Inspirit Energy Holdings plc
Annual Report and Financial Statements
for the year ended 30 June 2015
Company Registration no: 05075088
1
Inspirit Energy Holdings plc
COMPANY INFORMATION
DIRECTORS :
J Gunn (Chairman and CEO)
N Jagatia
N Luke
COMPANY SECRETARY :
N Jagatia
REGISTERED OFFICE :
nd
Floor
2
2 London Wall Buildings
London
EC2M 5PP
COMPANY REGISTRATION NUMBER :
05075088
REGISTRAR AND TRANSFER OFFICE :
SOLICITORS :
INDEPENDENT AUDITOR :
NOMINATED ADVISOR AND
BROKER:
Share Registrars Limited
Suite E, First Floor
9 Lion and Lamb Yard
Farnham
Surrey
GU9 7LL
Nabarro LLP
Lacon House
84 Theobald’s Road
London
WC1X 8RW
Welbeck Associates
Statutory Auditor
30 Percy Street
London
W1T 2DB
Westhouse Securities Limited
Beaufort House
15 St Botolph Street
London
EC3A 7BB
2
Inspirit Energy Holdings plc
CONTENTS
Chairman’s statement
Strategic report
Report of the directors
Independent auditor's report
Group statement of comprehensive income
Group statement of changes in equity
Company statement of changes in equity
Group and company statements of financial position
Group and company statements of cash flows
Notes to the financial statements
page
3
4
7
10
12
13
14
15
16
17
3
Inspirit Energy Holdings plc
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 30 June 2015
INTRODUCTION
This financial year, Inspirit Energy Holdings plc has maintained its focus and taken important steps forward in the
commercialisation of the Company’s micro combined heat and power (“mCHP”) boilers “Inspirit Charger 2.0” and
“Inspirit Charger 3.0”.
COMMERCIALISATION AND PROGRESS
The significant investment made to date demonstrates the Group’s progress towards achieving full certification approval
and commercialisation of the Group’s highly efficient mCHP boilers.
Several key agreements were announced including an agreement for the future installation of test products with a utility
company and other organisations and a Letter of Intent with a large scale manufacturer.
The facility in Sheffield has been very active in demonstrating the mCHP boiler to various prospective large scale
customers and we are in the process of providing familiarisation training to installers.
Key Sales and Marketing personnel with specific industry track record were appointed during the period to formalise the
next phase of sales and distribution.
We committed to developing and producing of a new 2 kilowatt ("kW") electrical output version of the Inspirit mCHP
boiler-generator for the domestic market to complement the larger 3 kW electrical output version which is currently
being built for the SME market. The significance of this decision was to significantly increase the market potential of
Inspirit's product range by offering an appliance that is suitable for the larger domestic sector and that can qualify for the
current UK Government Feed in Tariff.
The Company rebranded the name of the mCHP boiler to Inspirit Charger 2.0 (2kW) and Inspirit Charger 3.0 (3kW)
OUTLOOK
The progress over the last year has been extremely positive. We are well positioned at the forefront of mCHP boiler
technology and I firmly believe we will continue to make great progress in 2016 and beyond, in achieving our goal of
technological commercialisation.
The Board would like to take this opportunity for thanking all of the Company’s staff and consultants for their hard work
during the year and our shareholders for their support.
J Gunn
Chairman and Chief Executive Officer
30 December 2015
4
Inspirit Energy Holdings plc
STRATEGIC REPORT
FOR THE YEAR ENDED 30 June 2015
The Directors present their Strategic Report on Inspirit Energy Holdings plc and its subsidiary undertakings (“the
Group”) for the year ended 30 June 2015.
REVIEW OF THE BUSINESS
The Company is now exclusively focused on commercialising the Group’s unique and highly efficient micro co-
generation boiler to generate returns for investors.
Inspirit Energy Limited is currently pursuing the development and commercialisation of a world-leading micro Combined
Heat and Power (“mCHP”) boiler for use in commercial and residential markets. The mCHP boiler is powered by natural
gas and designed to produce hot water (for Domestic Hot Water or Central Heating) and a simultaneous electrical
output that can be used locally or fed back into the National Grid.
Inspirit Energy’s new “British Engineered” mCHP boiler is one of the industry’s most powerful and energy efficient
mCHP appliances for its size with simultaneous generation of up to 15 kilowatts of thermal output and up to 3 kilowatts
of electrical output. The mCHP boiler has been designed to be low maintenance and can be installed by a certified gas-
safe tradesman. The appliance’s patented engine takes the waste heat from the boiler and converts it efficiently into
electricity, first supplying the property where it is installed and then feeding surplus electricity into the National Grid.
The developments made in the mCHP boiler show the great progress that the Company has made during the year and
the platform for success in the future.
Key Sales and Marketing Directors were appointed at Inspirit Energy Limited, Inspirit Energy Holdings plc's 100%
owned operating Company to provide sales and distribution channels for the mCHP boilers.
Inspirit intends to explore opportunities to market and /or licence its technology.
DEVELOPMENTS DURING THE YEAR
In September 2014, Dr John Bannister joined the management team as a full time consultant to the Company and
special advisor to the Board. The Group also agreed with Calor Gas Ltd, the UK's leading supplier of liquid petroleum
gas, to the installation of one of Inspirit's boilers at one of its customer sites, when commercial units become available.
In November 2014, the Group agreed a testing and field trial agreement with Utilitywise plc, which is one of Europe's
leading and rapidly expanding Energy, environmental management and Utility Broker companies.
In December 2014, John Gunn and David Lenigas, the former Chairman, committed to each providing the Group with
up to £250,000 in loan funding to continue with the commercialisation of the Inspirit mCHP appliance. Plus, the Group
agreed with Barchester Healthcare to install a mCHP unit in one of its care homes as part of the Field Trials.
In January 2015, the Group committed to the development and production of a new 2 kilowatt ("kW") electrical output
version of the Inspirit mCHP boiler-generator for the domestic market to complement the larger 3 kW electrical output
version currently being built for the SME market. The significance of this decision was to significantly increase the
market potential of Inspirit's product range by offering an appliance that is suitable for the larger domestic sector and
that can qualify for the current UK Government Feed in Tariff.
In February 2015, the Company signed a Letter of Intent with a major multi-national contract manufacturing Services
Company that may lead to a significant manufacturing agreement, and raised £350,000 (gross) through the issue of
38,888,889 new ordinary shares at a price of 0.9 pence per share.
In May 2015 Nick Stevenson (former Chief Operating Officer of Sustainable Power Ltd) and Paddy Thompson (former
General Manager of Ceramic Fuel Cells Ltd) were appointed to the senior management team in the roles of Marketing
Director and Sales Director of Inspirit Energy Limited, respectively.
5
Inspirit Energy Holdings plc
STRATEGIC REPORT
FOR THE YEAR ENDED 30 June 2015
BOARD CHANGES
On 6 February 2015, Jubeenh Nazhat, Executive Director stepped down from the board to pursue other interests.
On 21 December 2015, Mr John Gunn, the Company's CEO, took on the additional role of Chairman of the Company,
replacing Mr David Lenigas as Chairman who retired as a director of the Company.
RESULTS AND DIVIDENDS
The Group made a loss after taxation of £572,000 (2014: loss of £1,293,000).
The Directors do not propose a dividend for the year to 30 June 2015 (2014: £nil).
KEY PERFORMANCE INDICATORS
The key performance indicators used by the Board to monitor the performance of the Company, are set out below:
PLC STATISTICS
Net asset value
Net asset value – fully diluted per share
Closing share price
Market capitalisation
30 June
2015
30 June
2014
Change
%
£1,946,000
£2,098,000
0.28p
0.48p
0.32p
1.12p
£3,366,000
£7,342,000
-7%
-12%
-57%
-54%
KEY RISKS AND UNCERTAINTIES
Early stage product development carries a high level of risk and uncertainty, although the rewards can be outstanding.
At this stage there is a common risk associated with all pioneering technologically advanced companies in their
requirement to continually invest in research and development. The Group has already made significant investments in
addressing opportunities in the renewable energy sector.
The Group has raised funds during the period as discussed in the ‘Developments during the year’ above. The Directors
feel that while this is sufficient for operating forecasts, further funding requirements are necessary to expedite the
commercialisation of the micro co-generation boiler.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The principal financial risk faced by the Group is liquidity risk. The Group’s financial instruments included borrowings
and cash which it used to finance its operations. At the year end, borrowings did not include borrowings supplied from
the bank. More information is given in Note 3 to the Financial Statements. The Group has no significant concentrations
of credit risk.
ASSESSMENT OF BUSINESS RISK
The Board regularly reviews operating and strategic risks. The Group’s operating procedures include a system for
reporting financial and non-financial information to the Board including:
•
•
•
•
•
reports from management with a review of the business at each Board meeting, focusing on any new
decisions/risks arising;
reports on the performance of investments;
reports on selection criteria of new investments;
discussion with senior personnel; and
consideration of reports prepared by third parties.
Details of other financial risks and their management are given in Note 3 to the financial statements.
6
Inspirit Energy Holdings plc
STRATEGIC REPORT
FOR THE YEAR ENDED 30 June 2015
GOING CONCERN
The Group meets its day-to-day working capital requirements through its ability to raise funds when required. The
current economic conditions continue to create uncertainty, particularly over (a) the level of demand for the Group’s
products; and (b) the availability of funding for the foreseeable future.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue
in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in
preparing its consolidated Financial Statements.
POST YEAR END EVENTS
On 7 July 2015, John Gunn, the Company's Chief Executive Officer, acquired 2,000,000 ordinary shares of 0.1p each in
the Company at an average price of 0.4425p per share.
On 8 July 2015, Nilesh Jagatia, the Company's Chief Financial Officer, acquired 2,000,000 ordinary shares of 0.1p each
in the Company at an average price of 0.5p per share.
On 9 July 2015, the Group filed trademark applications for the product name for its CHP boiler and will be known as the
"INSPIRIT CHARGER". UK and EU trademark applications had been filed to protect the name.
On 17 July 2015, the Company raised £365,000 through the placing of 77,659,570 ordinary shares at a price of 0.47
pence per ordinary share. John Gunn, participated in the placing by investing £75,000. Of this investment, £50,000 was
invested by Global Investment Strategy UK Limited ("GIS") which is a 100% owned subsidiary of Octagonal Plc (OCT)
of which John Gunn is Chief Executive Officer and 52.44 per cent shareholder, as a conversion into Placing Shares of
an existing loan, and £25,000 was invested by John Gunn directly in the Placing. David Lenigas also participated in the
placing by converting an existing loan of £50,000 into Placing Shares.
On the same day, John Gunn transferred, for nil consideration, 18,769,200 Ordinary Shares to former investors in
Disenco Limited, the company which originally developed the Inspirit technology.
On 20 August 2015, the Company appointed Peterhouse Corporate Finance Limited as Joint Broker alongside
Westhouse Securities Limited.
On 17 December 2015, the Company announced the successful conclusion of in house operational testing on its first
Inspirit Charger mCHP appliance for field trial use.
ON BEHALF OF THE BOARD
N Jagatia
Director
30 December 2015
7
Inspirit Energy Holdings plc
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 30 June 2015
The Directors present their annual report on the affairs of the Group, together with the audited financial statements
for the year ended 30 June 2015.
PRINCIPAL ACTIVITIES
The principal activity of the Company is that of development and commercialisation of the mCHP boiler.
Details of the Group’s principal activities can be found in the Strategic Report.
DIRECTORS
The Directors who held office in the period up to the date of approval of the Financial Statements and their beneficial
interests in the Group’s issued share capital at the beginning and end of the accounting year were:
Number of
ordinary shares
Number of
share options and warrants
30 June
2015
30 June
2014
30 June
2015
30 June
2014
D Lenigas (resigned 21 December 2015)
6,000,000
6,000,000
J Gunn
368,479,632
353,841,356
J Nazhat (resigned 2 February 2015)
N Jagatia
N Luke
-
-
3,300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
INDEMNITY OF OFFICERS
The Company maintains appropriate insurance cover against legal action brought against its Directors and officers.
POLICY AND PRACTICE ON PAYMENT OF CREDITORS
The Company’s policy is to agree terms of payment with suppliers. These normally provide for settlement within 30
days of the date of the invoice, except where other arrangements have been negotiated. It is the policy of the
Company to abide by the agreed terms of payment, provided the supplier performs according to the terms of the
contract.
8
Inspirit Energy Holdings plc
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 30 June 2015
CORPORATE GOVERNANCE
The Board has not adopted the UK Corporate Governance Code; this is only a requirement for premium listed
companies and the Board does not consider it appropriate for a company of the size and nature of Inspirit Energy
Holdings plc. The Board has, however, adopted the requirements of the Corporate Governance Guidelines for
Smaller Companies published by the Quoted Companies Alliance, although, until an independent non-executive
director is appointed, Neil Luke will chair each of the committees.
BOARD OF DIRECTORS
The Board is responsible for strategy and performance, approval of major capital projects and the framework of
internal controls. To enable the Board to discharge its duties, all Directors receive appropriate and timely
information. All Directors have access to the advice and services of the Company Secretary, who is responsible for
ensuring the Board procedures, are followed and that applicable rules and regulations are complied with.
AUDIT COMMITTEE
The Audit Committee is currently chaired by Neil Luke and includes Nilesh Jagatia. The committee provides a forum
for reporting by the Group’s external auditors. The committee is also responsible for reviewing a wide range of
matters, including half-year and annual results before their submission to the Board, and for monitoring the controls
that are in force to ensure the integrity of information reported to shareholders. The Audit Committee will advise the
Board on the appointment of external auditors and on their remuneration for both audit and non-audit work, and will
discuss the nature, scope and results of the audit with the external auditors. The committee will keep under review
the cost effectiveness and the independence and objectivity of the external auditors.
The Audit Committee is responsible for ensuring the “right tone at the top” and that the ethical and compliance
commitments of management and employees are understood throughout the Group.
REMUNERATION COMMITTEE
The Remuneration Committee is chaired by Neil Luke and includes Nilesh Jagatia. The committee is responsible for
making recommendations to the Board, within agreed terms of reference, on the Group’s framework of executive
remuneration and its cost. The Remuneration Committee determines the contract terms, remuneration and other
benefits for the executive directors, including performance related bonus schemes and compensation payments.
The Board itself determines the remuneration of the non-executive directors.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority. In addition to the publication of an annual report and an
interim report, there is regular dialogue with shareholders and analysts. The Annual General Meeting is viewed as a
forum for communicating with shareholders, particularly private investors. Shareholders may question the Executive
Chairman and other members of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's system of internal control and for reviewing the
effectiveness of these systems. The risk management process and systems of internal control are designed to
manage rather than eliminate the risk of the Group failing to achieve its strategic objectives. It should be recognised
that such systems can only provide reasonable and not absolute assurance against material misstatement or loss.
The Group has well established procedures which are considered adequate given the size of the business.
9
Inspirit Energy Holdings plc
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 30 June 2015
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report of the Directors and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the
directors have prepared the group and parent company financial statements in accordance with International
Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”). Under company law the
directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the
state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing
these financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently
• make judgments and accounting estimates that are reasonable and prudent
•
state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material
departures disclosed and explained in the financial statements; and
•
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and
Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions. The Company is compliant with AIM Rule 26
regarding the Company’s website. See www.inspirit-energy.com.
DISCLOSURE OF INFORMATION TO AUDITOR
In the case of each person who was a Director at the time this report was approved:
•
so far as that director is aware there is no relevant audit information of which the Company’s auditor is
unaware: and
•
that director has taken all steps that the director ought to have taken as a director to make himself aware of
any relevant audit information and to establish that the Company’s auditor is aware of that information.
INDEPENDENT AUDITOR
The auditors, Welbeck Associates, who were appointed during the year following the resignation of PKF Littlejohn
LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
ON BEHALF OF THE BOARD
N Jagatia
Director
30 December 2015
10
Inspirit Energy Holdings plc
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF INSPIRIT ENERGY HOLDINGS PLC
FOR THE YEAR ENDED 30 June 2015
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INSPIRIT ENERGY HOLDING PLC
We have audited the Financial Statements of Inspirit Energy Holdings Plc for the year ended 30 June 2015 which
comprise the Group and Parent Company Statements of Financial Position, the Group Statement of Comprehensive
Income, the Group and Parent Company Statement of Cash Flow, the Group and Parent Company Statements of
Changes in Equity and the related notes. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as
regards the Parent Company Financial Statements, as applied in accordance with the provisions of the Companies Act
2006.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone, other than the Company and the Company's members as
a body, for our audit work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation
of the Financial Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and
express an opinion on the Financial Statements in accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards
for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are appropriate to the Company’s circumstances
and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates
made by Directors; and the overall presentation of the financial statements. In addition, we read all the financial and
non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements
and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
•
•
•
•
the Financial Statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 30 June 2015 and of the Group’s loss for the year then ended;
the Group Financial Statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the Parent Company Financial Statements for the 12 months ended 30 June 2015 have been properly
prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the
provisions of the Companies Act 2006; and
the Financial Statements have been prepared in accordance with the requirements of the Companies Act
2006.
EMPHASIS OF MATTER – GOING CONCERN
In forming our opinion on the Financial Statements, which is not modified, we have considered the adequacy of the
disclosure made in note 2 to the Financial Statements concerning the Group’s and Company’s ability to continue as
going concerns. These conditions, along with the other matters explained in note 2 to the Financial Statements, indicate
the existence of a material uncertainty which may cast doubt on the Group’s and Company’s ability to continue as going
concerns. The Financial Statements do not include the adjustments that would result if the Group was unable to
continue as a going concern.
11
Inspirit Energy Holdings plc
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF INSPIRIT ENERGY HOLDINGS PLC
FOR THE YEAR ENDED 30 June 2015
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year for which the
Financial Statements are prepared is consistent with the Financial Statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
•
the Parent Company Financial Statements are not in agreement with the accounting records and returns; or
•
certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Rory Heier (Senior statutory auditor)
For and on behalf of Welbeck Associates
Statutory auditor
30 December 2015
30 Percy Street
London
W1T 2DB
12
Inspirit Energy Holdings plc
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 June 2015
CONTINUING OPERATIONS:
Revenue
Administrative expenses
Impairment of goodwill
Other losses – net
OPERATING LOSS
Finance costs
LOSS BEFORE INCOME TAX
Income tax credit
LOSS FOR THE YEAR (ATTRIBUTABLE TO OWNERS OF THE PARENT)
Other comprehensive income
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(ATTRIBUTABLE TO OWNERS OF THE PARENT)
EARNINGS PER SHARE
- Basic and fully diluted earnings per share
(attributable to owners of the parent)
Note
8
13
9
10
11
2015
£’000
-
(724)
-
-
2014
£’000
-
(506)
(663)
(197)
(724)
(1,366)
(55)
(779)
207
(572)
-
(11)
(1,377)
84
(1,293)
-
(572)
(1,293)
12
(0.08p)
(0.24p)
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the
Parent Company Statement of Comprehensive Income.
The loss for the Parent Company for the year was £4,539,000 (2014: £646,000).
The accompanying accounting policies and notes are an integral part of these financial statements.
13
Inspirit Energy Holdings plc
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 June 2015
Attributable to the owners of the parent
Share
capital
£’000
Share
premium
£’000
Other
reserves
£’000
Merger
reserve
£’000
Reverse
acquisition
reserve
£’000
Retained
losses
£’000
Total
Equity
£’000
BALANCE AT 1 July 2013
Loss for the year
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
15
-
-
737
23
-
-
Shares issued
Share issue costs
Share based payments
Share warrants exercised
Cancellation of share warrants
Conversion of convertible loan
Reverse acquisition
TRANSACTIONS WITH OWNERS
154
2,153
-
60
7
-
10
806
1,037
(53)
735
59
-
40
3,275
6,209
BALANCE AT 30 June 2014
1,052
6,946
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,150
3,150
(7,361)
(7,361)
(529)
246
(1,293)
(1,293)
(1,293)
(1,293)
-
-
-
-
23
-
-
2,307
(53)
795
66
-
50
(20)
23
3,145
3,150
(7,361)
(1,799)
2,098
-
-
-
-
-
-
(23)
-
110
87
110
BALANCE AT 1 July 2014
1,052
6,946
110
3,150
(7,361)
(1,799)
2,098
Loss for the year
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
Shares issued for cash
Share issue costs
Share based payments
Issue of warrants
TRANSACTIONS WITH OWNERS
-
-
39
-
7
-
46
-
-
311
(27)
75
-
359
-
-
-
-
-
15
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(572)
(572)
-
-
-
-
-
(572)
(572)
350
(27)
82
15
420
BALANCE AT 30 June 2015
1,098
7,305
125
3,150
(7,361)
(2,371)
1,946
The accompanying accounting policies and notes are an integral part of these financial statements.
14
Inspirit Energy Holdings plc
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 June 2015
Attributable to equity shareholders
Share
capital
£’000
Share
premium
£’000
Other
reserves
£’000
Retained
losses
£’000
471
-
-
350
154
-
60
7
10
581
4,012
110
(4,534)
-
-
3,150
2,153
(53)
735
59
40
6,084
-
-
-
-
-
-
-
-
-
(646)
(646)
-
-
-
-
-
-
-
Total
equity
£’000
59
(646)
(646)
3,500
2,307
(53)
795
66
50
6,665
1,052
10,096
110
(5,180)
6,078
BALANCE AT 1 July 2013
Loss for the year
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
Reverse acquisition
Shares issued
Share issue costs
Share based payments
Share warrants exercised
Conversion of convertible loan
TRANSACTIONS WITH OWNERS
BALANCE AT 30 June 2014
BALANCE AT 1 July 2014
1,052
10,096
110
Loss for the year
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
Shares issued for cash
Share issue costs
Share based payments
Issue of warrants
TRANSACTIONS WITH OWNERS
BALANCE AT 30 June 2015
-
-
39
-
7
-
46
-
-
311
(27)
75
-
359
-
-
-
-
15
15
(5,180)
(4,539)
(4,539)
-
-
-
-
6,078
(4,539)
(4,539)
350
(27)
82
15
420
1,098
10,455
125
(9,719)
1,959
The accompanying accounting policies and notes are an integral part of these financial statements.
15
Inspirit Energy Holdings plc
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 June 2015
Company Number: 05075088
GROUP
COMPANY
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Investment in subsidiaries
CURRENT ASSETS
Inventories
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY ATTRIBUTABLE TO OWNERS OF
THE PARENT
Share capital
Share premium
Other reserves
Merger reserve
Reverse acquisition reserve
Retained losses
TOTAL EQUITY
CURRENT LIABILITIES
Trade and other payables
Borrowings
TOTAL LIABILITIES
Note
13
14
15
16
17
18
19
19
21
21
21
22
23
2015
£’000
2,107
76
-
2,183
5
447
1
453
2014
£’000
1,060
12
-
1,072
5
1,204
67
1,276
2015
£’000
-
-
2,440
2,440
-
32
1
33
2014
£’000
-
-
4,643
4,643
-
1,539
59
1,598
2,636
2,348
2,473
6,241
1,098
7,305
125
3,150
(7,361)
(2,371)
1,052
6,946
110
3,150
(7,361)
(1,799)
1,098
10,455
125
-
-
(9,719)
1,052
10,096
110
-
-
(5,180)
1,946
2,098
1,959
6,078
370
320
690
690
250
-
250
250
194
320
514
514
163
163
163
TOTAL EQUITY AND LIABILITIES
2,636
2,348
2,473
6,241
These Financial Statements were approved by the Board of Directors on 30 December 2015 and were signed on its
behalf by:
N Jagatia
Director
The accompanying accounting policies and notes are an integral part of these financial statements.
16
Inspirit Energy Holdings plc
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 June 2015
GROUP
COMPANY
Note
2015
£’000
2014
£’000
2015
£’000
2014
£’000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax
Depreciation
Finance income
Finance expense
Shares issued in settlement of fees and debt
Share warrants exercised
Impairment of investment in subsidiary
Interco loan provision
Impairment of goodwill
Decrease/(increase) in trade and other receivables
(Increase)/decrease in trade and other payables
CASH (USED BY)/GENERATED FROM OPERATING
ACTIVITIES
Income tax credit received
NET CASH (USED BY)/GENERATED FROM
OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in development costs
Purchases of property, plant and equipment
Increase in loan to subsidiary
NET CASH FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVTIES
Net proceeds from issue of share capital
Increase in short term borrowings
Finance costs paid
NET CASH FROM FINANCING ACTIVITIES
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS
Cash and cash equivalents at the beginning of the
year
CASH AND CASH EQUIVALENTS AT THE END OF THE
YEAR
18
(779)
14
-
55
82
-
-
-
-
964
120
456
-
(1,377)
1
-
11
795
66
-
-
663
80
(652)
(413)
17
(4,539)
-
(81)
55
82
-
1,800
2,128
-
1,045
31
521
-
(646)
-
-
6
795
66
-
(364)
(260)
(403)
-
456
(396)
521
(403)
(1,047)
(78)
-
(1,125)
323
320
(40)
603
(66)
67
1
(291)
(7)
-
(298)
771
-
(11)
760
66
1
67
-
-
(1,182)
(1,182)
323
320
(40)
603
(58)
59
1
-
-
(403)
(403)
871
(6)
865
59
-
59
The accompanying accounting policies and notes are an integral part of these financial statements.
17
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
1
GENERAL INFORMATION
The principal activity of Inspirit Energy Holdings plc during the period was that of developing and
commercialising the mCHP boiler.
On 25 July 2013 the Company completed the acquisition of Inspirit Energy Limited, and now owns all of that
company’s issued share capital. These financial statements show the consolidated results of the Group for
the year ended 30 June 2015 together with the comparative results for the year ended 30 June 2014.
Inspirit Energy Holdings plc is a company incorporated and domiciled in England and Wales and quoted on
nd
the Alternative Investment Market of the London Stock Exchange. The address of its registered office is 2
Floor, 2 London Wall Buildings, London, EC2M 5PP, United Kingdom.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out below.
These policies have been consistently applied to all the periods presented, unless otherwise stated.
BASIS OF PREPARATION
The consolidated Financial Statements of Inspirit Energy Holdings plc have been prepared in accordance
with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (“IFRIC”) as
adopted by the European Union and the parts of Companies Act 2006 applicable to companies reporting
under IFRS and IFRIC interpretations.
The consolidated Financial Statements have been prepared under the historical cost convention and are
presented in GBP Pound Sterling, rounded to the nearest £1,000.
The preparation of Financial Statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the consolidated Financial Statements are disclosed in
Note 4.
GOING CONCERN
The Group’s activities, together with the factors likely to affect its future development, performance and
position, are set out in the Strategic Report on pages 4 to 6. It also includes the Group’s objectives, policies
and processes for managing its business risk objectives, which includes its exposure to technology,
customer and other operational risks.
The Directors have prepared cash flow forecasts for the Group and Company which reflect the Group’s and
Company’s forecast cash inflows and costs.
On 17 July 2015 the Company raised £365,000 through an equity placing. The cash flow forecasts for the
Group and Company show that further equity and/or borrowings will be required to complete the final
development and external testing of the Group’s mCHP boilers and bring them into production. Although the
Directors are confident that further equity can be raised at a valuation acceptable to the Company there is no
guarantee this will be the case. In the event that further equity cannot be raised or insufficient equity is
raised the Company has the benefit of standby loan agreements with both John Gunn and the former
Director David Lenigas, who have undertaken to provide loans of up to £450,000 and £250,000 respectively
over the next 12 months, as the Company may reasonably require.
18
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
GOING CONCERN (continued)
It is envisaged by the Directors, who have formed a judgement at the time of approving these financial
statements, that existing cash resources together with these forecast cash inflows will provide adequate
funds for the Group for the foreseeable future. For this reason the Directors continue to adopt the going
concern basis in preparing the financial statements.
BASIS OF CONSOLIDATION
Inspirit Energy Holdings plc, the legal parent, is domiciled and incorporated in the United Kingdom.
The Group Financial Statements consolidate the Financial Statements of Inspirit Energy Holdings plc and its
subsidiary, Inspirit Energy Limited, made up to 30 June 2015.
Subsidiaries are entities over which the Group has control. Control is the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. The Group obtains and exercises
control through voting rights. The existence and effect of potential voting rights that are currently exercisable
or convertible are considered when assessing whether the company controls another entity.
The Company acquired Inspirit Energy Limited on 25 July 2013 through a share exchange. As the
shareholders of Inspirit Energy Limited have control of the legal parent, Inspirit Energy Holdings Plc, the
transaction has been accounted for as a reverse acquisition in accordance with IFRS 3 “Business
Combinations”. Consequently, although the Financial Statements are prepared in the name of the legal
parent, they are in substance a continuation of those of the legal subsidiary. The following accounting
treatment has been applied in respect of the reverse acquisition:
•
•
•
the assets and liabilities of the legal subsidiaries within Inspirit Energy Limited are recognised and
measured in the consolidated financial statements at their pre-combination carrying amounts, without
restatement to fair value;
the equity structure appearing in the consolidated financial statements reflects the equity structure of
the legal parent, Inspirit Energy Holdings plc, including the equity instruments issued to effect the
business combination;
comparative numbers presented in the consolidated financial statements are those reported in the
financial statements of the legal subsidiaries consolidated within Inspirit Energy Limited.
The cost of acquisition is measured as the fair value of the assets acquired, equity instruments issued and
liabilities incurred or assumed at the date of exchange. Acquisition related costs are expensed as incurred.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated.
19
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP
a)
New and amended standards adopted by the Group:
The following standards and amendments to existing standards and interpretations and are mandatory for
the annual period beginning after 1 July 2014 and have been applied in preparing these financial
statements:
Standard
IAS 27
Impact on initial application
Separate Financial Statements
Effective date
1 January 2014
IAS 27 (Amendments)
Consolidated Financial Statements – Investments Entities
1 January 2014
IAS 36 (Amendments)
Impairment of Assets - Recoverable Amount Disclosures
for Non-Financial Assets
1 January 2014
IFRS 10 (Amendments)
Consolidated Financial Statements
1 January 2014
IFRS 10 (Amendments)
Consolidated Financial Statements – Investment Entities
1 January 2014
IFRS 12 (Amendments)
Disclosure of Interests in Other Entities
IFRS 12 (Amendments)
Disclosure of Interests in Other Entities
IFRS 12 (Amendments)
Disclosure of Interests in Other Entities – Investment
Entities
1 January 2014
1 January 2014
1 January 2014
b)
New and amended standards and interpretations issued but not yet effective or not yet endorsed
and not early adopted
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the
financial statements are disclosed below. The Group intend to adopt these standards, if applicable, when
they become effective.
Standard
Impact on initial application
Effective date
IAS 1 (Amendments)
Presentation of Financial Statements
Initiative
- Disclosure
*1 January 2016
IAS 16 (Amendments)
Property, plant and equipment
Acceptable Methods of Depreciation
- Clarification of
*1 January 2016
IAS 16 (Amendments)
Property, plant and equipment - Bearer Plants
*1 January 2016
IAS 19 (Amendments)
Defined Benefits Plans - Employee Contributions
*1 January 2015
IAS 27 (Amendments)
Separate Financial Statements
*1 January 2016
IAS 28 (Amendments)
Investments in Associates and Joint Ventures
*1 January 2016
IAS 28 (Amendments)
Accounting for Investments - Applying the Consolidation
Exception
*1 January 2016
IAS 38 (Amendments)
Intangible Assets - Clarification of Acceptable Methods of
Amortisation
*1 January 2016
IAS 41 (Amendments)
Agriculture - Bearer Plants
IFRS 9 (Amendments)
Financial Instruments
*1 January 2016
*1 January 2018
20
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP (continued)
Standard
Impact on initial application
Effective date
IFRS 10 (Amendments)
Consolidated Financial Statements -
Associates and Joint Ventures
Investments
in
*1 January 2016
IFRS 10 (Amendments)
Consolidated Financial Statements: Applying
Consolidation Exception
the
*1 January 2016
IFRS 11 (Amendments)
Joint Arrangements - Accounting
Interests in Joint Operations
for Acquisition of
*1 January 2016
IFRS 12 (Amendments)
Disclosure of Interests in Other Entities: Applying the
Consolidation Exception
*1 January 2016
IFRS 14 (Amendments)
Regulatory Deferral Accounts
IFRS 15 (Amendments)
Revenue from Contracts with Customers
Annual Improvements
2012 - 2014 Cycle
Annual Improvements
2010 - 2012 Cycle
Annual Improvements
2011 - 2013 Cycle
*Subject to EU endorsement.
*1 January 2016
*1 January 2018
*1 January 2016
1 February 2015
1 January 2015
The Directors anticipate that the adoption of the above standards and interpretations in future periods will
have little or no impact on the financial statements of the Group when the relevant standards come into
effect.
SEGMENTAL REPORTING
The accounting policy for identifying segments is now based on internal management reporting information
that is regularly reviewed by the chief operating decision maker, which is identified as the Board of Directors.
In identifying its operating segments, management generally follows the Group's service lines which
represent the main products and services provided by the Group. The Directors believe that the Group’s
continuing trading operations comprise one segment.
FOREIGN CURRENCY TRANSLATION
a)
FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the Financial Statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (“functional currency”).
The consolidated Financial Statements are presented in Pounds Sterling (£), which is the Company’s
functional and the Group’s presentation currency.
b)
TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions, or valuation where items are remeasured. Foreign exchange gains and
losses resulting from the settlement of such transactions, and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign currencies, are recognised the Statement of
Comprehensive Income.
Foreign exchange gains and losses relating to borrowings and cash and cash equivalents are presented in
the Statement of Comprehensive Income within “Finance Income” or “Finance Costs”. All other foreign
exchange gains and losses are presented in the Statement of Comprehensive Income within “Other
(Losses)/Gains – Net”.
21
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is
derecognised. All other repairs and maintenance are charged to the Statement of Comprehensive Income
during the financial period in which they are incurred.
Depreciation is calculated to allocate the cost of each class of asset to their residual values over their
estimated useful lives, as follows:
• Plant and Equipment – 15% reducing balance
•
Fixtures and Fittings – 20% reducing balance
• Motor Vehicles – 5 years, straight line
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount, and are
recognised within “Other (Losses)/Gains – Net” in the Statement of Comprehensive Income.
INTANGIBLE ASSETS
a)
GOODWILL
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures and represents the excess of
the consideration transferred over the Company’s interest in the net fair value of the net identifiable assets,
liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the
acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of
the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies
of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level
within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored
at the operating segment level.
Goodwill impairment reviews are undertaken annually, or more frequently, if events or changes in
circumstances indicate a potential impairment. The carrying value of goodwill is compared to the
recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment
is recognised immediately as an expense and is not subsequently reversed.
b)
DEVELOPMENT COSTS
Development costs relate to expenditure on the development of certain new products and service projects
where the outcome of those projects is assessed as being reasonably certain as regards viability and
technical feasibility. Such expenditure is capitalised and amortised over the expected sales life of the
product, being generally a period not longer than five years commencing in the year the sales of the product
were first made.
22
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INTANGIBLE ASSETS (continued)
Development costs incurred on specific projects are capitalised when all the following conditions are
satisfied:
•
•
•
•
•
•
completion of the intangible asset is technically feasible so that it will be available for use or sale
the Group intends to complete the intangible asset and use or sell it
the Group has the ability to use or sell the intangible asset
the intangible asset will generate probable future economic benefits
there are adequate technical, financial and other resources to complete the development and to use
or sell the intangible asset, and
the expenditure attributable to the intangible asset during its development can be measured
reliably.
Directly attributable costs that are capitalised as part of the software product include the software
development employee costs and an appropriate portion of relevant overheads.
Other development expenditure that does not meet these criteria is recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent
period.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested
annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that
suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
FINANCIAL ASSETS
a)
CLASSIFICATION
The Group classifies its financial assets in the following categories: at fair value through profit or loss and
loans and receivables. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at initial recognition.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets at fair value or loss are financial assets held for trading. A financial asset is classified in this
category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised
as held for trading unless they are designated as hedges.
Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise,
they are classified as non-current.
LOANS AND RECEIVABLES
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for maturities greater than 12 months
after the Statement of Financial Position date. These are classified as non-current assets. The Group’s loans
and receivables comprise trade and other receivables and cash and cash equivalents in the Statement of
Financial Position.
23
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
FINANCIAL ASSET (continued)
b)
RECOGNITION AND MEASUREMENT
Regular purchases and sales of financial assets are recognised on the trade date – the date on which the
Group commits to purchasing or selling the asset. Financial assets carried at fair value through profit or loss
is initially recognised at fair value, and transaction costs are expensed in the Statement of Comprehensive
Income. Financial assets are derecognised when the rights to receive cash flows from the assets have
expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of
ownership.
Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and
receivables are subsequently carried at amortised cost using the effective interest method.
Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss
are presented in the Statement of Comprehensive Income within “Other (Losses)/Gains – Net” in the period
in which they arise.
IMPAIRMENT OF FINANCIAL ASSETS
The Group assesses at the end of each reporting period whether there is objective evidence that a financial
asset, or a group of financial assets, is impaired. A financial asset, or a group of financial assets, is impaired,
and impairment losses are incurred, only if there is objective evidence of impairment as a result of one or
more events that occurred after the initial recognition of the asset (a “loss event”), and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset, or group of financial assets,
that can be reliably estimated.
The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:
•
•
•
•
•
significant financial difficulty of the issuer or obligor;
a breach of contract, such as a default or delinquency in interest or principal repayments;
the disappearance of an active market for that financial asset because of financial difficulties;
observable data indicating that there is a measurable decrease in the estimated future cash flows
from a portfolio of financial assets since the initial recognition of those assets, although the
decrease cannot yet be identified with the individual financial assets in the portfolio; or
for assets classified as available-for-sale, a significant or prolonged decline in the fair value of the
security below its cost.
a)
ASSETS CARRIED AT AMORTISED COST
The amount of impairment is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future credit losses that have not been incurred),
discounted at the financial asset’s original effective interest rate. The asset’s carrying amount is reduced,
and the loss is recognised in the Statement of Comprehensive Income. As a practical expedient, the Group
may measure impairment on the basis of an instrument’s fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as an improvement in the
debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the
Statement of Comprehensive Income.
INVENTORIES
Inventories are stated at the lower of cost and net realisable value. The cost of finished goods and work in
progress comprises raw materials, direct labour, other direct costs and related production overheads (based
on normal operating capacity). Net realisable value is the estimated selling price in the ordinary course of
business, less applicable variable selling expenses.
24
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
DERIVATIVE FINANCIAL INSTRUMENTS
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and are
subsequently remeasured at their fair value.
TRADE AND OTHER RECEIVABLES
Trade receivables are amounts due from customers for merchandise sold or services performed in the
ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of
the business if longer), they are classified as current assets. If not they are presented as non-current assets.
Trade receivables are recognised initially at fair value, and subsequently measured at amortised cost using
the effective interest method, less provision for impairment.
CASH AND CASH EQUIVALENTS
In the consolidated Statement of Cash Flows, cash and cash equivalents comprise cash in hand and
deposits held at call with banks.
SHAREHOLDERS’ EQUITY
Equity comprises the following:
•
•
•
•
“Share capital” represents the nominal value of equity shares.
“Share premium” represents the excess over nominal value of the fair value of consideration
received for equity shares, net of expenses of the share issue.
“Option reserve” represents the cumulative cost of share based payments.
“Retained losses" represents retained losses.
FINANCIAL LIABILITIES
The Group’s financial liabilities comprise trade payables. Financial liabilities are obligations to pay cash or
other financial assets and are recognised when the Group becomes a party to the contractual provisions of
the instruments.
TRADE PAYABLES
Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using
the effective interest rate method.
BORROWINGS
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and
the redemption value is recognised in the Statement of Comprehensive Income over the period of the
borrowings, using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the end of the reporting period.
BORROWINGS COSTS
Borrowing costs are recognised in profit or loss in the period in which they are incurred.
25
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
CURRENT AND DEFERRED INCOME TAX
The tax expense for the period comprises current tax. Tax is recognised in the Statement of Comprehensive
Income, except to the extent that it relates to items recognised directly in equity. In this case the tax is also
recognised directly in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in the countries where the Company’s subsidiaries operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on
the basis of amounts expected to be paid to the tax authorities.
SHARE BASED PAYMENTS
The Group operates equity-settled, share-based schemes, under which it receives services from employees
or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The
Group may also issue warrants to share subscribers as part of a share placing. The fair value of the equity-
settled share based payments is recognised as an expense in the Statement of Comprehensive Income or
charged to equity depending on the nature of the service provided or instrument issued. The total amount to
be expensed or charged is determined by reference to the fair value of the options granted:
•
•
•
including any market performance conditions;
excluding the impact of any service and non-market performance vesting conditions (for example,
profitability or sales growth targets, or remaining an employee of the entity over a specified time
period); and
including the impact of any non-vesting conditions (for example, the requirement for employees to
save).
In the case of warrants the amount charged to equity is determined by reference to the fair value of the
services received if available. If the fair value of the services received is not determinable, the warrants are
valued by reference to the fair value of the warrants granted as described previously.
Non-market vesting conditions are included in assumptions about the number of options or warrants that are
expected to vest. The total expense or charge is recognised over the vesting period, which is the period over
which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity
revises its estimates of the number of options that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of
Comprehensive Income or equity as appropriate, with a corresponding adjustment to a separate reserve in
equity.
When the options are exercised, the Group issues new shares. The proceeds received, net of any directly
attributable transaction costs, are credited to share capital (nominal value) and share premium.
OPERATING LEASES
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases.
Payments made under operating leases are charged to the Statement of Comprehensive Income on a
straight line basis over the period of the lease.
26
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
3
FINANCIAL RISK MANAGEMENT
The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The
Group’s risk management is coordinated by the Board of Directors, and focuses on actively securing the Group’s
short to medium term cash flows by minimising the exposure to financial markets.
The main risks the Group is exposed to through its financial instruments are market risk (including market price risk),
credit risk and liquidity risk.
MARKET PRICE RISK
The Group’s exposure to market price risk mainly arises from potential movements in the pricing of its products. The
Group manages this price risk within its long-term strategy to grow the business and maximise shareholder return. .
CREDIT RISK
The Group’s financial instruments that are subject to credit risk are cash and cash equivalents and loans and
receivables. The credit risk for cash and cash equivalents is considered negligible since the counterparties are
reputable financial institutions. The credit risk for loans and receivables is mainly in respect of short term loans, made
on market terms, which are monitored regularly by the Board.
The Group’s maximum exposure to credit risk is £434,000 (2014: £1,271,000) comprising cash and cash equivalents
and loans and receivables.
LIQUIDITY RISK
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities. The Group manages this risk through maintaining a positive cash
balance and controlling expenses and commitments. The Directors are confident that adequate resources exist to
finance current operations.
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted
payments.
Group
At 30 June 2015
Trade and other payables
At 30 June 2014
Trade and other payables
Less than
1 year
£’000
Between 1
and 2 years
£’000
Between 2
and 5 years
£’000
Over 5
years
£’000
624
250
-
-
-
-
-
-
Total
£’000
624
Carrying
value
£’000
624
250
250
CAPITAL RISK MANAGEMENT
The Group’s objectives when managing capital are:
•
to safeguard the Group’s ability to continue as a going concern, so that it continues to provide returns
and benefits for shareholders;
to support the Group’s growth; and
to provide capital for the purpose of strengthening the Group’s risk management capability.
•
•
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital
structure and equity holder returns, taking into consideration the future capital requirements of the Group and
capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital
expenditures and projected strategic investment opportunities. Management regards total equity as capital
and reserves, for capital management purposes.
27
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
4
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of Financial Statements in conformity with IFRSs requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. Estimates and judgements are continually evaluated and are
based on historical experience and other factors including expectations of future events that are believed to
be reasonable under the circumstances.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
IMPAIRMENT OF GOODWILL
Goodwill has a carrying value of £nil (2014: £nil). The Group tests annually whether goodwill has suffered
any impairment, in accordance with the accounting policy stated in Note 2. The recoverable amounts of
cash-generating units have been determined based on value-in-use calculations.
IMPAIRMENT OF DEVELOPMENT COSTS AND INVESTMENTS
The Group tests annually whether development costs and investments in the subsidiaries, which have a
carrying value of £2,107,000 and £2,440,000, respectively (2014: £1,060,000 and £4,643,000, respectively),
have suffered any impairment in accordance with the accounting policy as stated in Note 2.
Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying
amount may not be recoverable. When a review for impairment is conducted, the recoverable amount is
determined based on value in use calculations prepared on the basis of management’s assumptions and
estimates. As a result of their 2015 review management has concluded that an impairment charge to the
carrying value of investment in subsidiaries of £1,800,000, and an impairment provision against the loan
from the Company of £2,128,000 is necessary for the year. See Note 15 to the Financial Statements.
In respect of development costs, the recoverable amounts of cash-generating units have been determined,
based on value- in- use calculations. The value –in- use calculations require the entity to estimate future
cash flows expected to arise from the cash generating unit and apply a suitable discount rate in order to
calculate present value. The recoverable amount of the development costs have been determined, based on
value in use calculations. These calculations require the use of estimates. The Directors have concluded
that no impairment charge is necessary.
SHARE BASED PAYMENTS
The Group has made awards of options and warrants over its unissued share capital to certain Directors and
employees as part of their remuneration package. Certain warrants have also been issued to shareholders
as part of their subscription for shares and to suppliers for various services received.
The fair value of options is determined by reference to the fair value of the options granted, excluding the
impact of any non-market vesting conditions. In accordance with IFRS 2 ‘Share Based Payments’, the
Company has recognised the fair value of options, calculated using the Black-Scholes option pricing model.
The Directors have made assumptions particularly regarding the volatility of the share price at the grant date
in order to reach a fair value. Further information is disclosed in Note 22.
28
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
5
6
SEGMENTAL INFORMATION
The Group’s primary reporting format is business segments and its secondary format is geographical
segments. The Group only operates in a single business and geographical segment. Accordingly no
segmental information for business segment or geographical segment is required.
DIRECTORS’ EMOLUMENTS
Aggregate emoluments
Social security costs
Name of director
J Gunn
J Nazhat
N Jagatia
N Luke
D Lenigas
2015
£
199
18
217
Total
2015
£
74
20
31
74
-
2014
£
177
13
190
Total
2014
£
66
37
14
60
-
199
177
Salary and
fees
£
Benefits
£
74
20
31
74
-
199
-
-
-
-
-
-
The Group does not operate a pension scheme and no contributions were paid during the year.
7
EMPLOYEE INFORMATION
Wages and salaries
Social security costs
2015
£
199
18
217
2014
£
177
13
190
In addition to the above a total of £121,000 (2014: £108,000) wages and salaries for employees have been
included in Development costs
Average number of persons employed (including executive directors):
Office and management
2015
Number
2014
Number
6
5
COMPENSATION OF KEY MANAGEMENT PERSONNEL
There are no key management personnel other than the Directors of the Company (Note 6).
29
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
8
LOSS FOR THE YEAR
Loss for the year is arrived at after charging:
Salaries and wages (Note 7)
Audit and other fees
Operating lease rent
Depreciation
AUDITOR’S REMUNERATION
During the year the Group obtained the following services from the Company’s auditor:
Fees payable to the Company’s auditor for the audit of the parent company
and the Group financial statements
Fees payable to the Company’s auditor and its associates for other services:
Taxation compliance services
Other assurance services
9
OTHER LOSSES
Financial assets at fair value through profit or loss (Note 19)
Other income
10
FINANCE COSTS
Interest expense:
Other loans
2015
£’000
2014
£’000
217
16
53
14
190
15
52
1
2015
£’000
2014
£’000
13
2
1
2015
£’000
-
-
-
13
1
1
2014
£’000
237
(40)
197
2015
£’000
2014
£’000
55
11
30
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
11
INCOME TAX CREDIT
GROUP
Current R&D tax credit on loss for the year
2015
£’000
(207)
(207)
2014
£’000
(84)
(84)
The tax on the Group's loss before tax differs from the theoretical amount that would arise using the
weighted average rate applicable to losses of the consolidated entities as follows:
Loss before tax from continuing operations
Loss before tax multiplied by rate of corporation tax in the UK of 20%
(2014: 20%)
Tax effects of:
Expenses not deductible for tax purposes
Unrelieved tax losses carried forward
Research and development tax credit
Total tax
2015
£’000
2014
£’000
(779)
(1,377)
(156)
(275)
14
142
(207)
(207)
207
68
(84)
(84)
The Group has excess management expenses of approximately £3,780,000 (2014: £3,037,000), capital
losses of £150,000 (2014: £150,000) and non-trade financial losses of approximately £119,000 (2014:
£119,000) to carry forward against future suitable taxable profits. No deferred tax asset has been provided
on any of these losses due to uncertainty over the timing of their recovery.
12
EARNINGS PER SHARE
Loss per ordinary share has been calculated by dividing the loss attributable to equity holders of the
Company by the weighted average number of shares in issue during the year. The calculations by both
basic and diluted loss per share for the year are based upon the loss for the year of £572,000 (2014:
£1,293,000). The weighted number of equity shares in issue during the year was 673,897,325 (2014:
546,838,937).
In accordance with IAS 33, basic and diluted earnings per share are identical as the effect of the exercise of
share options and warrants would be to decrease the loss per share and therefore deemed anti-dilutive.
Details of share options and warrants that could potentially dilute earnings per share in future periods are set
out in Notes 2.
31
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
13
INTANGIBLE ASSETS
GROUP
COST
At 1 July 2013
Additions
Reverse acquisition
At 30 June 2014
Additions
At 30 June 2015
ACCUMULATED AMORTISATION AND IMPAIRMENT
At 1 July 2013
Impairment charge
At 30 June 2014 and 30 June 2015
NET BOOK VALUE
At 30 June 2014
At 30 June 2015
Goodwill
£’000
Development
Costs
£’000
Total
£’000
769
291
663
1,723
1,047
2,770
,
-
663
663
769
291
-
1,060
1,047
2,107
-
-
-
1,060
2,107
1,060
2,107
-
-
663
663
-
663
-
663
663
-
-
The Goodwill relating to the Parent Company is attributable to the benefits derived from the listing of the
Parent Company and reflects the cost of the reverse acquisition and admission to AIM (Note 24). The
Directors have reviewed the carrying value of Goodwill at 30 June 2015 and consider that a complete
impairment provision is required in the year.
No amortisation has been recognised on development costs to date as the assets are still in the
development stage and the related products are not yet ready for sale.
The recoverable amount of the above cash generating unit has been determined based on value-in-use
calculations. No goodwill is allocated to the Group’s cash generating unit as this related to the Parent
Company as explained above. The value-in-use calculations use cash flow projections based on financial
budgets approved by Management covering a seven year period. These incorporate potential revenues
which are based on project tenders and projected revenue. Given the nature of the work and the visibility of
revenue in the future, it is considered appropriate not to extend the cash flow workings beyond this period.
The recoverable amount based on value-in-use exceeded the carrying value above. The impairment review
did not identify any impairment for recognition in the current or prior year.
32
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
14
PROPERTY, PLANT AND EQUIPMENT
GROUP
COST
As 1 July 2013
Additions
As 30 June 2014
Additions
As at 30 June 2015
DEPRECIATION
As at 1 July 2013
Charge for year
As at 30 June 2014
Charge for year
As at 30 June 2015
NET BOOK VALUE
As at 30 June 2014
As at 30 June 2015
15
INVESTMENT IN SUBSIDIARIES
COMPANY
SHARES IN GROUP UNDERTAKINGS:
At 1 July
Transfer from investments
Reverse acquisition
Impairment provision
Non-Current loan due from group undertaking
Transfer from current intercompany receivable
Increase in loan to group undertaking
Interest on loan
Provision against the loan balance outstanding
Plant and
Equipment
£’000
7
-
7
74
81
Fixtures
and fittings
£’000
4
7
11
4
15
Motor
Vehicles
£’000
1
-
1
-
1
3
-
3
12
15
4
66
3
1
4
1
5
7
10
-
-
-
1
-
1
-
2015
£’000
4,240
-
-
(1,800)
2,440
403
462
1,182
81
(2,128)
2,440
Total
£’000
12
7
19
78
97
6
1
7
14
21
12
76
2014
£’000
-
740
3,500
-
4,240
403
-
-
-
-
4,643
Investments in Group undertakings are recorded at cost, which is the fair value of the consideration paid.
Details of Subsidiary Undertakings are as follows:
Name of subsidiary
Inspirit Energy
Limited
Somemore Limited
Country of
incorporation
Parent company
Registered
capital
England and
Wales
England and
Wales
Inspirit Energy
Holdings Plc
Ordinary shares
£15,230
Inspirit Energy
Limited
Ordinary shares
£1
Proportion of
share capital
held
Nature of
business
100%
Product
development
100%
Dormant
33
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
16
INVENTORIES
Work in progress
GROUP
COMPANY
2015
£’000
5
2014
£’000
5
2015
£’000
-
2014
£’000
-
The Directors consider that the carrying amount of inventories is approximately equal to their fair value.
17
TRADE AND OTHER RECEIVABLES
Amounts due from group undertakings
Corporation tax
VAT recoverable
Other receivables
Unpaid share capital
Prepayments and accrued income
GROUP
COMPANY
2015
£’000
-
291
125
-
18
13
447
2014
£’000
-
84
41
42
1,025
12
1,204
2015
£’000
-
-
5
-
18
9
32
2014
£’000
462
-
3
41
1,025
8
1,539
Other receivables amounting to £nil (2014: £18,000) include amounts due from related parties made on
normal market terms. The Directors consider that the carrying amount of short term loans and other
receivables is approximately equal to their fair value.
The unpaid share capital was received post year end.
18
CASH AND CASH EQUIVALENTS
Cash and cash equivalents
GROUP
COMPANY
2015
£’000
1
2014
£’000
67
2015
£’000
1
2014
£’000
59
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.
All of the Group and Company’s cash and cash equivalents are held with institutions with an AA credit rating.
34
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
19
SHARE CAPITAL AND SHARE PREMIUM
Number of
ordinary
shares
Number of
deferred
shares
Ordinary
shares
£
Deferred
shares
£
Share
premium
£
Total
£
At 1 July 2013
73,139,505
400,932
73,139
396,923
4,011,515
4,482,798
Issue of new shares on
acquisition*
Issue of new shares
350,000,000
154,110,886
Share based payments
60,088,753
Share warrants
exercised
Conversion of
convertible loans
Share conversion from
“B” to “A” shares
Share issue costs
At 30 June 2014
7,000,000
10,000,000
1,221,200
-
-
-
-
-
-
-
-
350,000
154,111
60,089
7,000
10,000
1,221
-
-
-
-
-
-
-
-
3,150,000
3,500,000
2,152,889
2,307,000
735,061
795,150
58,800
65,800
40,000
50,000
-
-
(52,500)
(52,500)
655,560,344
400,932
655,560
396,923 10,095,765 11,148,248
Issue of new shares
38,888,889
Issue costs
-
Share based payments
6,698,056
-
-
-
38,889
-
6,698
-
-
311,111
350,000
(26,880)
(26,880)
75,234
81,932
At 30 June 2015
701,147,289
400,932
701,147
396,923 10,455,230 11,553,300
*This amount has been included in the Share premium for the Company financial statements. This has been
disclosed separately within the Merger Reserve for the Group financial statements.
As at 1 July 2013 there were 1,221,200 B ordinary shares. These were converted into ordinary shares on 8
June 2013.
The deferred shares have no voting rights.
On 18 September 2014 the Company issued 3,398,056 new ordinary shares of 0.1p each at a price of 1p
per share in settlement of outstanding fees.
On 10 February 2015 the Company issued 38,888,889 new ordinary shares of 0.1p each at a price of 0.9p
per share raising a total of £350,000 before costs as part of a private placing.
On 2 April 2015 the Company issued 3,300,000 new ordinary shares of 0.1p each at a price of 1p per share
in settlement of outstanding fees.
35
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
20
SHARE BASED PAYMENTS
Share options and warrants are granted to selected Directors and third party service providers.
Share options and warrants outstanding at the end of the year have the following expiry dates and
exercisable prices:
Weighted Average
Exercise Price
2015
0.0566
0.0090
-
0.0100
0.0154
Options and
warrants
15,646,620
9,283,364
-
(13,500,000)
11,429,984
Weighted Average
Exercise Price
2014
0.2984
0.0100
0.0100
0.2114
0.0566
At 1 July
Granted
Exercised
Terminated
At 30 June
Options and
warrants
3,412,620
20,500,000
(7,000,000)
(1,266,000)
15,646,620
Grant date
Expiry date
26 April 2011
25 April 2021
13 Sept 2012
12 Sept 2015
26 July 2013
25 July 2014
30 April 2015
29 April 2018
Exercise price in £
per share
Number of options
and warrants
2015
Number of options
and warrants
2014
0.0488
0.0300
0.0100
0.0090
0.0566
1,500,000
646,620
1,500,000
646,620
-
13,500,000
9,283,364
11,429,984
-
15,646,620
The total weighted average contractual life of the outstanding options and warrants at 30 June 2015 was 3.07
years (2014: 0.72 years).
On 30 April 2015 the Company issued 9,283,364 warrants exercisable at 0.9p per share for a period of 3
years from the date of issue. These warrants were issued in connection with a short term loan facility and the
resultant fair value charge to the profit and loss account of £15,000 has been recognised in finance costs
(see note 23).
The fair value of the share options and warrants were determined using the Black Scholes valuation model.
The parameters used are detailed below:
Date of grant
Shares and warrants under option
Option life (years)
Share price (pence per share) at grant date
Risk free rate
Expected volatility
Expected dividend yield
Fair value per option granted
(pence per share)
Exercise price (pence per share)
2015
Warrants
30 April 2015
9,283,364
3
0.65
2.00%
50%
Nil
0.162
2014
Options
26 July 2013
20,500,000
1
1.15
2.50%
0%
Nil
0.270
0.900
1.000
36
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
20
SHARE BASED PAYMENTS (continued)
In respect of the warrants issued in April 2015 the volatility is based on the approximate average volatility of
similar AIM quoted stocks. The risk free rate of return is based on zero yield government bonds for a term
consistent with the option life.
Based on materiality, the total fair value of the options and warrants granted in the year has resulted in a
charge to the Statement of Comprehensive Income for the year to 30 June 2015 of £15,000 (2014: £nil).
21
OTHER RESERVES
1 July 2013
Cancellation of warrants
Reverse acquisition
30 June 2014
Issue of warrants
30 June 2015
22
TRADE AND OTHER PAYABLES
Trade payables
Other payables
Amount due to related parties
Social security and other taxes
Accrued expenses
Share
option
reserve
£’000
23
(23)
110
110
15
125
Merger
reserve
£’000
-
3,150
3,150
-
Reverse
acquisition
reserve
£’000
-
(7,361)
(7,361)
-
3,150
(7,361)
GROUP
2015
£’000
270
11
23
66
370
2014
£’000
65
62
9
32
82
250
COMPANY
2015
£’000
104
11
15
64
194
Total
£’000
23
(23)
(4,101)
(4,101)
15
(4,086)
2014
£’000
53
8
9
12
81
163
The Directors consider that the carrying amount of trade payables approximates to their fair value.
The Company entered into an unsecured loan facility on 28 June 2013 with Global Investments Strategy UK
Limited (“GIS”) for an aggregate maximum amount of £350,000. Amounts may be drawn down at the
discretion of the Company. Interest is payable on any drawdown at 5 per cent above the base rate of HSBC
Bank plc. Any amount drawn down under the loan facility shall be repayable 18 months from the date of the
loan facility. No amounts had been drawn down under this facility as at 30 June 2014.
On 4 September 2013, the Company approved the settlement of all existing debt held with GIS and Mr J
Gunn (Executive Director) through the issue of new shares. Total debt and accrued interest of £706,680
(including the liabilities of subsidiary Inspirit Energy Limited) was satisfied by the allotment of 54,360,019
new ordinary shares in the Company at a conversion price of 1.3 pence each.
37
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
23
BORROWINGS
Current
Drawdown facility
Related party short term loans
GROUP
2015
£’000
2014
£’000
COMPANY
2015
£’000
2014
£’000
211
109
320
-
-
-
211
109
320
-
-
-
The Drawdown facility relates to the facility entered into during the year with YA Global Master SPV Limited,
showing the remaining balance outstanding at the year end. The facility is unsecured and carries an implied
interest rate of 10 per cent per annum, repayable in 12 equal monthly instalments.
On 30 April 2015 the Company issued warrants to subscribe for 9,283,364 new ordinary shares as part of
the unsecured $3,000,000 Debt facility arrangement with YA Global Master SPV Limited. The issue of the
warrants was triggered following the drawdown of the initial Tranche 1, being $400,000, under the terms of
the agreement.
The terms of the issue of warrants are governed by the Debt Facility agreement, which specific that for every
tranche drawn down, the Company is required to issue 25% of the value of the drawdown based on the
interbank rate at the nearest possible date and using the average Volume Weighted Average Price
(“VWAP”) of the Company for the five trading days immediately prior the date of the agreement.
Based on those terms, were the Company to drawdown the remaining $2,600,000 they would be required to
issue further warrants to subscribe for an estimated total of 87,929,787 new ordinary shares. This is based
on the Exchange rate as at 30 June 2015 of $1 / £0.6358 and a VWAP of 0.43p.
The Directors do not expect to use the remaining facility in the foreseeable future.
Included in the Related party short term loans is an amount owing to David Lenigas, the former Chairman of
£50,000. This is an unsecured short term loan facility and was provided by Mr Lenigas during the year. The
implied interest rate on the loan is zero per cent.
Also included in the Related party short term loans is an amount owing to John Gunn of £9,000. This also is
an unsecured short term loan facility and was provided by Mr Gunn during the year. This also has an implied
interest rate of zero per cent.
All other related party transactions have been included in Note 28.
24
BUSINESS COMBINATIONS
In the year ended 30 June 2011 the Company acquired 17.05% of the share capital of Inspirit Energy
Limited for £740,000.
On 26 July 2013, the Company acquired the remaining 82.95% of the share capital and obtained control of
Inspirit Energy Limited for £3,500,000. Inspirit Energy Limited is an unlisted company registered in the
United Kingdom. The acquisition was in line with the Company’s overall strategy as an investment
company.
The acquisition was treated as a reverse acquisition accounted for in accordance with IFRS 3, as set out in
the accounting policies.
In accordance with IFRS 3, goodwill under a reverse acquisition is calculated on the net assets of the legal
parent. The goodwill of £663,000 arising from the acquisition is attributable to the value of the parent
company. The Directors do not consider goodwill reflects an increase in the Group’s assets and therefore
have impaired the goodwill in full.
The following table summarises the consideration paid for Inspirit Energy Holdings plc through the reverse
acquisition and the amounts of the assets acquired and liabilities assumed at the acquisition date.
38
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
24
BUSINESS COMBINATIONS (continued)
Consideration at 26 July 2013
Equity instruments in issue (73,139,505 ordinary shares at 1p each)
TOTAL CONSIDERATION
Recognised amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
Investments
Trade and other receivables
Trade and other payables
Borrowings
TOTAL IDENTIFIED NET ASSETS
GOODWILL (Note 13)
£’000
731
731
£’000
-
740
159
(779)
(52)
68
663
In a reverse acquisition, the fair value of the consideration at the date of acquisition transferred by Inspirit
Energy Limited is based on the number of equity instruments that Inspirit Energy Limited would have had to
issue to the owners of Inspirit Energy Holdings plc to give the owners of Inspirit Energy Holdings Plc the
same percentage of equity interests that results from the reverse acquisition. However, in the absence of a
reliable valuation of Inspirit, the cost of the combination was calculated using the fair value of all the pre-
acquisition issued equity instruments of Inspirit Energy Holdings plc at the date of acquisition. The fair value
was based on the published price of Inspirit Energy Holdings plc shares on 26 July 2013 immediately prior
to the acquisition.
25
FINANCIAL INSTRUMENTS BY CATEGORY
The IAS 39 categories of financial instruments included in the Statement of Financial Position and the
headings in which they are included are as follows:
FINANCIAL ASSETS – LOANS AND RECEIVABLES:
Trade and other receivables (excluding prepayments)
Cash and bank balances
FINANCIAL LIABILITIES AT AMORTISED COST:
Trade and other payables (excluding accruals)
Borrowings
2015
£’000
434
1
304
270
2014
£’000
1,192
67
250
-
39
Inspirit Energy Holdings plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 June 2015
26
OPERATING LEASE COMMITMENTS
27
28
The Group leases an office under a non-cancellable operating lease agreement. The lease term is for one
year and the lease agreement is renewable at the end of the lease period at market rate.
The future aggregate minimum lease payments under non-cancellable operating lease are as follows:
GROUP:
No later than 1 year
ULTIMATE CONTROLLING PARTY
2015
£’000
2014
£’000
26
36
At the date of signing this report the Directors do not consider there to be one single ultimate controlling
party.
RELATED PARTY TRANSACTIONS
All intra group transactions are eliminated on consolidation. The remaining transactions are as follows:
Global Investment Strategy (UK) Limited
Mr J Gunn is a Shareholder and Director of Global Investment Strategy (UK) Limited (“GIS”).
The Company entered into an unsecured loan facility on 28 June 2013 with GIS for an aggregate maximum
amount of £350,000. Amounts may be drawn down at the discretion of the Company. Interest is payable on
any drawdown at 5 per cent above the base rate of HSBC Bank plc. Any amount drawn down under the
loan facility shall be repayable 18 months from the date of the loan facility. No amounts were drawn down
under this facility in the year to 30 June 2015 (2014: £nil).
GIS hold a fixed and floating charge over all the assets of the Company.
In December 2014 GIS provided the Company with a short term loan of £50,000. This loan came under the
charge GIS holds over the assets of the Company and was repayable on demand, with interest accruing at
a rate of zero per cent p.a. The loan was converted into shares at the time of the placing by the Company
on 17 July 2015.
Other related parties
On 28 June 2013, the Company entered into a Discretionary Drawdown Facility (“DDF”) with Mr D Lenigas,
the former non-executive Chairman, which provided the Company with an equity facility up to a maximum
aggregate limit of £70,000. The facility was available for drawdown at any time during the year, and for any
specified amount at the Company’s discretion, up to 17 May 2015. Mr D Lenigas was entitled to commission
at 6.0% of any amount received by the Company in accordance with the terms of the facility. In May 2015
the DDF lapsed. No amounts were drawn down on the DDF during the period (2014: £nil).
During the year, Montpelier Law Ltd, a company in which former Director, J Nazhat is a Director, charged
corporate services fees of £20,333 (2014: £37,000). The amount owed to Montpelier Law Ltd at the year
end is £nil (2014: £4,000).
During the year, NKJ Associates Ltd, a company in which N Jagatia is a Director, charged consultancy fees
of £31,000 (2014: £14,000). The amount owed to NKJ Associates Ltd at year end is £nil (2014: £2,000).
29
EVENTS AFTER THE REPORTING DATE
On 17 July 2015 the Company issued 77,659,570 new ordinary shares of 0.1p each, at a price of 0.47p
each, as part of a private placing, raising £365,000 before expenses.
On 17 December 2015, the Company’s operating subsidiary, Inspirit Energy Limited, completed internal
operational testing on its ‘Inspirit Charger’ product.
On 21 December 2015, David Lenigas, resigned as Chairman and Director of the Company.