ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
Amala Foods PLC
Annual Financial Report
2024
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
COMPANY INFORMATION
Directors | Aidan Bishop | Executive Director |
Jonathan Morley-Kirk | Non-executive Chairman | |
Celia Li | Non-executive Director | |
Company Secretary | Liga Cirite | |
Registered office of the Company | ||
Independent Auditor | PKF Littlejohn LLP | |
15 Westferry Circus | ||
Canary Wharf | ||
London E14 4HD | ||
Bankers | eWealthGlobal Group Limited | |
17 Broad St | ||
St Helier | ||
Jersey JE2 3RR |
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
CONTENTS
Directors and Governance
Chairman’s Report | 3 |
Report of the Directors | 4 |
Strategic Report | 9 |
Accounts
Independent Auditor’s Report to the Members of Amala Foods PLC | 10 |
Statement of Comprehensive Income | 13 |
Statement of Financial Position | 14 |
Statement of Changes in Equity | 15 |
Cash Flow Statement | 16 |
Notes to the Accounts | 17 |
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
CHAIRMAN’S REPORT
The Company is a cash shell and, as such, is seeking to identify a transaction that will lead to a reverse takeover.
The Directors have actively sought to identify new opportunities for the Company with a view to identifying and completing a successful transaction resulting in a reverse takeover. The Company initially announced on 9 November 2023 a potential transaction with a healthcare group, Healthcare Medical Plus Pte, which has several Philippine subsidiaries. As a result, the shares were suspended from trading and remain suspended pending the outcome of the potential transaction. The Company provided further updates to the market both during and after the period stating that the potential transaction continued to progress and that a regulatory process with the Financial Conduct Authority (FCA) is in process. Whilst there can be no guarantee that the transaction will result in a successful outcome, the Board remain optimistic of a successful conclusion.
The Directors have continued to neither receive nor accrue any remuneration for the year until a successful transaction reaches the stage of a reverse takeover, upon which £125,000 will be issued to the Directors in equity at the readmission price.
It is my sincere hope that the current regulatory process that is underway and is progressing will result in a successful outcome after a challenging couple of years.
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
REPORT OF THE DIRECTORS
The Directors present the report together with the audited accounts of the Company for the year ended 31 March 2024.
The Company
Amala Foods Plc is registered (registered number 121041) and domiciled in Jersey. It was incorporated on 11 April 2016.
Principal Activity and Business Review
The Company’s principal activity during the year ended 31 March 2024 was that of identifying potential companies, businesses or asset(s) for acquisition. The Directors are actively seeking new opportunities that will lead to a reverse takeover.
Results and Dividends
The results of the Company for the year ended 31 March 2024 show a loss before taxation of £424,617 (31 March 2023: £440,076).
During the year, the company wrote off the advance receivable from Terra Rara (UK) Limited amounting to £101,189 following management’s assessment that this would not be recoverable.
The Directors do not recommend payment of a dividend for the year ended 31 March 2024 (31 March 2023: nil). Key performance indicators have been discussed in the strategic report on page 10.
Sustainability Information Statement
The board of directors is aware of the requirement to include details of the Company’s compliance with the 4 key pillars of the Taskforce on Climate-related Financial Disclosures’ (TCFD) recommendations from January 2022:
• | Governance- disclose the organisation’s governance around climate-related risks and opportunities | |
• | Strategy- disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning where such information is material | |
• | Risk Management- disclose how the organisation identifies, assesses and manages climate-related risks | |
• | Metrics and Targets-disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. |
The directors note that for the years ended 31 March 2024 and 31 March 2023, the company is not in compliance with TCFD as it has limited climate related risks due to being a shell company with no active operations yet. The company intends to actively monitor the situation and will devise strategies when the status of the entity changes in the near future.
Future Developments
The Company’s future developments are outlined in the strategic report section.
Going Concern
On 22 September 2023, the Company entered into an Amendment and Restatement of the Deed of Standstill with Riverfort Global Opportunities PCC Limited (“Riverfort”) to reprofile outstanding debt to an amount of £707,569 (amended further after year end to £707,719), that would convert to shares at the re-admission price upon a Reverse Takeover and that no interest will accrue and all existing warrants will be cancelled upon a Reverse Takeover(amended further after year end to have all existing warrants cancelled with effect from 22 September 2023).
The Company raised £405,000 in Convertible Loan Notes in the prior year that would largely be used to fund a transaction leading to a Reverse Takeover. These Convertible Loan Notes are automatically converted into shares upon a Reverse Takeover. However, given that the repayment dates for these Convertible Loan Notes have passed, the holders of the convertible loan notes may call upon cash payments should there be no Reverse Takeover.
Having prepared and reviewed the cashflow forecasts, the Directors have ascertained that the due dates of repayment of the Convertible Loan Notes of £405,000 are passed due and so they could be called-in to be paid in cash in the next 12 months. The Directors are confident that should the convertible loan notes, in part or in full, require repayment then they would be able to raise sufficient funds to be able to make such repayments whilst still funding the Company’s forecasted expenditure. They are also confident of a transaction occurring and therefore the share conversion option of the convertibles presenting the best value opportunity to holders. The Company is undertaking a reverse takeover process with Healthcare Medical Plus Pte,
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
however, as completion of a reverse takeover by the required dates and thus avoiding cash repayment of the convertible loan notes is not guaranteed and given the requirement to raise further funds in such an event during the next 12 months, they acknowledge that a material uncertainty relating to going concern exists.
The accounts have therefore been prepared on a going concern basis. The auditors make reference to going concern by way of a material uncertainty within their audit report.
Principal Risks and Uncertainties
The principal business risks that have been identified are as below.
Transaction Risk
There is no guarantee that the potential transaction with Healthcare Medical Plus Pte Ltd will result in a reverse takeover. Even if a transaction is successful, there is no guarantee that the Directors will be successful in managing the new business and derive the value that is hoped. Should a transaction not be completed, then the Directors will need to invest further time and resources in identifying another suitable target company and raise further funds.
Funding Risk
The Company has not yet achieved profitability and is therefore reliant on periodically raising finance to fund its expenditure. There can be no guarantees that additional capital will be available when required. The company has not raised any additional funding during the year ended 31 March 2024. Further capital may be required prior to achieving a reverse takeover and there is no guarantee that further capital will be available when required or that further capital will be available to fund an enlarged group after the completion of a transaction. The Directors have taken steps to conserve cash including not receiving any remuneration until there is a successful reverse takeover.
Key Personnel Risk
The Company is dependent on the experience and abilities of its Directors. Whilst the Company does not expect any of the Directors to leave the Company, if such individuals were to leave the Company, and the Company was unable to attract suitable experienced personnel, it could have a negative impact on the future prospects of the Company. The Directors are confident that in the event a Director left the Company a suitable replacement could be quickly identified.
Corporate Governance
The Company is registered in Jersey. There is no applicable regime of corporate governance to which the directors of a Jersey company must adhere over and above the general fiduciary duties and duties of care, skill and diligence imposed on such directors under Jersey law. As a Jersey company and a company with a Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code. The Directors have responsibility for the overall corporate governance of the Company and recognise the need for appropriate standards of behaviour and accountability.
The Directors are committed to the principles underlying best practice in corporate governance and have regard to certain principles outlined in the UK Corporate Governance Code to the extent they are considered appropriate for the Company given its size, early stage of operations and complexities. The directors will reconsider this position on a successful completion of a reverse take over.
Internal Control
The Directors acknowledge they are responsible for the Company’s system of internal control and for reviewing the effectiveness of these systems. The risk management process and systems of internal control are designed to manage rather than eliminate the risk of the Company failing to achieve its strategic objectives. It should be recognised that such systems can only provide reasonable and not absolute assurance against material misstatement or loss. The Company has well established procedures which are considered adequate given the size of the business. The Company is at an early stage in its development and directors and senior management are directly involved in approving all significant investment and expenditure decisions.
Audit Committee
The Company has established an Audit Committee with delegated duties and responsibilities. The Audit Committee is responsible, amongst other things, for making recommendations to the Board on the appointment of auditors and the audit fee, monitoring and reviewing the integrity of the Company's accounts and any formal announcements on the Company’s financial performance as well as reports from the Company’s auditors on those accounts. The Audit Committee includes only Jonathan Morley-Kirk, which the Board has deemed reasonable for the time being but will be expanded once growth is achieved.
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
Events after the Reporting Period
Refer to Note 19 to the audited financial statements.
Company Directors (served during the year)
Appointment | Audit | Remuneration | ||
Position | Date | Committee | Committee | |
Jonathan Morley-Kirk | Non-Executive Chairman | 16 April 2016 | ✔ | ✔ |
Aidan Bishop | Executive Director | 16 April 2016 | ✔ | — |
Celia Li | Non-Executive Director | 17 March 2023 | — | ✔ |
Role of the Board
The Board sets the Company's strategy, ensuring that the necessary resources are in place to achieve the agreed strategic priorities, and reviews management and financial performance. It is accountable to shareholders for the creation and delivery of strong, sustainable financial performance and monitoring the Company's affairs within a framework of controls which enable risk to be assessed and managed effectively. The Board also has responsibility for setting the Company's core values and standards of business conduct and for ensuring that these, together with the Company's obligations to its stakeholders, are widely understood throughout the Company.
Directors Remuneration
The remuneration of the Executive Director is fixed by the Remuneration Committee, which comprises of the Non-Executive Directors. The Remuneration Committee is responsible for reviewing and determining the Company policy on executive remuneration and the allocation of long-term incentives to executives and employees. The remuneration of Non-Executive Directors is determined by the Board. In setting remuneration levels, the Company seeks to provide appropriate reward for the skill and time commitment required in order to retain the right caliber of Directors at an appropriate cost to the Company.
The directors did not receive any remuneration in the form of share-based payments, post - employment benefits, termination benefits or other long-term benefits in the year ended 31 March 2024 (31 March 2023: nil). The Directors have agreed to not receive any remuneration due for the period prior to and during the suspension of the listing and until a transaction is completed that leads to a reverse takeover - these amounts relate to the £125,000 payable to Directors from 31 March 2023 is to be issued in equity at the readmission price, which is contingent on the successful reverse takeover.
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Executive Directors | ||
Aidan Bishop | — | 100,000 |
Non-executive Directors | ||
Jonathan Morley-Kirk | — | 25,000 |
Celia Li | — | — |
Total Remuneration | — | 125,000 |
Monza Capital Ventures Limited, which is associated with Aidan Bishop, held 55,018,687 shares in the Company at 31 March 2024 and 31 March 2023 (representing 11.78% and 12.40% ownership of the Company at 31 March 2024 and 31 March 2023, respectively). Jonathan Morley-Kirk held no shares in the Company at 31 March 2024 and 31 March 2023.
Share Capital
At 31 March 2024 the issued share capital of the Company stood at 466,920,137 (31 March 2023: 443,620,823) - with debt converted to 23,299,314 new shares having been issued during the period (refer to Note 16).
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
Substantial Shareholders
At 31 March 2024, the following had notified the Company of disclosable interests in 5% or more of the nominal value of the Company’s shares.
Number | % | |
Fiske Nominees Limited* | 114,592,082 | 24.54% |
Hargreaves Lansdowne (Nominees) Limited | 101,633,220 | 21.77% |
Interactive Investor Services Nominees Limited | 39,100,001 | 8.37% |
HSDL Nominees Limited | 38,611,379 | 8.27% |
*Includes 55,018,687 shares held by Monza Capital Ventures Limited, which is associated with Aidan Bishop. Monza Capital Ventures Limited continued to hold 55,018,687 shares at the date of this Annual Report.
Employees
The Company has a policy of equal opportunities throughout the organisation and is proud of its culture of diversity and tolerance.
Disclosure of Information to Auditor
So far as the Directors are aware, there is no relevant audit information of which the company’s auditor is unaware; and each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.
The Directors confirm to the best of their knowledge that:
• | the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; |
• | the strategic report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face; and |
• | the annual report and accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy. |
Auditor Appointment
The Company’s auditor, PKF Littlejohn LLP, was initially appointed on 23 March 2020. It is proposed by the Board that they be reappointed as auditors at the forthcoming AGM. The auditors have expressed their willingness to continue in office.
Diversity and Inclusion
The Board consists of one executive director who is male and two non-executive directors, one male and one female. The female member of the Board is from a minority ethnic background. As a shell company, it is prudent for the Board to remain small in number. In the event of a successful reverse takeover the composition of the Board is likely to change.
Statement of Directors Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws and regulations.
Companies (Jersey) Law 1991 requires the Directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the financial statements in accordance with the UK-adopted International Accounting Standards (“UK-adopted IAS”).
International Accounting Standard 1 requires that financial statements present fairly for each financial year the Company’s financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board’s ‘Framework for the preparation and presentation of financial statements. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable International Financial Reporting Standards. However, directors are also required to;
• | properly select and apply accounting policies; |
• | present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; |
• | make judgements and accounting estimates that are reasonable and prudent; |
• | provide additional disclosures when compliance with the specific requirements in UK-adopted IAS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance; |
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
• | state that the Company has complied with UK-adopted IAS, subject to any material departures disclosed and explained in the accounts; and |
• | prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business. |
The Directors are also required to prepare accounts in accordance with the rules of the London Stock Exchange for companies trading securities on the Stock Exchange.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the company, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of accounts. The Directors are committed to ensure effective anti-corruption and anti-bribery policies are observed.
Financial information is published on the Company's website. The maintenance and integrity of this website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may occur to the accounts after they are initially presented on the website.
Legislation in Jersey governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.
Directors’ Responsibility Statement
We confirm to the best of our knowledge:
• | The Company’s accounts have been prepared in accordance with UK-adopted IAS and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company. |
• | The annual report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that they face. |
This Directors' Report was approved by the Board of Directors on 30 August 2024 and is signed on its behalf.
By Order of the Board
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
STRATEGIC REPORT
The Company was mainly focused on identifying a transaction that would lead to a reverse takeover. The Company has identified a potential transaction with a healthcare group, Healthcare Medical Plus Pte Ltd that has subsidiaries in the Philippines. The Company commenced a regulatory process during the year with the Financial Conduct Authority (FCA) with a view to concluding a successful reverse takeover.
The Directors consider the Company to be a cash shell company under the Listing Rules 5.6.5A R.
Key Performance Indicators
The Company is solely focused on the successful completion of a reverse takeover process with Healthcare Medical Plus Pte Ltd. There are no KPIs that the company has set to achieve aside of completing a reverse takeover process.
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AMALA FOODS PLC
Opinion
We have audited the financial statements of Amala Foods Plc (the ‘company') for the year ended 31 March 2024 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards.
In our opinion, the financial statements:
• | give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its loss for the year then ended; | |
• | have been properly prepared in accordance with UK-adopted international accounting standards; and | |
• | have been properly prepared in accordance with the requirements of the Companies (Jersey) Law 1991. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2.3 in the financial statements, which indicates that the company incurred a net loss of £424,617 and is in a net current liability position of £1,241,223 as at 31 March 2024. The directors have acknowledged that the repayment dates for the Convertible Loan Notes (CLN) of £405,000 raised in 2023 are now passed due and could be calledin by the holders. The directors have ascertained that further finance will need to be raised should the Convertible Loan Notes (CLNs) be required to be repaid in cash within the next 12 months. As stated in note 2.3, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included:
• | obtaining the director's going concern assessment and evaluating the appropriateness of this assessments; | |
• | obtaining cashflow forecasts and/or budgets for at least a 12-month period from the anticipated approval of the financial statements, ascertaining the key assumptions in the preparing of this forecast/budget and assessing the reasonableness of such assumptions; | |
• | comparing previous forecasts/budgets to performance to assess the reliability of such forecasts/budgets; | |
• | discussing with management to ascertain where they are on the RTO transaction and obtained evidence of any prospectus being submitted to the FCA and ascertained that the RTO transaction is more likely than not to be complete during the 12 months going concern period; | |
• | ascertaining the repayment dates and other terms in respect of all loans held and; | |
• | reviewing the latest post year-end management accounts and the latest bank statements to ascertain the company's post year-end performance, financial position and cash reserves. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures.
Materiality for the financial statements was set as £55,000 (2023: £45,000) based upon 5% (2023: 5%) of net liabilities. Materiality was set based on the net liabilities given the limited value of assets and the focus of the key stakeholders on the company's ability to remain a going concern.
The performance materiality was set at £41,250 (2023: £33,750), which represents 75% (2023: 75%) of the materiality for the financial statements, and the triviality threshold was set at £2,750 (2023: £2,250). These thresholds have been determined based on our accumulated knowledge of the company and the assessed risk.
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
We also agreed to report to the Audit Committee differences below the triviality threshold that we believe warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular we looked at areas involving significant accounting estimates and judgements by the directors and considered future events that are inherently uncertain, such as the carrying value of loan receivables. We also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty related to going concern section we have determined the matter described below to be the key audit matter to be communicated in our report.
Key Audit Matter | How our scope addressed this matter |
Carrying value of loan receivable | |
In the financial year ended 31 March 2022, the company advanced $125,000 (£101,189) to the acquisition target (at the time) Terra Rara UK Limited. | Our work in respect of this risk included, but was not limited to: • Evaluating and challenging management's impairment assessment, including the key assumptions and inputs; |
As the balance is overdue for repayment, there is a risk that the loan receivable may not be fully recoverable and thus materially overstated. Additionally, significant judgement is required by the directors in assessing whether expected credit losses are required to be recognised in the financial statements. | • Ensuring that the loan has been appropriately measured as at 31 March 2024 in line with IFRS 9 expected credit loss model assessment; and • Reviewing the disclosures in the financial statements including those relating to estimates and judgements used in the expected credit losses assessment. |
Note 9 in the financial statements sets out further details in respect of these balances and note 3.2 explains the judgements made by the directors in their assessment of the expected credit losses in line with IFRS 9 Financial Instruments. | Based on the audit work performed, the loan is not recoverable at 31 March 2024 as Terra Rara UK Limited was dissolved during the year. The loan receivable has been fully impaired. |
Other information
The other information comprises the information included in the annual financial report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:
• | proper accounting records have not been kept, or proper returns adequate for our audit have not been received from branches not visited by us; or | |
• | the financial statements are not in agreement with the accounting records and returns; or | |
• | we have not received all the information and explanations we require for our audit. |
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• | We obtained an understanding of the company and the sector in which it operates to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussion with management, independent research of the Companies (Jersey) Law 1991 and our accumulated knowledge and experience of the industry. | |
• | We determined the principal laws and regulations relevant to the company in this regard to be those arising from the Listing Rules and Disclosure Guidance and Transparency Rules, and the Companies (Jersey) Law 1991. | |
• | We designed our audit procedures to ensure the audit team considered whether there were any indications of noncompliance by the company with those laws and regulations. These procedures included, but were not limited to: | |
- | Discussing with management regarding compliance with laws and regulations by the company; | |
- | Reviewing board minutes; and | |
- | Reviewing Regulatory News Services announcements made. | |
• | We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that the potential for management bias was identified in relation to the assessment of the carrying value of the loan receivable. We addressed this by challenging the assumptions and judgements made by management (see the Key audit matters section of our report for further detail). | |
• | As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. | |
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with our engagement letter dated 4 June 2024. 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.
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AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
STATEMENT OF COMPREHENSIVE INCOME
For the years ended 31 March 2024 and 31 March 2023
Note | 31 Mar 2024 | 31 Mar 2023 | |
£ | £ | ||
Administrative expense | ( | ( | |
Impairment expense | 9 | ( | |
Share-based payments expense | 18 | ( | |
Operating loss | ( | ( | |
Interest and other income | |||
Loan note interest | ( | ( | |
Loss before taxation | ( | ( | |
Income tax expense | 8 | ||
Loss and total comprehensive loss for the year attributable to the owners of the company | ( | ( | |
Loss per share: Basic and diluted loss per share | 16 | ( | ( |
The accompanying accounting policies and notes form an integral part of these accounts.
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AMALAFOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
STATEMENT OF FINANCIAL POSITION
At 31 March 2024
Note | 31 Mar 2024 | 31 Mar 2023 | |
£ | £ | ||
Current assets | |||
Trade and other receivables | 10 | ||
Cash and Cash equivalents | 11 | ||
Current liabilities | |||
Trade and other payables | 13 | ( | ( |
Borrowings | 12 | ( | ( |
( | ( | ||
Net liabilities | ( | ( | |
Deficit | |||
Issued share capital | 16 | ||
Other reserves | 15 | ||
Accumulated losses | ( | ( | |
Total deficit | ( | ( | |
The accompanying accounting policies and notes form an integral part of these accounts.
These accounts were approved and signed by the Chairman.
14
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
STATEMENT OF CHANGES IN EQUITY
For the years ended 31 March 2024
Share | Other | Accumulated | Total | |
capital | reserves | losses | deficit | |
£ | £ | £ | £ | |
At 1 April 2022 | ( | ( | ||
Loss for the year | ( | ( | ||
Total comprehensive loss for the year | ( | |||
Shares to be issued waived | ( | |||
Contingent shares to be issued to Directors | ||||
Expired and cancelled options | ( | |||
Options reserve | ||||
Total transactions with owners | ( | |||
At 31 March 2023 | ( | ( | ||
Loss for the year | ( | ( | ||
Total comprehensive loss for the year | ( | |||
Issue of ordinary shares | ||||
Shares to be issued reserve | ||||
Cancelled share warrants | ( | |||
Total transactions with owners | ( | |||
At 31 March 2024 | ( | ( | ||
The accompanying accounting policies and notes form an integral part of these accounts.
15
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
CASH FLOW STATEMENT
For the years ended 31 March 2024
Note | 31 Mar 2024 | 31 Mar 2023 | |
£ | £ | ||
Cash flows from operating activities | |||
Loss before tax for the year | ( | ( | |
Adjustments for: | |||
Impairment expense | 9 | ||
Finance cost | |||
Unrealised foreign exchange gain | ( | ||
Contingent shares to be issued to Directors | |||
Share based payment expenses | |||
Movement in trade and other payables | |||
Net cash used in operating activities | ( | ( | |
Cash flows from financing activities | |||
Loan received | 12 | ||
Net cash from financing activities | |||
Net (decrease)/increase in cash at bank | ( | ||
Cash at bank at start of year | |||
Cash at bank at end of year | 11 | ||
There were significant non-cash transactions relating to the settlement of financial liabilities in the year ended 31 March 2024. The Company settled its borrowings to Riverfort amounting to £80,150 by converting the borrowings to 23,299,314 shares at £0.00344 per share (refer to Note 16). There were no non-cash transactions in the year ended 31 March 2023.
The accompanying accounting policies and notes form an integral part of these accounts.
16
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
NOTES TO THE ACCOUNTS
For the year ended 31 March 2024
1. GENERAL INFORMATION
Amala Foods Plc (‘Company’) is a public company limited by shares. It was incorporated on 11 April 2016 and is registered (registered number 121041) and domiciled in Jersey
2. BASIS OF PREPARATION AND ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS
The financial statements of the Company have been prepared in accordance with UK-adopted international accounting standards (‘UK-Adopted IASs’) and the requirements of the Companies (Jersey) Law 1991.
The financial statements have been prepared on a historical cost basis, except for certain financial instruments that are carried at amortised cost.
The preparation of financial statements in accordance with International Financial Reporting Standards (‘UK-Adopted IASs’) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a high degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3.
The financial statements are prepared in sterling (“£”), which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £, except when otherwise indicated.
2.1 | In issue and effective for years commencing on 01 April 2023 |
The International Accounting Standards Board (IASB) issued various amendments and revisions to IFRS and IFRIC interpretations. The amendments and revisions were applicable for the year ended 31 March 2024 but did not result in any material changes to the financial statements of the Company.
Of the other IFRS and IFRIC amendments, none are expected to have a material effect on the future Company financial statements.
2.2 | Standards in issue but not yet effective |
At the date of approval of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not effective:
Standard | Impact on initial application | Effective date | |
IAS 7 | Supplier Finance Arrangements | January 1, 2024 | |
IFRS 16 | Lease Liability in a Sale and Leaseback | January 1, 2024 | |
IAS 1 | Non-current Liabilities with Covenants | January 1, 2024 |
The Directors do not believe that the implementation of new standards, amended standards and interpretations issued but not yet effective and have not been early adopted early will have a material impact once implemented in future periods.
2.3 | Going concern |
The Company has the following loans, which total £1,092,569 at 31 March 2024 (31 March 2023: £1,172,719):
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Borrowings | 1,092,569 | 1,172,719 |
The Company incurred a loss of £424,617 (31 March 2023: £440,076). At 31 March 2024, the cash held was £98,794 (31 March 2023: £318,217) and the Company had current liabilities of £1,241,223 (31 March 2023: £896,762).
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
On 22 September 2023, the Company entered into an Amendment and Restatement of the Deed of Standstill with Riverfort Global Opportunities PCC Limited (“Riverfort”) to reprofile outstanding debt to an amount of £707,569 (amended further after year end to £707,719), that would convert to shares at the re-admission price upon a Reverse Takeover and that no interest will accrue and all existing warrants will be cancelled upon a Reverse Takeover(amended further after year end to have all existing warrants cancelled with effect from 22 September 2023).
The Company raised £405,000 in Convertible Loan Notes in the prior year that would largely be used to fund a transaction leading to a Reverse Takeover. These Convertible Loan Notes are automatically converted into shares upon a Reverse Takeover. However, given that the repayment dates for these Convertible Loan Notes have passed, the holders of the convertible loan notes may call upon cash payments should there be no Reverse Takeover.
Having prepared and reviewed the cashflow forecasts, the Directors have ascertained that the due dates of repayment of the Convertible Loan Notes of £405,000 are passed due and so they could be called-in to be paid in cash in the next 12 months. The Directors are confident that should the convertible loan notes, in part or in full, require repayment then they would be able to raise sufficient funds to be able to make such repayments whilst still funding the Company’s forecasted expenditure. They are also confident of a transaction occurring and therefore the share conversion option of the convertibles presenting the best value opportunity to holders. The Company is undertaking a reverse takeover process with Healthcare Medical Plus Pte, however, as completion of a reverse takeover by the required dates and thus avoiding cash repayment of the convertible loan notes is not guaranteed and given the requirement to raise further funds in such an event during the next 12 months, they acknowledge that a material uncertainty relating to going concern exists.
The accounts have therefore been prepared on a going concern basis. The auditors make reference to going concern byway of a material uncertainty within their audit report.
3. JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND SOURCES OF ESTIMATION UNCERTAINTY
Certain amounts included in the accounts involve the use of judgement and/or estimation. These are based on the management’s best knowledge of the relevant facts and circumstances, having regard to prior experience. However, judgements and estimations regarding the future are a key source of uncertainty and actual results may differ from the amounts included in the accounts. Information about judgements and estimations is contained in the accounting policies and/or other notes to the accounts. The key areas are summarised below.
3.1 | Share-based payments |
Judgement is required when determining the fair value of options and warrants issued under the scope of IFRS 2 (refer to Note 18) as a number of the inputs are subjective.
3.2 | Impairment of financial assets |
Allowance for ECLs is maintained at a level considered adequate to provide for uncollectible receivables. ECLs are unbiased probability-weighted estimates of credit losses which are determined by evaluating a range of possible outcomes and taking into account past events, current conditions and assessment of future economic conditions. The Company has used relevant historical information and loss experience to determine the probability of default of the financial assets and incorporated forward-looking information based on certain macroeconomic factors such as gross domestic product and inflation rate, including significant changes in external market indicators, which involved significant estimates and judgements.
The amounts advanced to Terra Rara (UK) Ltd have been classified as loan receivable under IFRS 9 and therefore the Directors have to consider the recoverable value of this balance by applying the expected credit loss approach. The Directors assessed that given the reverse takeover did not proceed it was unlikely that the loan would be recovered (Refer to Note 9).
3.3 | Post year-end settlement of convertible loan notes |
The convertible loan notes issued prior to 31 March 2024 are due for repayment in cash within 12 months of the approval date of these financial statements should a reverse takeover not take place by the dates noted within the underlying agreements.
Should the reverse takeover not take place by the specified dates, the Directors make a judgement that the Company would be able to settle the convertible loan notes in cash by deferring payment until such a point that they were able to raise the requisite funds.
4. ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to the years presented unless otherwise stated.
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
4.1 Income taxes
Current income tax liabilities comprise those obligations to fiscal authorities in the countries in which the Company carries out operations and where it generates its profits. They are calculated according to the tax rates and tax laws applicable to the financial period and the country to which they relate. All changes to current tax assets and liabilities are recognised as a component of the tax charge in the statement of comprehensive income.
Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amount of assets and liabilities in the consolidated accounts with their respective tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects taxes or accounting profit. Deferred tax liabilities are provided for in full.
Deferred tax assets are recognised when there is sufficient probability of utilisation. Deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.
4.2 Financial assets
Financial assets are classified as either financial assets at amortised cost, at fair value through other comprehensive income or at fair value through profit or loss depending upon the business model for managing the financial assets and the nature of the contractual cash flow characteristics of the financial asset.
A loss allowance for expected credit losses is determined for all financial assets, other than those at fair value through profit or loss (FVPL), at the end of each reporting period. The Company applies a simplified approach to measure the credit loss allowance for trade receivables using the lifetime expected credit loss provision.
The lifetime expected credit loss is evaluated for each trade receivable taking into account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of any other relevant and current observable data. The Company applies a general approach on all other receivables classified as financial assets. The general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition.
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
4.3 Financial liabilities
Financial liabilities include convertible loans and trade and other payables. In the statement of financial position these items are included within current liabilities. Financial liabilities are recognised when the Company becomes a party to the contractual agreements giving rise to the liability. Interest related charges are recognised as an expense in finance costs in the income statement unless they meet the criteria of being attributable to the funding of construction of a qualifying asset, in which case the finance costs are capitalised.
Trade and other payables and convertible loans are recognised initially at their fair value and subsequently measured at amortised costs using the effective interest rate, less settlement payments. Convertible loans issued in the year are classified as a financial liability as there is a contractual obligation to pay cash that the issuer cannot avoid, the exceptions in IAS 32.16A-D are not met and it is not a derivative.
The Company derecognises financial liabilities when the Company's obligations are discharged, cancelled or have expired.
4.4 Segmental reporting
An operating segment is a component of the Company engaged in revenue generation activity that is regularly reviewed by the Chief Operating Decision Maker (CODM) for the purposes of allocating resources and assessing financial performance. The CODM is considered to be the Board of Directors.
The Company’s operating segments are based on geographical location and determined solely as Jersey (refer to Note 5 of the audited financial statements).
4.5 Share capital and unissued share capital
Financial instruments issued by the Company are treated as equity only to the extent that they do not meet the definition of a financial liability. The Company’s ordinary shares are classified as equity and have no par value. Costs directly associated with the issue of shares are charged to share capital.
AMALAFOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
Where the Company has a contractual right to issue a fixed number of shares to settle a fixed liability it recognises unissued share capital pending the issue of shares.
Treasury shares are held by the Company at no par value and are adjusted through share capital for receipts and disbursements.
4.6 Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at reporting period end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the statement of comprehensive income.
The functional currency of the Company is GBP in the reporting period as it is the currency which most affects each company’s revenue, costs and financing. The Company’s presentation currency is the GBP.
4. 7 Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand, demand deposits and short term highly liquid investments and are measured at cost which is deemed to be fair value as they have short-term maturities
4.8 Share-based payments and valuation of share options and warrants
The calculation of the fair value of equity-settled share-based awards requires assumptions to be made regarding future events and market conditions. These assumptions include the future volatility of the Company's share price. These assumptions are then applied to a recognised valuation model in order to calculate the fair value of the awards.
Where employees, directors or advisers are rewarded using share-based payments, the fair value of the employees', directors' or advisers' services are determined by reference to the fair value of the share options/warrants awarded. Their value is appraised at the date of grant and excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). In some instances, warrants issued in association with the issue of convertible loan notes also represent share-based payments and a share-based payment charge is calculated for these instruments.
In accordance with IFRS 2, a charge is made to the statement of comprehensive income for all share-based payments including share options based upon the fair value of the instrument used. A corresponding credit is made to other reserves, in the case of options/warrants awarded to employees, directors, advisers and other consultants.
If service conditions or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options/warrants expected to vest. Non-market vesting conditions are included in assumptions of the number of options/warrants that are expected to become exercisable, and hence reflected in the sharebased payment charge.
Estimates are subsequently revised, if there is any indication that the number of share options/warrants expected to vest differs from previous estimates. No adjustment is made to the expense or share issue cost recognised in prior periods if the number of share options ultimately vest differs from previous estimates.
Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, up to the nominal value of the shares issued, are allocated to share capital.
Where share options are cancelled, this is treated as an acceleration of the vesting period of the options. The amount that otherwise would have been recognised for services received over the remainder of the vesting period is recognised immediately within the statement of comprehensive income.
All goods and services received in exchange for the grant of any share-based payment are measured at their fair value.
4.9 Earnings per share
Basic earnings per share is calculated as profit or loss attributable to equity holders of the company for the year, adjusted to exclude any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares.
4.10 Convertible loan notes
Convertible loan notes are financial instruments issued as debt that give the holder an option to convert the notes into fixed number of shares at a predetermined price. Upon issuance, the convertible loan notes are recognised as a financial liability at fair value net of transaction costs directly attributable to the issuance. The liability is subsequently measured at amortised cost using the effective interest method. Interest expense is recognised in the profit and loss account over the term of the note. Upon conversion of the loan note into shares, the carrying amount of the liability is transferred to share capital. No gain or loss is recognised on conversion. Any modifications to the terms of the convertible loan notes are assessed to determine if the modification results in derecognition or if it is accounted for as a modification of the existing liability. If the convertible
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
notes are not converted at or before maturity, they are settled in cash as per the terms of the agreement resulting in the extinguishment of the liability.
5. SEGMENTAL REPORTING
The Company’s operating segments are based on geographical location and determined solely as Jersey and given the nature of the Company and its operations during the year there is no segmental reporting to disclose other than the information already disclosed within the primary statements.
6. LOSS FOR THE YEAR BEFORE TAX
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Loss before taxation has been arrived at after charging: | ||
Auditor’s remuneration | 37,400 | 37,400 |
Directors’ remuneration* | — | 125,000 |
Share-based payments expense | — | 16,441 |
Write-off of Terra Rara UK advance receivable | 101,189 | - |
*Stock award contingent on a successful reverse takeover, upon which this will be issued in equity.
7. REMUNERATION
7.1 Remuneration of management personnel and employees
In accordance with IAS 24 - Related party transactions, all executive and non-executive directors, who are the company’s key management personnel, are those persons having authority and responsibility for planning, directing and controlling the activities of the company. Details of directors’ remuneration is outlined in the report of the directors.
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Directors’ emoluments during the year | — | 125,000 |
Total Directors emoluments | — | 125,000 |
The directors have agreed to waive the right to receive or accrue any and all outstanding remuneration or any unissued equity prior to the completion of a successful reverse takeover. The £nil and £125,000 shown in the year ended 31 March 2024 and 31 March 2023 respectively is a stock award contingent on a successful reverse takeover, upon which this will be issued in equity at the readmission price.
7.2 Average number of employees
The average number of employees during the year was made up as follows:
31 Mar 2024 | 31 Mar 2023 | |
Directors | 3 | 2 |
Average employees during the year | 3 | 2 |
AMALAFOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
8. TAXATION
The Company is taxed at the standard rate of income tax for Jersey companies which is 0% (2023: 0%). Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. There were no current and deferred tax charges for the years ended 31 March 2024 and 31 March 2023.
The tax charge for the year can be reconciled to the loss per the statement of comprehensive income as follows:
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Loss before taxation | (334,774) | (440,076) |
Jersey Corporation Tax at 0% | — | — |
Total tax charge* | — | — |
*No deferred tax asset has been recognised as Jersey having a 0% corporation tax, which means there are no unutilised tax losses.
9. EXPECTED CREDIT LOSSES
The advances made to Terra Rara UK Ltd were for costs associated with the potential reverse takeover such as for a competent persons report at its project in Uganda and Angola and due diligence report. On 23 February 2024, the directors of the company agreed to write-off the advances made to Terra Rara UK Ltd amounting to £101,189 due to the decision taken not to pursue the potential transaction.
The company’s impairment losses consist of:
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Write-off of advance receivable, net - Terra Rara UK Ltd. | 101,189 | — |
Total impairment | 101,189 | — |
10. TRADE AND OTHER RECEIVABLES
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Loan Receivables* | - | 101,189 |
Balance at end of year | — | 101,189 |
*Relates to USD 125,000 loaned to Terra Rara UK Ltd. This has been fully impaired at 31 March 2024. See Note 9 above.
11. CASH AND CASH EQUIVALENTS
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Cash at bank | 98,794 | 318,217 |
Balance at end of year | 98,794 | 318,217 |
Cash at bank is only held at substantial bank with high credit ratings.
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
12. BORROWINGS
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Borrowings | 1,092,569 | 1,172,719 |
Balance at end of year | 1,092,569 | 1,172,719 |
Included in the borrowings is £707,569 (31 March 2023: £787,719) relating to short-term loan with Riverfort to be used for working capital purposes with an interest rate of 7.5%. The repayment terms were renegotiated on 22 September 2023 to reprofile the outstanding debt on the basis that no interest will be accrued until the earlier of a successful reverse takeover or the termination of a proposed takeover or the date falling 6 months from the date of the agreement. Upon a successful take over, the debt would reduce to £690,000. However, following the lapse of the 6 months of the renegotiated terms on 23 March 2024, no successful reverse takeover had taken place at the balance sheet date. Consequently, the repayment terms were further renegotiated on 16th June 2024, to reprofile the outstanding debt to further freeze the accrual of interest effective 23 September 2023 until a successful reverse takeover at which time the debt will be reduced to £610,000. All existing warrants granted pursuant to the facility agreement were cancelled with effect from 22 September 2023.
The finance costs incurred for the borrowings amounted to £nil and £160,182 for 2024 and 2023, respectively.
13. TRADE AND OTHER PAYABLES
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Trade payables | 74,600 | 83,109 |
Accruals | 172,848 | 60,340 |
Balance at end of year | 247,448 | 143,449 |
Trade payables pertain to non-interest-bearing liabilities arising from the purchases of services from third party suppliers.
No interest is charged on the trade payables.
Accrued expenses consist mainly of accrual for audit fees which are normally settled within the year and the accrual for interest on the Convertible Loan Notes.
14. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCEDURES
The Company’s Corporate Treasury function provides services to the business, coordinates access to domestic financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk, including liquidity risk, interest rate risk, foreign currency risk and credit risk.
14.1 Financial assets at amortised cost
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Trade and other receivables | — | 101,189 |
Cash and cash equivalents | 98,794 | 318,217 |
Balance at end of year | 98,794 | 419,406 |
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
14.2 Financial liabilities at amortised cost
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Trade and other payables | 247,448 | 143,449 |
Borrowings | 1,092,569 | 1,172,719 |
Balance at end of year | 1,340,017 | 1,316,168 |
14.3 Liquidity risk
The Company monitors constantly the cash outflows from day-to-day business and monitors long-term liabilities to ensure that liquidity is maintained.
14.4 Interest rate risk
At the balance sheet date, the company does not have any long-term variable rate borrowings. The Directors do not consider the impact of possible interest rate changes based on current market conditions to be material to the net result for the year or the equity position at the year ended 31 March 2024.
14.5 Foreign currency risk
The Company is infrequently exposed to transaction foreign exchange risk due to transactions not being matched in the same currency. This is managed, where possible and material, by the Company retaining monies received in base currencies in order to pay for expected liabilities in that base currency. The Company currently has no currency hedging in place.
The Directors do not consider the impact of possible foreign exchange fluctuations to be material to the net result for the year or the equity position at the year-end for either the year ended 31 March 2024, or the year ended 31 March 2023.
14.6 Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. In order to minimise this risk, the Company endeavours only to deal with companies which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the value of the outstanding amounts as follows:
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Trade and other receivables* | — | 101,189* |
Cash and cash equivalents | 98,794 | 318,217 |
98,794 | 419,406 |
*Equates to USD 125,000
Credit risk on cash at bank is considered to be acceptable as the counterparties are substantial bank with high credit ratings. Loan receivable, net is a current asset and due within 12 months. The Company has assessed the expected credit losses is £101,189 and nil for the years ended 31 March 2024 and 31 March 2023, respectively.
The Company may consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
15. CAPITAL MANAGEMENT
For the purposes of the Company’s capital management, capital includes called-up share capital, share-based payments for options, share-based payments for warrants and equity reserves attributable to the equity holders of the Company as reflected in the statement of financial position.
The Company’s capital management objectives are to ensure that the Company’s ability to continue as a going concern, and to provide an adequate return to shareholders.
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
The Company manages the capital structure through a process of constant review and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares, adjust dividends paid to shareholders, return capital to shareholders, or seek additional debt finance.
The nature of the Company’s equity reserves are:
• | Reserves - including warrants, options and shares to be issued reserves related to the value of equity that investors have secured as part of their funding provided to the Company and that management has agreed to issue for settlement of remuneration; | |
• | Share capital - represents the nominal value of shares issued; | |
• | Unissued share capital - reflects the value of equity that management has agreed to issue for settlement of remuneration, liabilities and funding provided; and | |
• | Accumulated losses - comprise the Company’s cumulative accounting profits and losses since inception. |
15.1 Reserves
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Warrants reserve | — | 381,159 |
Shares to be issued reserve | 279,945 | 279,939 |
Balance at end of year | 279,945 | 661,098 |
16. SHARE CAPITAL
16.1 Share capital
31 Mar 2024 | 31 Mar 2023 | |||
Amount | Amount | |||
Shares* | £ | Shares* | £ | |
Opening balance | 443,620,823 | 6,488,490 | 443,620,823 | 6,488,490 |
Ordinary shares - new shares issued during the period | 23,299,314 | 80,150 | — | — |
Balance at end of year | 466,920,137 | 6,568,640 | 443,620,823 | 6,488,490 |
*Number of shares issued and fully paid
The shares have no par value. At 31 March 2024 and 31 March 2023 the Company held 19,607,383 treasury shares.
16.2 Earnings per share
31 Mar 2024 | 31 Mar 2023 | |
£ | £ | |
Basic and diluted loss per share | (0.0007) | (0.0010) |
Loss used to calculate basic and diluted earnings per share | (334,774) | (440,076) |
Weighted average number of shares used in calculating basic and diluted | ||
earnings per share | 465,767,973 | 443,620,823 |
Basic earnings per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding and shares to be issued during the year.
In 2024 and 2023, the potential ordinary shares were anti-dilutive as the Company was in a loss-making position and therefore the conversion of potential ordinary shares would serve to decrease the loss per share from continuing operations. Where potential ordinary shares are anti-dilutive, a diluted earnings per share is not calculated and is deemed to be equal to the basic earnings per share. The warrants and options noted in Note 18 could potentially dilute EPS in the future.
AMALA FOODS PLC
ANNUAL FINANCIAL REPORT: YEAR ENDED 31 MARCH 2024
17. RELATED PARTY TRANSACTIONS
Aidan Bishop agreed to subscribe for nil convertible loan notes (31 March 2023: £40,000) during the year ended 31 March 2024. For the Directors’ emoluments, please refer to Note 7.
18. SHARE OPTIONS AND WARRANTS
18.1 Share warrants
Warrants are denominated in Sterling and are issued for services provided to the Company or as part of the acquisition of a subsidiary.
In the years ended 31 March 2024 and 31 March 2023, the Company recognised no share-based payments expenses and the warrants issued on 31 March 2021 had already expired.
On 22 September 2023, all existing warrants granted pursuant to the agreement with Riverfort were cancelled (refer to Note 13).
The movement of share warrants is as follows:
No. | No. lapsed or | No. outstanding | |||
Exercise price | No. issued | exercised | re-negotiated | and exercisable | Expiry date |
Issued in the year ended 31 Mar 2021 | |||||
1.35p | 4,324,320 | — | — | 4,324,320 | 19 October 2023 |
1.10p | 5,404,400 | — | — | 5,404,400 | 19 November 2023 |
Issued in the year ended 31 Mar 2022 | |||||
1.15p | 43,478,260 | — | — | 43,478,260 | 16 July 2025 |
Transactions during the year ended 31 Mar 2024 | |||||
1.35p | — | — | (4,324,320) | (4,324,320) | 19 October 2023 |
1.10p | — | — | (5,404,400) | (5,404,400) | 19 November 2023 |
1.15p | — | — | (43,478,260) | (43,478,260) | 16 July 2025 |
Balance at end of year | 53,206,980 | — | (53,206,980) | — | |
18.2 Share options
Under the provisions of IFRS 2 a charge is recognised for those share options and awards under the share plan issued. The estimate of the fair value of the services received is measured based on the Black-Scholes model for share options granted under the executive and discretionary share option schemes.
The Company recognised a nil share-based payments charge in the year ended 31 March 2024 in respect of options issued in previous years (31 March 2023: £16,441).
Each of the options noted above has been cancelled or lapsed during the year ended 31 March 2024.
18.3 Share awards
In the year ended 31 March 2019, the Company entered into an agreement with a number of employees to issue a total of 599,156 shares at a price equal to the admission price in two years’ time should the employees still be employed by the Company.
Although due. the shares had not been issued to those employees as at 31 March 2024 and 31 March 2023 and thus the fair value of these share awards is included within other reserves.
19. EVENTS AFTER THE REPORTING PERIOD
There have been no significant events after the reporting period, up to the date of authorisation of these financial statements, that would require adjustment of, or disclosure in the financial statements.