Last checked at 31 Dec 2015 07:00
31 December 2015
Inspirit Energy Holdings plc
("INSP" or the "Company")
Audited results for the year ended 30 June 2015 and Notice of AGM
INSP today announces its audited results for the year ended 30 June 2015.
Copies of the Company's Annual Report and Accounts will be sent to shareholders and will be available on the Company's website www.inspirit-energy.com today. Further copies may be obtained directly from the Company's Registered Office at Inspirit Energy Holdings plc, 2nd Floor, 2 London Wall Buildings, London EC2M 5PP
The notice of Annual General Meeting ("AGM") will also be posted to shareholders shortly. The AGM will be held at the offices of the Company, 2 London Wall buildings, London EC2M 5PP on 29 January 2016 at 11 am.
Contacts:
John Gunn, Chairman/ CEO INSP +44 (0) 207 048 9400
Nilesh Jagatia, CFO INSP +44 (0) 207 048 9400
Antonio Bossi / David Coaten, Westhouse Securities +44 (0) 207 601 6100
Lucy Williams / Duncan Vasey, Peterhouse Corporate Finance +44 (0) 207 469 0930
The financial information set out below does not constitute the Company's statutory accounts for the periods ending 30 June 2015 or 30 June 2014. The financial information for 2015 and 2014 is derived from the statutory accounts for those years. The statutory accounts for 2014 have been delivered to the Registrar of Companies. The statutory accounts for 2015 will be delivered to the Registrar of Companies. The auditors, Welbeck Associates, have reported on the 2015 and 2014 accounts. The reports were unqualified and did not contain any statements required under either s498 (2) or s498 (3) of the Companies Act 2006. This preliminary announcement has been prepared on the basis of the accounting policies as stated in the financial statements for the period ended 30 June 2015. The information included in this preliminary announcement is based on the Company's financial statements, which are prepared in accordance with International Financial Reporting Standards (IFRS).
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 30 June 2015
INTRODUCTION
This financial year, Inspirit Energy Holdings plc has maintained its focus and taken important steps forward in the commercialisation of the Company's micro combined heat and power ("mCHP") boilers "Inspirit Charger 2.0" and "Inspirit Charger 3.0".
COMMERCIALISATION AND PROGRESS
The significant investment made to date demonstrates the Group's progress towards achieving full certification approval and commercialisation of the Group's highly efficient mCHP boilers.
Several key agreements were announced including an agreement for the future installation of test products with a utility company and other organisations and a Letter of Intent with a large scale manufacturer.
The facility in Sheffield has been very active in demonstrating the mCHP boiler to various prospective large scale customers and we are in the process of providing familiarisation training to installers.
Key Sales and Marketing personnel with specific industry track record were appointed during the period to formalise the next phase of sales and distribution.
We committed to developing and producing of a new 2 kilowatt ("kW") electrical output version of the Inspirit mCHP boiler-generator for the domestic market to complement the larger 3 kW electrical output version which is currently being built for the SME market. The significance of this decision was to significantly increase the market potential of Inspirit's product range by offering an appliance that is suitable for the larger domestic sector and that can qualify for the current UK Government Feed in Tariff.
The Company rebranded the name of the mCHP boiler to Inspirit Charger 2.0 (2kW) and Inspirit Charger 3.0 (3kW)
OUTLOOK
The progress over the last year has been extremely positive. We are well positioned at the forefront of mCHP boiler technology and I firmly believe we will continue to make great progress in 2016 and beyond, in achieving our goal of technological commercialisation.
The Board would like to take this opportunity for thanking all of the Company's staff and consultants for their hard work during the year and our shareholders for their support.
J Gunn
Chairman and Chief Executive Officer
30 December 2015
STRATEGIC REPORT
FOR THE YEAR ENDED 30 June 2015
The Directors present their Strategic Report on Inspirit Energy Holdings plc and its subsidiary undertakings ("the Group") for the year ended 30 June 2015.
REVIEW OF THE BUSINESS
The Company is now exclusively focused on commercialising the Group's unique and highly efficient micro co-generation boiler to generate returns for investors.
Inspirit Energy Limited is currently pursuing the development and commercialisation of a world-leading micro Combined Heat and Power ("mCHP") boiler for use in commercial and residential markets. The mCHP boiler is powered by natural gas and designed to produce hot water (for Domestic Hot Water or Central Heating) and a simultaneous electrical output that can be used locally or fed back into the National Grid.
Inspirit Energy's new "British Engineered" mCHP boiler is one of the industry's most powerful and energy efficient mCHP appliances for its size with simultaneous generation of up to 15 kilowatts of thermal output and up to 3 kilowatts of electrical output. The mCHP boiler has been designed to be low maintenance and can be installed by a certified gas-safe tradesman. The appliance's patented engine takes the waste heat from the boiler and converts it efficiently into electricity, first supplying the property where it is installed and then feeding surplus electricity into the National Grid.
The developments made in the mCHP boiler show the great progress that the Company has made during the year and the platform for success in the future.
Key Sales and Marketing Directors were appointed at Inspirit Energy Limited, Inspirit Energy Holdings plc's 100% owned operating Company to provide sales and distribution channels for the mCHP boilers.
Inspirit intends to explore opportunities to market and /or licence its technology.
DEVELOPMENTS DURING THE YEAR
In September 2014, Dr John Bannister joined the management team as a full time consultant to the Company and special advisor to the Board. The Group also agreed with Calor Gas Ltd, the UK's leading supplier of liquid petroleum gas, to the installation of one of Inspirit's boilers at one of its customer sites, when commercial units become available.
In November 2014, the Group agreed a testing and field trial agreement with Utilitywise plc, which is one of Europe's leading and rapidly expanding Energy, environmental management and Utility Broker companies.
In December 2014, John Gunn and David Lenigas, the former Chairman, committed to each providing the Group with up to £250,000 in loan funding to continue with the commercialisation of the Inspirit mCHP appliance. Plus, the Group agreed with Barchester Healthcare to install a mCHP unit in one of its care homes as part of the Field Trials.
In January 2015, the Group committed to the development and production of a new 2 kilowatt ("kW") electrical output version of the Inspirit mCHP boiler-generator for the domestic market to complement the larger 3 kW electrical output version currently being built for the SME market. The significance of this decision was to significantly increase the market potential of Inspirit's product range by offering an appliance that is suitable for the larger domestic sector and that can qualify for the current UK Government Feed in Tariff.
In February 2015, the Company signed a Letter of Intent with a major multi-national contract manufacturing Services Company that may lead to a significant manufacturing agreement, and raised £350,000 (gross) through the issue of 38,888,889 new ordinary shares at a price of 0.9 pence per share.
In May 2015 Nick Stevenson (former Chief Operating Officer of Sustainable Power Ltd) and Paddy Thompson (former General Manager of Ceramic Fuel Cells Ltd) were appointed to the senior management team in the roles of Marketing Director and Sales Director of Inspirit Energy Limited, respectively.
BOARD CHANGES
On 6 February 2015, Jubeenh Nazhat, Executive Director stepped down from the board to pursue other interests.
On 21 December 2015, Mr John Gunn, the Company's CEO, took on the additional role of Chairman of the Company, replacing Mr David Lenigas as Chairman who retired as a director of the Company.
RESULTS AND DIVIDENDS
The Group made a loss after taxation of £572,000 (2014: loss of £1,293,000).
The Directors do not propose a dividend for the year to 30 June 2015 (2014: £nil).
KEY PERFORMANCE INDICATORS
The key performance indicators used by the Board to monitor the performance of the Company, are set out below:
PLC S PLC STATISTICS | 30 June 2015 | 30 June 2014 | Change % |
Net asset value | £1,946,000 | £2,098,000 | -7% |
Net asset value - fully diluted per share | 0.28p | 0.32p | -12% |
Closing share price | 0.48p | 1.12p | -57% |
Market capitalisation | £3,366,000 | £7,342,000 | -54% |
KEY RISKS AND UNCERTAINTIES
Early stage product development carries a high level of risk and uncertainty, although the rewards can be outstanding. At this stage there is a common risk associated with all pioneering technologically advanced companies in their requirement to continually invest in research and development. The Group has already made significant investments in addressing opportunities in the renewable energy sector.
The Group has raised funds during the period as discussed in the 'Developments during the year' above. The Directors feel that while this is sufficient for operating forecasts, further funding requirements are necessary to expedite the commercialisation of the micro co-generation boiler.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The principal financial risk faced by the Group is liquidity risk. The Group's financial instruments included borrowings and cash which it used to finance its operations. At the year end, borrowings did not include borrowings supplied from the bank. More information is given in Note 3 to the Financial Statements. The Group has no significant concentrations of credit risk.
ASSESSMENT OF BUSINESS RISK
The Board regularly reviews operating and strategic risks. The Group's operating procedures include a system for reporting financial and non-financial information to the Board including:
· reports from management with a review of the business at each Board meeting, focusing on any new decisions/risks arising;
· reports on the performance of investments;
· reports on selection criteria of new investments;
· discussion with senior personnel; and
· consideration of reports prepared by third parties.
Details of other financial risks and their management are given in Note 3 to the financial statements.
GOING CONCERN
The Group meets its day-to-day working capital requirements through its ability to raise funds when required. The current economic conditions continue to create uncertainty, particularly over (a) the level of demand for the Group's products; and (b) the availability of funding for the foreseeable future.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its consolidated Financial Statements.
POST YEAR END EVENTS
On 7 July 2015, John Gunn, the Company's Chief Executive Officer, acquired 2,000,000 ordinary shares of 0.1p each in the Company at an average price of 0.4425p per share.
On 8 July 2015, Nilesh Jagatia, the Company's Chief Financial Officer, acquired 2,000,000 ordinary shares of 0.1p each in the Company at an average price of 0.5p per share.
On 9 July 2015, the Group filed trademark applications for the product name for its CHP boiler and will be known as the "INSPIRIT CHARGER". UK and EU trademark applications had been filed to protect the name.
On 17 July 2015, the Company raised £365,000 through the placing of 77,659,570 ordinary shares at a price of 0.47 pence per ordinary share. John Gunn, participated in the placing by investing £75,000. Of this investment, £50,000 was invested by Global Investment Strategy UK Limited ("GIS") which is a 100% owned subsidiary of Octagonal Plc (OCT) of which John Gunn is Chief Executive Officer and 52.44 per cent shareholder, as a conversion into Placing Shares of an existing loan, and £25,000 was invested by John Gunn directly in the Placing. David Lenigas also participated in the placing by converting an existing loan of £50,000 into Placing Shares.
On the same day, John Gunn transferred, for nil consideration, 18,769,200 Ordinary Shares to former investors in Disenco Limited, the company which originally developed the Inspirit technology.
On 20 August 2015, the Company appointed Peterhouse Corporate Finance Limited as Joint Broker alongside Westhouse Securities Limited.
On 17 December 2015, the Company announced the successful conclusion of in house operational testing on its first Inspirit Charger mCHP appliance for field trial use.
ON BEHALF OF THE BOARD
N Jagatia
Director
30 December 2015
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 30 June 2015
The Directors present their annual report on the affairs of the Group, together with the audited financial statements for the year ended 30 June 2015.
PRINCIPAL ACTIVITIES
The principal activity of the Company is that of development and commercialisation of the mCHP boiler.
Details of the Group's principal activities can be found in the Strategic Report.
DIRECTORS
The Directors who held office in the period up to the date of approval of the Financial Statements and their beneficial interests in the Group's issued share capital at the beginning and end of the accounting year were:
Number of ordinary shares | Number of share options and warrants | |||
30 June 2015 | 30 June 2014 | 30 June 2015 | 30 June 2014 | |
D Lenigas (resigned 21 December 2015 | 6,000,000 | 6,000,000 | - | - |
J Gunn | 368,479,632 | 353,841,356 | - | - |
J Nazhat (resigned 2 February 2015) | - | - | - | - |
N Jagatia | - | - | - | - |
N Luke | 3,300,000 | - | - | - |
INDEMNITY OF OFFICERS
The Company maintains appropriate insurance cover against legal action brought against its Directors and officers.
POLICY AND PRACTICE ON PAYMENT OF CREDITORS
The Company's policy is to agree terms of payment with suppliers. These normally provide for settlement within 30 days of the date of the invoice, except where other arrangements have been negotiated. It is the policy of the Company to abide by the agreed terms of payment, provided the supplier performs according to the terms of the contract.
CORPORATE GOVERNANCE
The Board has not adopted the UK Corporate Governance Code; this is only a requirement for premium listed companies and the Board does not consider it appropriate for a company of the size and nature of Inspirit Energy Holdings plc. The Board has, however, adopted the requirements of the Corporate Governance Guidelines for Smaller Companies published by the Quoted Companies Alliance, although, until an independent non-executive director is appointed, Neil Luke will chair each of the committees.
BOARD OF DIRECTORS
The Board is responsible for strategy and performance, approval of major capital projects and the framework of internal controls. To enable the Board to discharge its duties, all Directors receive appropriate and timely information. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring the Board procedures, are followed and that applicable rules and regulations are complied with.
AUDIT COMMITTEE
The Audit Committee is currently chaired by Neil Luke and includes Nilesh Jagatia. The committee provides a forum for reporting by the Group's external auditors. The committee is also responsible for reviewing a wide range of matters, including half-year and annual results before their submission to the Board, and for monitoring the controls that are in force to ensure the integrity of information reported to shareholders. The Audit Committee will advise the Board on the appointment of external auditors and on their remuneration for both audit and non-audit work, and will discuss the nature, scope and results of the audit with the external auditors. The committee will keep under review the cost effectiveness and the independence and objectivity of the external auditors.
The Audit Committee is responsible for ensuring the "right tone at the top" and that the ethical and compliance commitments of management and employees are understood throughout the Group.
REMUNERATION COMMITTEE
The Remuneration Committee is chaired by Neil Luke and includes Nilesh Jagatia. The committee is responsible for making recommendations to the Board, within agreed terms of reference, on the Group's framework of executive remuneration and its cost. The Remuneration Committee determines the contract terms, remuneration and other benefits for the executive directors, including performance related bonus schemes and compensation payments. The Board itself determines the remuneration of the non-executive directors.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority. In addition to the publication of an annual report and an interim report, there is regular dialogue with shareholders and analysts. The Annual General Meeting is viewed as a forum for communicating with shareholders, particularly private investors. Shareholders may question the Executive Chairman and other members of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's system of internal control and for reviewing the effectiveness of these systems. The risk management process and systems of internal control are designed to manage rather than eliminate the risk of the Group failing to achieve its strategic objectives. It should be recognised that such systems can only provide reasonable and not absolute assurance against material misstatement or loss. The Group has well established procedures which are considered adequate given the size of the business.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report of the Directors and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the directors have prepared the group and parent company financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU"). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently
· make judgments and accounting estimates that are reasonable and prudent
· state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; and
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The Company is compliant with AIM Rule 26 regarding the Company's website. See www.inspirit-energy.com.
DISCLOSURE OF INFORMATION TO AUDITOR
In the case of each person who was a Director at the time this report was approved:
· so far as that director is aware there is no relevant audit information of which the Company's auditor is unaware: and
· that director has taken all steps that the director ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
INDEPENDENT AUDITOR
The auditors, Welbeck Associates, who were appointed during the year following the resignation of PKF Littlejohn LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
ON BEHALF OF THE BOARD
N Jagatia
Director
30 December 2015
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INSPIRIT ENERGY HOLDINGS PLC
FOR THE YEAR ENDED 30 June 2015
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF INSPIRIT ENERGY HOLDING PLC
We have audited the Financial Statements of Inspirit Energy Holdings Plc for the year ended 30 June 2015 which comprise the Group and Parent Company Statements of Financial Position, the Group Statement of Comprehensive Income, the Group and Parent Company Statement of Cash Flow, the Group and Parent Company Statements of Changes in Equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the Parent Company Financial Statements, as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an 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.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR
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. Our responsibility is to audit and express an opinion on the Financial Statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
· the Financial Statements give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 30 June 2015 and of the Group's loss for the year then ended;
· the Group Financial Statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
· the Parent Company Financial Statements for the 12 months ended 30 June 2015 have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
· the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
EMPHASIS OF MATTER - GOING CONCERN
In forming our opinion on the Financial Statements, which is not modified, we have considered the adequacy of the disclosure made in note 2 to the Financial Statements concerning the Group's and Company's ability to continue as going concerns. These conditions, along with the other matters explained in note 2 to the Financial Statements, indicate the existence of a material uncertainty which may cast doubt on the Group's and Company's ability to continue as going concerns. The Financial Statements do not include the adjustments that would result if the Group was unable to continue as a going concern.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the information given in the Strategic Report and Directors' Report for the financial year for which the Financial Statements are prepared is consistent with the Financial Statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
· the Parent Company Financial Statements are not in agreement with the accounting records and returns; or
· certain disclosures of Directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
Rory Heier (Senior statutory auditor) For and on behalf of Welbeck Associates Statutory auditor |
30 Percy Street London W1T 2DB |
30 December 2015
GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 June 2015
| 2015 | 2014 | |
Note | £'000 | £'000 | |
CONTINUING OPERATIONS: | |||
Revenue | - | - | |
Administrative expenses | 8 | (724) | (506) |
Impairment of goodwill | 13 | - | (663) |
Other losses - net | 9 | - | (197) |
OPERATING LOSS | (724) | (1,366) | |
Finance costs | 10 | (55) | (11) |
LOSS BEFORE INCOME TAX | (779) | (1,377) | |
Income tax credit | 11 | 207 | 84 |
LOSS FOR THE YEAR (ATTRIBUTABLE TO OWNERS OF THE PARENT) | (572) | (1,293) | |
Other comprehensive income | - | - | |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (ATTRIBUTABLE TO OWNERS OF THE PARENT) | (572) | (1,293) | |
EARNINGS PER SHARE | |||
- Basic and fully diluted earnings per share (attributable to owners of the parent) | 12 | (0.08p) | (0.24p) |
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the Parent Company Statement of Comprehensive Income.
The loss for the Parent Company for the year was £4,539,000 (2014: £646,000).
|
Attributable to the owners of the parent | ||||||
Share capital | Share premium | Other reserves | Merger reserve | Reverse acquisition reserve | Retained losses | Total Equity | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
BALANCE AT 1 July 2013 | 15 | 737 | 23 | - | - | (529) | 246 |
Loss for the year | - | - | - | - | - | (1,293) | (1,293) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | - | - | - | - | - | (1,293) | (1,293) |
Shares issued | 154 | 2,153 | - | - | - | - | 2,307 |
Share issue costs | - | (53) | - | - | - | - | (53) |
Share based payments | 60 | 735 | - | - | - | - | 795 |
Share warrants exercised | 7 | 59 | - | - | - | - | 66 |
Cancellation of share warrants | - | - | (23) | - | - | 23 | - |
Conversion of convertible loan | 10 | 40 | - | - | - | - | 50 |
Reverse acquisition | 806 | 3,275 | 110 | 3,150 | (7,361) | - | (20) |
TRANSACTIONS WITH OWNERS | 1,037 | 6,209 | 87 | 3,150 | (7,361) | 23 | 3,145 |
BALANCE AT 30 June 2014 | 1,052 | 6,946 | 110 | 3,150 | (7,361) | (1,799) | 2,098 |
BALANCE AT 1 July 2014 | 1,052 | 6,946 | 110 | 3,150 | (7,361) | (1,799) | 2,098 |
Loss for the year | - | - | - | - | - | (572) | (572) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | - | - | - | - | - | (572) | (572) |
Shares issued for cash | 39 | 311 | - | - | - | - | 350 |
Share issue costs | - | (27) | - | - | - | - | (27) |
Share based payments | 7 | 75 | - | - | - | - | 82 |
Issue of warrants | - | - | 15 | - | - | - | 15 |
TRANSACTIONS WITH OWNERS | 46 | 359 | - | - | - | - | 420 |
BALANCE AT 30 June 2015 | 1,098 | 7,305 | 125 | 3,150 | (7,361) | (2,371) | 1,946 |
GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 June 2015 |
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 June 2015 Attributable to equity shareholders | |||||
Share capital | Share premium |
Other reserves | Retained losses | Total equity | |
£'000 | £'000 | £'000 | £'000 | £'000 | |
BALANCE AT 1 July 2013 | 471 | 4,012 | 110 | (4,534) | 59 |
Loss for the year | - | - | - | (646) | (646) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | - | - | - | (646) | (646) |
Reverse acquisition | 350 | 3,150 | - | - | 3,500 |
Shares issued | 154 | 2,153 | - | - | 2,307 |
Share issue costs | - | (53) | - | - | (53) |
Share based payments | 60 | 735 | - | - | 795 |
Share warrants exercised | 7 | 59 | - | - | 66 |
Conversion of convertible loan | 10 | 40 | - | - | 50 |
TRANSACTIONS WITH OWNERS | 581 | 6,084 | - | - | 6,665 |
BALANCE AT 30 June 2014 | 1,052 | 10,096 | 110 | (5,180) | 6,078 |
BALANCE AT 1 July 2014 | 1,052 | 10,096 | 110 | (5,180) | 6,078 |
Loss for the year | - | - | - | (4,539) | (4,539) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | - | - | - | (4,539) | (4,539) |
Shares issued for cash | 39 | 311 | - | - | 350 |
Share issue costs | - | (27) | - | - | (27) |
Share based payments | 7 | 75 | 82 | ||
Issue of warrants | - | - | 15 | - | 15 |
TRANSACTIONS WITH OWNERS | 46 | 359 | 15 | - | 420 |
1,098 | 10,455 | 125 | (9,719) | 1,959 | |
STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 June 2015 | ||||||||
| GROUP | COMPANY | ||||||
2015 | 2014 | 2015 | 2014 | |||||
Note | £'000 | £'000 | £'000 | £'000 | ||||
NON-CURRENT ASSETS | ||||||||
Intangible assets | 13 | 2,107 | 1,060 | - | - | |||
Property, plant and equipment | 14 | 76 | 12 | - | - | |||
Investment in subsidiaries | 15 | - | - | 2,440 | 4,643 | |||
2,183 | 1,072 | 2,440 | 4,643 | |||||
CURRENT ASSETS | ||||||||
Inventories | 16 | 5 | 5 | - | - | |||
Trade and other receivables | 17 | 447 | 1,204 | 32 | 1,539 | |||
Cash and cash equivalents | 18 | 1 | 67 | 1 | 59 | |||
453 | 1,276 | 33 | 1,598 | |||||
TOTAL ASSETS | 2,636 | 2,348 | 2,473 | 6,241 | ||||
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT | ||||||||
Share capital | 19 | 1,098 | 1,052 | 1,098 | 1,052 | |||
Share premium | 19 | 7,305 | 6,946 | 10,455 | 10,096 | |||
Other reserves | 21 | 125 | 110 | 125 | 110 | |||
Merger reserve | 21 | 3,150 | 3,150 | - | - | |||
Reverse acquisition reserve | 21 | (7,361) | (7,361) | - | - | |||
Retained losses | (2,371) | (1,799) | (9,719) | (5,180) | ||||
TOTAL EQUITY | 1,946 | 2,098 | 1,959 | 6,078 | ||||
CURRENT LIABILITIES | ||||||||
Trade and other payables | 22 | 370 | 250 | 194 | 163 | |||
Borrowings | 23 | 320 | - | 320 | ||||
690 | 250 | 514 | 163 | |||||
TOTAL LIABILITIES | 690 | 250 | 514 | 163 | ||||
TOTAL EQUITY AND LIABILITIES | 2,636 | 2,348 | 2,473 | 6,241 | ||||
These Financial Statements were approved by the Board of Directors on 30 December 2015 and were signed on its behalf by:
N Jagatia
Director
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 June 2015 | ||||||||||
GROUP | COMPANY | |||||||||
2015 | 2014 | 2015 | 2014 |
| ||||||
Note | £'000 | £'000 | £'000 | £'000 |
| |||||
CASH FLOWS FROM OPERATING ACTIVITIES |
| |||||||||
Loss before tax | (779) | (1,377) | (4,539) | (646) |
| |||||
Depreciation | 14 | 1 | - | - |
| |||||
Finance income | - | - | (81) | - |
| |||||
Finance expense | 55 | 11 | 55 | 6 |
| |||||
Shares issued in settlement of fees and debt | 82 | 795 | 82 | 795 |
| |||||
Share warrants exercised | - | 66 | - | 66 |
| |||||
Impairment of investment in subsidiary | - | - | 1,800 |
| ||||||
Interco loan provision | - | - | 2,128 |
| ||||||
Impairment of goodwill | - | 663 | - | - |
| |||||
Decrease/(increase) in trade and other receivables | 964 | 80 | 1,045 | (364) |
| |||||
(Increase)/decrease in trade and other payables | 120 | (652) | 31 | (260) |
| |||||
CASH (USED BY)/GENERATED FROM OPERATING ACTIVITIES | 456 | (413) | 521 | (403) |
| |||||
Income tax credit received | - | 17 | - | - |
| |||||
NET CASH (USED BY)/GENERATED FROM OPERATING ACTIVITIES | 456 | (396) | 521 | (403) |
| |||||
CASH FLOWS FROM INVESTING ACTIVITIES |
| |||||||||
Increase in development costs | (1,047) | (291) | - | - |
| |||||
Purchases of property, plant and equipment | (78) | (7) | - | - |
| |||||
Increase in loan to subsidiary | - | - | (1,182) | (403) |
| |||||
NET CASH FROM INVESTING ACTIVITIES | (1,125) | (298) | (1,182) | (403) |
| |||||
CASH FLOWS FROM FINANCING ACTIVTIES |
| |||||||||
Net proceeds from issue of share capital | 323 | 771 | 323 | 871 |
| |||||
Increase in short term borrowings | 320 | - | 320 |
| ||||||
Finance costs paid | (40) | (11) | (40) | (6) |
| |||||
NET CASH FROM FINANCING ACTIVITIES | 603 | 760 | 603 | 865 |
| |||||
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (66) | 66 | (58) | 59 |
| |||||
Cash and cash equivalents at the beginning of the year | 67 | 1 | 59 | - |
| |||||
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR | 18 | 1 | 67 | 1 | 59 |
| ||||
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 June 2015 | |
1 | GENERAL INFORMATION |
The principal activity of Inspirit Energy Holdings plc during the period was that of developing and commercialising the mCHP boiler. On 25 July 2013 the Company completed the acquisition of Inspirit Energy Limited, and now owns all of that company's issued share capital. These financial statements show the consolidated results of the Group for the year ended 30 June 2015 together with the comparative results for the year ended 30 June 2014. Inspirit Energy Holdings plc is a company incorporated and domiciled in England and Wales and quoted on the Alternative Investment Market of the London Stock Exchange. The address of its registered office is 2nd Floor, 2 London Wall Buildings, London, EC2M 5PP, United Kingdom. | |
2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. | |
BASIS OF PREPARATION | |
The consolidated Financial Statements of Inspirit Energy Holdings plc have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee ("IFRIC") as adopted by the European Union and the parts of Companies Act 2006 applicable to companies reporting under IFRS and IFRIC interpretations. The consolidated Financial Statements have been prepared under the historical cost convention and are presented in GBP Pound Sterling, rounded to the nearest £1,000. The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated Financial Statements are disclosed in Note 4. | |
GOING CONCERN The Group's activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report on pages 4 to 6. It also includes the Group's objectives, policies and processes for managing its business risk objectives, which includes its exposure to technology, customer and other operational risks. The Directors have prepared cash flow forecasts for the Group and Company which reflect the Group's and Company's forecast cash inflows and costs. On 17 July 2015 the Company raised £365,000 through an equity placing. The cash flow forecasts for the Group and Company show that further equity and/or borrowings will be required to complete the final development and external testing of the Group's mCHP boilers and bring them into production. Although the Directors are confident that further equity can be raised at a valuation acceptable to the Company there is no guarantee this will be the case. In the event that further equity cannot be raised or insufficient equity is raised the Company has the benefit of standby loan agreements with both John Gunn and the former Director David Lenigas, who have undertaken to provide loans of up to £450,000 and £250,000 respectively over the next 12 months, as the Company may reasonably require. | |
GOING CONCERN (continued) | |
It is envisaged by the Directors, who have formed a judgement at the time of approving these financial statements, that existing cash resources together with these forecast cash inflows will provide adequate funds for the Group for the foreseeable future. For this reason the Directors continue to adopt the going concern basis in preparing the financial statements. | |
BASIS OF CONSOLIDATION Inspirit Energy Holdings plc, the legal parent, is domiciled and incorporated in the United Kingdom. The Group Financial Statements consolidate the Financial Statements of Inspirit Energy Holdings plc and its subsidiary, Inspirit Energy Limited, made up to 30 June 2015. Subsidiaries are entities over which the Group has control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Group obtains and exercises control through voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the company controls another entity. The Company acquired Inspirit Energy Limited on 25 July 2013 through a share exchange. As the shareholders of Inspirit Energy Limited have control of the legal parent, Inspirit Energy Holdings Plc, the transaction has been accounted for as a reverse acquisition in accordance with IFRS 3 "Business Combinations". Consequently, although the Financial Statements are prepared in the name of the legal parent, they are in substance a continuation of those of the legal subsidiary. The following accounting treatment has been applied in respect of the reverse acquisition: · the assets and liabilities of the legal subsidiaries within Inspirit Energy Limited are recognised and measured in the consolidated financial statements at their pre-combination carrying amounts, without restatement to fair value; · the equity structure appearing in the consolidated financial statements reflects the equity structure of the legal parent, Inspirit Energy Holdings plc, including the equity instruments issued to effect the business combination; · comparative numbers presented in the consolidated financial statements are those reported in the financial statements of the legal subsidiaries consolidated within Inspirit Energy Limited. The cost of acquisition is measured as the fair value of the assets acquired, equity instruments issued and liabilities incurred or assumed at the date of exchange. Acquisition related costs are expensed as incurred. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. | |
NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP a) New and amended standards adopted by the Group: The following standards and amendments to existing standards and interpretations and are mandatory for the annual period beginning after 1 July 2014 and have been applied in preparing these financial statements:
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b) New and amended standards and interpretations issued but not yet effective or not yet endorsed and not early adopted The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the financial statements are disclosed below. The Group intend to adopt these standards, if applicable, when they become effective.
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*Subject to EU endorsement. The Directors anticipate that the adoption of the above standards and interpretations in future periods will have little or no impact on the financial statements of the Group when the relevant standards come into effect.
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SEGMENTAL REPORTING The accounting policy for identifying segments is now based on internal management reporting information that is regularly reviewed by the chief operating decision maker, which is identified as the Board of Directors. In identifying its operating segments, management generally follows the Group's service lines which represent the main products and services provided by the Group. The Directors believe that the Group's continuing trading operations comprise one segment. | ||||||||||||||||||||||||||||||||||
FOREIGN CURRENCY TRANSLATION a) FUNCTIONAL AND PRESENTATION CURRENCY Items included in the Financial Statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("functional currency"). The consolidated Financial Statements are presented in Pounds Sterling (£), which is the Company's functional and the Group's presentation currency. b) TRANSACTIONS AND BALANCES Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions, or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised the Statement of Comprehensive Income. Foreign exchange gains and losses relating to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within "Finance Income" or "Finance Costs". All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within "Other (Losses)/Gains - Net".
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| PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the Statement of Comprehensive Income during the financial period in which they are incurred. Depreciation is calculated to allocate the cost of each class of asset to their residual values over their estimated useful lives, as follows: · Plant and Equipment - 15% reducing balance · Fixtures and Fittings - 20% reducing balance · Motor Vehicles - 5 years, straight line The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount, and are recognised within "Other (Losses)/Gains - Net" in the Statement of Comprehensive Income. | |||||||||||||||||||||||||||||||||
INTANGIBLE ASSETS a) GOODWILL Goodwill arises on the acquisition of subsidiaries, associates and joint ventures and represents the excess of the consideration transferred over the Company's interest in the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level. Goodwill impairment reviews are undertaken annually, or more frequently, if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed. b) DEVELOPMENT COSTS Development costs relate to expenditure on the development of certain new products and service projects where the outcome of those projects is assessed as being reasonably certain as regards viability and technical feasibility. Such expenditure is capitalised and amortised over the expected sales life of the product, being generally a period not longer than five years commencing in the year the sales of the product were first made. | ||||||||||||||||||||||||||||||||||
Development costs incurred on specific projects are capitalised when all the following conditions are satisfied: · completion of the intangible asset is technically feasible so that it will be available for use or sale · the Group intends to complete the intangible asset and use or sell it · the Group has the ability to use or sell the intangible asset · the intangible asset will generate probable future economic benefits · there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and · the expenditure attributable to the intangible asset during its development can be measured reliably. Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads. Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. | ||||||||||||||||||||||||||||||||||
IMPAIRMENT OF NON-FINANCIAL ASSETS Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. | ||||||||||||||||||||||||||||||||||
FINANCIAL ASSETS a) CLASSIFICATION The Group classifies its financial assets in the following categories: at fair value through profit or loss and loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Financial assets at fair value or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current. LOANS AND RECEIVABLES Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the Statement of Financial Position date. These are classified as non-current assets. The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the Statement of Financial Position.
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b) RECOGNITION AND MEASUREMENT Regular purchases and sales of financial assets are recognised on the trade date - the date on which the Group commits to purchasing or selling the asset. Financial assets carried at fair value through profit or loss is initially recognised at fair value, and transaction costs are expensed in the Statement of Comprehensive Income. Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership. Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method. Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are presented in the Statement of Comprehensive Income within "Other (Losses)/Gains - Net" in the period in which they arise. | ||||||||||||||||||||||||||||||||||
IMPAIRMENT OF FINANCIAL ASSETS The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired. A financial asset, or a group of financial assets, is impaired, and impairment losses are incurred, only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a "loss event"), and that loss event (or events) has an impact on the estimated future cash flows of the financial asset, or group of financial assets, that can be reliably estimated. The criteria that the Group uses to determine that there is objective evidence of an impairment loss include: · significant financial difficulty of the issuer or obligor; · a breach of contract, such as a default or delinquency in interest or principal repayments; · the disappearance of an active market for that financial asset because of financial difficulties; · observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio; or · for assets classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost.
a) ASSETS CARRIED AT AMORTISED COST The amount of impairment is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset's original effective interest rate. The asset's carrying amount is reduced, and the loss is recognised in the Statement of Comprehensive Income. As a practical expedient, the Group may measure impairment on the basis of an instrument's fair value using an observable market price. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the Statement of Comprehensive Income. | ||||||||||||||||||||||||||||||||||
INVENTORIES Inventories are stated at the lower of cost and net realisable value. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
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DERIVATIVE FINANCIAL INSTRUMENTS Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and are subsequently remeasured at their fair value. | ||||||||||||||||||||||||||||||||||
TRADE AND OTHER RECEIVABLES Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not they are presented as non-current assets. Trade receivables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method, less provision for impairment. | ||||||||||||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS In the consolidated Statement of Cash Flows, cash and cash equivalents comprise cash in hand and deposits held at call with banks. | ||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY Equity comprises the following: · "Share capital" represents the nominal value of equity shares. · "Share premium" represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue. · "Option reserve" represents the cumulative cost of share based payments. · "Retained losses" represents retained losses. | ||||||||||||||||||||||||||||||||||
FINANCIAL LIABILITIES The Group's financial liabilities comprise trade payables. Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instruments. | ||||||||||||||||||||||||||||||||||
TRADE PAYABLES Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method. | ||||||||||||||||||||||||||||||||||
BORROWINGS Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of Comprehensive Income over the period of the borrowings, using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. | ||||||||||||||||||||||||||||||||||
BORROWINGS COSTS Borrowing costs are recognised in profit or loss in the period in which they are incurred. |
CURRENT AND DEFERRED INCOME TAX The tax expense for the period comprises current tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised directly in equity. In this case the tax is also recognised directly in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company's subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. | |
SHARE BASED PAYMENTS The Group operates equity-settled, share-based schemes, under which it receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The Group may also issue warrants to share subscribers as part of a share placing. The fair value of the equity-settled share based payments is recognised as an expense in the Statement of Comprehensive Income or charged to equity depending on the nature of the service provided or instrument issued. The total amount to be expensed or charged is determined by reference to the fair value of the options granted: · including any market performance conditions; · excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and · including the impact of any non-vesting conditions (for example, the requirement for employees to save). In the case of warrants the amount charged to equity is determined by reference to the fair value of the services received if available. If the fair value of the services received is not determinable, the warrants are valued by reference to the fair value of the warrants granted as described previously. Non-market vesting conditions are included in assumptions about the number of options or warrants that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of Comprehensive Income or equity as appropriate, with a corresponding adjustment to a separate reserve in equity. When the options are exercised, the Group issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium. | |
OPERATING LEASES Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the period of the lease. |
3 | FINANCIAL RISK MANAGEMENT The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Group's risk management is coordinated by the Board of Directors, and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial markets. The main risks the Group is exposed to through its financial instruments are market risk (including market price risk), credit risk and liquidity risk. |
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MARKET PRICE RISK The Group's exposure to market price risk mainly arises from potential movements in the pricing of its products. The Group manages this price risk within its long-term strategy to grow the business and maximise shareholder return. . | |||||||||
CREDIT RISK The Group's financial instruments that are subject to credit risk are cash and cash equivalents and loans and receivables. The credit risk for cash and cash equivalents is considered negligible since the counterparties are reputable financial institutions. The credit risk for loans and receivables is mainly in respect of short term loans, made on market terms, which are monitored regularly by the Board. The Group's maximum exposure to credit risk is £434,000 (2014: £1,271,000) comprising cash and cash equivalents and loans and receivables. | |||||||||
LIQUIDITY RISK Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through maintaining a positive cash balance and controlling expenses and commitments. The Directors are confident that adequate resources exist to finance current operations. The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments. | |||||||||
| Group At 30 June 2015 | Less than 1 year £'000 | Between 1 and 2 years £'000 | Between 2 and 5 years £'000 | Over 5 years £'000 | Total £'000 | Carrying value £'000 |
| |
| Trade and other payables | 624 | - | - | - | 624 | 624 |
| |
| At 30 June 2014 |
| |||||||
| Trade and other payables | 250 | - | - | - | 250 | 250 |
| |
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
· to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;
· to support the Group's growth; and
· to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.
4 | CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of Financial Statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. IMPAIRMENT OF GOODWILL Goodwill has a carrying value of £nil (2014: £nil). The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. IMPAIRMENT OF DEVELOPMENT COSTS AND INVESTMENTS The Group tests annually whether development costs and investments in the subsidiaries, which have a carrying value of £2,107,000 and £2,440,000, respectively (2014: £1,060,000 and £4,643,000, respectively), have suffered any impairment in accordance with the accounting policy as stated in Note 2. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. When a review for impairment is conducted, the recoverable amount is determined based on value in use calculations prepared on the basis of management's assumptions and estimates. As a result of their 2015 review management has concluded that an impairment charge to the carrying value of investment in subsidiaries of £1,800,000, and an impairment provision against the loan from the Company of £2,128,000 is necessary for the year. See Note 15 to the Financial Statements. In respect of development costs, the recoverable amounts of cash-generating units have been determined, based on value- in- use calculations. The value -in- use calculations require the entity to estimate future cash flows expected to arise from the cash generating unit and apply a suitable discount rate in order to calculate present value. The recoverable amount of the development costs have been determined, based on value in use calculations. These calculations require the use of estimates. The Directors have concluded that no impairment charge is necessary. SHARE BASED PAYMENTS The Group has made awards of options and warrants over its unissued share capital to certain Directors and employees as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and to suppliers for various services received. The fair value of options is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions. In accordance with IFRS 2 'Share Based Payments', the Company has recognised the fair value of options, calculated using the Black-Scholes option pricing model. The Directors have made assumptions particularly regarding the volatility of the share price at the grant date in order to reach a fair value. Further information is disclosed in Note 22. |
5 | SEGMENTAL INFORMATION | |||||
The Group's primary reporting format is business segments and its secondary format is geographical segments. The Group only operates in a single business and geographical segment. Accordingly no segmental information for business segment or geographical segment is required.
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6 | DIRECTORS' EMOLUMENTS |
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2015 | 2014 |
| ||||
£ | £ |
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Aggregate emoluments | 199 | 177 |
| |||
Social security costs | 18 | 13 |
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217 | 190 |
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Name of director | Salary and fees | Benefits | Total 2015 | Total 2014 |
| |
£ | £ | £ | £ |
| ||
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J Gunn | 74 | - | 74 | 66 |
| |
J Nazhat | 20 | - | 20 | 37 |
| |
N Jagatia | 31 | - | 31 | 14 |
| |
N Luke | 74 | - | 74 | 60 |
| |
D Lenigas | - | - | - | - |
| |
199 | - | 199 | 177 |
| ||
The Group does not operate a pension scheme and no contributions were paid during the year.
7 | EMPLOYEE INFORMATION | ||
2015 | 2014 | ||
£ | £ | ||
Wages and salaries | 199 | 177 | |
Social security costs | 18 | 13 | |
217 | 190 | ||
In addition to the above a total of £121,000 (2014: £108,000) wages and salaries for employees have been included in Development costs Average number of persons employed (including executive directors): | |||
2015 | 2014 | ||
Number | Number | ||
Office and management | 6 | 5 | |
COMPENSATION OF KEY MANAGEMENT PERSONNEL | |
There are no key management personnel other than the Directors of the Company (Note 6). |
8 | LOSS FOR THE YEAR | ||
Loss for the year is arrived at after charging: | |||
2015 | 2014 | ||
£'000 | £'000 | ||
| |||
S | Salaries and wages (Note 7) | 217 | 190 |
A | Audit and other fees | 16 | 15 |
Operating lease rent | 53 | 52 | |
Depreciation | 14 | 1 | |
AUDITOR'S REMUNERATION | |||
During the year the Group obtained the following services from the Company's auditor: | |||
2015 | 2014 | ||
£'000 | £'000 | ||
Fees payable to the Company's auditor for the audit of the parent company and the Group financial statements | 13 | 13 | |
Fees payable to the Company's auditor and its associates for other services: | |||
Taxation compliance services | 2 | 1 | |
Other assurance services | 1 | 1 | |
9 | OTHER LOSSES | ||
2015 | 2014 | ||
£'000 | £'000 | ||
Financial assets at fair value through profit or loss (Note 19) | - | 237 | |
Other income | - | (40) | |
- | 197 | ||
10 | FINANCE COSTS | ||
2015 | 2014 | ||
£'000 | £'000 | ||
Interest expense: | |||
Other loans | 55 | 11 | |
11 | INCOME TAX CREDIT | |||
GROUP | 2015 | 2014 | ||
£'000 | £'000 | |||
Current R&D tax credit on loss for the year | (207) | (84) | ||
(207) | (84) | |||
The tax on the Group's loss before tax differs from the theoretical amount that would arise using the weighted average rate applicable to losses of the consolidated entities as follows: | ||||
2015 | 2014 | |||
£'000 | £'000 | |||
Loss before tax from continuing operations | (779) | (1,377) | ||
Loss before tax multiplied by rate of corporation tax in the UK of 20% (2014: 20%) | (156) | (275) | ||
Tax effects of: | ||||
Expenses not deductible for tax purposes | 14 | 207 | ||
Unrelieved tax losses carried forward | 142 | 68 | ||
Research and development tax credit | (207) | (84) | ||
Total tax | (207) | (84) | ||
The Group has excess management expenses of approximately £3,780,000 (2014: £3,037,000), capital losses of £150,000 (2014: £150,000) and non-trade financial losses of approximately £119,000 (2014: £119,000) to carry forward against future suitable taxable profits. No deferred tax asset has been provided on any of these losses due to uncertainty over the timing of their recovery. |
| |||
12 | EARNINGS PER SHARE |
Loss per ordinary share has been calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of shares in issue during the year. The calculations by both basic and diluted loss per share for the year are based upon the loss for the year of £572,000 (2014: £1,293,000). The weighted number of equity shares in issue during the year was 673,897,325 (2014: 546,838,937). In accordance with IAS 33, basic and diluted earnings per share are identical as the effect of the exercise of share options and warrants would be to decrease the loss per share and therefore deemed anti-dilutive. Details of share options and warrants that could potentially dilute earnings per share in future periods are set out in Notes 2. |
13 | INTANGIBLE ASSETS | |||
GROUP
COST | Goodwill £'000 | Development Costs £'000 | Total £'000 | |
At 1 July 2013 | - | 769 | 769 | |
Additions | - | 291 | 291 | |
Reverse acquisition | 663 | - | 663 | |
At 30 June 2014 | 663 | 1,060 | 1,723 | |
Additions | - | 1,047 | 1,047 | |
At 30 June 2015 | 663 | 2,107 | 2,770 | |
, | ||||
ACCUMULATED AMORTISATION AND IMPAIRMENT | ||||
At 1 July 2013 | - | - | - | |
Impairment charge | 663 | - | 663 | |
At 30 June 2014 and 30 June 2015 | 663 | - | 663 | |
NET BOOK VALUE | ||||
At 30 June 2014 | - | 1,060 | 1,060 | |
At 30 June 2015 | - | 2,107 | 2,107 | |
The Goodwill relating to the Parent Company is attributable to the benefits derived from the listing of the Parent Company and reflects the cost of the reverse acquisition and admission to AIM (Note 24). The Directors have reviewed the carrying value of Goodwill at 30 June 2015 and consider that a complete impairment provision is required in the year.
No amortisation has been recognised on development costs to date as the assets are still in the development stage and the related products are not yet ready for sale.
The recoverable amount of the above cash generating unit has been determined based on value-in-use calculations. No goodwill is allocated to the Group's cash generating unit as this related to the Parent Company as explained above. The value-in-use calculations use cash flow projections based on financial budgets approved by Management covering a seven year period. These incorporate potential revenues which are based on project tenders and projected revenue. Given the nature of the work and the visibility of revenue in the future, it is considered appropriate not to extend the cash flow workings beyond this period.
The recoverable amount based on value-in-use exceeded the carrying value above. The impairment review did not identify any impairment for recognition in the current or prior year.
14 | PROPERTY, PLANT AND EQUIPMENT | |||||
GROUP | Plant and Equipment | Fixtures and fittings | Motor Vehicles | Total |
| |
COST | £'000 | £'000 | £'000 | £'000 |
| |
As 1 July 2013 | 7 | 4 | 1 | 12 |
| |
Additions | - | 7 | - | 7 |
| |
As 30 June 2014 | 7 | 11 | 1 | 19 |
| |
Additions | 74 | 4 | - | 78 |
| |
As at 30 June 2015 | 81 | 15 | 1 | 97 |
| |
| ||||||
DEPRECIATION |
| |||||
As at 1 July 2013 | 3 | 3 | - | 6 |
| |
Charge for year | - | 1 | - | 1 |
| |
As at 30 June 2014 | 3 | 4 | - | 7 |
| |
Charge for year | 12 | 1 | 1 | 14 |
| |
As at 30 June 2015 | 15 | 5 | - | 21 |
| |
NET BOOK VALUE |
| |||||
As at 30 June 2014 | 4 | 7 | 1 | 12 |
| |
As at 30 June 2015 | 66 | 10 | - | 76 |
| |
15 | INVESTMENT IN SUBSIDIARIES | ||
COMPANY | 2015 | 2014 | |
SHARES IN GROUP UNDERTAKINGS: | £'000 | £'000 | |
At 1 July | 4,240 | - | |
Transfer from investments | - | 740 | |
Reverse acquisition | - | 3,500 | |
Impairment provision | (1,800) | - | |
2,440 | 4,240 | ||
Non-Current loan due from group undertaking | 403 | 403 | |
Transfer from current intercompany receivable | 462 | - | |
Increase in loan to group undertaking | 1,182 | - | |
Interest on loan | 81 | - | |
Provision against the loan balance outstanding | (2,128) | - | |
A | 2,440 | 4,643 | |
Investments in Group undertakings are recorded at cost, which is the fair value of the consideration paid.
Details of Subsidiary Undertakings are as follows:
Name of subsidiary | Country of incorporation | Parent company | Registered capital | Proportion of share capital held | Nature of business | |
Inspirit Energy Limited | England and Wales | Inspirit Energy Holdings Plc | Ordinary shares £15,230 | 100% | Product development | |
Somemore Limited | England and Wales | Inspirit Energy Limited | Ordinary shares £1 | 100% | Dormant |
16 | INVENTORIES | ||||
GROUP | COMPANY | ||||
2015 | 2014 | 2015 | 2014 | ||
£'000 | £'000 | £'000 | £'000 | ||
Work in progress | 5 | 5 | - | - | |
The Directors consider that the carrying amount of inventories is approximately equal to their fair value.
17 | TRADE AND OTHER RECEIVABLES | ||||
GROUP | COMPANY | ||||
2015 | 2014 | 2015 | 2014 | ||
£'000 | £'000 | £'000 | £'000 | ||
Amounts due from group undertakings | - | - | - | 462 | |
Corporation tax | 291 | 84 | - | - | |
VAT recoverable | 125 | 41 | 5 | 3 | |
Other receivables | - | 42 | - | 41 | |
Unpaid share capital | 18 | 1,025 | 18 | 1,025 | |
Prepayments and accrued income | 13 | 12 | 9 | 8 | |
447 | 1,204 | 32 | 1,539 | ||
Other receivables amounting to £nil (2014: £18,000) include amounts due from related parties made on normal market terms. The Directors consider that the carrying amount of short term loans and other receivables is approximately equal to their fair value.
The unpaid share capital was received post year end.
18 | CASH AND CASH EQUIVALENTS | ||||
GROUP | COMPANY | ||||
2015 | 2014 | 2015 | 2014 | ||
£'000 | £'000 | £'000 | £'000 | ||
Cash and cash equivalents | 1 | 67 | 1 | 59 | |
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.
All of the Group and Company's cash and cash equivalents are held with institutions with an AA credit rating.
19 | SHARE CAPITAL AND SHARE PREMIUM |
| |||||||
Number of ordinary shares | Number of deferred shares | · Ordinary shares | · Deferred shares | Share premium | Total | ||||
£ | £ | £ | £ | ||||||
At 1 July 2013 | 73,139,505 | 400,932 | 73,139 | 396,923 | 4,011,515 | 4,482,798 | |||
Issue of new shares on acquisition* | 350,000,000 | - | 350,000 | - | 3,150,000 | 3,500,000 | |||
Issue of new shares | 154,110,886 | - | 154,111 | - | 2,152,889 | 2,307,000 | |||
Share based payments | 60,088,753 | - | 60,089 | - | 735,061 | 795,150 | |||
Share warrants exercised | 7,000,000 | - | 7,000 | - | 58,800 | 65,800 | |||
Conversion of convertible loans | 10,000,000 | - | 10,000 | - | 40,000 | 50,000 | |||
Share conversion from "B" to "A" shares | 1,221,200 | - | 1,221 | - | - | - | |||
Share issue costs | - | - | - | - | (52,500) | (52,500) | |||
At 30 June 2014 | 655,560,344 | 400,932 | 655,560 | 396,923 | 10,095,765 | 11,148,248 | |||
Issue of new shares | 38,888,889 | - | 38,889 | - | 311,111 | 350,000 | |||
Issue costs | - | - | - | - | (26,880) | (26,880) | |||
Share based payments | 6,698,056 | - | 6,698 | 75,234 | 81,932 | ||||
At 30 June 2015 | 701,147,289 | 400,932 | 701,147 | 396,923 | 10,455,230 | 11,553,300 | |||
\* This amount has been included in the Share premium for the Company financial statements. This has been disclosed separately within the Merger Reserve for the Group financial statements. As at 1 July 2013 there were 1,221,200 B ordinary shares. These were converted into ordinary shares on 8 June 2013. The deferred shares have no voting rights. On 18 September 2014 the Company issued 3,398,056 new ordinary shares of 0.1p each at a price of 1p per share in settlement of outstanding fees. On 10 February 2015 the Company issued 38,888,889 new ordinary shares of 0.1p each at a price of 0.9p per share raising a total of £350,000 before costs as part of a private placing. On 2 April 2015 the Company issued 3,300,000 new ordinary shares of 0.1p each at a price of 1p per share in settlement of outstanding fees. |
20 | SHARE BASED PAYMENTS | |||||||||
Share options and warrants are granted to selected Directors and third party service providers. Share options and warrants outstanding at the end of the year have the following expiry dates and exercisable prices: | ||||||||||
Weighted Average Exercise Price 2015 | Options and warrants | Weighted Average Exercise Price 2014 | Options and warrants | |||||||
At 1 July | 0.0566 | 15,646,620 | 0.2984 | 3,412,620 | ||||||
Granted | 0.0090 | 9,283,364 | 0.0100 | 20,500,000 | ||||||
Exercised | - | - | 0.0100 | (7,000,000) | ||||||
Terminated | 0.0100 | (13,500,000) | 0.2114 | (1,266,000) | ||||||
At 30 June | 0.0154 | 11,429,984 | 0.0566 | 15,646,620 | ||||||
Grant date | Expiry date | Exercise price in £ per share | Number of options and warrants | Number of options and warrants | ||||||
2015 | 2014 | |||||||||
26 April 2011 | 25 April 2021 | 0.0488 | 1,500,000 | 1,500,000 | ||||||
13 Sept 2012 | 12 Sept 2015 | 0.0300 | 646,620 | 646,620 | ||||||
26 July 2013 | 25 July 2014 | 0.0100 | - | 13,500,000 | ||||||
30 April 2015 | 29 April 2018 | 0.0090 | 9,283,364 | - | ||||||
0.0566 | 11,429,984 | 15,646,620 | ||||||||
| ||||||||||
The total weighted average contractual life of the outstanding options and warrants at 30 June 2015 was 3.07 years (2014: 0.72 years). On 30 April 2015 the Company issued 9,283,364 warrants exercisable at 0.9p per share for a period of 3 years from the date of issue. These warrants were issued in connection with a short term loan facility and the resultant fair value charge to the profit and loss account of £15,000 has been recognised in finance costs (see note 23). The fair value of the share options and warrants were determined using the Black Scholes valuation model. The parameters used are detailed below: | ||||||||||
2015 | 2014 | |||||||||
Warrants | Options | |||||||||
Date of grant | 30 April 2015 | 26 July 2013 | ||||||||
Shares and warrants under option | 9,283,364 | 20,500,000 | ||||||||
Option life (years) | 3 | 1 | ||||||||
Share price (pence per share) at grant date | 0.65 | 1.15 | ||||||||
Risk free rate | 2.00% | 2.50% | ||||||||
Expected volatility | 50% | 0% | ||||||||
Expected dividend yield | Nil | Nil | ||||||||
Fair value per option granted (pence per share) | 0.162 | 0.270 | ||||||||
Exercise price (pence per share) | 0.900 | 1.000 | ||||||||
In respect of the warrants issued in April 2015 the volatility is based on the approximate average volatility of similar AIM quoted stocks. The risk free rate of return is based on zero yield government bonds for a term consistent with the option life. Based on materiality, the total fair value of the options and warrants granted in the year has resulted in a charge to the Statement of Comprehensive Income for the year to 30 June 2015 of £15,000 (2014: £nil).
| |||||
21 | OTHER RESERVES | ||||
Share option reserve | Merger reserve | Reverse acquisition reserve | Total | ||
£'000 | £'000 | £'000 | £'000 | ||
1 July 2013 | 23 | - | - | 23 | |
Cancellation of warrants | (23) | (23) | |||
Reverse acquisition | 110 | 3,150 | (7,361) | (4,101) | |
30 June 2014 | 110 | 3,150 | (7,361) | (4,101) | |
Issue of warrants | 15 | - | - | 15 | |
30 June 2015 | 125 | 3,150 | (7,361) | (4,086) | |
22 | TRADE AND OTHER PAYABLES | |||||
GROUP | COMPANY | |||||
2015 | 2014 | 2015 | 2014 | |||
£'000 | £'000 | £'000 | £'000 | |||
Trade payables | 270 | 65 | 104 | 53 | ||
Other payables | 11 | 62 | 11 | 8 | ||
Amount due to related parties | 9 | 9 | ||||
Social security and other taxes | 23 | 32 | 15 | 12 | ||
Accrued expenses | 66 | 82 | 64 | 81 | ||
370 | 250 | 194 | 163 | |||
The Directors consider that the carrying amount of trade payables approximates to their fair value.
The Company entered into an unsecured loan facility on 28 June 2013 with Global Investments Strategy UK Limited ("GIS") for an aggregate maximum amount of £350,000. Amounts may be drawn down at the discretion of the Company. Interest is payable on any drawdown at 5 per cent above the base rate of HSBC Bank plc. Any amount drawn down under the loan facility shall be repayable 18 months from the date of the loan facility. No amounts had been drawn down under this facility as at 30 June 2014.
On 4 September 2013, the Company approved the settlement of all existing debt held with GIS and Mr J Gunn (Executive Director) through the issue of new shares. Total debt and accrued interest of £706,680 (including the liabilities of subsidiary Inspirit Energy Limited) was satisfied by the allotment of 54,360,019 new ordinary shares in the Company at a conversion price of 1.3 pence each.
23 | BORROWINGS | ||||
GROUP | COMPANY | ||||
2015 | 2014 | 2015 | 2014 | ||
£'000 | £'000 | £'000 | £'000 | ||
Current |
| ||||
Drawdown facility | 211 | - | 211 | - | |
Related party short term loans | 109 | - | 109 | - | |
320 | - | 320 | - | ||
The Drawdown facility relates to the facility entered into during the year with YA Global Master SPV Limited, showing the remaining balance outstanding at the year end. The facility is unsecured and carries an implied interest rate of 10 per cent per annum, repayable in 12 equal monthly instalments.
On 30 April 2015 the Company issued warrants to subscribe for 9,283,364 new ordinary shares as part of the unsecured $3,000,000 Debt facility arrangement with YA Global Master SPV Limited. The issue of the warrants was triggered following the drawdown of the initial Tranche 1, being $400,000, under the terms of the agreement.
The terms of the issue of warrants are governed by the Debt Facility agreement, which specific that for every tranche drawn down, the Company is required to issue 25% of the value of the drawdown based on the interbank rate at the nearest possible date and using the average Volume Weighted Average Price ("VWAP") of the Company for the five trading days immediately prior the date of the agreement.
Based on those terms, were the Company to drawdown the remaining $2,600,000 they would be required to issue further warrants to subscribe for an estimated total of 87,929,787 new ordinary shares. This is based on the Exchange rate as at 30 June 2015 of $1 / £0.6358 and a VWAP of 0.43p.
The Directors do not expect to use the remaining facility in the foreseeable future.
Included in the Related party short term loans is an amount owing to David Lenigas, the former Chairman of £50,000. This is an unsecured short term loan facility and was provided by Mr Lenigas during the year. The implied interest rate on the loan is zero per cent.
Also included in the Related party short term loans is an amount owing to John Gunn of £9,000. This also is an unsecured short term loan facility and was provided by Mr Gunn during the year. This also has an implied interest rate of zero per cent.
All other related party transactions have been included in Note 28.
24 | BUSINESS COMBINATIONS |
In the year ended 30 June 2011 the Company acquired 17.05% of the share capital of Inspirit Energy Limited for £740,000. On 26 July 2013, the Company acquired the remaining 82.95% of the share capital and obtained control of Inspirit Energy Limited for £3,500,000. Inspirit Energy Limited is an unlisted company registered in the United Kingdom. The acquisition was in line with the Company's overall strategy as an investment company. The acquisition was treated as a reverse acquisition accounted for in accordance with IFRS 3, as set out in the accounting policies. In accordance with IFRS 3, goodwill under a reverse acquisition is calculated on the net assets of the legal parent. The goodwill of £663,000 arising from the acquisition is attributable to the value of the parent company. The Directors do not consider goodwill reflects an increase in the Group's assets and therefore have impaired the goodwill in full. The following table summarises the consideration paid for Inspirit Energy Holdings plc through the reverse acquisition and the amounts of the assets acquired and liabilities assumed at the acquisition date. |
Consideration at 26 July 2013 | £'000 | ||
Equity instruments in issue (73,139,505 ordinary shares at 1p each) | 731 | ||
S | TOTAL CONSIDERATION | 731 | |
Recognised amounts of identifiable assets acquired and liabilities assumed: | £'000 | ||
Cash and cash equivalents | - | ||
Investments | 740 | ||
Trade and other receivables | 159 | ||
Trade and other payables | (779) | ||
Borrowings | (52) | ||
TOTAL IDENTIFIED NET ASSETS | 68 | ||
GOODWILL (Note 13) | 663 | ||
In a reverse acquisition, the fair value of the consideration at the date of acquisition transferred by Inspirit Energy Limited is based on the number of equity instruments that Inspirit Energy Limited would have had to issue to the owners of Inspirit Energy Holdings plc to give the owners of Inspirit Energy Holdings Plc the same percentage of equity interests that results from the reverse acquisition. However, in the absence of a reliable valuation of Inspirit, the cost of the combination was calculated using the fair value of all the pre-acquisition issued equity instruments of Inspirit Energy Holdings plc at the date of acquisition. The fair value was based on the published price of Inspirit Energy Holdings plc shares on 26 July 2013 immediately prior to the acquisition. | |||
25 | FINANCIAL INSTRUMENTS BY CATEGORY | ||
The IAS 39 categories of financial instruments included in the Statement of Financial Position and the headings in which they are included are as follows: | |||
2015 | 2014 | ||
£'000 | £'000 | ||
FINANCIAL ASSETS - LOANS AND RECEIVABLES: | |||
Trade and other receivables (excluding prepayments) | 434 | 1,192 | |
Cash and bank balances | 1 | 67 | |
FINANCIAL LIABILITIES AT AMORTISED COST: | |||
Trade and other payables (excluding accruals) | 304 | 250 | |
Borrowings | 270 | - | |
26 | OPERATING LEASE COMMITMENTS | ||
The Group leases an office under a non-cancellable operating lease agreement. The lease term is for one year and the lease agreement is renewable at the end of the lease period at market rate. The future aggregate minimum lease payments under non-cancellable operating lease are as follows: | |||
2015 | 2014 | ||
£'000 | £'000 | ||
GROUP: | |||
No later than 1 year | 26 | 36 | |
27 | ULTIMATE CONTROLLING PARTY | |
| At the date of signing this report the Directors do not consider there to be one single ultimate controlling party. | |
28 | RELATED PARTY TRANSACTIONS | |
All intra group transactions are eliminated on consolidation. The remaining transactions are as follows: Global Investment Strategy (UK) Limited Mr J Gunn is a Shareholder and Director of Global Investment Strategy (UK) Limited ("GIS"). The Company entered into an unsecured loan facility on 28 June 2013 with GIS for an aggregate maximum amount of £350,000. Amounts may be drawn down at the discretion of the Company. Interest is payable on any drawdown at 5 per cent above the base rate of HSBC Bank plc. Any amount drawn down under the loan facility shall be repayable 18 months from the date of the loan facility. No amounts were drawn down under this facility in the year to 30 June 2015 (2014: £nil). GIS hold a fixed and floating charge over all the assets of the Company. In December 2014 GIS provided the Company with a short term loan of £50,000. This loan came under the charge GIS holds over the assets of the Company and was repayable on demand, with interest accruing at a rate of zero per cent p.a. The loan was converted into shares at the time of the placing by the Company on 17 July 2015. | ||
Other related parties On 28 June 2013, the Company entered into a Discretionary Drawdown Facility ("DDF") with Mr D Lenigas, the former non-executive Chairman, which provided the Company with an equity facility up to a maximum aggregate limit of £70,000. The facility was available for drawdown at any time during the year, and for any specified amount at the Company's discretion, up to 17 May 2015. Mr D Lenigas was entitled to commission at 6.0% of any amount received by the Company in accordance with the terms of the facility. In May 2015 the DDF lapsed. No amounts were drawn down on the DDF during the period (2014: £nil). During the year, Montpelier Law Ltd, a company in which former Director, J Nazhat is a Director, charged corporate services fees of £20,333 (2014: £37,000). The amount owed to Montpelier Law Ltd at the year end is £nil (2014: £4,000). During the year, NKJ Associates Ltd, a company in which N Jagatia is a Director, charged consultancy fees of £31,000 (2014: £14,000). The amount owed to NKJ Associates Ltd at year end is £nil (2014: £2,000). |
| |
29 | EVENTS AFTER THE REPORTING DATE |
|
On 17 July 2015 the Company issued 77,659,570 new ordinary shares of 0.1p each, at a price of 0.47p each, as part of a private placing, raising £365,000 before expenses. On 17 December 2015, the Company's operating subsidiary, Inspirit Energy Limited, completed internal operational testing on its 'Inspirit Charger' product. On 21 December 2015, David Lenigas, resigned as Chairman and Director of the Company. |
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