Final Results

RNS Number : 2358B
Remote Monitored Systems PLC
09 June 2021
 

9 June 2021

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has been incorporated into UK law by the European Union (Withdrawal) Act 2018.  Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside is now considered to be in the public domain.

 

Remote Monitored Systems plc 

("Remote Monitored Systems", the "Company" or the "Group")
 

Final Results for the Year to 31 December 2020

The Company is pleased to announce its final results for the year end 31 December 2020.

Company Highlights

Financials

Growing revenues of £104k (2019: £52k)

Losses increased to £1.53m (2019: £0.59m) including share option cost (£434k) and impairment of GyroMetric (£363k)

Net cash used in continuing operations £990k (2019: £583k)

Over £6m of new capital raised net of costs

Operations

Acquisition of Pharm 2 Farm

Proposed disposal of GyroMetric

Proposed change of name to "nanosynth group plc"

Three subsidiaries: Pharm 2 Farm Ltd (development of nanoparticles for agricultural products and human nutrients); nanosynth Ltd (development of nanoparticles for advanced materials and their application in healthcare and other sectors): and Cloudveil (intelligence services and Security Risk Management).

Board

Reconfiguring and strengthening the Company's board in progress in order to facilitate the Company's new focus and direction.

 

Antony Legge, Executive Chairman commented:

"Significant progress has been made in transforming the Group and refocusing on businesses which provide good opportunities where we are able to apply the Company's reserves to best exploit those areas. To this end, the board has been largely reshaped as we continue our search for a new CEO and look to invest in our marketing capability . Building on the excellent work done to date, I am confident that we will be able to progress several positive developments in the coming months."

 

ENQUIRIES :

 

Remote Monitored Systems plc

via IFC Advisory

Antony Legge (Executive Chairman) 

 

 

 

SP Angel Corporate Finance LLP 

+44 20 3470 0470

Nominated Adviser and Joint Broker

 

Stuart Gledhill

 

Caroline Rowe

 

 

 

Peterhouse Capital Limited  

+44 20 7469 0930

Joint Broker

 

Lucy Williams

 

 

 

IFC Advisory Ltd 

+44 20 3934 6630

Graham Herring

 

Zach Cohen

 

 

 

 

 

 

 

 

CHAIRMAN'S STATEMENT

The last twelve months has been a period of major change at RMS; the Company has acquired a new subsidiary in Pharm 2 Farm Ltd ("P2F"), new shareholders, a new board, a new direction and is now proposing the disposal of its 58 per cent. subsidiary, GyroMetric Systems Ltd ("GyroMetric"), and a change of name to nanosynth group plc.  Such pace of change in an organisation is immensely challenging, however, the Company has emerged stronger than this time last year with a healthy balance sheet and many more growth opportunities ahead of it.

2020 started positively, with the Company reporting in April that unprecedented interest in Cloudveil and customer orders for GyroMetric meant that the future was brightening.  By the end of June, the potential remained strong, but the lockdown was delaying any meaningful progress.  Two months later, on 21 August, the Company announced it was in discussions to acquire P2F, a spin-out from Nottingham Trent University ("NTU"), which had responded to the COVID-19 pandemic by diverting from its original strategy of creating novel agricultural supplements using nano particles to developing enhanced personal protective equipment ("PPE") through producing an antiviral face mask.  The acquisition was approved by shareholders on 4 November 2020.

With the acquisition of P2F completing just 8 weeks before the end of RMS's financial year and now the proposed disposal of GyroMetric, the results for 2020 provide few meaningful indications for the future. 

Revenue increased to £104k in 2020 from £52k in 2019, driven mainly by sales at GyroMetric (up to £83k from £51k in 2019).  Operating costs increased to £1.26m from £0.61m in 2019, due mainly to the expense of the share options granted to directors in November 2020 and a number of one-off costs, including costs related to the P2F acquisition.  With the carrying value of GyroMetric being written off at the end year reflecting the proposed terms of its disposal, total losses before tax on continuing operations more than doubled to £1.53m from £0.59m in 2019; giving a loss per share on continuing operations of 0.18p.  However, nearly half this loss was due to the share option expenses (£434k) and the impairment on the value of GyroMetric (£363k).  As these are both non-cash items, the net cash used by continuing operations was £990k, compared to £583k in 2019, driven mainly by an increase of £358k in working capital (mainly due to advance payments on the mask machine and raw materials to make the anti-viral masks at P2F) compared to a decrease of £123k in 2019.  Through placings in April, July and December, coupled with the exercise of warrants, the Company raised over £6.0m net of costs of £0.4m.  £1.5m of the placing monies from December were not received until after the year end and hence are not included in the year-end cash balance of £3.6m.  The exercise to date in 2021 of further warrants and options have raised an additional £0.9m for the Group and, as at 7 June 2021, its consolidated bank balance stood at approximately £5.0m .

Moving into 2021, the Company responded to shareholder concerns with several board changes, including myself replacing Paul Ryan as Chairman and Richard Clarke joining as an independent non-executive director.  The challenge for the new board was severalfold; the mask machine arrived at P2F in early January and needed commissioning ahead of a formal launch of P2F's anti-viral mask under its band name "ProLarva"; initial interest in the mask needed to be converted into sales and decisions needed taking on how to best utilise the funds raised in December 2020.  To this last point, the Board commenced a strategic review, which has recently completed.  The Board was also keen to build on the innovations behind the anti-viral face mask and develop further products using the same technology, alongside the development of products for the agricultural sector, which had been the founding principle behind P2F.

The first step was to solve the production issue and avoid disappointing customers by being unable to deliver any masks.  Commissioning of the mask machine has been delayed by several months as a number of problems were identified and dealt with and the Board is confident that the machine should be fully operational by early July.  With the machine at BioCity unable to meet the anticipated demand, the Board outsourced the manufacturing of the mask to Volz Filters UK.

The price of masks has decreased significantly since the start of the COVID-19 pandemic and the differential between the Pro-Larva mask and other, non anti-pathogenic masks is now significantly greater than 12 months ago.  This combined with the impact of existing stockpiles of masks, the success of the vaccination campaign and the uncertainty over the lifting or otherwise of current lockdown restrictions has made sales challenging in the UK.  The Group has adopted a two-pronged approach to marketing the Pro-Larva mask.  The first, for areas suffering from a rise in COVID infection rates, such as India, is to position the mask as a key step in breaking the infection cycle.  However, this is only a short-term opportunity that will fade as the pandemic recedes.  The second approach is to position the mask as part of an array of enhanced personal protection equipment, providing a broad anti-pathogenic protection and so reducing the impact of infection amongst workers in in key sectors, such as healthcare.  The short-term focus will be on the dental and GP sectors, with a longer-term campaign to encourage the NHS to adopt the protection offered by the unique anti-viral layer, currently contained in the Pro-Larva mask.

However, the Pro-Larva mask is but a small element of the Group's potential.  The purpose of the strategic review undertaken by the Board was to identify other areas of opportunity and to apply the Company's cash reserves to best exploit those areas.  GyroMetric had shown potential in the discussions with offshore wind turbine manufacturers.  However, significant investment would have been required to take advantage of this and other opportunities for GyroMetric's technology and so the Board will be seeking shareholder approval at the forthcoming Annual General Meeting ("AGM") to return control of GyroMetric to its founders and reduce ongoing costs to the Group.  Cloudveil continues to show promise, although sales this year have been slowed by the merger of two of its major potential customers.  Cloudveil does not currently require any investment, although this could change if it secures some of the current contracts under discussion.  The opportunities arising from the intellectual property inside P2F are substantial.  The use of copper as a biocide in the anti-viral layer (the 'α-virion'™ layer) has led to the development of two spin-off applications.  Initial tests on the anti-viral characteristics of these new applications have been successful and the Group is now seeking partners to further develop these ideas into commercial products.  P2F is also in advanced discussions with a major global agricultural supplier for a new range of animal nutrients.

With the recognition of the importance of nano-technology to the future of the Group, the Board believes that it is now the right time to change the Group's name.  The Board proposes that the Company is renamed nanosynth group plc; and that following the disposal of GyroMetric, there will be three subsidiaries; Pharm 2 Farm Ltd (to focus on agricultural applications and the human nutrient market), nanosynth Ltd (to focus on advance materials such as the 'α-virion'™ layer and their applications in healthcare and other sectors), and Cloudveil Ltd (to focus on Intelligence Services and Security Risk Management).

As has been previously reported, the Group has begun its search for a new Chief Executive Officer.  It is expected that this search could take several months as we want to be certain of finding the right calibre of individual who will help the team best exploit the myriad of opportunities arising from its nanotechnology, but we hope that it will be complete by the time that we announce our interim results.  We are also looking to boost our marketing capabilities.  In the meantime, we are privileged to have very capable executives across the Group, who are receiving good guidance and support from the Board.  The appointment of Dr Gareth Cave and Dr Felicity Sartain as non-executive directors ensures that science remains at the heart of all Board conversations.

Lastly, I would like to thank all the Company's shareholders for their support over the last few months.  I know that many shareholders feel communication can be improved and we continue to work in that direction.  However, we also need to ensure that we are only announcing concrete news.  After the groundwork that has been carried out during the year to date, I am confident that the second half of the year will see the announcement of several positive developments at nanosynth group plc.

Antony Legge

Executive Chairman

8 June 2021

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2020

 

 

 

 

Note

2020

£

  2019

£

Revenue from contracts with customers

5

104,309

52,648

Cost of sales

 

(62,064)

(26,582)

Gross profit

 

42,245

26,066

Administrative expenses

6

(1,256,234)

(608,802)

Other operating income

 

19,841

-

Impairments

 

(363,745)

(125,983)

Operating loss

 

(1,557,893)

(708,719)

Finance costs

10

(4,085)

(3,295)

Finance income

 

39

72

Loss before income tax

 

(1,561,939)

(711,942)

Income tax

11

27,976

119,652

Loss for the year from continuing operations

 

(1,533,963)

(592,290)

Profit/(loss) for the year from discontinued operations

12

85,241

(1,029,239)

Total comprehensive income for the year

 

(1,448,722)

(1,621,529)

 

 

 

 

Loss and total comprehensive income attributable to:

 

 

 

Equity holders of the parent

 

(1,416,088)

(1,551,256)

Non-controlling interests

 

(32,634)

(70,273)

 

 

 

 

Earnings per ordinary share attributable to owners of the parent during the year (expressed in pence per share)

13

 

 

Basic and diluted - continuing operations

 

(0.18)

(0.13)

Basic and diluted - discontinued operations

 

0.01

(0.25)

Basic and diluted - total

 

(0.17)

(0.38)

 

The loss for the financial year dealt with in the financial statements of the Parent Company, Remote Monitored Systems plc, was £1,543,714 (2019 £2,348,306). As permitted by Section 408 of the Companies Act 2006, no separate statement of comprehensive income is presented in respect of the Parent Company.

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2020

 

 

 

 

Note

2020

£

  2019

£

Non-current assets

 

 

 

 

Intangible assets

 

14

1,764,419

378,345

Property, plant and equipment

 

15

25,661

10,978

Total non-current assets

 

 

1,790,080

389,323

Current Assets

 

 

 

 

Trade and other receivables

 

18

1,925,987

66,090

Corporation tax

 

 

1,396

-

Inventories

 

 

63,491

14,589

Assets classified as held for sale

 

12

-

160,275

Cash and cash equivalents

 

19

3,741,135

74,770

Total current assets

 

 

5,732,009

315,724

Total assets

 

 

7,522,089

705,047

Equity attributable to owners of the parent

 

 

 

 

Share capital

 

20

5,795,751

5,128,124

Share premium

 

20

12,445,569

6,822,694

Convertible loan stock

 

22

2,000

103,000

Other reserves

 

23

1,675,276

(475,153)

Translation reserve

 

 

92,181

92,181

Retained earnings

 

 

(13,033,293)

(11,642,051)

equity ATTRIBUTABLE TO OWNERS OF THE PARENT

 

 

6,977,484

28,795

Non-controlling interests

 

24

(80,679)

(48,045)

TOTAL EQUITY

 

 

6,896,805

(19,250)

Current liabilities

 

 

 

 

Trade and other payables

 

25

333,087

375,822

Social security and other taxes

 

 

242,322

200,775

Lease liabilities

 

26

29,500

29,500

Obligations under finance leases

 

26

-

60,825

Total current liabilities

 

 

604,909

666,922

Non-current liabilities

 

 

 

 

Lease liabilities

 

26

7,375

36,875

Provisions

 

27

13,000

20,500

Deferred tax liabilities

 

28

-

-

Total non-current liabilities

 

 

20,375

57,375

TOTAL LIABILITIES

 

 

625,284

724,297

TOTAL EQUITY AND LIABILTIES

 

 

7,522,089

705,047

       

 

 

 

 

PARENT COMPANY STATEMENT OF FINANCIAL POSITION

As at 31 December 2020

Company number: 09109008

 

 

 

 

Note

2020

£

  2019

£

Non-current assets

 

 

 

 

Property, plant and equipment

 

15

3,625

7,975

Investment in subsidiary undertakings

 

16

60,000

384,601

Trade and other receivables

 

18

428,974

118,040

Total non-current assets

 

 

492,599

510,616

Current Assets

 

 

 

 

Trade and other receivables

 

18

1,558,026

16,427

Cash and cash equivalents

 

19

3,590,521

4,784

Total current assets

 

 

5,148,547

21,211

TOTAL ASSETS

 

 

5,641,146

531,827

 

 

 

 

 

Equity attributable to shareholders

 

 

 

 

Share capital

 

20

5,795,751

5,128,124

Share premium

 

20

12,445,569

6,822,694

Convertible loan stock

 

22

2,000

103,000

Other reserves

 

23

435,275

24,846

Retained loss

 

 

(13,234,612)

(11,715,744)

Total equity

 

 

5,443,983

362,920

 

Current liabilities

 

 

 

 

Trade and other payables

 

25

197,163

168,907

Total current liabilities

 

 

197,163

168,907

TOTAL LIABILITIES

 

 

197,163

168,907

TOTAL EQUITY AND LIABILITIES

 

 

5,641,146

531,827

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

As at 31 December 2020

 

Share

Capital

£

 

Share Convertible

Premium  loan stock

£ £

Other reserves

£

Translation reserve

£

Retained

loss

£

Total

£

Non- controlling

Interests

£

Total equity

£

As at 1 January 2019

4,791,747

6,330,629

-

(298,454)

92,181

(10,247,994)

668,109

22,228

690,337

Loss and total comprehensive income for the year

-

-

-

-

-

(1,551,256)

(1,551,256)

(70,273)

(1,621,529)

Shares issued1

336,377

492,065

-

-

-

-

828,442

-

828,442

Convertible loan stock issued2

-

-

103,000

-

-

-

103,000

-

103,000

Share based payments lapsed

-

-

-

(19,500)

-

-

(19,500)

-

(19,500)

Share based payments expired

-

-

-

(157,199)

-

157,199

-

-

-

As at 31 December 2019

5,128,124

6,822,694

103,000

(475,153)

92,181

(11,642,051)

28,795

(48,045)

(19,250)

 

 

 

 

 

 

 

 

 

 

As at 1 January 2020

5,128,124

6,822,694

103,000

(475,153)

92,181

(11,642,051)

28,795

(48,045)

(19,250)

Loss and total comprehensive income for the year

-

-

-

-

-

(1,416,088)

(1,416,088)

(32,634)

(1,448,722)

Shares issued

667,627

5,612,964

(71,752)

-

-

-

6,208,839

-

6,208,839

Warrants issued

-

-

-

10,712

-

-

10,712

-

10,712

Warrants exercised

-

9,911

-

(9,911)

-

-

-

-

-

Convertible loan stock issued

-

-

4,085

-

-

-

4,085

-

4,085

Convertible loan stock redeemed

-

-

(33,333)

-

-

-

(33,333)

-

(33,333)

Share based payments arising

-

-

-

434,474

-

-

434,474

-

434,474

Share based payments expired

-

-

-

(24,846)

-

24,846

-

-

-

Merger relief on acquisition

-

-

-

1,740,000

-

-

1,740,000

-

1,740,000

As at 31 December 2020

5,795,751

12,445,569

2,000

1,675,276

92,181

(13,033,293)

6,977,484

(80,679)

6,896,805

 

1Shares issued are net of costs

 

2Convertible loan stock includes cumulative interest payable by the issue of shares

 

 

 

 

 

 

 

 

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

As at 31 December 2020

 

Share

capital

£

Share

premium

£

Convertible

loan stock

£

Other

reserves

£

Retained

loss

£

Total

£

As at 1 January 2019

4,791,747

6,330,629

-

201,545

(9,524,637)

1,799,284

Loss and total comprehensive income for the year

-

-

-

 -

(2,348,306)

(2,348,306)

Shares issued1

336,377

492,065

-

-

-

828,442

Convertible loan stock issued2

-

-

103,000

-

-

103,000

Share based payments lapsed

-

-

-

(19,500)

-

(19,500)

Share based payments expired

-

-

  (157,199)

157,199

-

As at 31 December 2019

5,128,124

6,822,694

103,000

24,846

(11,715,744)

362,920

 

 

As at 1 January 2020

5,128,124

6,822,694

103,000

24,846

(11,715,744)

362,920

Loss and total comprehensive income for the year

-

-

-

-

(1,543,714)

(1,543,714)

Shares issued1

667,627

5,612,964

(71,752)

-

-

6,208,839

Convertible loan stock issued2

-

-

4,085

-

-

4,085

Warrants issued

-

-

-

10,712

-

10,712

Warrants exercised

-

9,911

-

(9,911)

-

-

Convertible loan stock redeemed

-

-

(33,333)

-

-

(33,333)

Share based payments arising

-

-

-

434,474

-

434,474

Share based payments expired

-

-

-

(24,846)

24,846

-

As at 31 December 2020

5,795,751

12,445,569

2,000

435,275

(13,234,612)

5,443,983

 

 

1 Shares issued are net of costs

2 Convertible loan stock includes cumulative interest payable by the issue of shares.

 

 

CONSOLIDATED CASH FLOW STATEMENT

As at 31 December 2020

 

 

 

 

Note

2020

£

  2019

£

Cash Flows from Operating Activities

 

 

 

 

 

Loss for the year on continuing activities

 

 

(1,533,963)

(592,290)

Profit/(loss) for the year from discontinued operations

 

 

85,241

(1,029,239)

Depreciation of property, plant and equipment

 

 

15

6,900

161,862

Amortisation of intangible assets

 

 

14

14,600

255,182

Share based payments

 

 

 

434,474

(7,500)

Impairments

 

 

 

363,745

602,108

Non-cash directors' fees

 

 

 

-

94,958

Interest income

 

 

 

(39)

(80)

Finance costs

 

 

 

4,085

27,081

Profit on disposal

 

 

 

-

(7,608)

Taxation

 

 

 

(120,471)

(334,969)

(Increase)/decrease in inventories

 

 

 

(4,879)

3,501

(Increase)/decrease in trade and other receivables

 

 

 

(229,024)

206,821

(Decrease)/increase in provisions

 

 

 

(7,500)

20,500

Decrease in trade and other payables

 

 

 

(123,806)

(87,828)

Cash used in operations

 

 

 

(1,110,637)

(687,501)

Income taxes received

 

 

 

120,471

128,641

Interest paid

 

 

 

-

(24,081)

Net cash used in operating activities

 

 

 

(990,166)

(582,941)

Cash Flows from Investing Activities

 

 

 

 

 

Purchases of property, plant and equipment

 

 

15

(518)

(37,884)

Proceeds from sale of property, plant and equipment

 

 

-

28,374

Interest income

 

 

 

39

80

Proceeds from sale of business

 

 

 

160,275

 

Investment in subsidiaries (net of cash acquired)

 

 

 

15,592

1,617

Net cash used in investing activities

 

 

 

175,388

(7,813)

Cash Flows from Financing Activities

 

 

 

 

 

Repayment of lease liabilities

 

 

 

(29,500)

(29,500)

Repayment of borrowings

 

 

 

(60,825)

(105,841)

Issue of loan notes

 

 

 

-

100,000

Repayment of loan notes

 

 

 

(33,333)

-

Issue of shares, net of issue costs

 

 

 

4,604,801

591,484

Net cash generated from financing activities

 

 

 

4,481,143

556,143

Net increase/(decrease) in cash and cash equivalents

 

 

3,666,365

(34,611)

Cash and cash equivalents at beginning of year

 

 

 

74,770

109,381

Cash and cash equivalents at 31 December

 

 

19

3,741,135

74,770

Non-cash transactions

The principal non-cash transactions relate to:

 

 

 

 

 

 

Acquisition of subsidiary

 

 

16

1,800,000

130,000

Loan note conversion (including interest)

 

 

 

71,752

-

 

 

 

 

1,871,752

130,000

 

 

 

 

PARENT COMPANY CASH FLOW STATEMENT

As at 31 December 2020

 

 

 

 

Note

2020

£

  2019

£

Cash Flows from Operating Activities

 

 

 

 

 

Loss for the year on continuing activities

 

 

(1,543,714)

(2,348,306)

Depreciation of property, plant and equipment

 

 

15

4,350

4,350

Share based payments

 

 

 

434,474

(7,500)

Impairments

 

 

 

640,201

2,020,810

Non-cash directors' fees

 

 

 

-

94,958

Interest income

 

 

 

-

(7)

Finance costs

 

 

 

4,085

3,295

(Increase)/decrease in trade and other receivables

 

 

 

(35,449)

16,232

Increase in trade and other payables

 

 

 

53,006

11,070

Cash used in operations

 

 

 

(443,047)

(205,098)

Interest paid

 

 

 

-

(295)

Net cash used in operating activities

 

 

 

(443,047)

(205,393)

Cash Flows from Investing Activities

 

 

 

 

 

Interest income

 

 

 

-

7

Loans to subsidiary undertakings

 

 

 

(542,684)

(492,692)

Net cash used in investing activities

 

 

 

(542,684)

(492,685)

Cash Flows from Financing Activities

 

 

 

 

 

Issue of loan notes

 

 

 

-

100,000

Repayment of loan notes

 

 

 

(33,333)

-

Issue of shares, net of issue costs

 

 

 

4,604,801

591,484

Net cash generated from financing activities

 

 

 

4,571,468

691,484

Net increase/(decrease) in cash and cash equivalents

 

 

3,585,737

(6,594)

Cash and cash equivalents at beginning of year

 

 

 

4,784

11,378

Cash and cash equivalents at 31 December

 

 

19

3,590,521

4,784

Non-cash transactions

The principal non-cash transactions relate to:

 

 

 

 

 

 

Acquisition of subsidiary

 

 

16

60,000

130,000

Loan note conversion (including interest)

 

 

 

71,752

-

 

 

 

 

131,752

130,000

 

 

 

These Financial Statements were approved by the Board of Directors and authorised for issue on 8 June 2021 and were signed on its behalf by:

 

 

Antony Legge

Executive Chairman

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2020

 

1  General information

 

Remote Monitored Systems plc (the "Company") and its subsidiaries (together the "Group") conducted three main continuing activities during the year as detailed in note 5. The Company is incorporated and domiciled in the UK and its registered office is 27-28 Eastcastle Street, London W1W 8DH.

 

The Company's shares are quoted on the Alternative Investment Market ("AIM") of the London Stock Exchange plc.

 

2  Summary of accounting policies

 

The principal accounting policies applied in the preparation of these Consolidated Financial Statements are set out below. These policies have been consistently applied in the year presented, unless otherwise stated.

 

(a)  Basis of preparation

 

The Consolidated Financial Statements of Remote Monitored Systems plc (the "Group") have been prepared in accordance with International Accounting Standards ("IAS") in conformity with the requirements of the Companies Act 2006.  These accounting policies comply with each IAS that is mandatory for accounting periods ending on 31 December 2020 except for, in order to present fairly the acquisition of Pharm 2 Farm Limited, the Group has departed from the requirements within IFRS 3 relating to the value of the consideration as detailed in note 17.

 

The Financial Statements are presented in GBP (£) rounded to the nearest pound.

 

The preparation of financial statements in conformity with IAS 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 Financial Statements are disclosed in Note 4.

 

(b)  Going concern basis

 

At the date of this report the Group had net cash of approximately £5.0m.  The Directors have reviewed the Group's strategy with regard to future investment in its business.

The Directors have considered the impact of Covid-19 and are closely monitoring the situation.

 

The Group's business activities together with the factors likely to affect its future development performance and position are set out in the Strategic Report. 

 

For the year ended 31 December 2020, the Group's objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments and its exposure to credit and liquidity risk can be found in the Strategic Report and in Notes 3 and 29.

 

Based on these assumptions, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future and therefore have adopted the going concern basis of preparation in these Financial Statements.

 

(c)  New and amended standards

 

Changes in accounting policy

 

For the purpose of the preparation of these consolidated financial statements, apart from that detailed in 2(a) above the Group has applied all standards and interpretations that are effective for accounting periods beginning on or after 1 January 2020.

 

There were no new standards, amendments and interpretations effective for the first time on or after 1 January 2020 that had a material impact on the Group or parent company.

 

New standards, interpretations and amendments not yet effective

 

Standards, amendments and interpretations that have been published and will be mandatory for accounting periods beginning on or after 1 January 2021 are not expected to have a material impact on the Group's or parent company's results or shareholders' funds.

 

(d)  Basis of consolidation

Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee).

• Exposure, or rights, to variable returns from its involvement with the investee

• The ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• The contractual arrangement with the other vote holders of the investee.

• Rights arising from other contractual arrangements.

• The Group's voting rights and potential voting rights.

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. The acquisition method is used to account for the acquisition of subsidiaries.

Acquisition related costs are expensed as incurred.

The Group measures goodwill at the acquisition date as the excess of the fair value of the consideration transferred, plus the recognised amount of any non-controlling interests, less the recognised amount of the identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All intercompany transactions and balances between group entities are eliminated on consolidation.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions. Gains or losses on disposals to non-controlling interests are recorded in equity.

Where considered appropriate, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All intercompany transactions and balances between Group enterprises are eliminated on consolidation.

 

The Company's UK subsidiaries Limited use UK GAAP rules to prepare and report their financial statements. The Group reports using IFRS standards and in order to comply with the Group's reporting standards, management of these subsidiaries processed several adjustments to ensure the financial information included at a Group level complies with IFRS. These subsidiaries will continue to prepare their company financial statements in line with UK GAAP rules.

 

(e)  Segmental reporting

 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker ("CODM"). The CODM is deemed to be the Chief Executive Officer and the Chief Financial Officer.

 

Operating segments are identified on the basis of internal reports that are regularly reviewed by the CODM to allocate resources and to assess performance. Using the Group's internal management reporting as a starting point, three continuing reporting segments set out in note 5 have been identified.

 

The individual financial statements of each Group company are measured in the currency of the primary economic environment in which it operates (its functional currency) being US dollar or pounds sterling. For the purpose of the Group Financial Statements, the results and financial position are expressed in pounds sterling GBP, which is the presentation currency for the Group and Company.

 

(f)  Discontinued operations
 

A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

 

• represents a separate major line of business or geographic area of operations;

• is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or

• is a subsidiary acquired exclusively with a view to re-sale.


Discontinued operations are presented in the income statement as a separate line and are shown net of tax.  Comparative information in relation to the Consolidated Statement of Comprehensive Income has been restated to reflect this presentation.

 

Foreign currencies

 

Functional and presentation currency

 

Pounds sterling GBP is the Group's presentation currency and the parent company's functional currency.  

 

Transactions and balances

 

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At the Statement of Financial Position date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing on the Statement of Financial Position date. Exchange differences arising on the settlement of monetary items, and on the translation of monetary items at the Statement of Financial Position date, are included in the Statement of Comprehensive Income for the year.

 

Group companies

 

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

· assets and liabilities for each period end date presented are translated at the period-end closing rate;

· income and expenses for each Income Statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

· all resulting exchange differences are recognised in other comprehensive income.

 

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future, are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the Income Statement as part of the gain or loss on sale

 

(g)  Intangible assets

 

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognised directly in the Statement of Comprehensive Income.

 

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs, or groups of CGUs, that is 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 the CGU containing the goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.

 

Customer lists and intellectual property rights are shown at fair value at date of acquisition, less amortisation and impairments. Costs associated with these are recognised as an expense as incurred.

 

Development costs that are directly attributable to the design and testing of identifiable and unique products controlled by the Company are recognised as intangible assets when the following criteria are met:

 

· it is technically feasible to complete the product so that it will be available for use;

· management intends to complete the product and use or sell it;

· there is an ability to use or sell the product;

· it can be demonstrated how the product will generate probable future economic benefits;

· adequate technical, financial and other resources to complete the development and use or sell the product are available; and

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

 

The Group's Intangible assets, other than goodwill acquired on acquisition, are amortised at 20% per annum on a straight line basis. 

 

At each year end date, the Group reviews the carrying amounts of its intangible assets other than goodwill if there is an indication of impairment to determine if those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

In assessing value in use, the estimated future cash flows are discounted to their present value, using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

 

(h)  Property, plant and equipment

 

All property, plant and equipment are shown at cost less subsequent depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of 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 year in which they are incurred.

 

Depreciation is charged so as to write off the cost of assets over their useful economic lives, using the straight-line method, which is considered to be as follows:

 

· Plant and equipment  - 5 years

· Motor Vehicles  - 3 to 5 years

· Software    - 3 years

The assets' residual values and useful lives are reviewed, and, if appropriate, asset values are written down to their estimated recoverable amounts, at each Statement of Financial Position date.

 

Gains and losses on disposals are determined by comparing proceeds with the carrying amounts and are included in the Statement of Comprehensive Income.

 

(i)  Financial assets

 

The Group and Company has classified all of its financial assets as 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.

 

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. The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the Statement of Financial Position.

 

Loans and receivables are initially recognised at fair value plus transaction costs and are subsequently carried at amortised cost using the effective interest method, less provision for impairment.

 

(j)  Impairment of financial assets

 

The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. 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 and Company 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 amount of the loss 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 profit or loss.

 

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

 

If, in a subsequent year, 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 trade and other receivables credit rating), the reversal of the previously recognised impairment loss is recognised in the Statement of Comprehensive Income.

 

(k)  Trade and other receivables

 

Trade receivables are amounts due from customers for 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.

 

(l)  Cash and cash equivalents

 

In the Cash Flow Statements, cash and cash equivalents comprise cash in hand and deposits held at call with banks.

 

(m)  Share capital and reserves

 

Equity comprises the following:

 

· Share Capital represents ordinary shares issued at par value and includes "Deferred Shares" below

· Deferred Shares represents notional shares arising on the redenomination of the nominal share capital at various times.  The Deferred Shares form part of the Share Capital balance shown in the Statement of Financial Position.

· Share Premium represents the premium paid on shares issued above par value net of issue costs.

· Retained earnings represents retained profits and losses.

· Merger reserve represents the difference between the carrying value of the investment and the nominal value of the shares of subsidiaries upon consolidation under merger accounting. The merger reserve is presented in "other reserves".

· Merger relief reserve represents the difference between the nominal value of shares issued accounted under merger relief and the consideration attributed to the shares issued.

· Share option and warrants reserve represents the fair value of unexpired warrants.

· Convertible loan stock represents fair value of consideration received together with interest thereon.

Foreign Currency Translation Reserve - represents the translation differences arising from translating the financial statement items from functional currency to presentational currency

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

 

(n)  Share-based payments

 

The Group operates a number of equity-settled, share-based compensation plans, under which the entity receives goods or services from employees or third party suppliers as consideration for equity instruments of the Company. The fair value of the equity-settled share based payments are recognised as an expense in the Statement of Comprehensive Income or charged to equity depending on the nature of the services provided or instruments issued.

 

(o)  Trade and other payables

 

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.

 

(p)  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 year of the borrowings using the effective interest method.

 

(q)  Revenue recognition

 

The Group recognises revenue in accordance with IFRS 15 which includes five key steps: 

 

Step 1: Identify the contracts with a customer;  Step 2: Identify the performance obligations in the contract;  Step 3: Determine the transaction price;  Step 4: Allocate the transaction price to the performance obligations in the contract; and  Step  5: Recognise revenue when (or as) the entity satisfies a performance obligation. 

 

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity, and specific criteria have been met for each of the Group's activities, as described below: if revenue has been billed but the specific performance obligations are not met then this is recognised as deferred revenue.

 

Primarily revenues were recognised on the provision of survey services when the services were rendered to clients as per the terms of specific contracts. In the case of fixed price contracts, revenues are recognised on a percentage of completion basis. Turnover is stated net of value added tax in respect of continuing activities.

 

The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Where the Group makes sales relating to a future financial period, these are deferred and recognised under 'deferred revenue' on the Statement of Financial Position. 

 

(r)  Current and deferred income tax

 

Income tax represents tax currently payable or receivable and deferred tax.  The tax currently payable is based on taxable profit or loss for the year. Taxable profit or loss differs from the profit or loss for the year as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability or asset for current tax is calculated using tax rates that have been enacted or substantively enacted by the Statement of Financial Position date.

 

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

 

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

 

Deferred tax is calculated at the tax rates that are expected to apply in the relevant jurisdiction in the year when the liability is settled or the asset is realised. Deferred tax is charged or credited to the Consolidated Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax is not discounted.

 

Deferred tax assets and liabilities are offset where there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

 

(s)  Leases

 

Prior to 1 January 2019: Leases in which a significant portion of the risks and rewards were retained by the lessor were classified as operating leases.  Payments made under operating leases were charged to the Statement of Comprehensive Income on a straight line basis over the period of the lease.

 

Assets held under finance leases were recognised as assets of the Group at the fair value at the inception of the lease or if lower, at the present value of the minimum lease payments.  The related liability to the lessor was included in the Statement of Financial Position as a finance lease obligation.  Lease payments were apportioned between interest expenses and capital redemption of the liability.  Interest was recognised immediately in the Statement of Comprehensive Income, unless attributable to qualifying assets, in which case they were capitalised to the cost of those assets.

 

Post 1 January 2019: Assets held under leases are recognised as assets of the Group at the fair value at the inception of the lease or if lower, at the present value of the minimum lease payments.  The related liability to the lessor is included in the Statement of Financial Position as a finance lease obligation.  Lease payments are apportioned between interest expenses and capital redemption of the liability.  Interest is recognised immediately in the Statement of Comprehensive Income, unless attributable to qualifying assets, in which case they are capitalised to the cost of those assets.

 

Exemptions are applied for short life leases and low value assets, with payments made under operating leases charged to the Statement of Comprehensive Income on a straight line basis over the period of the lease.

 

3  Financial risk management

 

Group financial risk factors

 

The Group's activities expose it to a variety of financial risks. The Group's finance function monitors and manages the financial risks relating to the operations of the Group. The Group is exposed to market risks (including foreign exchange risk and price risk) and credit risk and to a very limited amount interest rate risk and liquidity risk.

 

Risk management is carried out by the Board of Directors.  The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk and credit risk, to mitigate financial risk exposures.

 

 

Market risk

 

(a)  Foreign exchange risk

The Group has closed its operations located in parts of the world whose functional currency is not the same as the Group's functional currency (GBP Sterling), therefore the foreign exchange risk is low. The Group's net assets arising from closed US operations are exposed to currency risk resulting in gains and losses on retranslation from US Dollar. Due to the minimal amount of transactions in US dollars, the Group does not consider hedging its net investments beneficial because the cash flow risk created from such hedging techniques would outweigh the risk of foreign currency exposure. It is the Group's policy to hold surplus funds over and above working capital requirements in the Parent Company. The Group considers this policy minimises any unnecessary foreign exchange exposure.

 

In order to monitor the continuing effectiveness of this policy the Board through their approval of both corporate and capital expenditure budgets, and review of the currency profile of cash balances and management accounts, considers the effectiveness of the policy on an ongoing basis.

 

(b)  Price risk

The Group is not exposed to commodity price risk as a result of its operations. The Directors will revisit the appropriateness of this policy should the Group's operations change in size or nature.

 

Credit risk

 

Credit risk arises from the Group's trade receivables. Where no independent rating of customers is available, credit control assesses the quality of customers by reference to their financial position, past experience and any other relevant factors.

 

Interest rate risk management

 

The Group is not exposed to interest rate risk on financial liabilities.

 

Liquidity risk management

 

The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

 

Capital risk management

 

The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders. The Group's capital structure primarily consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and retained losses.

 

4  Critical accounting estimates and judgements

 

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.

 

The Group makes estimates and judgements concerning the future. The resulting accounting estimates and judgements will, by definition, seldom equal the related actual results. The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are addressed below:

 

Intangible assets

Intangible assets comprise of goodwill, development costs, customer lists and Intellectual Property acquired on acquisitions and apart from goodwill are amortised as follows:

 

Development costs                20% per annum on a straight-line basis

Customer lists   20% per annum on a straight-line basis

Intellectual Property   20% per annum on a straight-line basis

 

Useful lives are based on management's estimates of the period that the assets will generate revenues with such records being periodically reviewed for continual appropriation.

 

On acquisitions the group values intangible assets excluding goodwill. 

 

The Group test annually whether goodwill has suffered any impairment, and of other intangible assets where there is an indication of impairment, in accordance with the accounting policy.  Where applicable, 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. These calculations require the use of estimates (note 14).

 

Share Options

The group issued 77,603,512 employee share options on the 9 November 2020 at a price of 1.4p per option, exercisable at any time within 5 years from issue.

 

The valuation of options used is the Black Scholes model and is detailed in Note 21. Changes to inputs and assumptions, in particular concerning the volatility of the Company's share price and the time to exercise can have a significant effect on the valuation.

 

Share options in GyroMetric Systems Limited were issued during 2019.  The fair value of the options was considered to be negligible and therefore no expense reflected in the financial statements.

 

 

5  Segmental analysis

Management considers that during 2020 there were three continuing activities as set out below.  The 'utilisation of functional nanoparticles' segment commenced during the year on the acquisition of Pharm 2 Farm Limited.  This segmental analysis is reflected in the Consolidated Group Statements set out herein.  The revenue below excludes the discontinued operations of the Geocurve business (note 12).

 

Total revenue comprises:

 

Revenue from external customers:

 

2020

£

2019

£

Developing and manufacturing digital monitoring and safeguarding systems for rotating shafts

83,591

51,012

Security and risk management consultancy

20,118

1,636

Utilisation of functional nanoparticles

600

-

 

104,309

52,648

 

Revenues are generated by geographical areas as follows:

 

2020

£

2019

£

United Kingdom

10,050

11,265

Europe

94,259

41,383

 

104,309

52,648

 

The following customers generated more than 10% of the Group's revenue:

 

2020

£

2019

£

Customer 1

69,154

41,383

Customer 2

16,418

9,629

 

85,572

51,012

 

Carrying amount of assets:

 

2020

£

2019

£

United Kingdom

7,552,089

544,332

United States of America

-

440

 

7,552,089

544,772

 

Carrying amount of liabilities:

 

2020

£

2019

£

United Kingdom

423,337

536,439

United States of America

201,947

187,858

 

625,284

724,297

 

The segmental analysis of the balance sheet is not part of routine management reporting and consequently no activity segmental analysis of assets is shown.

 

 

6  Administrative expenses

 

The following have been charged in arriving at operating loss from continuing operations:

 

2020

£

2019

£

Staff costs

341,890

320,587

Foreign exchange gains and losses

15,342

(6,738)

Depreciation

6,900

4,523

Amortisation of intangibles

14,600

14,600

Audit fees (note 9)

22,500

22,500

Share based payments expense

434,474

12,000

Other expenses

420,528

241,330

 

1,256,234

608,802

 

7  Staff costs

 

The average number of employees, including Directors, was:

 

2020

Total

 

No.

2020

Continuing operations

No.

2019

Total

 

No.

2019

Continuing

operations

No.

Directors (including subsidiaries)

12

12

12

11

Development

2

2

9

1

Administration

-

-

3

1

 

14

14

24

13

 

Employees', including Directors' costs comprise:

 

2020

Total

£

2020

Continuing operations

£

2019

Total

£

2019

Continuing operations

£

Wages, salaries and other staff costs

319,697

314,697

758,394

303,362

Share option expense

434,474

434,474

 

 

Social security costs

23,876

23,876

62,128

13,646

Pension costs

3,358

3,317

4,304

3,579

 

781,405

776,364

824,826

320,587

 

The directors were the only employees of the Company and the costs incurred by the Company are detailed in note 8.  Included in the figures below were £51,500 (2019 £55,000) paid through subsidiary companies.

 

8  Directors

 

The Directors during the year were considered to be the Key Management of the Group.

 

2020

2019

Group

Short term employee benefits

£

Pension

£

Share option expense

£

Total

£

Short term employee benefits

£

Pension

£

Total

£

Paul Ryan

48,000

-

217,237

265,237

48,000

-

48,000

Trevor Brown

54,167

-

217,237

271,404

48,000

-

48,000

Nigel Burton

(9,182)

-

-

(9,182)

48,000

-

48,000

John Richardson

85,000

1,500

-

86,500

55,000

-

55,000

 

177,985

1,500

434,474

613,959

199,000

-

199,000

 

Paul Ryan was paid his short-term employee benefits through a service company, Warande1970 BVBA.  Nigel Burton agreed to waive some of his accrued benefits on his resignation.

 

Gary Nel, former director of Geocurve Limited, was considered to be Key Management until his departure during the previous year and was paid short term employee benefits during that year of £34,808.
 

During 2019 John Richardson also received 5,000 share options in GyroMetric Systems Limited the fair value of which were considered to be negligible.

 

The share option expense is detailed further in note 21.

 

9  Auditors remuneration

 

2020

£

2019

£

Fees payable to the Company's auditor for the audit of the Group and Parent Company's Financial Statements

22,500

 

22,500

Fees payable to the Company's auditor for other services

-

-

 

 

22,500

22,500

    

 

10  Finance costs

 

2020

£

2019

£

Interest payable and other finance costs

4,085

3,295

 

11  Tax

 

2020

£

2019

£

Group

 

 

Income tax

 

 

Current tax

 

 

UK Corporation tax credit

(27,976)

(49,107)

Deferred tax 

 

 

Current year

-

(70,545)

Tax credit

(27,976)

(119,652)

    

 

The tax on the Group's loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits/(losses) of the consolidated entities as follows:

 

 

2020

£

2019

£

Group

 

 

Loss before tax

(1,561,939)

(711,942)

Tax at the applicable rate of 19.00% (2019 19.00%):

(296,768)

(135,269)

Effect of:

 

 

Expenses/income not deductible for tax purposes

78,432

26,016

Depreciation in excess of capital allowances

1,311

855

R&D tax credit

(27,976)

(49,107)

Fixed asset timing differences

2,774

(70,545)

Net tax effect of losses carried forward

214,251

108,398

Tax credit for the year

(27,976)

(119,652)

    

 

The tax rate used for 2019 is the standard rate of corporation tax in the UK.

 

The Group has tax losses of approximately £5,200,000 (2019 £4,800,000) available to carry forward against future taxable profits.  No deferred tax asset has been recognised in view of the uncertainty over the timing of future taxable profits against which the losses may be offset.

 

 

12  Discontinued operations

During December 2019 the group reached agreement to sell the fixed assets and goodwill within Geocurve Limited. At the same time, a formal plan was made to discontinue the Geocurve business.  The disposal was completed in January 2020.  The fixed assets included in the sale were sold for £160,275 and were included within 'Assets classified as held for sale' within the 2019 Consolidated Statement of Financial Position at the lower of carrying value and net realisable value.  Impairments relating to the disposal were intangible assets of £189,238 and fixed assets of £286,887 which were shown within the 2019 discontinued operations.

 

In addition, the purchaser has agreed to pay a finder's fee as a percentage of sales arising from existing customers of the Geocurve business.  These amounts will be credited to income when the respective sales are settled.

 

Results of discontinued operations were as follows:

 

2020

£

2019

£

Revenue

6,132

427,616

Cost of sales

(1,243)

(459,227)

Depreciation

-

(157,339)

Intangible amortisation

-

(240,582)

Share option credit/(expense)

-

19,500

Impairments

-

(476,125)

Other costs

(12,143)

(334,621)

Finance income

-

8

Finance costs

-

(23,786)

Income tax

92,495

215,317

 

85,241

(1,029,239)

 

Included in the Group Cash Flow Statement are the following amounts relating to discontinued operations;

 

2020

£

2019

£

Cash flow from operating activities

77,757

(240,117)

Cash flow from investing activities

(90,325)

366,953

Cash flow from financing activities

160,675

(135,341)

 

13  Earnings per share

 

Basic earnings per share has been calculated by dividing the loss attributable to equity holders of the Company after taxation by the weighted average number of shares in issue during the year. There is no difference between the basic and diluted loss per share on loss making operations.  The difference between the basic and diluted profit per share on discontinued operations for 2020 is insignificant.

 

2020

£

2019

£

Basic and Diluted

 

 

Loss after taxation - continuing operations

(1,501,329)

(522,017)

Profit/(loss) after taxation - discontinued operations

85,241

(1,029,239)

Loss after taxation - total

(1,416,088)

(1,551,256)

Weighted average number of shares

813,456,106

412,161,620

Earnings per share (pence) - continuing operations

(0.18)

(0.13)

Earnings per share (pence) - discontinued operations

0.01

(0.25)

Earnings per share (pence) - total

(0.17)

(0.38)

 

 

14  Intangible assets

 

2020

£

2019

£

Goodwill - Group

 

 

 

Cost

At 1 January

 

450,795

 

334,646

Additions (note 17)

 

1,764,419

125,983

Reclassification to held for sale assets (note 12)

 

-

(9,834)

At 31 December

 

2,215,214

450,795

Impairment

 

 

 

At 1 January

 

125,983

-

Arising during the year

 

324,812

135,817

Reclassification to held for sale assets (note 12)

 

-

(9,834)

At 31 December

 

450,795

125,983

Net book value at 31 December

 

1,764,419

324,812

 

As at the year end, management has reassessed the recoverable amount of the Goodwill relating to Pharm 2 Farm Limited based on forecast NPV calculations. Management budgeted operating margin based upon current estimated costing and its expectations of market development.  The discount rates reflect specific risks relating to the relevant operating segment. The value in use calculations and headroom is sensitive to any change in the key assumptions.  Management concluded that the goodwill is not impaired.

 

The key assumptions used for the Pharm 2 Farm value-in-use calculations were as follows:

 

Operating margin

12%

Growth rate

Specific annual estimates

Discount rate

20%

 

The goodwill of £324,812 relating to the GyroMetric Business has been fully impaired due to the current proposal by the directors for the disposal of the division as detailed in the Chairman's Statement.

 

Given the inherent uncertainty partially relating to the Covid-19 virus, management have considered that the reliability of value in use calculations for the Cloudveil business would still not be sufficiently robust.  The goodwill of £125,983 was fully impaired in 2019. 

 

 

 

 

Customer

Lists

£

Intellectual Property

£

Development Costs

£

Total

£

Other intangibles - Group

 

 

 

 

 

Cost

 

 

 

 

 

At 1 January 2019

 

 370,227

 532,867

 372,818

 1,275,912

Reclassification to held for sale assets (note 12)

 

(370,227)

(459,867)

(372,818)

(1,202,912)

At 31 December 2019

 

-

73,000

-

73,000

At 31 December 2020

 

-

73,000

-

73,000

Amortisation

 

 

 

 

 

At 1 January 2019

 

 265,919

 272,133

 249,741

 787,793

Amortisation

 

74,045

106,573

74,564

255,182

Impairment

 

30,263

100,628

48,513

179,404

Reclassification to held for sale assets (note 12)

 

(370,227)

(459,867)

(372,818)

(1,202,912)

At 31 December 2019

 

-

19,467

-

19,467

Amortisation

 

-

14,600

-

14,600

Impairment

 

-

38,933

-

38,933

At 31 December 2020

 

-

73,000

-

73,000

Net book value

 

 

 

 

 

At 31 December 2018

 

 104,308

 260,734

 123,077

 488,119

At 31 December 2019

 

-

53,533

-

53,533

At 31 December 2020

 

-

-

-

-

 

 

 

 

15  Property, Plant and Equipment

 

Right of use leasehold

£

Plant & equipment

£

 

Software

£

Motor Vehicles

£

 

Total

£

Group

 

 

 

 

 

Cost

 

 

 

 

 

At 1 January 2019

-

 685,570

 17,900

 15,031

 718,501

Reclassification of leases

95,875

-

-

-

95,875

Acquisition of subsidiary

-

4,299

-

-

4,299

Additions

-

37,884

-

-

37,884

Disposals

-

(49,984)

-

(8,000)

(57,984)

Reclassification to held for sale assets (note 12)

-

(639,632)

(4,850)

(7,031)

(651,513)

At 31 December 2019

95,875

38,137

13,050

-

 147,062

Acquisition of subsidiary

-

24,377

-

-

24,377

Additions

-

518

-

-

518

Disposals

-

(28,956)

-

-

(28,956)

At 31 December 2020

95,875

34,076

13,050

-

143,001

Accumulated depreciation

 

 

 

 

 

At 1 January 2019

-

 204,472

 1,533

 8,008

 214,013

Acquisition of subsidiary

-

1,778

-

-

1,778

Charge for the year

29,500

123,608

5,563

3,191

161,862

Disposals

-

(33,050)

-

(4,168)

(37,218)

Impairments

66,375

217,683

2,829

 

286,887

Reclassification to held for sale assets (note 12)

-

(479,357)

(4,850)

(7,031)

(491,238)

At 31 December 2019

95,875

35,134

5,075

-

136,084

Acquisition of subsidiary

-

3,312

-

-

3,312

Charge for the year

-

2,550

4,350

-

6,900

Disposals

-

(28,956)

-

-

(28,956)

At 31 December 2020

95,875

12,040

9,425

-

117,340

 

 

 

 

 

 

Net book value

 

 

 

 

 

At 31 December 2018

-

 481,098

 16,367

 7,023

 504,488

At 31 December 2019

-

3,003

7,975

-

10,978

At 31 December 2020

-

22,036

3,625

-

25,661

 

 

 

 

 

15  Property, Plant and Equipment (continued)

 

Plant &

equipment

£

Software

£

 

Total

£

Company

 

 

 

Cost

 

 

 

At 1 January 2019

4,226

13,050

17,276

Additions

-

-

-

At 31 December 2019

4,226

13,050

17,276

Additions

-

-

-

At 31 December 2020

4,226

13,050

17,276

Accumulated depreciation

 

 

 

At 1 January 2019

4,226

725

4,951

Charge for the year

-

4,350

4,350

At 31 December 2019

4,226

5,075

9,301

Charge for the year

-

4,350

4,250

At 31 December 2020

4,226

9,425

13,651

Net book value

 

 

 

At 31 December 2018

-

12,325

12,325

At 31 December 2019

-

7,975

7,975

At 31 December 2020

-

3,625

3,625

 

16  Investment in subsidiary undertakings

 

2020

£

2019

£

Company

 

 

 

 

As at 1 January

 

 

384,601

1,289,509

Additions (note 17)

 

 

60,000

130,000

Impairment

 

 

(384,601)

(1,034,908)

Cost at 31 December

 

 

60,000

384,601

 

The addition in 2020 relates to the company's acquisition of Pharm 2 Farm Ltd.  Under s615 of the Companies Act 2006, the company has elected to show the investment at the nominal cost of the shares issued.  The Fair Value of the shares issued is set out in Note 17.

 

The impairment in 2020 relates to the company's investment in GyroMetric Limited and in its US subsidiary Strat Aero International, Inc.

 

The impairment in 2019 relates to the company's investments in Geocurve Limited which held the Geocurve business that was disposed after the year end (note 12), its investment in Cloudveil Limited and a partial impairment against its investment in GyroMetric Systems Limited.

 

The following are the principal subsidiaries of the Company at 31 December 2020 and at the date of these Financial Statements.  All these were incorporated in the UK.  These subsidiaries are taking advantage in their individual financial statements of audit exemption.

Name of company

 

Registered Address

Parent company

Class of shares

Share capital held

Nature of business

GyroMetric Systems Limited

Dockholme Lock Cottage, 380 Bennett Street, Long Eaton, Nottingham

NG10 4JF, UK

Remote Monitored Systems plc

Ordinary

57.8%

Shaft Monitoring

Cloudveil Limited

52 West Street, Farnham

GU9 7DX, UK

Remote Monitored Systems plc

Ordinary

100%

Security

Geocurve Limited

27-28 Eastcastle Street, London

W1W 8DH, UK

Remote Monitored Systems plc

Ordinary

100%

Receipt of commission from former business

Pharm 2 Farm Limited

27-28 Eastcastle Street, London

W1W 8DH, UK

Remote Monitored Systems plc

Ordinary

100%

Nanoparticle applications

 

In addition to the above the company has non trading fully owned subsidiaries at 31 December 2020 as follows:

 

Incorporated and Registered in United States of America

Strat Aero International, Inc.

 

17  Acquisition of subsidiary undertakings

 

In November 2020 the entire issued share capital of Pharm 2 Farm Limited was acquired. 

 

As detailed in the share purchase agreement dated 21 August 2020 the purchase consideration was stated as £1,800,000 to be settled through the issue of 600,000,000 ordinary shares.  Due to the need for regulatory and shareholder approval the consideration shares were not issued until 5 November 2020 when control of Pharm 2 Farm Limited was obtained.  Under IFRS 3 the consideration would be based on the market value of those shares at the point of issue which would equate to £17,700,000.  Management does not believe this fairly reflects the acquisition given the volatility of the share price leading up to 5 November 2020 and have used the consideration within the agreement of £1,800,000 as a fairer reflection of the agreement.  In accordance with IFRS 3, the Company will perform a purchase price allocation within the 12 months of fully acquiring Pharm 2 Farm Limited.  Pharm 2 Farm is based in the UK and its principal activity is that of utilisation of functional nano particles.

 

 

£

Purchase consideration

 

1,800,000

Fair value of net assets acquired

 

35,581

Goodwill

 

1,764,419

 

At acquisition Pharm 2 Farm Limited had rights over intellectual property under 15 year licences signed in 2019.  Whilst management believe there is now significant intrinsic value of these licences, at the time of acquisition the estimate of timing and value of income generation was insufficiently robust for a reasonable estimate of the valuation of these rights at acquisition to be made.

 

The goodwill acquired also includes employee knowledge and expertise with regard to nano particle technology applications.

 

The fair value of net assets and liabilities arising from the acquisition were as follows:

 

 

£

Cash and cash equivalents

 

15,592

Property, plant and equipment

 

21,065

Inventories

 

44,023

Trade and other receivables

 

127,269

Trade and other payables

 

(172,368)

 

 

35,581

 

Included in the Consolidated Statement of Comprehensive Income is revenue of £600 and operating losses of £51,780 attributable to Pharm 2 Farm Limited in the post acquisition period.

 

Revenue of £52,493 and operating losses of £210,132 would have been included in the Consolidated Statement of Comprehensive Income had the acquisition been made on 1 January 2020.

 

There were no adjustments processed during the year to the fair value of the business combinations completed during the year ended 31 December 2019.

 

18  Trade and other receivables

 

2020

2019

 

Group

Company

Group

Company

 

£

£

£

£

Amounts due from group undertakings

-

430,124

-

118,040

Trade receivables

11,535

-

23,312

-

VAT receivable

68,424

23,035

8,085

5,984

Other receivables

1,813,877

1,505,000

19,889

-

Prepayments

32,151

28,841

14,804

10,443

At 31 December

1,925,987

1,987,000

66,090

134,467

Less: non-current portion

-

(428,974)

-

(118,040)

Current portion

1,925,987

1,558,026

66,090

16,427

 

Amounts due from group undertakings were impaired by £255,600 (2019 £985,514) during the year within the Company.

 

The fair value of all receivables is the same as their carrying values stated above.

 

2020

£

2019

£

Ageing of trade receivables net of provisions - Group:

 

 

Not due

630

2,160

0 - 30 days

-

16,992

Over 30 days

10,905

4,160

 

11,535

23,312

 

The carrying amount of the Group's trade receivables are all denominated in GB pounds. 

 

The maximum exposure to credit risk at the reporting date is the carrying value reported above. The Group does not hold collateral as security. Provisions totalling £20,345 (2019: £335) have been made at the year end in respect of trade receivables.

 

19  Cash and cash equivalents

 

Cash at bank is held with credit institutions with an A credit rating.  The carrying amount of the Group's cash and cash equivalents are denominated in the following currencies:

 

2020 

2019

 

Group

Company

Group

Company

 

£

£

£

£

US dollars

-

-

446

-

GB pounds

3,741,135

3,590,521

74,324

4,784

 

3,741,135

3,590,521

74,770

4,784

 

20  Share capital

 

Group and Company

2020

2019

Issued equity share capital

Number

£

Number

£

Issued andfullypaid

 

 

 

 

Ordinary shares of 0.2p each

-

-

500,656,790

1,001,313

Ordinary shares of 0.01p each

1,983,270,231

198,327

-

-

Deferred shares of 0.1p each

2,358,954,414

2,358,954

2,358,954,414

Deferred shares of 0.19p each

774,006,790

1,470,613

-

A Deferred shares of 0.001p each

17,678,567,358

1,767,857

 

 

5,795,751

 

 

Group and Company

 

Number of

deferred

shares

 

Number of ordinary

shares

 

Share capital

£

Share premium

£

Total

£

As at 1 January 2019

20,037,521,772

332,467,690

4,791,747

6,330,629

11,122,376

Issue of new shares 17 January 2019

-

53,846,154

107,692

232,308

340,000

Issue of new shares 30 July 2019

-

21,101,715

42,203

52,754

94,957

Issue of new shares 3 October 2019

-

22,241,231

44,482

85,518

130,000

Issue of new shares 18 October 2019

-

62,500,000

125,000

116,485

241,485

Issue of new shares 21 October 2019

-

2,500,000

5,000

5,000

10,000

Issue of new shares 6 December 2019

-

6,000,000

12,000

-

12,000

As at 31 December 2019

20,037,521,772

500,656,790

5,128,124

6,822,694

11,950,818

 

 

 

 

20  Share capital (continued)

 

Group and Company

 

Number of

deferred

shares

 

Number of ordinary

shares

 

 

Share capital

£

Share premium

£

Total

£

As at 1 January 2020

20,037,521,772

500,656,790

5,128,124

6,822,694

11,950,818

Issue of new shares 17 and 20 April 2020

-

160,400,000

320,800

53,488

374,288

Issue of new shares 10 July 2020

-

112,950,000

225,900

46,086

271,986

Share subdivision

774,006,790

-

-

-

-

Loan note conversion 27 October 2020

-

12,801,543

1,280

34,564

35,844

Exercise of warrants 27 October 2020

-

12,618,928

1,262

34,071

35,333

Exercise of warrants 26 October 2020 to 2 November 2020

-

97,200,000

9,720

476,280

486,000

Issue of new shares 5 November 2020

-

600,000,000

60,000

(12,200)

47,800

Exercise of warrants 11 to 13 November 2020

-

51,200,000

5,120

250,880

256,000

Exercise of warrants 12 November 2020

-

12,618,928

1,262

34,071

35,333

Loan note conversion 12 November 2020

-

12,824,042

1,283

34,624

35,907

Issue of new shares 16 November 2020

-

10,000,000

1,000

24,000

25,000

Issue of new shares 18 December 2020

-

400,000,000

40,000

4,637,100

4,677,100

Release of warrants reserve

-

-

-

9,911

9,911

As at 31 December 2020

20,811,528,562

1,983,270,231

5,795,751

12,445,569

18,241,320

On 17 April 2020 the Company issued 140,000,000 new ordinary shares of 0.2p each at a price of 0.25p per share raising gross proceeds of £350,000.  Two directors took part in the open offer with each subscribing to 10,000,000 new ordinary shares.  Each share was issued with 1 warrant to subscribe for 1 ordinary share exercisable at 0.5p.

 

On 20 April 2020 the Company issued 20,400,000 new ordinary shares of 0.2p each at a price of 0.25p per share in consideration for outstanding fees payable by the Company, to an advisor.  Each share was issued with 1 warrant to subscribe for 1 ordinary share exercisable at 0.5p.

 

On 10 July 2020 the Company issued 112,950,000 new ordinary shares of 0.2p each at a price of 0.25p per share raising gross proceeds of £265,000 and settling advisors fees of £17,375.

 

During 26 October to 13 November 2020 148,400,000 warrants for shares were exercised at a price of 0.5p each.

 

On 27 October 2020 the Company issued 12,801,543 new ordinary shares of 0.01p each in settlement of the convertible loan notes including interest held by a director.

 

On 27 October 2020 12,618,928 warrants for shares were exercised at a price of 0.28p each by a director.

 

On 5 November 2020 the Company issued 600,000,000 new ordinary shares in consideration of the entire issued share capital of Pharm 2 Farm Limited.  The shares have been recorded at their nominal value.

 

On 12 November 2020 the Company issued 12,824,042 new ordinary shares of 0.1p each in settlement of the convertible loan notes including interest held by a director.

 

On 12 November 2020 12,618,928 warrants for shares were exercised at a price of 0.28p each by a director.

 

On 16 November 2020 the Company issued 10,000,000 new ordinary shares of 0.1p each at a price of 0.25p per share in settlement of outstanding consultancy fees.

 

On 18 December 2020 the Company issued 400,000,000 new ordinary shares of 0.01p each at a price of 1.25 per share raising gross proceeds of £5,000,000.

 

Share options in the Company

 

There were no share options outstanding 31 December 2019.

 

At 31 December 2020 there were 77,603,512 outstanding share options which had been issued on 9 November 2020.  The options vested on issue, had a term of 5 years and an option price of 1.4 pence per share.

 

Warrants

 

Warrants to subscribe for new Ordinary Shares in the Company were in issue as follows:

 

2020

2019

 

 

No. of warrants

Weighted average price

£

 

No. of warrants

Weighted average price

£

At 1 January

49,451

0.0500

80,454,531

0.05

Issued during the year

185,637,856

0.0047

-

-

Lapsed during the year

(49,451)

0.0500

(80,405,080)

0.05

Exercised during the year

173,637,856

0.0047

-

-

Outstanding at 31 December

12,000,000

0.0047

49,451

0.05

 

The warrants outstanding at 31 December 2020 had a weighted average remaining contractual life of 4 months (31 December 2019: 9 months).

 

The fair value of the warrants granted in the year were calculated using the Black Scholes model.

 

Share options in GyroMetric Systems Limited

 

At 31 December 2019 share options were in issue relating to shares in GyroMetric Systems Limited.  The number of share options, which are only exercisable on a trade sale or IPO, vary dependent upon the exit valuation.  The maximum number of options outstanding at 31 December 2020 were as follows:

 

Number of shares

Exercise price

65,300

£0.62

544,366

£1.05

 

The number of shares in issue in GyroMetric Systems Limited is 1,091,302.

 

Included in the above were 5,000 options issued during 2019 at an exercise price of £0.62.  The value of these options was considered to be negligible.

 

21  Share-based payments

 

Share option plan

During the year 38,801,756 share options were granted to each of Trevor Brown and Paul Ryan, directors of the company, under the existing incentive plan.  The options had an exercise price of 1.4p per share being the closing mid market place on the issue date.  The options vested immediately and were exercisable within 5 years. 

Fair value of share options

The fair value of the share options granted in the year have been calculated using the Black Scholes model assuming the inputs shown below:

Grant date  9 November 2020

No of options granted  77,603,512

Share price on date of grant  1.4p

Exercise price  1.4p

Continuous growth rate  0.00%

Dividend yield  0.00%

Volatility  46.89%

Time to maturity  5 years

Value of option in accounts  0.1448p

 

Volatility was measured over a 3 year period and excluded the period of exceptional share price movement in the days leading up to the granting of the options.

 

 

 

22  Convertible loan stock

 

2020

£

2019

£

Group and Company

 

 

 

 

As at 1 January

 

 

103,000

-

Convertible loan stock issued

 

 

-

100,000

Repayment/conversion of loan stock and interest

 

(105,085)

-

Accrued interest

 

 

4,085

3,000

At 31 December

 

 

2,000

103,000

The convertible loan stock was unsecured and had an annual coupon of 6%.  The coupon was payable in shares.  The convertible loan stock was fully repaid/converted during 2020, with the balance representing shares to be issued in relation to interest.

 

23  Other reserves

 

The measurement requirements of IFRS 2 have been implemented in respect of share options and warrants granted.

 

Group

Company

 

Share option

 and warrants

reserve

Merger relief reserve

Merger

reserve

 

 

Total

Share option and warrants reserve

 

 

Total

 

£

£

£

£

£

£

At 1 January 2019

201,545

-

(499,999)

(298,454)

201,545

201,545

Share options charge 

(19,500)

-

-

(19,500)

(19,500)

(19,500)

Share warrants lapsed

(157,199)

-

-

(157,199)

(157,199)

(157,199)

At 31 December 2019

24,846

-

(499,999)

(475,153)

24,846

24,846

At 1 January 2020

24,846

-

(499,999)

(475,153)

24,846

24,846

Share options charge 

434,474

-

-

434,474

434,474

434,474

Share warrants issued

10,712

-

-

10,712

10,712

10,712

Share warrants exercised

(9,911)

-

-

(9,911)

(9,911)

(9,911)

Share warrants lapsed

(24,846)

-

-

(24,846)

(24,846)

(24,846)

Arising on consolidation

-

1,740,000

-

1,740,000

-

-

At 31 December 2020

435,275

1,740,000

(499,999)

1,675,276

435,275

435,275

 

24  Non controlling interests

 

 

 

 

Total

Group

 

 

 

£

As at 1 January 2019

 

 

 

22,228

Non controlling interests in share of losses for the year

 

 

70,372

At 31 December 2019

 

 

 

(48,045)

Non controlling interest in share of losses for the year

 

 

(32,634)

At 31 December 2020

 

 

 

(80,679)

      

 

25  Trade and other payables

 

2020

2019

 

Group

Company

Group

Company

 

£

£

£

£

Amounts due to group undertakings

 

 

-

2,669

Trade payables

115,648

69,673

105,732

43,269

VAT payable

1,755

-

8,018

-

Corporation tax

-

-

2,531

-

Accruals

94,265

84,376

135,034

112,969

Other creditors

121,419

43,114

124,507

10,000

 

333,087

197,163

375,822

168,907

 

 

26  Lease and finance lease obligations

 

2020

2019

 

 

Lease liabilities

Finance lease

Lease liabilities

Finance lease

Group

£

£

£

£

Total at 31 December

36,875

-

66,375

60,825

Less: non-current portion

(7,375)

-

(36,875)

-

Current portion

29,500

-

29,500

60,825

 

The non current portion of the lease liabilities are payable as to £7,375 within 2022.

 

27  Provisions

 

 

 

2020

2019

Group

 

 

£

£

Closure costs in respect of the Geocurve business

 

 

13,000

20,500

 

It is expected provision for closure costs will be settled within 2021.

 

28  Deferred tax

 

2020

2019

 

Group

Company

Group

Company

 

£

£

£

£

Deferred tax liabilities

 

 

 

 

Deferred tax liability

-

-

-

-

 

 

The movement in the deferred tax account is as follows:

 

2020

2019

 

Group

Company

Group

Company

 

£

£

£

£

At 1 January 

-

-

206,328

-

Investment in subsidiaries

-

-

(150,941)

-

Fixed asset timing differences

-

-

(55,387)

-

At 31 December

-

-

-

-

 

 

 

 

29  Financial instruments

 

Categories of financial instruments

 

 

2020

2020

 

 

Group

Company

 

 

£

£

Assets - Loans and receivables

 

 

 

  Trade and other receivables (excluding prepayments)

 

1,825,412

1,935,124

  Cash and cash equivalents

 

3,741,135

3,590,521

 

 

5,566,547

5,525,645

Liabilities - At amortised cost

 

 

 

Trade and other payables (excluding non-financial liabilities)

 

237,067

113,237

Lease liabilities

 

36,875

-

 

 

273,942

113,237

 

 

 

2019

2019

 

 

Group

Company

 

 

£

£

Assets - Loans and receivables

 

 

 

  Trade and other receivables (excluding prepayments)

 

43,201

118,040

  Cash and cash equivalents

 

74,770

4,784

 

 

117,971

122,824

Liabilities - At amortised cost

 

 

 

Trade and other payables (excluding non-financial liabilities)

 

433,047

55,938

Lease liabilities & Finance lease obligations

 

127,200

-

 

 

 

-

 

 

560,247

55,938

 

30  Financial commitments

 

Operating leases

 

The Group had no significant operating lease obligations at 31 December 2020 or 31 December 2019.

 

Other commitments

 

At 31 December 2020 the Group had capital commitments of £250,381 (2019 - £nil) of which £227,904 had been paid and is included within other receivables.  The Company had no capital commitments at 31 December 2020 or 31 December 2019.

 

31  Contingent liabilities

 

The Group has received a claim made against its subsidiary in the US following the dismissal of an employee. The claim is in the hands of the Group's lawyers and the outcome has not yet been reached, however the Directors believe that the claim is without merit. In the event of a settlement, the exact level of compensation is unknown at this stage. On this basis, the contingent liability cannot be quantified.

 

 

32  Related party transactions

 

Directors' transactions

 

Directors remuneration is disclosed in note 8.

 

The amount owing to Nigel Burton in respect of unpaid salary at 31 December 2020 was £nil (2019 - £11,182).

 

The amount owing to Trevor Brown in respect of unpaid salary at 31 December 2020 was £nil (2019 - £750).

 

Paul Ryan is the owner of Warande1970 BVBA which the Group pays in relation to Paul's director fee. £8,000 was outstanding at 31 December 2020 (2019 - £4,750).

 

Trevor Brown is a director and significant shareholder of Braveheart Investment Group plc.  During the year the Company purchased a 51.73% interest in Pharm 2 Farm Limited from Braveheart Investment Group plc settled through the issue of 310,354,815 ordinary shares.

 

During the year Braveheart Investment Group plc provided additional funds to GyroMetric Systems Limited totalling £5,000 (2019 - £34,200 in the form of a convertible loan note).  These amounts were both still outstanding at 31 December 2020.

 

During the previous year Cloudveil Limited advanced amounts to Hugo Gillum-Webb, a Director of that Company which were repaid in full during the year.  11,038 was due to that Company at 31 December 2019.

 

Various amounts have been advanced by the Directors of the Parent Company and Subsidiaries. The following amounts were outstanding at the year end:

 

 

2020

 

2019

N Burton

-

 

  29,000

P & R Orton

6,312

 

  6,312

A Ferguson

19,200

 

4,200

 

Parent Company transactions with subsidiary companies

 

At the year end £1,451,632 (2019: £1,034,568) was due from the subsidiary companies.

 

The above balance included amounts owing from GyroMetric Systems Ltd and Cloudveil Ltd which were impaired by £141,600 and £114,000 respectively during the current year and from Geocurve Ltd which was impaired by £765,908 during the previous year.

 

33  Ultimate controlling party

 

There is not considered to be a controlling party.  For details of major shareholdings please refer to the Director's Report. 

 

34  Events after the reporting year

 

Following the year end there have been additional exercises of warrants and options raising in excess of £0.9m.

 

After a strategic review of the Group's operations by the directors, as detailed in the Chairman's statement, they are recommending the proposal for the disposal of the Group's interest of its GyroMetric division. In addition, the directors are recommending a proposal for a change of name of the Company to nanosynth group plc to bring it in line with the future direction of the company.

 

 

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