

Current tax

The current tax is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

 

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

 

1.14  Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

 

Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

 

1.15  Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

 

1.16  Leases

At inception, the Group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the Group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property and are recognised for all leases except those which are considered to have a fair value below £4,500 and those with a duration of 12 months or less.

 

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

 

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the Group is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

 

1.17  Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

 

1.18  Earnings per share

The Group presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.

 

1.19  New and amended standards

 

New and amended standards adopted by the Group

The Group has applied the following amendments for the first time for the annual reporting period commencing 1 January 2023:

 

· Insurance Contracts - Amendments to IFRS 17

· Presentation of Financial Statements - Amendments to IAS 1

· Making Materiality Judgements - Disclosure of Accounting Policies - Amendments to IFRS Practice statement 2

· Income Tax - Amendments to IAS 12

· Accounting Policies, Changes in Accounting Estimates and Errors - Amendments to IAS 8.

 

The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

 

New standards and interpretations not yet adopted

 

At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective:

 

· Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28

· Classification of Liabilities as Current or Non-current - Amendments to IAS 1

· Non-current Liabilities with Covenants - Amendments to IAS 1

· Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7

· Lease Liability in a Sale and Leaseback - Amendments to IFRS 16

 

The Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods.

 

 

2. Earnings per share
	31 December	31 December
	2023	2022
	Number	Number
Number of shares
Weighted average number of ordinary shares in issue	274,747,246	237,184,397
Less weighted average number of own shares	(192,323)	-
Weighted average number of ordinary shares for basic earnings per share	274,554,923	237,184,397
Weighted average number of ordinary shares for diluted earnings per share	274,554,932	237,184,397
	31 December	31 December
	2023	2022
Earnings	£	£
Continuing operations
Loss for the period from continued operations	(8,317,531)	(7,839,398)
	2023	2022
	Pence per share	Pence per share
Basic and diluted earnings per share
From continuing operations	(3.06)	(3.31)

 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares outstanding during the year.

 

For diluted earnings per share, the weighted average number of shares in issue is adjusted to assume conversion of all potentially dilutive warrants and options over ordinary shares. Potential ordinary shares resulting from the exercise of warrants and options have an anti-dilutive effect due to the Group being in a loss position. As a result, dilutive loss per share is disclosed as the same value as basic loss per share.

 

3. Events after the reporting date

 

There are no events to report after the reporting date.

 

4. Financial information in this Announcement 

The financial information presented in this announcement does not comprise the statutory accounts for the Group for the financial years ended 31 December 2023 and 31 December 2022, but extracts from them. The Annual Report and Accounts for the year ended 31 December 2023, together with the Notice of Annual General Meeting, will be despatched to shareholders shortly and will be available to download from the Company's website a thttps://fiinuplc.com/annual-and-interim-reports.  

 

 

~ ENDS ~

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