Silver Falcon Plc
Annual Report & Financial statements
for the period
ended 31 December 2016
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Contents
Company Information
Chairman’s Statement
Board of Directors and Senior Management
Directors’ Report
Strategic Report
Governance Report
Directors’ Remuneration Report
Independent Auditors’ Report
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
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Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Company information
Directors
Geoffrey Dart (Executive Chairman)
Peter Redmond (Non-Executive Director)
Adrian Beeston (Non-Executive Director)
Company Secretary
Timothy Le Druillenec FCMA
Registered Office
5 Fleet Place
London EC4M 7RD
Registered Number
8401609 (England and Wales)
Broker
Optiva Securities Limited
2, Mill Street
London
W1S 2AT
Financial Adviser
Peterhouse Corporate Finance
15, Eldon Street
London
EC2M 7LD
Independent Auditor
PKF Littlejohn LLP
Statutory Auditor
1 Westferry Circus
Canary Wharf
London E14 4HD
Solicitors
Charles Russell Speechlys LLP
5 Fleet Place
London EC4M 7RD
Principal Bankers
Metro Bank plc
One Southampton Row
London WC1B 5HA
Registrars
Computershare Investor Services PLC
The Pavillions
Bridgewater Road
Bristol
BS13 8AE
1
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Chairman’s Statement
I hereby present the annual accounts for the year ended 31st December 2016. During the year
the Company reported a loss of £519,898 (31 December 2015 – loss of £80,367) which arose
predominantly from professional fees in connection with the due diligence and legal
documentation relating to potential transactions, in particular with the current transaction under
review. As at the date of this report the Company has approximately £1m of cash balances.
Following its listing on the London Stock Exchange on 9th November 2015, the Company has
focused on the evaluation of various acquisition opportunities. To that end, it announced on 30th
December 2015 that it had entered into a non-binding Memorandum of Understanding with the
board and principal shareholder in Lime Holdings Limited ("Lime") regarding a possible
acquisition of 100% of the share capital of Lime by way of a share for share exchange. On 30th
September 2016 the Company announced that it was no longer proceeding with that transaction
following detailed due diligence.
As at the year ended 31 December 2016, the Company was in talks with another potential
business with an eventual acquisition expected to finalise before the end of the second quarter
2017. As at the date of this report, this is still the case and the transaction is at an advanced
stage and whilst no binding agreement has yet been entered into the directors are optimistic of
a successful outcome.
I would like to thank all those who have assisted in relation to the possible acquisitions reviewed
and remain hopeful of a successful outcome.
…………………………..
Geoffrey Dart
Executive Chairman
24 April 2017
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Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Board of Directors and Senior Management
Geoffrey Gilbert Dart Executive Chairman
Geoffrey Dart is a merchant banker with over 35 years of experience of fund raising and listing
transactions. In 1990 he was appointed to the board of Harrell Hospitality Inc, a hotel
management and development Company, after he structured and completed its reverse takeover
by a US-listed shell Company. In 2003, as chairman of Energy Technique Plc (a Main Market
Company) Geoffrey oversaw the re-structuring and re-capitalisation of the Company. Also in
2003, as a founder and an executive director of London and Boston Investments Plc (an AIM-
listed Company), Geoffrey was responsible for M&A activity for the Company. In 2010, Geoffrey
joined the board of Hayward Tyler Limited, the specialist pump manufacturer and after raising
equity and debt funding, completed the Main Market listing of the Company and thereafter took
on particular responsibility for the group’s Chinese operations and completed a successful re-
structuring of those operations. He is Chairman of Dukemount Capital Plc, a company trading on
the Main Market of the London Stock Exchange.
Peter Redmond Non- Executive Director
Peter Redmond is a corporate financier with some 30 years’ experience in corporate finance and
venture capital. He has acted on and assisted a wide range of companies to attain a listing over
many years, on the Unlisted Securities Market, the Full List and AIM, whether by IPO or in many
cases via reversals, across a wide range of sectors, ranging from technology through financial
services to natural resources and, in recent years has done so as a director of the companies
concerned. He has been active over many years in corporate rescues and reconstructions on
AIM and in reverse transactions into a range of investing companies. He was a founder director
of Cleeve Capital plc (now Satellite Solutions plc) and Mithril Capital plc (now BeHeard Group
plc), both of which were admitted to the Standard List of the London Stock Exchange, and took
a leading role in the reconstruction and refinancing of of AIM-quoted Kennedy Investments plc
and 3Legs Resources plc (now SalvaRx plc). Peter is a director of Dukemount Capital Plc.
Adrian Richard Thorpe Beeston Non- Executive Director
Adrian founded Thorpe-Beeston Investments Ltd (“TBIL”) in 2002. TBIL specialises in the
financing and structuring of small to medium size businesses, and the floatation of these
companies on the American Stock Exchange, AIM Exchange and TSX Venture Exchange.
Previous to this, Adrian was at Altium Capital, a major pan-European corporate finance house,
where he focused primarily on the raising of private equity. Adrian has worked extensively in
small to mid size businesses, financing and working with over 20 companies in the last 5 years.
Other work has included implementation of corporate structure, human resources planning,
corporate governance policies and providing finance once these cornerstones of a business are
in place.
Timothy Vincent Le Druillenec The Company Secretary
Timothy Le Druillenec is a Fellow of the Chartered Institute of Management Accountants and
provides consultancy and accounting services to a number of companies including Dukemount
Capital Plc, a Main Market Company, and during 2013, Leed Resources Plc, Kennedy Ventures
Plc and Pires Investments Plc, all AIM-listed companies. Prior to that between 2005 and 2012,
he had executive experience as the chief executive of Richards Walford & Company Ltd, a fine
wine importer and prior to that he was the finance director and Company secretary of Bella Media
Plc and between 1995 and 2004 he was group finance director and Company secretary of Pacific
3
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Media Plc, a Main Market Company which was ultimately re-named as Responze TV Plc
following the acquisition of effective control by an Asian investor group.
Directors’ Report
The Directors present their report with the audited financial statements of the Company for the
year ended 31 December 2016.
The Company’s Ordinary Shares were admitted to listing on the London Stock Exchange, on the
Official List pursuant to Chapters 14 of the Listing Rules, which sets out the requirements for
Standard Listings, on 9th November 2015.
Directors
The Directors of the Company during the year and their beneficial interest in the Ordinary
shares of the Company at 31 December 2016 were as follows:
Director
Position
Appointed Ordinary
shares
Options
Other
Geoffrey Dart*
Executive Chairman 13/02/2013 4,800,000
Peter Redmond**
Adrian Beeston
Non-Executive
Director
Non-Executive
Director
-
29/07/2015 3,600,000
29/07/2015 3,350,000
-
-
-
-***
-***
-***
*
Geoffrey Dart holds these shares through Chesterfield Capital Ltd, of which he is the
ultimate beneficial owner and Dukemount Capital Plc in which, following the listing of that
Company on 29th March 2017, he holds 22.17% via Chesterfield Capital Ltd.
** Peter Redmond holds these shares through Catalyst Corporate Consultants Ltd of which
he is the sole shareholder.
*** Each of the Directors has agreed not to receive a fee from the Company for so long as the
Company remains as a special purpose acquisition Company. The Directors, will however,
be entitled to receive a success fee of £30,000 each on completion of an Acquisition to be
satisfied by the Company issuing and allotting to each of the Directors 1,000,000 Ordinary
Shares at an issue price of £0.03 per Ordinary Share (subject to any adjustment following
any sub-division or consolidation of the Ordinary Shares).
At the date of this report, there have been no changes to the Directors’ beneficial interest in the
Ordinary shares of the Company as disclosed in the table above.
Qualifying Third Party Indemnity Provision
At the date of this report, the Company have a third party indemnity policy in place for all three
Directors.
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Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Directors’ Report (continued)
Substantial shareholders
As at 31 December 2016, the total number of issued Ordinary Shares with voting rights in the
Company was 66,900,000.
The Company has been notified of the following interests of 3 per cent or more in its issued share
capital as at the date of approval of this report.
Party Name
Optiva Securities Limited*
Geoffrey Dart**
Peter Redmond***
Adrian Beeston
Wayne Gibson
Abdelatif Lachab
Number of Ordinary
Shares
5,000,000
4,800,000
3,600,000
3,350,000
2,600,000
2,600,000
% of
Share Capital
7.7%
7.4%
5.5%
5.2%
4.0%
4.0%
* Optiva Securities Limited holds these shares through JIM Nominees Limited.
** Geoffrey Dart holds these shares through Chesterfield Capital Ltd, of which he is the
ultimate beneficial owner and Dukemount Capital Plc in which, following the listing of that
Company on 29th March, he holds 22.17% via Chesterfield Capital Ltd.
*** Peter Redmond holds these shares through Catalyst Corporate Consultants Ltd of which
he is the sole shareholder.
Financial instruments
Details of the use of the Company’s financial risk management objectives and policies as well as
exposure to financial risk are contained in the Accounting policies and note 13 of the financial
statements.
Greenhouse Gas (GHG) Emissions
The Company is not trading with no head office or employees other than its directors, and
therefore has minimal carbon emissions. It is not practical to obtain emissions data and as such
none is disclosed. This disclosure will become more relevant once the Company makes an
acquisition.
Dividends
The Directors do not propose a dividend in respect of the year ended 31 December 2016 (31
December 2015: nil).
Future developments and events subsequent to the year end
Further details of the Company’s future developments and events subsequent to the year end
are set out in the Strategic Report.
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Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Directors’ Report (continued)
Corporate Governance
The Corporate Governance report forms part of the Director’s Report and is disclosed on page
12.
Going Concern
The Company’s business activities, together with facts likely to affect its future operations and
financial and liquidity positions are set out in the Chairman’s Statement and Strategic Report and
also note 13 of the financial statements. In addition, note 2 i) to the financial statements discloses
the Company’s financial risk management policy and note 2 b) details out further considerations
made by the Director in respect of going concern.
The Directors having made due and careful enquiry, are of the opinion that the Company has
adequate working capital to execute its operations over the next 12 months. The Directors
therefore have made an informed judgment, at the time of approving the financial statements,
that there is a reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. As a result, the Directors have adopted the going
concern basis of accounting in the preparation of the annual financial statements.
Principal Activities
The Company’s principal activity is currently that of a ‘cash shell’ actively seeking an investment.
The Company was formed for the purpose of acquiring a company, business or asset that is
looking to develop and expand.
Auditors
The auditors, PKF Littlejohn LLP, have expressed their willingness to continue in office and a
resolution to reappoint them will be proposed at the Annual General Meeting.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year.
Under that law the Directors have elected to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Under Company law the Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the Company and of the profit
or loss of the Company for that year.
In preparing these financial statements, the Directors are required to:
Select suitable accounting policies and then apply them consistently;
Make judgments and accounting estimates that are reasonable and prudent;
State whether applicable IFRSs as adopted by the European Union have been followed,
subject to any material departures disclosed and explained in the financial statements; and
Prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Company will continue in business.
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Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Directors’ Report (continued)
The Directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the Company’s transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure that the financial statements
and the Directors’ remuneration report comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities. They are also responsible to
make a statement that they consider that the annual report and accounts, taken as a whole, is
fair, balanced, and understandable and provides the information necessary for the shareholders
to assess the Company’s position and performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may differ from legislation in other
jurisdictions.
Directors’ responsibility statement pursuant to disclosure and Transparency Rule
Each of the Directors, whose names and functions are listed on page 3 confirm that, to the best
of their knowledge and belief:
the financial statements prepared in accordance with IFRS as adopted by the European
Union, give a true and fair view of the assets, liabilities, financial position and loss of the
Company; and
the Annual Report and financial statements, including the Strategic Report, includes a
fair review of the development and performance of the business and the position of the
Company, together with a description of the principal risks and uncertainties that they
face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit information of which the Company’s
auditors are unaware, and each Director has taken all the steps that he ought to have taken as
a Director in order to make himself aware of any relevant audit information and to establish that
the Company’s auditors are aware of that information.
Approved by the Board on 24 April 2017
Signed ………………………………………….
Geoffrey Dart
Executive Chairman
7
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Strategic Report
The Directors present the Strategic Report of Silver Falcon Plc for the year ended 31 December
2016.
Review of Business in the Period
Operational Review
Silver Falcon Plc was established for the purpose of acquiring a company, business or asset that
it will then look to develop and expand.
The Company has not as yet traded and no material level of interest income has been received
to date. Since incorporation, its expenses have related to professional and associated expenses
related to the Standard Listing, Placing, Advisory, Due Diligence and Legal Documentation on
potential transactions along with general administration expenses. These expenses have been
met from the proceeds of the issue of Shares which have been the only sources of cash for the
Company to date.
The capital raised has been used to fund the due diligence of potential projects and the costs of
running the company.
The Board, which comprises individuals who have a number of years of experience in a range of
various fields of expertise that will provide a sound foundation for the future development of the
Company, is responsible for the Company’s business strategy and its overall supervision,
including the identification and assessment of acquisition opportunities, the approval, structuring
and execution of acquisitions and determination and execution of strategy for the acquired
companies, businesses or assets. The Board has considerable experience in identifying
acquisition targets and in executing such transactions.
Financial review
Loss for the period
The Company incurred a loss for the year to 31 December 2016 of £519,898 (31 December 2015
– loss of £80,367).
In the year to 31 December 2016 the loss mainly arose from expenses in connection to
professional and associated expenses related to the Advisory and Consultancy Fees, Due
Diligence and Legal Documentation on potential transactions along with general administration
expenses. These expenses have been met from the proceeds of the issue of shares, which have
been the only sources of cash for the Company to date.
8
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Strategic Report (continued)
Cash flow
Cash used in operations totalled £519,898 (31 December 2015 - £80,367)
Closing cash
As at 31 December 2016, the Company held £1,045,723 in the bank account (31 December
2015 - £1,323,869).
Key Performance Indicators
At this stage in its development, the Company is focusing on the evaluation of various
opportunities and as disclosed in the Chairman’s statement, the Company has discontinued its
interest in Lime. As and when the Company executes its first substantial acquisition, financial,
operational, health, safety, and environmental KPIs will become more relevant and reported upon
as appropriate. As a result, the Directors are of the opinion that, other than the maintenance of
cash and cash equivalents, analysis using KPI’s is not appropriate for an understanding of the
business at this time.
2016
2015
Cash and cash equivalents
£1,045,723 £1,323,869
Position of Company’s Business at the Year End
The Company has invested money raised from share issues during the year in researching
potential projects. Further details of the Company’s strategy is set out in the Chairman’s
Statement and on page 8. Disclosure on the future business model and factors/trends that are
likely to affect future development, position and performance of the Company will be more
relevant once an acquisition is completed.
During the year, 2,000,000 new Ordinary Shares of £0.01 nominal value were issued at a
premium of £0.03 per share to M6 Limited as settlement for a fee of £80,000 for online marketing
services.
At the year end
At the year end the Company’s Statement of Financial Position shows assets totaling £1,047,403
(31 December 2015 – £1,355,036). The Company has few liabilities and is considered to have a
strong cash position at the reporting date.
Environmental matters
The Board contains personnel with a good history of running businesses that have been
compliant with all relevant laws and regulations and there have been no instances of non-
compliance in respect environmental matters. More detail will be disclosed in the future annual
reports once the Company completes an acquisition.
9
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Strategic Report (continued)
Employee information
At present, there are no female Directors’ in the Company. Apart from the Executive Chairman
and Non-executive Directors there are no employees currently in the Company.
Social/Community/Human rights matters
The Board acknowledge that, following an acquisition, they will need to consider social and
community implications, particularly in the areas of operations, and the Board will fully take into
consideration and comply with any necessary local requirements
Whilst the Company has no female members on the Board, they recognise the need to operate
a gender diverse business, and they will revisit this area following an acquisition to consider its
appropriateness. The Board will also ensure any future employment takes into account the
necessary diversity requirements and compliance with all employment law. The Board has
experience and sufficient training/qualifications in dealing with such issues to ensure they would
meet all requirements. More detail will be disclosed in the future annual reports once the
Company complete an acquisition.
Business strategy
Silver Falcon Plc was established for the purpose of acquiring a company, business or asset that
it will then look to develop and expand. The way in which the Company plans to achieve this is
to complete due diligence assessments on potential businesses to evaluate their suitability and
potential.
The business model is the identification and assessment of potential businesses and assets with
the target industry sector being seen as having considerable growth potential. Until a reputable
investment is identified, the Director’s look to spend as little as possible unless the expenditure
directly relates with the above assessment exercises.
Principal Risks and Uncertainties
The Directors consider the key risk for the Company to be the maintenance of its reserves of cash
and cash equivalents whilst it targets an acquisition.
The Company operates in an uncertain environment and is subject to a number of risk factors.
The Directors consider the following risk factors are of particular relevance to the Company’s
activities and to any investment in the Company. It should be noted that the list is not exhaustive
and that other risk factors not presently known or currently deemed immaterial may apply.
The risk factors are summarised below:
Risks relating to the Company’s business strategy
The Company will be dependent on the ability of the Directors to identify suitable investment
opportunities and to implement the Company’s strategy. There is no assurance that the
Company’s activities will be successful in acquiring a suitable investment that will ultimately be
developed.
10
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Strategic Report (continued)
Environmental and other regulatory requirements
These will become more relevant once the Company makes an acquisition. The event of a
breach with any environmental or regulatory requirements may give rise to reputational, financial
or other sanctions against the Company, and therefore the Board considers these risks seriously
and designs, maintains and reviews its policies and processes so as to mitigate or avoid these
risks. Whilst the Board has a good record of compliance, there is no assurance that the
Company’s activities will always be compliant.
Financing
The Board are actively seeking an acquisition and acknowledge that financing could depend
upon the Company’s ability to obtain financing primarily through a further raising of new equity
capital. The Company’s ability to raise further funds maybe be affected by the success of its
acquired investments. The Company may not be successful in procuring the requisite funds on
terms which are acceptable to it (or at all) and, if such funding is unavailable, the Company may
be required to reduce the scope of its intended acquisition. Further, Shareholders’ holdings of
Ordinary Shares may be materially diluted if debt financing is not available.
Brexit
The Company does not foresee any material issues with Brexit at this stage and indeed would
not look to conclude any transaction where the possibility of a detrimental effect caused by Brexit
would be likely. There may be issues raising funds from investors in the short term now that
Article 50 has been triggered by the UK Government however investor markets in the UK have
continued to be strong and it is too early to say if there will be any direct impact. The Directors
continue to monitor events and as the Directors receive more information from the Government
and the EU they will assess the impact to the Company and take appropriate steps as required.
Market Conditions
Market conditions, including general economic conditions and their effect on exchange rates,
interest rates and inflations rates, may impact the ultimate value of the Company regardless of
its operating performance. The Company also faces competition from other organisations, some
of which may have greater resources or be more established in a particular territory. The Board
considers and reviews all market conditions to try and mitigate any risks that may arise from
these.
Approved by the Board on 24 April 2017
Geoffrey Dart
Executive Chairman
11
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Governance Report
Introduction
The Company recognises the importance of, and is committed to, high standards of Corporate
Governance. At the date of this Report, and whilst the Company is not formally required to comply
with the UK Corporate Governance Code, the Company will try to observe, where practical, the
requirements of the UK Corporate Governance Code. The UK Corporate Governance Code can
be found at frc.org.uk/our-work/publications/Corporate-Governance. The ways in which the
Company will try and observe the code are set out below:
Given the composition of the Board, certain provisions of the UK Corporate Governance
Code (in particular the provisions relating to the division of responsibilities between the
Chairman and chief executive and executive compensation), are considered by the Board
to be inapplicable to the Company. In addition, the Company does not comply with the
requirements of the UK Corporate Governance Code in relation to the requirement to
have a senior independent director.
The UK Corporate Governance Code also recommends the submission of all directors
for re-election at annual intervals. No Director will be required to submit for re-election
until the first annual general meeting of the Company following the Acquisition.
Until the Acquisition is made the Company will not have nomination, remuneration, audit
or risk committees. The Board as a whole will instead review its size, structure and
composition, the scale and structure of the Directors’ fees (taking into account the
interests of Shareholders and the performance of the Company) take responsibility for
the appointment of auditors and payment of their audit fee, monitor and review the
integrity of the Company’s financial statements and take responsibility for any formal
announcements on the Company’s financial performance. Following the Acquisition the
Board intends to put in place nomination, remuneration, audit and risk committees.
As at the date of this Report the Board has voluntarily adopted the Model Code for Directors’
dealings contained in the Listing Rules of the UK Listing Authority. The Board will be responsible
for taking all proper and reasonable steps to ensure compliance with the Model Code by the
Directors. Compliance with the Model Code is being undertaken on a voluntary basis and the
FCA will not have the authority to (and will not) monitor the Company’s voluntary compliance with
the Model Code, nor to impose sanctions in respect of any failure by the Company to so comply.
In addition, the Company will take all proper and reasonable steps to ensure compliance by the
Founders with the Model Code for dealings in the Ordinary Shares.
The Company is a small company with a modest resource base. The Company has a clear
mandate to optimise the allocation of limited resources to support its development plans. As
such, the Company strives to maintain a balance between conservation of limited resources and
maintaining robust corporate governance practices. As the Company evolves, the Board is
committed to enhancing the Company’s corporate governance policies and practices deemed
appropriate for the size and maturity of the organisation.
Set out below are Silver Falcon Plc’s corporate governance practices for the year ended
31 December 2016.
12
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Governance Report (continued)
Leadership
The Company is headed by an effective Board which is collectively responsible for the long-term
success of the Company.
The role of the Board - The Board sets the Company’s strategy, ensuring that the necessary
resources are in place to achieve the agreed strategic priorities, and reviews management and
financial performance. It is accountable to shareholders for the creation and delivery of strong,
sustainable financial performance and long-term shareholder value. To achieve this, the Board
directs and monitors the Company’s affairs within a framework of controls which enable risk to
be assessed and managed effectively. The Board also has responsibility for setting the
Company’s core values and standards of business conduct and for ensuring that these, together
with the Company’s obligations to its stakeholders, are widely understood throughout the
Company. The Board has a formal schedule of matters reserved which is provided later in this
report.
Board Meetings - The core activities of the Board are carried out in scheduled meetings of the
Board. These meetings are timed to link to key events in the Company’s corporate calendar and
regular reviews of the business are conducted. Additional meetings and conference calls are
arranged to consider matters which require decisions outside the scheduled meetings. During
the year, the Board met on 9 occasions.
Outside the scheduled meetings of the Board, the Directors maintain frequent contact with each
other to discuss any issues of concern they may have relating to the Company or their areas of
responsibility, and to keep them fully briefed on the Company’s operations.
Matters reserved specifically for Board - The Board has a formal schedule of matters reserved
that can only be decided by the Board. The key matters reserved are the consideration and
approval of;
The Company’s overall strategy;
Financial statements and dividend policy;
Management structure including succession planning, appointments and remuneration;
material acquisitions and disposal, material contracts, major capital expenditure projects and
budgets;
Capital structure, debt and equity financing and other matters;
Risk management and internal controls;
The Company’s corporate governance and compliance arrangements; and
Corporate policies;
Summary of the Board’s work in the year – During the year, the Board considered all relevant
matters within its remit, but focused in particular on the establishment of the Company and the
identification of a suitable investment opportunity for the Company to pursue.
13
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Governance Report (continued)
Attendance at meetings:
Member
Geoffrey Dart
Peter Redmond
Adrian Beeston
Executive Chairman
Non-executive Director
Non-executive Director
Meetings
attended
9
9
9
The Board is pleased with the high level of attendance and participation of Directors at Board
and committee meetings.
The Chairman, Geoffrey Dart, sets the Board Agenda and ensures adequate time for discussion.
Non-executive Directors - The non-executive Directors bring a broad range of business and
commercial experience to the Company and have a particular responsibility to challenge
independently and constructively the performance of the Executive management (where
appointed) and to monitor the performance of the management team in the delivery of the agreed
objectives and targets.
Non-executive Directors are initially appointed for a term of three years, which may, subject to
satisfactory performance and re-election by shareholders, be extended by mutual agreement.
Other governance matters - All of the Directors are aware that independent professional advice
is available to each Director in order to properly discharge their duties as a Director. In addition,
each Director and Board committee has access to the advice of the Company Secretary.
The Company Secretary - The Company Secretary is Timothy Le Druillenec who is retained on
a consultancy basis. He is available to Directors and responsible for the Board complying with
UK procedures.
Effectiveness
For the period under review the Board comprised of an Executive Chairman and two independent
non-executive Directors. Biographical details of the Board members are set out on page 3 of this
report.
The Directors are of the view that the Board and its committees consist of Directors with an
appropriate balance of skills, experience, independence and diverse backgrounds to enable
them to discharge their duties and responsibilities effectively
Independence - The non-executive Directors bring a broad range of business and commercial
experience to the Company. The Board considers each of the non-executive Directors to be
independent in character and judgement.
Appointments – the Board is responsible for reviewing and the structure, size and composition
of the Board and making recommendations to the board with regards to any required changes.
14
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Governance Report (continued)
Commitments – All Directors have disclosed any significant commitments to the Board and
confirmed that they have sufficient time to discharge their duties.
Induction - All new Directors received an induction as soon as practical on joining the Board.
Conflict of interest - A Director has a duty to avoid a situation in which he or she has, or can have,
a direct or indirect interest that conflicts, or possibly may conflict with the interests of the
Company. The Board had satisfied itself that there is no compromise to the independence of
those Directors who have appointments on the Boards of, or relationships with, companies
outside the Company. The Board requires Directors to declare all appointments and other
situations which could result in a possible conflict of interest.
Board performance and evaluation – Silver Falcon Plc has a policy of appraising Board
performance annually. Having reviewed various approaches to Board appraisal, it has concluded
that for a Company of its current scale, an internal process in which all Board members submit
answers to a questionnaire that considers the functionality of the Board and its committees is
most appropriate at this stage.
Accountability
The Board is committed to providing shareholders with a clear assessment of the Company’s
position and prospects. This is achieved through this report and as required other periodic
financial and trading statements.
Going concern - The Company’s business activities, together with factors likely to affect its future
operations, financial position, and liquidity position are set out in the Chairman’s Statement and
the Operational Review and the principle risks and uncertainties sections of the Strategic Report.
In addition, the notes to financial statements discloses the Company’s financial risk management
practices with respect to its capital structure, liquidity risk, interest rate risk, credit risk, and other
related matters.
The Directors, having made due and careful enquiry, are of the opinion that the Company has
adequate working capital to execute its operations and has the ability to access additional
financing, if required, over the next 12 months. The Directors, therefore, have made an informed
judgement, at the time of approving financial statements, that there is a reasonable expectation
that the Company has adequate resources to continue in operational existence for the
foreseeable future. As a result, the Directors have continued to adopt the going concern basis of
accounting in preparing the annual financial statements.
Internal controls - The Board of Directors reviews the effectiveness of the Company’s system of
internal controls in line with the requirement of the Code. The internal control system is designed
to manage the risk of failure to achieve its business objectives. This covers internal financial and
operational controls, compliances and risk management. The Company has necessary
procedures in place for the year under review and up to the date of approval of the Annual Report
and financial statements. The Directors acknowledge their responsibility for the Company’s
system of internal controls and for reviewing its effectiveness. The Board confirms the need for
an ongoing process for identification, evaluation and management of significant risks faced by
the Company. The Directors carry out a risk assessment before signing up to any commitments.
15
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Governance Report (continued)
The Audit Committee, once established, will regularly review and report to the Board on the
effectiveness of the system of internal control. Given the size of the Company and the relative
simplicity of the systems, the Board considers that there is no current requirement for an internal
audit function. The procedures that have been established to provide internal financial control
are considered appropriate for a Company of its size and include controls over expenditure,
regular reconciliations and management accounts.
The Directors are responsible for taking such steps as are reasonably available to them to
safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Remuneration
Currently due to the size of the Company there is no Remuneration Committee. This will be
established following an acquisition. As at the date of this report, salaries are not paid to the
directors.
Nomination
Currently due to the size of the Company there is no Nomination Committee. This will be
established following an acquisition
Shareholder relations
Communication and dialogue – Open and transparent communication with shareholders is given
high priority and there is regular dialogue with institutional investors, as well as general
presentations made at the time of the release of the annual and interim results. All Directors are
kept aware of changes in major shareholders in the Company and are available to meet with
shareholders who have specific interests or concerns. The Company issues its results promptly
to
the Company’s website:
www.silverfalconplc.com. Regular updates to record news in relation to the Company and the
status of its exploration and development programmes are included on the Company’s website.
Shareholders and other interested parties can subscribe to receive these news updates by email
by registering online on the website free of charge.
individual shareholders and also publishes
them on
The Directors are available to meet with institutional shareholders to discuss any issues and gain
an understanding of the Company’s business, its strategies and governance. Meetings are also
held with the corporate governance representatives of institutional investors when requested.
Annual General Meeting - At every AGM individual shareholders are given the opportunity to put
questions to the Chairman and to other members of the Board that may be present. Notice of the
AGM is sent to shareholders at least 21 working days before the meeting. Details of proxy votes
for and against each resolution, together with the votes withheld are announced to the London
Stock Exchange and are published on the Company’s website as soon as practical after the
meeting.
…………………
Geoffrey Dart
Executive Chairman
Date 24 April 2017
16
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Directors’ Remuneration Report
Until an acquisition is made the Company will not have a separate remuneration committee. The
Board as a whole will instead review the scale and structure of the Directors’ fees, taking into
account the interests of shareholders and the performance of the Company and directors.
Following the completion of an acquisition, the Board intends to put in place a remuneration
committee.
The items included in this report are unaudited unless otherwise stated.
Statement of Silver Falcon Plc’s policy on Directors’ remuneration by the Executive
Chairman
Each of the Directors has agreed not to receive a fee from the Company for so long as the
Company remains as a special purpose acquisition Company (December 2015: no remuneration
paid). Instead, the Company and the Directors have agreed that the Directors shall be entitled to
receive a success fee which is detailed below.
Remuneration Components
For the period ended 31 December 2016 no salaries were paid to any directors. Following a
suitable acquisition, the Board will consider the components of Director remuneration in future
years and following this review these are likely to consist of:
Base salaries
Pension and other benefits
Annual bonus
Share Incentive arrangements
Each of the Directors has agreed not to receive a fee from the Company for so long as the
Company remains as a special purpose acquisition Company. Instead, the Company and the
Directors have agreed that the Directors shall be entitled to receive a success fee of £30,000
each on completion of an Acquisition to be satisfied by the Company issuing and allotting to each
of the Directors 1,000,000 Ordinary Shares at an issue price of £0.03 per Ordinary Share (subject
to any adjustment following any sub-division or consolidation of the Ordinary Shares).
Service Agreements and Letters of Appointment
As at the date of this report the directors have not yet sought to have Service Agreements
prepared and will reconsider this position once a transaction has been agreed.
The Directors who held office at 31 December 2016 and who had beneficial interests in the
Ordinary Shares of the Company are summarised as follows:
Name of Director
Geoffrey Dart
Peter Redmond
Adrian Beeston
Position
Executive Chairman
Non-executive director
Non-executive director
Details of these beneficial interests can be found in the Directors’ Report.
17
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Directors’ Remuneration Report (continued)
Terms of appointment
The services of the Directors, provided under the terms of agreement with the Company dated
as follows:
Director
Geoffrey Dart
Peter Redmond
Adrian Beeston
Year of
appointment
2013
2015
2015
Number of years
completed
3
1
1
Date of current
engagement letter
30 September 2015
30 September 2015
30 September 2015
Consideration of shareholder views
The Board considers shareholder feedback received and guidance from shareholder bodies.
This feedback, plus any additional feedback received from time to time, is considered as part of
the Company’s annual policy on remuneration.
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities,
their individual’s experience and their current base salary. Where an individual is recruited at
below market norms, they may be re-aligned over time (e.g. two to three years), subject to
performance in the role. Benefits will generally be in accordance with the approved policy.
For external and internal appointments, the Board may agree that the Company will meet certain
relocation and/or incidental expenses as appropriate.
Directors’ emoluments and compensation (audited)
Set out below are the emoluments of the Directors for the period ended 31 December 2016
(GBP):
Salary and
fees
Taxable
benefits
Annual
bonus and
long term
benefits
Pension
related
benefits
Other
*
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name of
Director
Geoffrey Dart
Peter
Redmond
Adrian
Beeston
*
The Company and the Directors have agreed that the Directors shall be entitled to receive
a success fee of £30,000 each on completion of an Acquisition to be satisfied by the
Company issuing and allotting to each of the Directors 1,000,000 Ordinary Shares at an
issue price of £0.03 per Ordinary Share (subject to any adjustment following any sub-
division or consolidation of the Ordinary Shares).
18
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Directors’ Remuneration Report (continued)
Directors’ emoluments and compensation (audited) (continued)
Set out below are the emoluments of the Directors for the period ended 31 December 2015
(GBP):
Name of Director
Salary and
fees
Taxable
benefits
Annual
bonus and
long term
benefits
Pension
related
benefits
Other
Total
Geoffrey Dart
Peter Redmond
Adrian Beeston
Other matters
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Company does not currently have any annual or long-term incentive schemes or any other
scheme interests in place for any of the Directors other than already disclosed in respect of
‘success fee’ and as such there are no disclosures in this respect.
The Company does not have any pension plans for any of the Directors and does not pay pension
amounts in relation to their remuneration. The Company has not paid out any excess retirement
benefits to any Directors or past Directors. The Company has not paid any compensation to past
Directors.
Performance Graph
The following table includes a performance graph
comparing, the total shareholder return of an
ordinary share in Silver Falcon Plc against the total
shareholder return of the FTSE All-share index.
Silver Falcon Plc was listed in November 2015 and
therefore no historical share price data exists prior
to this period, there was also no data after its
suspension
the
completion of a transaction.
in December 2015, pending
Approved on behalf of the Board of Directors.
………………………
Geoffrey Dart
Director & Executive Chairman
Date: 24 April 2017
19
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Independent Auditor’s Report to the Members of Silver Falcon Plc
Opinion on financial statements
In our opinion the financial statements:
give a true and fair view of the state of the Company's affairs as at 31 December 2016
and of its loss for the period then ended;
have been properly prepared in accordance with IFRSs as adopted by the European
Union; and
have been prepared in accordance with the requirements of the Companies Act 2006 and
article 4 of the IAS regulation.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
the part of the Directors’ Remuneration Report to be audited has been properly prepared
in accordance with the Companies Act 2006; and
the information given in the Strategic Report and the Directors' Report for the financial year
for which the financial statements are prepared is consistent with the financial statements.
Basis for opinion
We have audited the financial statements of Silver Falcon Plc for the year ended 31 December
2016 which comprise the Statement of Comprehensive Income, the Statement of Financial
Position, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes.
The financial reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Going concern
We have reviewed the Directors’ statement on page 6 that the Company is a going concern.
We confirm that:
We have not identified material uncertainties related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern which we believe
would need to be disclosed in accordance with IFRSs as adopted by the European Union;
and
We have concluded that the Directors’ use of the going concern basis of accounting for the
preparation of the financial statements to be appropriate.
However, because not all future events or conditions can be predicted, this statement is not a
guarantee as to the Company’s ability to continue as a going concern.
20
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Independent Auditor’s Report for the Members of Silver Falcon Plc (continued)
Corporate Governance
We have reviewed the contents of the Governance Report which starts from page 12 and we
have nothing further to report.
Our assessment of risks of material misstatement
Due to the nature of the Company, which is not trading, it has very few transactions other than
those connected with its listing onto the London Stock Exchange, we did not identify any specific
risks that give rise to material misstatement, mainly because of the limited number of
transactions, which meant that we were able to review almost all transactions during our audit.
The Company has very few liabilities and its main asset is cash at bank. As part of our audit, we
undertook the necessary substantive and analytical procedures and undertook a review of the
bank transactions, including authorisation and approval procedures. A bank confirmation letter
to confirm the cash balance and to identify any other relationship between the Company and its
bankers was obtained directly from the bank. The Company is not trading and therefore going
concern was also identified as a risk and our review of going concern is included in our report on
page 20 and page 22.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating
the effect of misstatements on our audit and on the financial statements. For the purposes of
determining whether the financial statements are free from material misstatement, we define
materiality as the magnitude of misstatement that makes it probable that the economic decisions
of a reasonably knowledgeable person, relying on the financial statements, would be changed
or influenced. We also determine a level of performance materiality which we use to assess the
extent of testing needed to reduce to an appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds materiality for the financial statements
as a whole. When establishing our overall audit strategy, we determined a magnitude of
uncorrected misstatements that we judged would be material for the financial statements as a
whole. We determined materiality for the Company to be £31,500, which is approximately 3% of
the total assets, as the Company has not traded and has very little activity other than the raising
of equity following acquisition. Our objective in adopting this approach is to ensure that total
detected and undetected audit differences do not exceed our planning materiality of £31,500 for
the financial statements as whole. We agreed with the Board that all audit differences in excess
of £1,575, as well as differences below that threshold that, in our view, warranted reporting.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors' Responsibilities within the Directors'
Report, the Directors are responsible for the preparation of the financial statements and for being
satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion
on the financial statements in accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices
Board's Ethical Standards for Auditors.
21
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Independent Auditor’s Report for the Members of Silver Falcon Plc (continued)
Respective responsibilities of directors and auditors (continued)
An audit involves obtaining evidence about the amounts and disclosures in the financial
statements sufficient to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This includes an assessment of:
whether the accounting policies are appropriate to the Company’s circumstances and have been
consistently applied and adequately disclosed; the reasonableness of significant accounting
estimates made by the Directors; and the overall presentation of the financial statements. In
addition we read all the financial and non-financial information in the Annual Report to identify
material inconsistencies with the audited financial statements and to identify any information that
is apparently materially incorrect based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for our report.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
An Overview of the Scope of our audit
Our audit scope focused on the financial statements of the Company and identified the material
balances in the statement of comprehensive income for the year ended 31 December 2016, the
statement of financial position at 31 December 2016, the statement of changes in equity for the
year ended 31 December 2016, the Statement of Cash Flows for the year ended 31 December
2016 and the notes to the financial statements.
Silver Falcon Plc is a single entity investing Company that is in talks with a business after
identifying a suitable acquisition. The Company incurred certain acquisition related expenses
during the year and settled a monetary debt through the issuance of its equity instruments. Our
audit focussed on the accounting treatment for these and the related disclosures thereof.
22
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Independent Auditor’s Report for the Members of Silver Falcon Plc (continued)
An Overview of the Scope of our audit (continued)
The way in which we scoped our response to the significant risks identified are as follows:
The Company has very few liabilities and its main asset is cash at bank. As part of our
audit, we undertook substantive procedures, to include testing the bank transactions
including authorisation and approval procedures and a general analytical review of all
balances. A bank confirmation letter was obtained directly from the bank to confirm the
cash balance and to identify any other relationship between the Company and its bankers.
Going concern – we note that the Company has a very small cost base and that it holds
sufficient funds to ensure it can meet its ongoing working capital needs to settle its debts
as they fall due for a period of at least one year from the date of approval of these financial
statements. We also note that the Directors seek to ensure that these costs be kept to a
minimum until an acquisition has been made and this has been reflected following our
review of the post year end transactions. The major expenses incurred in the year were in
respect of legal and professional fees relating to the planned acquisition, and other costs
associated with keeping the Company listed. There are no other planned expenses and in
considering these costs, the Directors have concluded that the Company has sufficient
funds in place to ensure it can meet its payment obligations as they fall due for a period of
at least one year from the date these financial statements are approved. Following our
review, we have concluded that the Director’s use of the going concern basis of accounting
to be appropriate.
Matters on which we are required to report by exception
Under International Standards on Auditing (UK and Ireland), we are required to report to you if,
in our opinion, information in the Annual Report is:
Materially inconsistent with the information in the audited financial statements or apparently
materially incorrect based on, or materially inconsistent with, our knowledge of the Company
acquired in the course of performing our audit or is otherwise misleading.
In the light of the knowledge and understanding of the Company and its environment obtained
in the course of the audit, we have not identified material misstatements in the Strategic Report
or the Directors’ Report.
Under the Companies Act 2006, we are required to report to you if, in our opinion:
certain disclosures of directors' remuneration specified by law are not made;
we have not received all the information and explanations we require for our audit;
adequate accounting records have not been kept, or returns adequate for our audit have
not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns.
23
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Independent Auditor’s Report for the Members of Silver Falcon Plc (continued)
Matters on which we are required to report by exception (continued)
Under the Listing Rules we are required to review:
the Directors’ statement, in relation to going concern; and
the part of the Corporate Governance Statement relating to the Company’s compliance with
the provisions of the UK Corporate Governance Code specified for our review.
We have nothing to report on in respect of the above.
Mark Ling (Senior Statutory Auditor)
For and on behalf of
PKF Littlejohn LLP
Statutory Auditor
1 Westferry Circus
Canary Wharf
London
E14 4HD
Date 24 April 2017
24
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Statement of Comprehensive Income
Year ended
31 December 2016
£
Period ended
31 December 2015
£
Note
3
4
Continuing operations
Revenue
Administrative expenses
Listing costs
Operating loss
Loss before taxation
Taxation
Loss for the year attributable to
equity owners
Other comprehensive income for the
year
Total comprehensive income for
the year attributable to the equity
owners
Earnings/(loss) per share
attributable to equity owners
-
(519,898)
-
(519,898)
-
(46,027)
(34,340)
(80,367)
(519,898)
(80,367)
-
-
(519,898)
(80,367)
-
-
(519,898)
(80,367)
Basic and diluted (£ per share)
5
(0.008)
(0.005)
The notes to the financial statements form an integral part of these financial statements.
25
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Statement of Financial Position
As at
31 December 2016
£
As at
31 December 2015
£
Note
Assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity attributable to shareholders
Called up share capital
Share Premium
Retained earnings
Total equity
Liabilities
Current liabilities
Trade and other payables
Total liabilities
6
7
8
9
10
1,680
1,045,723
1,047,403
1,047,403
31,167
1,323,869
1,355,036
1,355,036
669,000
841,243
(606,535)
649,000
781,243
(86,637)
903,708
1,343,606
143,695
143,695
11,430
11,430
Total equity and liabilities
1,047,403
1,355,036
The notes to the financial statements form an integral part of these financial statements.
This report was approved by the board and authorised for issue on 24 April 2017 and signed on
its behalf by;
………………………
Geoffrey Dart
Executive Chairman
Company Registration Number: 08401609
26
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Statement of Changes In Equity
CURRENT YEAR
Brought forward at 1 January
2016
Loss in year
Other Comprehensive Income
Total comprehensive income
for the year
Issue of share capital net of
share issue costs
Called up
share
capital
£
Share
Premium
£
Retained
earnings
£
Total
£
649,000
781,243
(86,637)
1,343,606
-
-
-
-
-
-
(519,898)
-
(519,898)
-
(519,898)
(519,898)
20,000
60,000
-
80,000
As at 31 December 2016
669,000
841,243
(606,535)
903,708
Called up
share
capital
£
50,000
-
-
-
Share
Premium
£
Retained
earnings
£
Total
£
-
-
-
-
(6,270)
43,730
(80,367)
-
(80,367)
-
(80,367)
(80,367)
599,000
781,243
-
1,380,243
As at 1 March 2015
Loss in period
Other Comprehensive Income
Total comprehensive income
for the period
Issue of share capital net of
share issue costs
As at 31 December 2015
649,000
781,243
(86,637)
1,343,606
Share capital comprises the ordinary issued share capital of the Company.
Share Premium represents consideration less nominal value of issued shares and costs directly
attributable to the issue of new shares.
Retained earnings represent the cumulative retained losses of the Company at the reporting
date.
The notes to the financial statements form an integral part of these financial statements.
27
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Statement of Cash Flows
Cash flow from operating activities
Loss before taxation
Adjustments for:
Share-based payment
Changes in working capital
Decrease in trade and other receivables
Increase in trade and other payables
Note
Year
ended
31
December
2016
£
Period
ended 31
December
2015
£
(519,898)
(80,367)
80,000
-
29,487
132,265
6,333
11,430
Net cash used in operating activities
(278,146)
(62,604)
Cash flows from financing activities
Proceeds from issuance of shares net of issue costs
Net cash generated from financing activities
Cash flows from investing activities
Net cash used in investing activities
-
-
-
-
1,380,243
1,380,243
-
-
Increase/(decrease) in cash and cash equivalents
(278,146)
1,317,639
Cash and cash equivalents at beginning of period
1,323,869
6,230
Cash and cash equivalents at end of period
7
1,045,723
1,323,869
Major non-cash transactions
On the 11 November 2016 2,000,000 new Ordinary Shares of £0.01 nominal value were issued
at a premium of £0.03 per share to M6 Limited as settlement for a fee of £80,000 for online
marketing services.
The notes to the financial statements form an integral part of these financial statements.
28
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements
1. General Information
The Company’s principal activity is currently that of a ‘cash shell’ actively seeking an
investment. The Company was incorporated in England and Wales on 13 February 2013 as
a private limited Company. The Company did not trade during the financial period ended 31
December 2016, the majority of expenses related to legal and professional fees in
connection with an aborted acquisition and a new potential acquisition, along with
consultancy and legal fees as well as general administration expenses.
The Company’s registered office is located at 5 Fleet Place, London EC4M 7RD, and is
listed on the London Stock Exchange.
2.
Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are
set out below. These policies have been consistently applied to all the years presented,
unless otherwise stated.
a) Basis of Preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) and IFRS Interpretations Committee (IFRS IC)
interpretations as adopted for use by the European Union, and the Companies Act
2006. The financial statements have been prepared under the historical cost
convention.
i) New and amended standards mandatory for the first time for the period beginning 1
January 2016
No new standards, amendments or interpretations, effective for the first time for the
financial year beginning on or after 1 January 2016 have had a material impact on
the Company.
29
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
a) Basis of Preparation (continued)
ii) New standards, amendments and Interpretations in issue but not yet effective or not
yet endorsed and not early adopted
The standards and interpretations that are issued, but not yet effective, up to the
date of issuance of the financial statements are listed below. The Company intend
to adopt these standards, if applicable, when they become effective.
Standard
IAS 7
(Amendments)
IAS 12
(Amendments)
IFRS 9
(Amendments)
IFRS 15
Impact on initial application
Disclosure Initiative
Recognition of Deferred Tax
Financial Instruments
Revenue from contracts with customers
IFRS 16
Leases
IFRS 2
(Amendments)
Annual
improvements
IAS 40
(Amendments)
IFRIC
Interpretations 22
IFRS 4
(Amendments)
IFRIC 22
IAS 40
(Amendments)
Share-based payments – classification and
measurement
2014-2016 Cycle
Transfer of investment property
Foreign currency transactions and advanced
consideration
Applying IFRS 9 ‘with IFRS 4’ Insurance
contracts
Foreign currency transactions and advance
consideration
Transfers of investment properties
* Subject to EU endorsement
Effective date
*1 January
2017
*1 January
2017
1 January
2018
*1 January
2018
*1 January
2019
*1 January
2018
*1 January
2017/ 1
January 2018
1 January
2017
1 January
2018
*1 January
2018
*1 January
2018
*1 January
2018
The Company is evaluating the impact of the new and amended standards above.
The Directors believe that these new and amended standards are not expected to
have a material impact on the Company’s results or shareholders’ funds but this will
revisited once an acquisition has been made. However, the following standards
should be looked at in more detail:
IFRS 9, ‘Financial instruments’, addresses the classification, measurement and
recognition of financial assets and financial liabilities. The complete version of IFRS
9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the
classification and measurement of financial instruments. IFRS 9 retains but
30
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
the mixed measurement model and establishes
simplifies
three primary
measurement categories for financial assets: amortised cost, fair value through OCI
and fair value through P&L. The basis of classification depends on the entity’s
business model and the contractual cash flow characteristics of the financial asset.
Investments in equity instruments are required to be measured at fair value through
profit or loss with the irrevocable option at inception to present changes in fair value
in OCI not recycling. There is now a new expected credit losses model that replaces
the incurred loss impairment model used in IAS 39. For financial liabilities there were
no changes to classification and measurement except for the recognition of changes
in own credit risk in other comprehensive income, for liabilities designated at fair
value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness
by replacing the bright line hedge effectiveness tests. It requires an economic
relationship between the hedged item and hedging instrument and for the ‘hedged
ratio’ to be the same as the one management actually use for risk management
purposes. Contemporaneous documentation is still required but is different to that
currently prepared under IAS 39. The standard is effective for accounting periods
beginning on or after 1 January 2018 but early adoption is permitted.
As at the year end, the Company only hold basic financial instruments such as loans
and receivables and other liabilities measured at amortised cost. Because of this,
the Director’s believe the potential changes caused by IFRS 9 will be immaterial
until an acquisition of a trading company has taken place.
IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition
and establishes principles for reporting useful information to users of financial
statements about the nature, amount, timing and uncertainty of revenue and cash
flows arising from an entity’s contracts with customers. Revenue is recognised when
a customer obtains control of a good or service and thus has the ability to direct the
use and obtain the benefits from the good or service. The standard replaces IAS 18
‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The
standard is effective for annual periods beginning on or after 1 January 2018 and
earlier application is permitted.
As at the year-end and at the date of the approval of the financial statements, no
revenue has been generated. Revenue will only be generated once an acquisition
of a trading company has taken place. Once this is the case, the Company will
determine a reasonable time frame for adopting IFRS 15 and the best approach in
providing reliable comparative information.
b) Significant accounting judgements, estimates and assumptions
The preparation of the financial statements in conformity with International Financial
Reporting Standards requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the
Company’s accounting policies.
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 estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below.
31
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
b) Significant accounting judgements, estimates and assumptions (continued)
The principal areas in which judgement is applied are as follows:
Going Concern
The preparation of financial statements requires an assessment on the validity of the
going concern assumption.
The Directors have reviewed projections for a period of at least 12 months from the
date of approval of the financial statements. The Company has no revenues but
significant cash resources were raised following its listing to finance its activities whilst
it identifies and completes suitable acquisition opportunities. On 30 September 2016,
a potential acquisition of Lime Holdings Limited was halted. Since this time, the
Company has been looking at other potential acquisitions but as of yet have not come
to a binding agreement.
In making their assessment of Going Concern, the Directors acknowledge that the
Company has a very small cost base and can therefore confirm that they hold sufficient
funds to ensure they can meet their ongoing working capital needs to settle their debts
as they fall due for a period of at least one year from date of approval of these financial
statements. Accordingly, the Board believes it is appropriate to adopt the going
concern basis in the preparation of the financial statements.
c) Financial Instruments
Financial assets and liabilities are recognised in the Company’s statement of financial
position when the Company becomes a party to the contractual provisions of the
instrument. The Company currently does not use derivative financial instruments to
manage or hedge financial exposures or liabilities.
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current assets,
except for maturities greater than 12 months after the end of the reporting period. These
are classified as non-current assets. The Company’s loans and receivables comprise
Trade and Other Receivables and Cash and Cash Equivalents in the Statement of
Financial Position
d) Trade and Other Receivables and Payables
Trade and other receivables are amounts due from customers for merchandise sold or
services performed in the ordinary course of business. If collection is expected in one year
or less (or in the normal operating cycle of the business if longer), they are classified as
current assets. If not they are presented as non-current assets.
Trade and other receivables are recognised initially at fair value, and subsequently
measured at amortised cost using the effective interest method, less provision for
impairment.
32
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
d) Trade and Other Receivables and Payables (continued)
Other liabilities measured at amortised cost are obligations to pay for goods or services
that have been acquired in the ordinary course of business from suppliers. The liabilities
are classified as current liabilities if payment is due within one year or less (or in the normal
operating cycle of the business if longer. If not, they are presented as non-current liabilities.
The liabilities are recognised initially at fair value, and subsequently measured at amortised
cost using the effective interest method.
e) De-recognition of Financial Instruments
i.
Financial Assets
A financial asset is derecognised where:
the right to receive cash flows from the asset has expired;
the Company retains the right to receive cash flows from the asset, but has
assumed an obligation to pay them in full without material delay to a third party
under a pass-through arrangement; or
the Company has transferred the rights to receive cash flows from the asset,
and either has transferred substantially all the risks and rewards of the asset or
has neither transferred nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.
ii.
Financial Liabilities
A financial liability is derecognised when the obligation under the liability is
discharged or cancelled or expires. Where an existing financial liability is replaced
by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is
treated as a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognised in the
statement of comprehensive income.
f) Taxation
Current Tax
Current tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the tax authorities. The tax rates and
the tax laws used to compute the amount are those that are enacted or substantively
enacted by the statement of financial position date.
33
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
f)
Taxation (continued)
Deferred Tax
Deferred income tax is recognised on all temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements,
with the following exceptions:
where the temporary difference arises from the initial recognition of goodwill or of
an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither accounting nor taxable profit or loss;
in respect of taxable temporary differences associated with investment in
subsidiaries, associates and joint ventures, where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future; and
deferred income tax assets are recognised only to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences,
carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at
the tax rates that are expected to apply when the related asset is realised or liability is
settled, based on tax rates and laws enacted or substantively enacted at the statement
of financial position date.
The carrying amount of deferred income tax assets is reviewed at each statement of
financial position date. Deferred income tax assets and liabilities are offset, only if a
legally enforcement right exists to set off current tax assets against current tax
liabilities, the deferred income taxes related to the same taxation authority and that
authority permits the Company to make a single net payment.
Income tax is charged or credited directly to equity if it relates to items that are credited
or charged to equity. Otherwise income tax is recognised in the statement of
comprehensive income.
g) Segmental Reporting
At this point, identifying and assessing investment projects is the only activity the
Company is involved in and is therefore considered as the only operating/reportable
segment.
Therefore the financial information of the single segment is the same as that set out in
the Company statement of comprehensive income, Company statement of financial
position, the Company statement of changes to equity and the Company statement of
cashflows.
34
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
2.
Summary of Significant Accounting Policies (continued)
h) Financial Risk Management Objectives and Policies
The Company does not enter into any forward exchange rate contracts.
The main financial risks arising from the Company’s activities are cash flow interest
rate risk, liquidity risk, price risk (fair value) and credit risk. Further details on the risk
disclosures can be found in Note 13.
i) Equity
Equity instruments issued by the Company are recorded net at proceeds after direct
issue costs.
j) Cash and Cash Equivalents
Cash and cash equivalents comprise cash held in bank. This definition is also used
for the Statement of Cash Flows.
The Company considers the credit ratings of banks in which it holds funds in order to
reduce exposure to credit risk. The Company only keeps its holdings of cash and cash
equivalents with institutions which have a minimum credit rating of ‘A-’.
The Company considers that it is not exposed to major concentrations of credit risk.
35
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
3.
Expenses by Nature
Advertising and PR
Fees payable to the Company’s auditor:
-
for the audit of the annual accounts
- non audit services
Legal and professional fees
Establishment expenses
Total Administrative expenses
4.
Income tax
Year ended
31 December
2016
£
80,400
Period ended
31 December
2015
£
17,050
11,575
24,000
296,016
107,907
519,898
7,025
-
6,825
15,127
46,027
Analysis of charge in the year
Current tax:
UK corporation tax on loss for the year
Deferred tax
Tax on loss on ordinary activities
Year ended
31 December
2016
£
Period ended
31 December
2015
£
-
-
-
-
-
-
Loss on ordinary activities before tax
(519,898)
(80,367)
Analysis of charge in the year
Loss on ordinary activities multiplied by rate
of corporation tax in the UK of 20%
Disallowed items
Timing differences
Tax losses carried forward
Current tax charge
Effects of:
Tax Loss brought forward
Prior year adjustment
Tax Loss in period unutilised
Tax Loss carried forward
Current tax charge for the year as above
(103,980)
(16,073)
54,145
-
(49,835)
-
(46,027)
(18,498)
(230,673)
(295,198)
-
3,168
3,700
(9,205)
-
-
-
(46,027)
(46,027)
-
The Company has accumulated tax losses arising in the UK of approximately £295,198 (Dec
2015: £46,027) that are available, under current legislation, to be carried forward against
future profits. No deferred tax asset has been recognised against these losses.
5.
Earnings per share
The calculation of the Basic and fully diluted earnings per share is calculated by dividing the
loss for the year from continuing operations of £519,898 (2015: £80,367) for the Company
by the weighted average number of ordinary shares in issue during the year of 65,173,973
(2015: 16,519,016).
There are no potential dilutive shares in issue.
36
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
6.
Trade and other receivables
VAT receivable
Other receivables
Prepayments
As at
31 December
2016
£
As at
31 December
2015
£
-
180
1,500
1,680
28,082
335
2,750
31,167
There are no material differences between the fair value of trade and other receivables and
their carrying value at the year end.
No receivables were past due or impaired at the year end.
7. Cash and cash equivalents
Cash at bank
8. Called up share capital
As at
31 December
2016
£
1,045,723
As at
31 December
2015
£
1,323,869
1,045,723
1,323,869
On 30 October 2015 and prior to the Company’s listing, 21,600,000 new Ordinary Shares of
£0.01 nominal value had been issued at par and fully paid. On 9 November 2015 following
the Company’s listing on the London Stock Exchange, 43,300,000 new Ordinary Shares of
£0.01 nominal value were issued, fully paid at a premium of £0.02 per share. On 11th
November 2016 2,000,000 new Ordinary Shares of £0.01 nominal value were issued at a
premium of £0.03 per share to M6 Limited as settlement for a fee of £80,000 for online
marketing services.
The ordinary shares have attached to them full voting, dividend and capital distribution rights
(including on a winding up). The ordinary shares do not confer any rights of redemption.
37
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
8. Called up share capital (continued)
At 1 March 2015
Subscription 29 July 2015
Intermediate placees subscription 30 October 2015
Placing 9 November 2015
At 1 January 2016
Ordinary Shares issued 11 November 2016
At 31 December 2016
Ordinary Shares of £0.01
9.
Share Premium
Summary of Share Premium
At 1 March 2015
Placing 9 November 2015
Number of
Shares
Ordinary
Shares
5,000,001
2,499,999
14,100,000
43,300,000
64,900,000
2,000,000
Share
Capital
£
50,000
25,000
141,000
433,000
649,000
20,000
66,900,000
669,000
Share
Premium
Paid (net
of cost of
shares)
£
-
866,000
Less share
issue costs
£
-
(84,757)
Net Share
Premium
£
-
781,243
At 1 January 2016
866,000
(84,757)
781,243
Ordinary Shares issued 11 November
2016
60,000
-
60,000
At 31 December 2016
926,000
(84,757)
841,243
10. Trade and other payables
Accruals
38
As at
31
December
2016
£
As at
31
December
2015
£
143,695
11,430
143,695
11,430
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
11. Related party disclosures
With effect from 11 November 2015, M6 Limited (“M6”) entered into an agreement to provide
web development, online marketing, mobile application development and marketing, content
production, advertising, public relations, and lead generation services to the Company for a
fee of £80,000. The Company has agreed with M6 to issue 2,000,000 Ordinary Shares at
the Placing Price at Admission in settlement of monies owed to M6. As at 11 November
2016, 2,000,000 Ordinary Shares were issued to M6 as payment for their services; further
details of this transaction are disclosed in note 8. Adrian Beeston, a director of the Company,
is also a director of M6 and holds c.17 per cent. of the issued ordinary share capital of M6
Limited.
During the year, the Company paid £20,239 (2015: £3,000) to Dukemount Capital Plc in
respect of rent. Peter Redmond, a Director of the Company, is also Director of Dukemount
Capital Plc. As at the year-end, £Nil (2015: £1,500) was owed to Dukemount in respect of
rent.
12. Directors’ emoluments
Details concerning Directors’ remuneration can be found below. The Directors are
considered to be the key management.
Name of Director
Geoffrey Dart
Peter Redmond
Adrian Beeston
Short
term
employee
benefits
-
-
-
Post
employment
benefits
Other
long
term
benefits
Termination
benefits
Other
Total
-
-
-
Total
-
-
-
-
-
-
Further information concerning Directors’ remuneration can be found in the Directors’
Remuneration report.
39
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
13. Financial instruments
The following table sets out the categories of financial instruments held by the Company as
at the year ended 31 December 2016 and period ended 31 December 2015:
2016
Trade and other receivables, except
prepayments
Cash and cash equivalents
2015
Trade and other receivables, except
prepayments
Cash and cash equivalents
2016
Trade and other payables
2015
Loans and
Receivables
Total
£
£
180
1,045,723
180
1,045,723
1,045,903
1,045,903
Loans and
Receivables
Total
£
£
28,417
1,323,869
28,417
1,323,869
1,352,286
1,352,286
Other financial
liabilities at
amortised cost
Total
£
£
143,695
143,695
143,695
121,695
Other financial
liabilities at
amortised cost
Total
£
£
Trade and other payables
11,430
11,430
11,430
11,430
40
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Cash & cash equivalents
All of the cash balance as per the Statement of Financial Position is held with the following
institutions:
Metro Bank PLC
Royal Bank of Scotland
a)
Interest rate risk
2016
£
2015
£
1,044,502
1,221
1,323,869
-
The Company has floating rate financial assets in the form of deposit accounts with
major banking institutions; however, it is not currently subjected to any other interest
rate risk.
Based on cash balances as above as at the statement of financial position date, a rise
in interest rates of 1% would not have a material impact on the profit and loss of the
Company and such is not disclosed.
In relation to sensitivity analysis, there was no material difference to disclosures made
on financial assets and liabilities.
b)
Liquidity risk
The Company regularly reviews its major funding positions to ensure that it has
adequate financial resources in meeting its financial obligations. The Company takes
liquidity risk into consideration when deciding its sources of funds. The principle
liquidity risk facing the business is the risk of going concern which has been discussed
in Note 2 (b).
c) Credit risk
The Company had receivables of £1,680 at 31 December 2016. Company receivables
of £1,680 at the year end were not past due, and the Directors consider there to be no
credit risk arising from these receivables.
d) Capital risk management
The Company defines capital as the total equity of the Company. The Company’s
objectives when managing capital are to safeguard the Company’s ability to continue
as a going concern in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount
of dividends paid to shareholders, return capital to shareholders, issue new shares or
sell assets to reduce debt.
e)
Fair value of financial assets and liabilities
There are no material differences between the fair value of the Company’s financial
assets and liabilities and their carrying values in the financial statements.
41
Silver Falcon Plc
Annual Report & Financial statements
For the Year Ended 31 December 2016
Notes to the Financial Statements (continued)
14. Staff Costs
During the year to 31 December 2016 there were no staff costs as no staff were employed
by the Company other than the directors. Therefore, the average staff number for the year
was 3 in administration, this includes the Directors.
15. Ultimate Controlling Party
The Directors have determined that there is no controlling party as no individual shareholder
holds a controlling interest in the Company.
16. Copies of the Annual Report
Copies of the annual report will be available on the Company’s website at
www.silverfalconplc.com and from the Company’s registered office, 5 Fleet Place
London EC4M 7RD.
42