Company No.: 05568060
Sabien Technology Group Plc
Annual Report and Consolidated Financial Statements
For the year ended 30 June 2021
Company Information
5th Floor
5 St Helen's Place
London
EC3A 6AB
DIRECTORS
Richard Parris (Executive Chairman)
Charles Goodfellow (Independent Non-Executive Director)
Ranald McGregor-Smith (Non-Executive Director)
Edward Sutcliffe (Chief Financial Officer and Executive
Director)
SECRETARY
Edward Sutcliffe
COMPANY NUMBER
05568060
REGISTERED OFFICE
WEBSITE
AUDITORS
BANKERS
NOMINATED ADVISER
BROKER
REGISTRARS
SOLICITORS
71-75 Shelton Street
London
WC2H 9JQ
www.sabien-tech.co.uk
Moore Kingston Smith LLP
Devonshire House
60 Goswell Road
London
EC1M 7AD
National Westminster Bank Plc
72-74 High Street
Watford
Herts WD17 2GZ
Allenby Capital Limited
5 St Helen's Place
London
EC3A 6AB
Peterhouse Capital Limited
3rd Floor
80 Cheapside
London
EC2V 6EE
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
Moore Barlow LLP
11 The Avenue
Southampton
Hants
SO17 1XF
Contents
Chairman & Chief Executive Officer’s Report
Strategic Report
Directors’ Report
Corporate Governance
Remuneration Report
Section 172(1) Statement
Directors’ Responsibilities Statement
Independent Auditors’ Report to the Members of Sabien Technology
Group Plc
Consolidated Statement of Comprehensive Income
Consolidated and Company Statements of Financial Position
Consolidated and Company Cash Flow Statements
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Notes to the Consolidated Financial Statements
3
6
12
14
21
23
24
25
31
32
33
34
35
36
Chairman & Chief Executive Officer’s Report
We report on the results for Sabien Technology Group Plc (“Sabien”, “the Company” or “the
Group”) for the year ended 30 June 2021.
Sabien Technology Group highlights 2021
• Sales for the year £0.97m (2020: £0.45m)
•
Loss before tax £0.5m (2020: £1.41m loss)
• Sales from Alliance Partners £0.04m (2020: £0.01m)
• Overseas sales £0.04m (2020: £0.02m)
• Exceptional costs of £0.18m in relation to legal and professional fees incurred in relation
to the aborted acquisition and potential reverse takeover of Ptarmigan Health Destinations
SA (“PHD”)
•
Fund raises of £1.7m (gross)
• Net cash balance at 30 June 2021 was £1.22m (30 June 2020: £0.60m)
Highlights since the year end
• Sales of £49k to 26 August 2021
• Orders received but not yet invoiced to 26 August 2021 £24k
• Net cash balance at 26 August 2021 of £1.17m
Financial results
Revenue for the year was £0.97m (2020: £0.45m). The loss before taxation was £0.5m (2020:
£1.41m loss).
At 30 June 2021, cash and cash equivalents amounted to £1.40m (2020: £0.78m).
Dividend policy
The directors propose no dividends (2020: nil) in the year.
3
Chairman’s Statement
The growth of the “Green Economy” has been notable during the last 12 months. Innovation has
accelerated, driven by the changed circumstances in which we find ourselves. Investment has
followed, as investors have recognised that this trend is secular rather than temporary. Specific
areas of macro-economic focus have informed and supported the Sabien strategy. Demographic,
technological and resource change are all likely to accelerate. In combination, the Board believes
that these trends will contribute to a “Green Economic” boom over the coming decades.
Our mission as a Board is to prepare for this scenario and, having done so, deliver. Our vision is to
establish a portfolio of businesses, all linked by reference to the “Green Economy” with clear
economic relationships with markets whose dynamics are changing. We have identified key areas
for development including wider industrial heating markets, non-refrigerant based cooling, battery
recycling and reproduction, and waste to energy sectors together with a number of other “green
energy” environmental opportunities in a variety of markets.
Sabien’s transition to this more broadly based “Green Economy” focus has been backed by an
impressive financial performance. In the year to 30 June 2021, the Group has generated revenue
of £0.97m (2020: £0.45m), with £0.56m recorded in the second half, an increase of 87% on the
£0.30m for the same period in the previous year.
Looking to the current year, I would highlight two key metrics. Sabien carries £43k of orders into
2021 and, as at 30 June 2021, the Group had cash in hand of £1.40m (2020: £0.78m) following the
raising of £1.7m (gross) during the year.
The security which our forward orders and cash position provides is supporting our planned
expansion: operationally and strategically.
Operationally, Sabien has extended the application of its M2G technology with its Cloud-based
subscription service now available across more than five sites within public sector, sports, and
pharmaceutical manufacturing locations. Allied to this important development, Sabien has signed
an agreement with Lockular to provide robust data security. Lockular’s platform is agnostic as to
which operations are contained on it and, as a result, this agreement provides scalability, Big Data
collection and AI insights for further acquisitions which the Company may make, potentially
decreasing the time required to generate value. In combination, these actions have given the
Company confidence to commit to the next generation of M2G, integrating remote commercial boiler
management within a single Cloud-enabled device.
Strategically, the Company made an investment into Aeristech, a leading manufacturer of
components for hydrogen fuel cells, secured a £400k contract with a UK Government department
for the use of M2G technology, and formed a US subsidiary from which it will source US acquisition
opportunities in addition to expanding the US market for Sabien’s European products and services.
Management strength in depth is critical to bringing strategic initiatives into operational success.
During the year under review, Sabien has strengthened its management team with the
appointments of Ed Sutcliffe as Chief Financial Officer, Danny Mills as President of the U.S.
subsidiary, Sabien Inc., Dr. Athan Fox as Chief Scientific Officer, Tom Sprunt as Managing Director
(non-Board) and Ranald McGregor-Smith as non-executive director.
Mr. Sutcliffe is a Chartered Accountant and brings a wealth of private and listed company experience
to the board. Mr. Mills is a US-based investor and technology operator who has worked with Sabien’s
leadership for a number of years. In combination with Richard Parris’ work in US markets, Mr. Mills
provides the necessary experience to benefit from President Biden’s Plan for a Clean Energy
Revolution and Environmental Justice. Dr. Fox’s experience encompasses organic chemistry,
intellectual property prosecution, technology transfer and fund raising for research, technology and
innovation. Through Dr. Fox’s work, Sabien is confident of a value-creating entry to the waste-to-
energy market. Mr. Sprunt has many years’ commercial experience in the boiler management
industry.
4
Mr McGregor-Smith is a corporate financier whose experience at senior level within a number of key
financial institutions will be invaluable to the Company as it develops.
In all cases, the new appointments bring a wealth of relevant experience and understanding of key
markets for the Company.
The strengthened Board of Sabien faces an array of opportunities within its chosen market areas.
In market capitalisation terms, Sabien is a small company listed on AIM. Executing an expansion
strategy via acquisition can be challenging and expensive due to necessary market regulation. The
Board will not be deterred by these challenges, and we are actively considering innovative structures
within which to maximise the returns to shareholders as soon as possible while minimising execution
expenses.
As previously announced, during the year the Board was disappointed to be unable to complete
the acquisition and associated reverse takeover of PHD. Sabien was unable to secure the required
Swiss and UK regulatory approvals in sufficient time to avoid the cancellation of trading in the
Company's ordinary shares on the AIM Market. Therefore, the Board took the decision to
withdraw from the transaction. Following this withdrawal, Cédriane de Boucaud Truell and Marco
Nijhof stepped down from the Sabien Board to continue PHD's growth plans. The Board thanks
Cédriane and Marco for their efforts.
Following the re-admission to trading of Sabien’s shares we have accomplished a lot. All initiatives
were undertaken to sustain and improve the long-term capability of Sabien Technology to deliver.
The Board is committed to ensuring that these accomplishments, and those to come, are delivered
to the advantage of shareholders, now and in the future.
Richard Parris
Executive Chairman
27 August 2021
5
STRATEGIC REPORT
For the year ended 30 June 2021
1. Review of the Group’s Business
“There is a tide in the affairs of men, which taken at the flood, leads on to fortune”
William Shakespeare, Julius Caesar.
Sabien’s strategy has been developed and will evolve further through the evolution of the
“Green Economy”. For example, the UK has committed to achieving a net-zero economy by
2050. The US, across its different markets, is setting similar targets within equivalent
timeframes.
These ambitious goals demand equally ambitious innovation in products, services, and
technology. Sabien is committed to building a portfolio of businesses which are involved directly
in the application of emerging and developed technology to the emerging Green Economy. It
will do so through organic, partnership and acquisition-led development.
During the year ended 30 June 2021, the Group achieved the following steps in its strategic
development:
• Lockular agreement to provide robust data security;
• £100k strategic investment into Aeristech, a leading manufacturer of components for
hydrogen fuel cells;
• Established a US subsidiary to promote Sabien’s interests in the US and to pursue
potential US opportunities; and
• Strengthened the management team and board as set out in the Chairman’s report.
Sabien’s commitment to growth is set in a context of consistent, long-term shareholder value.
This context is determined by clear investment criteria which are used to establish a route to
value at the point of commitment. The key consideration in assessing potential investments
are the strength of the management team, a defendable technical advantage, and strong
financial fundamentals.
Faced with an array of significant but still nascent markets, Sabien has strengthened its financial
position, its management team, and its understanding of opportunities. The Group is ready to
leverage these positions into consistent shareholder value.
Since incorporation, the Group has owned the rights to M1G and M2G, patented energy efficiency
products for installation on commercial boilers and water heaters, both within and outside the
UK. It subcontracts the manufacture of both products to its principal supplier, which is based
in Northern Ireland, and installation in the UK to a number of trained installation companies.
The Group has a strong reputation in the marketplace, being recognised as the market leader in
Boiler Optimisation Controls.
Background to the boiler optimisation business
Historically, and to gain a foothold in the UK market, the Group offered paid pilots of its M2G
boiler optimisation controller. While the timeline from pilot to estate roll-out was typically 6-18
months, this method of technology acceptance and adoption proved successful with clients
resulting in the Group being awarded numerous multimillion-pound contracts. Since the initial
success enjoyed by the Group, whilst large contracts continue to be won, timing is variable and
profitability has suffered as a result.
6
The Group introduced a rental model option during the 2018 financial year with a goal of making
the piloting and financing of M2G projects easier and risk free for its clients. In addition, a
Forensic Boiler Audit (FBA) service was implemented as an additional service line for the Group.
Both the rental model and FBA have attracted interest but so far uptake has been slower than
hoped.
The sales process has historically often involved proving to new customers that the savings
promised are real through a time-consuming pilot programme. The new generation cloud
enabled M2G device developed in the year has solved that issue by demonstrating savings in
real time through a cloud dashboard.
Market - Energy efficiency retrofit – Commercial Gas
Our clients are to be found in market sectors where the share of energy costs in total production
costs is low – such as in the services sectors, public administrations, or in industries like
mechanical engineering and the food sectors.
There are three overriding factors influencing contract award lead times, low gas price,
availability of capital and the lack of prevalence of Automated Maintenance Reporting (AMR)
and/or sub-AMR in the in-built UK building stock.
The lack of access to capital as a barrier to implementing energy efficiency initiatives in our
experience and in practice, is more complex. For large companies, the internal ‘access to
capital’ problem stems from neglect of energy efficiency within internal capital budgeting
procedures, combined with other organisational rules such as strict requirements on payback
periods.
For small and medium-sized companies, imperfect access to capital prevents the
implementation of profitable energy efficiency projects. Energy efficiency investments tend to
be classified as discretionary maintenance projects, they are usually given a lower priority over
essential maintenance projects or strategic investments.
This bias towards strict investment criteria can be worsened by individual managers’ incentives
to favour large, strategic projects, which are more prestigious than energy management
activities.
In addition, top management does not consider energy-cost savings as a strategic priority.
Thus, given the constraints on time and attention it can be overlooked.
Other sales channels
Outside the UK, the Group appoints “Tech Centres” which are organisations involved in the
supply of boiler systems and controls to customers in their own territories. These Tech Centres
are given training in the installation of M2G as part of the appointment process and purchase
an agreed minimum number of M2Gs each year.
The Group sells both directly and through a number of facilities management and property
management organisations. Sabien’s sales focus is organisations with multi-site estates within
both the public and private sectors.
Team
The Group employs its own project management and technical engineering staff who are
responsible for ensuring the smooth roll-out and quality control of each M2G pilot and
installation project. Headcount currently stands at 11.
7
2. Principal risks and uncertainties facing the Group
The principal risks faced by the Group are:
Inability to meet customer demand
• Downward pressure on gas and oil prices
• Technology developments and competitive products
• Changes in legislation
• Supply chain issues
•
• Brand awareness and maintenance of reputation
• Employee retention
• Raising further finance
• UK Energy Efficiency Barriers
• Continued impact of COVID-19
•
Insufficient financial resources to complete acquisition strategy
The Group places great importance on internal control and risk management. A risk-aware and
control-conscious environment is promoted and encouraged throughout the Group. The Board,
either directly or through its committees, sets objectives, performance targets and policies for
management of key risks facing the Group.
The risks outlined above are not an exhaustive list of those faced by the Group and are not
intended to be presented in any order of priority. The Group holds weekly management
meetings at which, inter alia, business risks are reviewed and any areas that are causing
concern are discussed. A plan of action to resolve issues is then put in place.
UK Energy Efficiency Barriers
Information, its provision and lack of trust, misaligned financial incentives, and behaviour
barriers mean energy efficiency is undervalued. These barriers are often inter-related and work
together to reduce investment in energy efficiency.
The UK market is underdeveloped thus has relatively limited/mixed expertise and ‘know-how’
on the Client, vendor side for energy efficiency investment.
Information
One of the key characteristics of an embryonic market is there is a lack of access to trusted
and appropriate information.
Energy efficiency improvements are typically made through purchasing upgraded equipment,
retro-fit technology and additives however the biggest challenge facing the market is identifying
the absolute savings in energy and emissions which means that potential buyers are not in a
position to assess the benefits of an energy efficiency proposal.
The upgraded and cloud enabled M2G has been designed to resolve these issues.
Financing
Energy efficiency projects can be undermined by the absence of standardised monitoring and
verification processes which means that the benefits of energy efficiency investments are not
trusted.
It can be difficult to relate back to individual activities to identify opportunities to make energy
efficiency improvements. In the absence of clear, trusted information, many buyers do not
prioritise energy efficiency investments.
8
Misaligned financial incentives
It is not always the case that the person who is responsible for making energy efficiency
improvements will receive the benefits of their actions.
Commercial rented tenants are responsible for their own bills and therefore it is in their interest
to reduce the bills, but contractual arrangements around landlord/tenants or facilities
management may inhibit investment.
Therefore, energy efficiency investments are not prioritised as they might otherwise be. Energy
costs can be a relatively small proportion of costs for many sectors, but in aggregate that
energy use is a huge ask of our energy system.
Undervaluing energy efficiency
The lack of salience of energy efficiency increases the impact of hassle costs and behavioural
barriers. Energy efficiency changes may involve significant hassle costs for those carrying out
the investment, which increases the costs of the investment e.g. disruption caused by building
works or disruption to production lines.
Energy efficiency improvements may not be seen as strategic for a company and therefore not
prioritised.
Outside of the energy intensive industry sectors, energy bills are only a small proportion of
business costs. If the relative gain is small, then the hassle costs can act as a significant barrier,
especially if there is uncertainty around the benefits of the investment. While hassle costs are
not a market failure, they compound the impact of other behavioural barriers, reducing
investment in energy efficiency. This is often why companies are reluctant to invest in energy
efficiency, seeking short payback times, even if a project is cost-effective and meets Simple
Payback (SPB) criteria. Wider economic uncertainty is also reducing willingness to invest.
3. Performance of the business in the financial year
• Business Development - UK
The Group achieved sales in the year of £0.97m (2020: £0.45m). Alliance partners contributed
£0.04m of sales representing 4.1% of the total for the year. The volume of sales from alliance
partners will vary from year to year and is dependent on the stage at which each partner is at in
the sales cycle with its own clients and pipeline.
• Business Development - Overseas
The Group sells M2G internationally through its network of “Sabien Tech Centres”. A “Sabien
Tech Centre” is a company outside the UK with:
o An established distribution network and an existing client base in the
commercial and industrial heating sector
o Engineering capability and capacity
o Competence in commercial boilers and currently offering energy efficiency
solutions as part of their product and service suite
The network requires a level of M2G operational support in knowledge transfer/sharing and
product training.
9
During the course of the financial year, overseas sales represented 4.1% of total sales at £0.04m
(2020 - £0.02m). In 2013, the Group appointed Fireye, Inc. as a non-exclusive distributor in
the USA as well as other overseas territories. Through this relationship with Fireye and with
other parties, we have appointed Tech Centres in a number of territories throughout the world.
Through our new US subsidiary, Sabien Inc, we intend to further develop this relationship and
bring additional value to the Group in the future. For further information on Fireye NXM2G,
please visit www.flamecontrols.com.
• UK M2G Pilots
The Group offers pilots but only on a paid basis and only to customers with large estates.
• COVID-19
While there remains uncertainty as to the future impact of the COVID-19 pandemic, the Group
continues to conduct ongoing risk assessments of the potential impact of the pandemic on its
business.
Customer confidence has increased compared to the height of the pandemic last year. This has
largely helped the Group achieve sales to pre pandemic levels. Despite this, the Board is aware
that uncertainties around the pandemic remain and that these continue to affect demand as
potential customers may be more reluctant to commit to future spending. The Group continues
to work with its main supplier to actively address the risk of disruption. The Group has taken
actions to enhance its operational resilience and position the business towards becoming fully
operational. Whilst the Group took advantage of the Coronavirus Job Retention Scheme, the
number of employees now working has progressed to near normal levels, whether through
working on site in accordance with protective safety measures or through working remotely from
home. In addition, the business continues to drive cost control measures. Despite the impact of
the pandemic, liquidity remains strong. The Group drew down a Coronavirus Business
Interruption Loan last year to provide additional support. Cash flow forecasting is performed by
the Group on a monthly basis to ensure that there is sufficient cash to meet operational needs
and maintain adequate headroom.
The COVID-19 pandemic could result in changes to the outlook in the Group’s markets. Areas of
the business that could be impacted include a decrease in spending by key customers, the failure
of suppliers to source parts to manufacture our units, the requirement for the Group or its
suppliers to reduce site operational levels, the inability to meet delivery requirements, the inability
to adequately staff the business, and an increase in the cost or lack of availability of funding.
Any of the above could have a material adverse effect on the Group. However, the uncertainties
surrounding the development of this pandemic make it difficult to predict the full extent to which
the Group may be affected.
4. Key Performance Indicators (“KPIs”)
The Group has identified a number of financial and non-financial key performance indicators
which are regularly monitored to ensure that business is on track or to give warning where
problems may be arising:
Financial: The management’s focus is on the development of sales, the maintenance of a
healthy gross margin and prudent cost control. The two main performance indicators are unit
sales and gross profit margin. During the year, the Group sold 450 units (2020: 193 units) and
the gross profit margin was 84.2% (2020: 80.4%). The margin has increased predominantly
due to increased direct stock sales this year which generally achieves higher gross profit
margins compared to other revenue sources. In addition, overheads have continued to reduce
from last year.
10
Non-financial: The Group’s reputation for project management and delivery of its product’s
benefits on time and within budget is key to its continuing business success. Management is
always looking at improving the quality of the Group’s performance and will continue to invest
in products and solutions to enable it to maintain and enhance its reputation.
5. Strategy and future developments
The Group intends to invest for growth in the following areas:
• Completion of next generation M2G device integrating remote commercial boiler
management within a single Cloud-enabled device.
• Development of the key US market through Original Equipment Manufacturer (OEM)
relationships.
• Maintain a network of overseas distribution partners to deliver material revenue for
the Group.
• Maintain or exceed an installation capacity in line with company forecasts and to
continue providing our clients and partners with a world class project management
service and experience.
• Maintaining brand awareness and reputation of the Group.
• Acquisitions of compatible businesses within ‘green energy’ environmental opportunities.
•
Licensing of relevant green energy technologies.
This report was approved and authorised for issue by the Board on 27 August 2021 and
signed on its behalf by:
Richard Parris
Executive Chairman
27 August 2021
11
Directors’ Report
For the year ended 30 June 2021
The directors present their report and the consolidated financial statements for the year ended
30 June 2021. The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS). In accordance with S414C(11) of the Companies Act
2006, the directors have chosen to include information about future developments and financial
instrument risk in the Strategic Report.
Principal Activities
The principal activity of the Group during the year was the design, manufacture and sale of
M1G and M2G, boiler energy efficiency technologies, which are proven to reduce energy
consumption on commercial boilers by up to 35%.
Review of Business
A review of the business, its development and performance for the year and its position at the
year end, together with the future prospects of the Group, is contained in the Chairman & Chief
Executive Officer’s Report and the Strategic Report.
Governance and the Board
The Board’s governance system provides balanced support for the executive management team
in the development of the Group’s strategy and with the need to ensure effective monitoring
of its implementation. The Board and its committees have considered the significant events of
the year and their impact on the Group’s business and reputation.
During the year the Audit Committee was chaired by Cédriane de Boucaud Truell (replaced by
Charles Goodfellow in January 2021), the Remuneration Committee was chaired by Charles
Goodfellow, the Risk Committee was chaired by Marco Nijhof (replaced by Ranald McGregor-
Smith in February 2021) and the Nomination Committee was chaired by Richard Parris. The
Board remains confident in the work of those committees and the overall system of governance.
Results and Dividends
The Group loss for the year, before taxation, amounted to £509k (2020: £1,409k loss). The
Directors do not recommend a final dividend this year (2020 – nil).
Directors
The Directors who served during the year and their beneficial interest in the Company’s issued
share capital at year end were:
C. Goodfellow
R. Parris
C. de Boucaud Truell
(resigned 22 January)
M. Nijhof (resigned 22
January)
R McGregor-Smith
(appointed 1 February)
E Sutcliffe (appointed 1
March)
Date of
appointment
New ordinary
shares of 3p each
New ordinary
shares of 0.01p
each
17 January 2019
2 September 2019
23 September 2019
-
2021 %
-
1,506,460 10.3
33,333 0.2
%
2020
-
-
33,333,333
2.3
10,000,000 0.7
23 September 2019
33,333 0.2
10,000,000 0.7
1 February 2021
1 March 2021
12
-
-
-
-
-
-
-
-
Substantial Shareholdings
At 30 June 2021, the Company had been notified that (other than Directors) the following were
interested in 3% or more of the issued capital of the Company:
Richard Parris
Sanderson Capital Partners Ltd & Related Parties
Richard Edwards
Monecor (London) Limited
Number of new ordinary
shares
1,506,460
633,333
583,688
511,667
% of issued share
capital
10.3%
4.3%
4.0%
3.5%
At 30 June 2021, there were 14,574,260 Ordinary shares in issue.
Auditors
Each of the persons who is a director at the date of approval of this annual report confirms
that:
•
so far as the director is aware, there is no relevant audit information of which the
company’s auditors are unaware; and
the 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.
•
This confirmation is given and should be interpreted in accordance with the provisions of section
418 of the Companies Act 2006.
The auditors, Moore Kingston Smith LLP, will be proposed for reappointment in accordance
with section 489 of the Companies Act 2006.
This report was approved and authorised for issue by the Board on 27 August 2021 and
signed on its behalf by:
Richard Parris
Executive Chairman
27 August 2021
13
Corporate Governance
The Company adopts the Quoted Companies Alliance Corporate Governance Code (QCA Code).
The QCA Code provides UK small and mid-sized companies with a corporate governance
framework that is appropriate for a Company of our size and nature. The Board considers the
principles and recommendations contained in the QCA Code to be appropriate for the Company.
Statement of compliance with the QCA Code and applying the principles of good
governance
The Company is committed to meeting these principles as far as it reasonably can, and the
commentary below reflects the extent to which the Company has complied with the QCA Code
during the period under review.
The ten principles set out in the QCA Code are listed below together with a short explanation
of how the Company applies each of the principles.
Principle One
Business Model and Strategy
Subject to a near term review of the Company’s market and capabilities, the Company intends to
invest for growth in the following areas:
• Completion of next generation M2G device integrating remote commercial boiler
management within a single Cloud-enabled device.
• Development of the key US market through Original Equipment Manufacturer (OEM)
relationships.
• Maintain a network of overseas distribution partners to deliver material revenue for
the Group.
• Maintain or exceed an installation capacity in line with company forecasts and to
continue providing our clients and partners with a world class project management
service and experience.
• Maintaining brand awareness and reputation of the Group.
• Acquisitions of compatible businesses within ‘green energy’ environmental opportunities.
•
Licensing of relevant green energy technologies.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having constructive dialogue
with its shareholders. The Company has close ongoing relationships with its private
shareholders. Institutional shareholders and analysts have the opportunity to discuss issues
and provide feedback at meetings with the Company. In addition, all shareholders are
encouraged to attend the Company’s Annual General Meeting. Investors also have access to
current information on the Company though its website, www.sabien-tech.co.uk, and via
Richard Parris, Executive Chairman and Edward Sutcliffe, Company Secretary who are available
to answer investor relations enquiries.
14
Principle Three
Considering wider stakeholder and social responsibilities
The Board recognises that the long-term success of the Company is reliant upon the efforts of
the employees of the Company and its contractors, suppliers, regulators and other
stakeholders. The Board has put in place a range of processes and systems to ensure that there
is close oversight and contact with its key resources and relationships. For example, a
companywide internal information system shares live information on key suppliers, customers
and projects, allowing the Company to efficiently fulfil customer requirements. Furthermore, all
employees of the Company participate in an annual assessment process which is designed to
ensure that there is an open and confidential dialogue with each person in the Company to
promote successful two-way communication with agreement on goals, targets and aspirations
of the employee and the Company. These feedback processes help to ensure that the Company
can respond to new issues and opportunities that arise to further the success of employees and
the Company. The Company has close ongoing relationships with a broad range of its
stakeholders and provides them with the opportunity to raise issues and provide feedback to
the Company.
Principle Four
Risk Management
The Board, through its committees is responsible for ensuring that procedures are in place and
are being implemented effectively to identify, evaluate and manage significant risks faced by
the Group. The table below outlines the risks faced by the Group, identifies their impact and
the controls that are in place to mitigate them.
Activity
Risk
Impact
Control(s)
Management Recruitment and
retention of key
staff
Reduction in operating
capability
Stimulating and safe working
environment
Regulatory
adherence
Breach of rules
Censure or withdrawal
of authorisation
Balancing salary with longer
term incentive plans
Strong compliance regime
instilled at all levels of the
Company including regular
review of any changes to
current legislation
Inadequate
disaster recovery
procedures
Loss of key
operational and
financial data
Robust compliance
Secure off-site storage of data
Lack of recurring
revenue
Over-reliance on
capital sales which
can be unpredictable
Development of cloud enabled
subscription model
Financial
Liquidity, market
and credit risk
Inability to continue
as going concern
Robust capital management
policies and procedures
Inappropriate
controls and
accounting
policies
Reduction in asset
values
Incorrect reporting of
assets
Appropriate authority and
investment levels as set by
Treasury and Investment
Policies
Audit Committee
15
The Board of Directors has overall responsibility for the Group’s system of internal control and
for reviewing its effectiveness. The purpose of the system of internal control is to manage
rather than eliminate the risk of failure to achieve business objectives and can only provide
reasonable, but not absolute, assurance against material misstatement or loss.
The Directors have established an organisational structure with clear operating procedures, and
lines of responsibility. In particular, any capital investment requires a business case to be
presented to and approved by the Board. Financial reporting is carried out within a
comprehensive financial planning and accounting framework with oversight by the Audit
Committee. The Board has reviewed the need for an internal audit function and concluded that
such a function is not currently appropriate given the size of the Group.
Principle Five
A Well-Functioning Board of Directors
As at the date hereof the Board comprised the Executive Chairman, Richard Parris, Chief
Financial Officer and Executive Director Edward Sutcliffe, and the Non-Executive Directors,
Charles Goodfellow, and Ranald McGregor-Smith.
Biographical details of the current Directors are set out within Principle Six below.
Executive and Non-Executive Directors retire by rotation in accordance with the Company’s
Articles of Association which prescribe that at every Annual General Meeting one third of the
directors for the time being or, if their number is not a multiple of three, then the number
nearest to but not exceeding one third, shall retire from office. Non-executive directors are
initially appointed for a three year term but their appointment is terminable by either party on
three months’ written notice. The letters of appointment of all Directors are available for
inspection at the Company’s registered office during normal business hours.
The Board meets at least six times per annum. It has established an Audit Committee, a
Remuneration Committee, a Nominations Committee and a Risk Committee, the particulars of
which appear hereafter. The Executive and Non-Executive Directors are considered to be part
time but are expected to provide as much time to the Company as is required. The Board
considers that this is appropriate given the Company’s current stage of operations. It shall
continue to monitor the need to match resources to its operational performance and costs and
the matter will be kept under review going forward. Charles Goodfellow and Ranald McGregor-
Smith are considered to be Independent Directors by the Board. The Board shall review further
appointments as scale and complexity grows.
Attendance at Board and Committee Meetings
The Company shall report annually on the number of Board and committee meetings held
during the year and the attendance record of individual Directors. In order to be efficient, the
Directors meet formally and informally both in person and by telephone. The following table
shows attendance of the directors at Board and Audit Committee meetings.
Richard Parris
Cédriane de Boucaud Truell
Marco Nijhof
Charles Goodfellow
Edward Sutcliffe
Ranald McGregor-Smith
Board
Audit Committee
Attended
16
11
12
16
2
4
Eligible to
attend
17
12
12
16
2
4
Attended
1
1
-
2
-
-
Eligible to
attend
1
1
-
2
-
-
16
Richard Parris
Cédriane de Boucaud Truell
Marco Nijhof
Charles Goodfellow
Edward Sutcliffe
Ranald McGregor-Smith
Risk Committee
Remuneration
Committee
Attended
5
4
5
5
-
-
Eligible to
attend
5
5
5
5
-
-
Attended
2
1
2
2
-
-
Eligible to
attend
2
2
2
2
-
-
The Nominations Committee did not meet in the year. All appointments in the year were
approved by the Board as a whole.
Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of four Directors. The Company believes that the current balance
of skills in the Board as a whole, reflects a very broad range of commercial and professional
skills across geographies and industries and each of the Directors has experience in public
markets.
The Board recognises that it currently has a limited diversity, and this will form a part of any
future recruitment consideration if the Board concludes that replacement or additional directors
are required.
The Board shall review annually the appropriateness and opportunity for continuing
professional development whether formal or informal.
Richard Parris
Executive Chairman
Richard was until 2018 the Chairman and Chief Executive of Intercede, an AIM-traded
technology company, which he founded in 1992 and which was admitted to trading on AIM in
2001. Richard Parris is an engineer by training and an entrepreneur by experience, he
operationally led Intercede through all phases of its growth, including building its UK technology
team to invent, develop and commercialise new software products, including the adoption of
Cloud services and IoT delivery models as the core of future business transformation, and
securing contracts with major US OEMs to expand US sales.
Edward Sutcliffe
Chief Financial Officer and Executive Director
Edward is an experienced business advisor with a wide range of accounting, management,
transactional, turnaround, and board level skills. A Fellow of the Institute of Chartered
Accountants in England and Wales, Edward has worked internationally, providing consultancy
and expertise in areas including private equity, due diligence, debt raising, financial modelling
and analysis, and management and board reporting.
Charles Goodfellow
Independent Non-executive Director
Charles is a corporate broker with over 25 years’ experience of fundraising for small and mid-
caps and private companies across a range of sectors and jurisdictions. In addition, he was
previously a Director of Acorn Growth plc (re-named Vodere plc).
Charles chairs the Audit and Remuneration Committees and is a member of the Risk and
Nominations Committees.
17
Ranald McGregor-Smith
Independent Non-Executive Director
Ranald has worked as a corporate adviser and broker for most of his career and has significant
experience in leadership roles at a number of advisory firms, where he worked with both listed
and private companies.
He has worked with and advised a host of companies and their boards through a 33-year
banking career which has encompassed a period of significant change in the equity capital
markets. In 2010, Ranald co-founded Whitman Howard Ltd, an investment banking business,
before its sale to a large competitor in 2020. Prior to this Ranald spent 20 years at Hoare
Govett, latterly as a Board Director.
Ranald chairs the Risk and Nominations Committees and is a member of the Audit and
Remuneration Committees.
Principle Seven
Evaluation of Board Performance
Internal evaluation of the Board, and individual Directors will be undertaken on an annual basis
in the form of peer appraisal and discussions to determine the effectiveness and performance
as well as the Directors' continued independence.
The results and recommendations that come out of the appraisals for the directors shall identify
the key corporate and financial targets that are relevant to each Director and their personal
targets in terms of career development and training. Progress against previous targets shall
also be assessed where relevant.
Principle Eight
Corporate Culture
The Board recognises that their decisions regarding strategy and risk will impact the corporate
culture of the Company as a whole and that this will impact the performance of the Company.
The Board is very aware that the tone and culture set by the Board will greatly impact all
aspects of the Company as a whole and the way that employees behave. The corporate
governance arrangements that the Board has adopted are designed to ensure that the
Company delivers long term value to its shareholders and that shareholders have the
opportunity to express their views and expectations for the Company in a manner that
encourages open dialogue with the Board. A large part of the Company's activities is centred
upon what needs to be an open and respectful dialogue with employees, clients and other
stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to
the ability of the Company to successfully achieve its corporate objectives. The Board places
great importance on this aspect of corporate life and seeks to ensure that this flows through
all that the Company does. The directors consider that at present the Company has an open
culture facilitating comprehensive dialogue and feedback and enabling positive and constructive
challenge. The Company has adopted, with effect from the date on which its shares were
admitted to AIM, a code for Directors' and employees' dealings in securities which is appropriate
for a company whose securities are traded on AIM and is in accordance with the requirements
of the Market Abuse Regulation.
Principle Nine
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company’s activities rests with the Board, the respective
responsibilities of the Executive Chairman arising as a consequence of delegation by the Board.
The Board has adopted appropriate delegations of authority which set out matters which are
reserved to the Board. The Executive Chairman is responsible for the effectiveness of the Board,
18
primary contact with shareholders, and oversight of management of the Company’s business.
Audit Committee
Between September 2019 and January 2021, the Audit Committee was chaired by Cédriane de
Boucaud Truell and she was supported by Charles Goodfellow and Richard Parris. Since January
2021, the Committee is chaired by Charles Goodfellow who is supported by Ranald McGregor-
Smith. This committee meets twice a year. It is responsible for making recommendations to
the Board on the appointment of auditors and the audit fee, for reviewing the conduct and
control of the annual audit and for reviewing the operation of the internal financial controls. It
also has responsibility for the reporting of the financial performance of the Group and for
reviewing financial statements prior to publication.
Remuneration Committee
Between September 2019 and January 2021 the Remuneration Committee was chaired by
Charles Goodfellow and he was supported by Marco Nijhof. Since January 2021, Charles has
continued to chair the Committee but is now supported by Ranald McGregor-Smith. The
Remuneration Committee meets as required during each financial year. It is responsible for
reviewing the performance of the executive directors and setting the scale and structure of
their remuneration and the basis of their service agreements with due regard to the interest of
shareholders. The Remuneration Committee shall also determine the allocation of share options
to employees. It is a rule of the Remuneration Committee that a Director shall not participate
in discussions or decisions concerning his/her own remuneration.
Nominations Committee
The Nominations Committee was established at the end of September 2019 and was chaired
by Richard Parris and he was supported by Cédriane de Boucaud Truell until January 2021
when they were replaced by Ranald McGregor-Smith as chair and Charles Goodfellow. The
Nominations Committee meets to review the size, structure and composition of the Board
ensuring that the Board and its Committees have appropriate balance of skills, knowledge and
experience. The Nominations Committee reviews all Board appointments.
Risk Committee
The Risk Committee was established at the end of September 2019 and was chaired by Marco
Nijhof and he was supported by Charles Goodfellow until January 2021. Since then the
Committee has been chaired by Ranald-McGregor-Smith who is supported by Charles
Goodfellow. The Risk Committee assists the Board in fulfilling its oversight responsibilities with
regard to Group risk management and compliance framework and governance structure that
supports it.
Non-Executive Directors
The Board has adopted guidelines for the appointment of Non-Executive Directors which have
been in place and which have been observed throughout the year. Non-Executive Directors
retire by rotation in accordance with the Company’s Articles of Association which prescribe that
at every Annual General Meeting one third of the directors for the time being or, if their number
is not a multiple of three, then the number nearest to but not exceeding one third, shall retire
from office. Non-executive directors are initially appointed for a three year term but their
appointment is terminable by either party on three months’ written notice.
In accordance with the Companies Act 2006, the Board complies with: a duty to act within their
powers; a duty to promote the success of the Company; a duty to exercise independent
judgement; a duty to exercise reasonable care, skill and diligence; a duty to avoid conflicts of
interest; a duty not to accept benefits from third parties and a duty to declare any interest in a
proposed transaction or arrangement.
19
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and having constructive dialogue
with its shareholders. The Company has close ongoing relationships with its private
shareholders. Institutional shareholders and analysts have the opportunity to discuss issues
and provide feedback at meetings with the Company. In addition, all shareholders are
encouraged to attend the Company’s Annual General Meeting.
Investors also have access to current information on the Company through its website,
www.sabien-tech.co.uk, and via Richard Parris, Executive Chairman and Edward Sutcliffe,
Company Secretary who are available to answer investor relations enquiries.
The Company shall include, when relevant, in its annual report, any matters of note arising
from the Audit or Remuneration Committees.
20
Remuneration Report
This report should be read in conjunction with note 8 to the accounts. The Remuneration
Committee is responsible for reviewing the level and make-up of the remuneration of executive
directors. In doing so, the Committee’s aims are:
• To determine the policy for the remuneration of the executive directors;
• To review the on-going appropriateness of the remuneration policy;
• To approve the design of and review share incentive plans and bonus schemes and to
determine the awards to be made under such plans or schemes; and
• To ensure that the remuneration policies adopted by the Company give due regard to
any legal requirements, the provisions and recommendations in the QCA Code and the
AIM rules and associated guidance.
The components of remuneration are:
• Basic salary and benefits determined by the Remuneration Committee which are
included in employment agreements and reviewed annually;
• Bonuses based upon performance of the Company and the individual concerned; and
• Share options.
Service contracts
The employment contracts of the executive directors with the Company are terminable by either
party with no less than three months’ notice in writing to the other. The remuneration of the
non-executive directors is determined by the Board within the limits set out in the Articles of
Association.
The service contracts of the directors, one third of whom who are eligible for re-election at the
Annual General Meeting, are as follows:
C. Goodfellow
R. Parris
E Sutcliffe
R McGregor-Smith
Notice period
1 month
3 months
3 months
3 months
Directors’ remuneration during the period (audited)
Executive directors
R. Parris
E. Sutcliffe (appointed 1 March 2021)
A. O’Brien (resigned 5 November 2019)
Salaries
and fees
Taxable
benefits
£’000 £’000
Total
2021
£’000
75
13
-
-
-
-
75
13
-
Total
2020
£’000
113
-
120
Non-executive directors
C. Goodfellow
C. de Boucaud Truell (resigned 22 January 2021)
M. Nijhof (resigned 22 January 2021)
R. McGregor-Smith (appointed 1 February 2021)
J. Taylor (resigned 3 September 2019)
Total
30
23
23
-
15
324
Fees paid to R. Parris, C. Goodfellow, C. de Boucaud Truell, M. Nijhof and R McGregor-Smith
were paid to Parris LLP, Woodlands Lery Ltd, Cédriane De Boucaud Truell, Unfold EU B.V.
and Bridgend Finance Limited respectively.
30
26
26
29
-
199
30
26
26
29
-
199
-
-
-
-
-
-
21
Sabien Technology Group Share Option Plan (audited)
Under the Plan, the Group can make awards of share options to selected directors and eligible
employees.
No Directors who served during the year held any share options.
The mid-market price of the Company’s shares at the end of the financial year was 0.22p.
Richard Parris
Executive Chairman
27 August 2021
22
Section 172(1) Statement
Section 172(1) of the Companies Act 2006 requires the Directors of the Company to act in a
way that they consider, in good faith, would be most likely to promote the success of the
company for the benefit of its members as a whole, and in doing so have regard (amongst
other matters) to:
a) The likely consequences of any decision in the long-term;
b) The interests of the Company’s employees;
c) The need to foster the Company’s business relationships with suppliers, customers and
others;
d) The impact of the Company’s operations on the community and the environment;
e) The desirability of the Company maintaining a reputation for high standards of business
conduct; and
f) The need to act fairly as between members of the Company.
The table below sets out the key stakeholder groups, their interest and how the Company has
engaged with over the reporting period.
Stakeholder
group
Investors
Employees
Customers
Suppliers
Their interests
•
Comprehensive review of
financial performance of the
business
Business sustainability
•
• High standard of governance
Awareness of long-term
•
strategy and direction
Job satisfaction and fulfilment
•
• Health and safety on site
•
•
•
Training and development
Career progression
Inclusion
•
Fulfil order delivery and
installation to requirements
• Health and safety
•
•
•
• Maintain dialogue and visibility
Long term returns
Post installation support
Prompt payment
on orders
Long term relationship
•
• Growth of purchasing
Community and
the environment
•
•
•
Sustainability
Energy usage
Recycling and waste
management
23
How management and/or Directors
engage
•
•
•
•
•
•
Annual and interim reports
Company website
Shareholder circulations
Company announcements
AGM
Stock exchange announcements
•
•
•
•
•
Performance reviews, objective setting
and formal policies and procedures
Regular dialogue with key management
Company culture which promotes
inclusion and sharing of ideas
Employee share option policy
Additional health and safety support
from outsourced specialists
Customer survey
Clear and consistent communication
Post installation support
Analysis of savings
Fully qualified installers
•
•
•
•
•
• Deposit payments on large orders
•
• Maintained relationship since inception
Advanced notice on orders
of the company
• Open dialogue to highlight any possible
•
•
•
•
supply chain issues
Products promote energy reduction
Corporate and social responsibility
policy
Environmental policy
Comply with the Waste Electric and
Electronic Equipment (WEEE)
Regulation
Directors’ Responsibilities Statement
The directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable laws and regulations.
Company law requires the directors to prepare such financial statements for each financial year.
Under that law, the directors have prepared the group and parent 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 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 judgements 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 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 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 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.
We confirm to the best of our knowledge that:
1.
2.
the financial statements, prepared in accordance with International Financial Reporting
Standards as adopted by the EU, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the company and the undertakings included in
the consolidation taken as a whole; and
the strategic report and the directors’ report include a fair review of the development
and performance of the business and the position of the company and the undertakings
included in the consolidation as a whole together with a description of the principal
risks and uncertainties that they face.
24
Independent Auditors’ Report to the Members of Sabien Technology Group Plc
Opinion
We have audited the financial statements of Sabien Technology Group Plc (the ‘parent
company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2021 which comprise
the Consolidated Statement of Comprehensive Income, the Consolidated and Company
Statements of Financial Position, the Consolidated and Company Statements of Cash Flows,
the Consolidated and Company Statements of Changes in Equity and notes to the financial
statements, including a summary of significant accounting policies. 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.
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 2021 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 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK)
(ISAs(UK)) and applicable law. Our responsibilities under those standards are further described
in the Auditor’s Responsibilities for the audit of financial statements section of our report. We
are independent of the group in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied
to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the group's
ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
25
Audit Area and Description
Audit approach
in
intangible asset
Carrying value of intangibles
The
the Consolidated
represents
Statement of Financial Position
intellectual property being the rights to the M2G
product acquired from the inventors. The overall
decline in revenue over the past five years, and
the pre taxation losses are potential indicators of
an impairment of the carrying value of the
intangible asset.
Carrying value of investments and
investment in subsidiaries
The cost of investment in Aeristech Limited and
Sabien Technology Limited in the Company and
Consolidated Statements of Financial Position are
£100,000 and £6,457,000 respectively at the
year end the latter has been fully impaired.
In order to satisfy ourselves that the carrying
value of
intangible asset was
appropriate:
the
• We
critically
assessed
underpinning
the
assumptions
the
Directors’ IAS 36 valuation of the
intellectual property.
• We critically assessed the Directors’
assertion that no impairment was
required by reference to trading
performance and forecasts.
• We performed sensitivity analysis of
the Directors’ IAS 36 valuation.
• We considered the appropriateness
for
the amortisation policy
of
intellectual property.
In order to satisfy ourselves that the carrying
value of the investments in Aeristech Limited
and Sabien Technology Limited were
appropriate:
• We
critically
assessed
underpinning
the
the
assumptions
Directors’ IAS 36 valuation of the
investment in Sabien Technology
Limited.
• We critically assessed the Directors’
assertion that the cost of investment
in Sabien Technology Limited
remains fully impaired by reference
to
and
forecasts and that no impairment in
Aeristech Limited is required.
performance
trading
Going concern
The pre taxation losses and the limited visibility
on future cash flow receipts indicate that the
Company and Group may have a going issue.
In order to satisfy ourselves that the going
concern basis is appropriate:
• We critically assessed the client’s
cashflow forecast to 31 December
2022 and assessed the underlying
assumptions.
• We critically assessed the Directors’
assertion that the Company and
Group
is a going concern by
reference to post year end trading
and cashflows and ability to raise
further funds if required.
26
Our application of materiality
The scope and focus of our audit was influenced by our assessment and application of
materiality. We define materiality as the magnitude of misstatement that could reasonably be
expected to influence the economic decisions of the users of the financial statements. We use
materiality to determine the scope of our audit and the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements on the financial statements both
individually and as a whole.
Due to the nature of the Group we considered income and profitability to be the main focus for
the readers of the financial statements and accordingly this consideration influenced our
judgement of materiality. Based on our professional judgement, we determined materiality for
the Group to be £27,500, based on an initial calculation of gross assets.
On the basis of our risk assessments, together with our assessment of the overall control
environment, our judgement was that performance materiality (i.e. our tolerance for
misstatement in an individual account or balance) for the Group was 50% of materiality, namely
£13,750.
We agreed to report to the Audit Committee all audit differences in excess of £1,375, as well
as differences below that threshold that, in our view, warranted reporting on qualitative
grounds. We also reported to the Audit Committee on disclosure matters that we identified
when assessing the overall presentation of the financial statements.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment,
including Group-wide controls, and assessing the risks of material misstatement at the Group
level. The Group is audited by one audit team, led by the Senior Statutory Auditor. Our
approach in respect of key audit matters is set out in the table in the Key Audit Matters Section
above.
Other information
The other information comprises the information included in the annual report, other than the
financial statements and our auditor’s report thereon. The directors are responsible for the
other information. Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact.
We have nothing to report in this regard.
Opinions 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.
27
In our opinion, based on the work undertaken in the course of the audit:
•
•
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 parent
company financial statements; and
the strategic report and the directors’ report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent 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.
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.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 24, the
directors are responsible for the preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s
and the parent company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to cease operations, or
have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures
are capable of detecting irregularities, including fraud is detailed below.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material
28
misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit
evidence regarding the assessed risks of material misstatement due to fraud, through designing
and implementing appropriate responses to those assessed risks; and to respond appropriately
to instances of fraud or suspected fraud identified during the audit. However, the primary
responsibility for the prevention and detection of fraud rests with both management and those
charged with governance of the company.
Our approach was as follows:
• We obtained an understanding of the legal and regulatory requirements applicable to
the group and considered that the most significant are the Companies Act 2006,
International Financial Reporting Standards, and UK taxation legislation.
• We obtained an understanding of how the group complies with these requirements by
discussions with management and those charged with governance.
• We assessed the risk of material misstatement of the financial statements, including
the risk of material misstatement due to fraud and how it might occur, by holding
discussions with management and those charged with governance.
• We inquired of management and those charged with governance as to any known
instances of non-compliance or suspected non-compliance with laws and regulations.
•
Based on this understanding, we designed specific appropriate audit procedures to
identify instances of non-compliance with laws and regulations. This included making
enquiries of management and those charged with governance and obtaining additional
corroborative evidence as required.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purposes
of expressing an opinion on the effectiveness of the group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the group’s or
the parent company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the
group or the parent company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the
29
underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the consolidated financial statements of
the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Use of 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 for no purpose
other than to draw to the attention of the company’s members those matters which we are
required to include in an auditor’s report addressed to them. To the fullest extent permitted by
law, we do not accept or assume responsibility to any party other than the company and
company’s members as a body, for our work, for this report, or for the opinions we have
formed.
Matthew Banton (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP, Statutory Auditor
27 August 2021
Devonshire House
60 Goswell Road
London
EC1M 7AD
30
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2021
Revenue
Cost of sales
Gross profit
Notes
2021
£’000
971
(153)
818
2020
£’000
454
(89)
365
Administrative expenses
(1,182)
(1,250)
Exceptional item
Operating loss
Other income
Finance expenses
Loss before tax
Tax credit
Loss for the year attributable to equity
holders of the parent company
6
5
9
(180)
(579)
(544)
(1,464)
35
-
55
-
(509)
(1,409)
10
-
-
(509)
(1,409)
Other comprehensive income
-
-
Total comprehensive income for the
year
(509)
(1,409)
Loss per share in pence – basic
Loss per share in pence – diluted
11
11
(6.22)
(6.22)
(0.11)
(0.11)
The earnings per share calculation relates to both continuing and total operations.
The notes on pages 36 to 55 form part of these financial statements.
31
Consolidated and Company Statements of Financial
Position
As at 30 June 2021
Company Reg No: 05568060
Group
Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Notes
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investments
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and bank balances
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Total current liabilities
Non-current liabilities
Borrowings
Total non-current liabilities
EQUITY
Equity attributable to equity holders
of the parent
Share capital
Other reserves
Retained earnings
Total equity
12
13
14
15
16
17
18
19
19
20
35
57
100
192
24
51
1,399
1,474
17
104
-
121
39
83
778
900
-
-
100
100
-
-
-
-
-
180
977
1,157
-
450
596
1,046
1,666
1,021
1,257
1,046
161
36
197
145
145
627
-
627
181
181
99
-
99
-
-
515
-
515
-
-
3,350
3,509
(5,535)
1,324
3,058
2,181
3,058
3,350
2,181
3,509
(5,026) (5,701) (4,708)
531
1,158
213
TOTAL EQUITY AND LIABILITIES
1,666
1,021
1,257
1,046
As permitted by section 408 of the Companies Act 2006, the Income Statement of the Parent
Company is not presented as part of these financial statements. The loss dealt with in the
accounts of the Parent Company is £993k (2020: £890k loss). There is no other comprehensive
income in the Parent Company.
The financial statements were approved and authorised for issue by the Board on 27 August
2021 and were signed on its behalf by:
Richard Parris
Executive Chairman
27 August 2021
The notes on pages 36 to 55 form part of these financial statements.
32
Consolidated and Company Cash Flow Statements
For the year ended 30 June 2021
Cash flows from operating activities
Loss before taxation
Adjustments for:
Depreciation and amortisation
Loss on disposal of fixed assets
Impairment of investment in subsidiary
Decrease / (increase) in trade and other
receivables
Decrease in inventories
(Decrease)/increase in trade and other
payables
Group
2021
£’000
2020
£’000
Company
2021
£’000
2020
£’000
(509)
(1,409)
(993)
(890)
51
11
-
32
53
1
-
34
-
-
-
284
15
(466)
15
491
-
(430)
-
-
160
(396)
-
488
Net cash outflow from operating activities
(866)
(815) (1,139)
(638)
Cash flows from investing activities
Investments acquired
Purchase of property, plant and equipment
(100)
(33)
-
(3)
(100)
-
(160)
-
Net cash used in investing activities
(133)
(3)
(100)
(160)
Cash flows from financing activities
Proceeds from borrowings
Proceeds from share issues
Share issue costs
-
1,700
(80)
181
726
(49)
-
1,700
(80)
Net cash generated by financing activities
1,620
858
1,620
-
726
(49)
677
Net increase/(decrease) 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
Cash and cash equivalents comprise:
Cash and cash equivalents
Invoice financing (included in other payables)
621
40
381
(121)
778
738
596
717
1,399
778
977
596
1,399
-
1,399
778
-
778
977
-
977
596
-
596
The notes on pages 36 to 55 form part of these financial statements.
33
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Share
capital
Share
premium
Share based
payment
reserve
Retained
earnings
Total
equity
£’000
£’000
£’000
£’000
£’000
3,001
1,560
41
(3,657)
945
-
57
-
-
-
669
(49)
-
-
-
(1,409)
(1,409)
-
-
726
(49)
-
(40)
40
-
3,058
2,180
1
(5,026)
213
Balance at 1 July
2019
Changes in equity for
year
Loss for the year
Share issues
Share issue costs
Transfer to
retained earnings
re lapsed options
Balance at 30 June
2020
Changes in equity for
year
Loss for the year
-
-
Share issues
292
1,408
Share issue costs
-
(80)
-
-
-
(509)
(509)
-
-
1,700
(80)
Balance at 30 June
2021
3,350
3,508
1
(5,535)
1,324
The notes on pages 36 to 55 form part of these financial statements.
34
Company Statement of Changes in Equity
For the year ended 30 June 2021
Share
capital
Share
premium
£’000
£’000
Share
based
payment
reserve
£’000
Retained
earnings
Total
equity
£’000
£’000
3,001
1,560
41
(3,858)
744
-
57
-
-
-
669
(49)
-
-
-
(890)
(890)
-
-
726
(49)
-
(40)
40
-
3,058
2,180
1
(4,708)
531
Balance at 1 July
2019
Changes in equity
for year
Loss for the year
Share issues
Share issue costs
Transfer to retained
earnings re lapsed
options
Balance at 30
June 2020
Changes in equity
for year
Loss for the year
-
-
Share issues
292
1,408
Share issue costs
-
(80)
-
-
-
(993)
(993)
-
-
1,700
(80)
Balance at 30
June 2021
3,350
3,508
1
(5,701)
1,158
The notes on pages 36 to 55 form part of these financial statements.
35
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
General information
The Company is incorporated in England & Wales under the Companies Act 2006. The address
of the registered office is given on page 1.
The nature of the Group’s operations and principal activities are set out in the Directors’ Report.
1.
Accounting policies
The following significant principal accounting policies have been used consistently in the
preparation of the consolidated financial information. The consolidated information comprises
the Company and its subsidiaries (together referred to as “the Group”).
a)
Basis of preparation: The financial information in this document has been
prepared using accounting principles generally accepted under International
Financial Reporting Standards (“IFRS”), as adopted by the European Union.
The Directors expect to apply these accounting policies, which are consistent with
International Financial Reporting Standards, in the Group’s Annual Report and
Financial Statements for all future reporting periods.
The consolidated financial statements have been prepared on the historical cost
basis and are presented in £’000 unless otherwise stated.
b)
Basis of consolidation: The consolidated financial statements incorporate the
financial statements of the Company and entities controlled by the Company (its
subsidiaries) made up to 30 June each year. Control is achieved where the
Company has the power to govern the financial and operating policies of an
investee entity so as to obtain benefit from its activities.
Except as noted below, the financial information of subsidiaries is included in the
consolidated financial statements using the acquisition method of accounting. On
the date of acquisition, the assets and liabilities of the relevant subsidiaries are
measured at their fair values.
All intra-Group transactions, balances, income and expenses are eliminated on
consolidation.
Accounting for the Company’s acquisition of the controlling interest in
Sabien Technology Limited: The Company’s controlling interest in its directly
held subsidiary, Sabien Technology Limited, was acquired through a transaction
under common control, as defined in IFRS 3 Business Combinations. The directors
note that transactions under common control are outside the scope of IFRS 3 and
that there is no guidance elsewhere in IFRS covering such transactions.
IFRS contain specific guidance to be followed where a transaction falls outside the
scope of IFRS. This guidance is included at paragraphs 10 to 12 of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors. This requires, inter alia, that
where IFRS does not include guidance for a particular issue, the directors may also
consider the most recent pronouncements of other standard setting bodies that
use a similar conceptual framework to develop accounting standards. In this
regard, it is noted that the UK standard FRS 6 Acquisitions and Mergers which was
in place at the time of the transaction addresses the question of business
combinations under common control.
In contrast to IFRS 3, FRS 6 sets out accounting guidance for transactions under
36
common control which, as with IFRS 3, are outside the scope of that accounting
standard. The guidance contained in FRS 6 indicates that merger accounting may
be used when accounting for transactions under common control.
Having considered the requirements of IAS 8, and the guidance included in FRS 6,
it is considered appropriate to use a form of accounting which is similar to pooling
of interest when dealing with the transaction in which the Company acquired its
controlling interest in Sabien Technology Limited.
In consequence, the consolidated financial statements for Sabien Technology
Group Plc report the result of operations for the year as though the acquisition of
its controlling interest through a transaction under common control had occurred
at 1 October 2005. The effect of intercompany transactions has been eliminated in
determining the results of operations for the year prior to acquisition of the
controlling interest, meaning that those results are on substantially the same basis
as the results of operations for the year after the acquisition of the controlling
interest.
Similarly, the Consolidated Statement of Financial Position and other financial
information have been presented as though the assets and liabilities of the
combining entities had been transferred at 1 October 2005.
Whilst FRS 6 is no longer effective similar requirements are set out in the current
UK Financial Reporting Standard, FRS 102, in respect of such transactions.
The Group did take advantage of section 131 of the Companies Act 1985 and
debited the difference arising on the merger with Sabien Technology Limited to a
merger reserve. When consolidated retained earnings are available, any debit
reserves are offset against these retained earnings. As there were consolidated
retained earnings available in the year ended 30 June 2012, the merger reserve
was offset against those retained earnings.
c)
d)
Property, plant and equipment: Property, plant and equipment are stated at
cost less accumulated depreciation. Assets are written off on a straight-line basis
over their estimated useful life commencing when the asset is brought into use.
The useful lives of the assets held by the Group are considered to be as follows:
Office equipment, fixtures and fittings
3-4 years
Intangible assets: Intellectual property, which is controlled through custody of
legal rights and could be sold separately from the rest of the business, is capitalised
where fair values can be reliably measured.
Intellectual property is amortised on a straight line basis evenly over its expected
useful life of 20 years.
Impairment tests on the carrying value of intangible assets are undertaken:
• At the end of the first full financial year following acquisition; and
•
In other periods if events or changes in circumstances indicate that
the carrying value may not be fully recoverable.
If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Recoverable amount
is the higher of the fair value, less costs to sell, and value in use. In assessing the
value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future
37
e)
f)
g)
h)
cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying
amount, the carrying amount of the asset is reduced to its recoverable amount. An
impairment loss is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset
is increased to the revised estimate of its recoverable amount, but only in so far
that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset
in prior years. A reversal of an impairment loss is recognised in income
immediately.
Fixed asset investments: Fixed asset investments are stated at cost less any
provision for impairment in value.
Deferred consideration: Deferred consideration is discounted from the
anticipated settlement date at the Group’s weighted average cost of capital.
Inventories: Inventories are valued at the lower of average cost and net
realisable value.
Financial instruments
Financial Assets:
The Group classifies its financial assets as financial assets at amortised cost and
cash. 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 amortised cost 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 balance
sheet date. These are classified as non-current assets.
Trade receivables are classified as financial assets at amortised cost and are
recognised at fair value less provision for impairment. Trade receivables, with
standard payment terms of between 30 to 65 days, are recognised and carried at
the lower of their original invoiced and recoverable amount. Where the time value
of money is material, receivables are carried at amortised cost.
A loss allowance is recognised on initial recognition of financial assets held at
amortised cost, based on expected credit losses, and is re-measured annually with
changes appearing in profit or loss. Where there has been a significant increase in
credit risk of the financial instrument since initial recognition, the loss allowance is
measured based on lifetime expected losses. In all other cases, the loss allowance
is measured based on 12-month expected losses. For assets with a maturity of 12
months or less, including trade receivables, the 12-month expected loss allowance
is equal to the lifetime expected loss allowance.
Short term financial assets are measured at transaction price, less any impairment.
Loans receivable are measured at transaction price net of transaction costs and
measured subsequently at amortised cost using the effective interest method, less
any impairment.
The Group’s financial assets are disclosed in notes 15 and 16. Impairment testing
of trade receivables is described in note 16.
38
i)
j)
Financial Liabilities:
The Group classifies its financial liabilities as trade payables and other short term
monetary liabilities. Trade payables and other short term monetary liabilities are
recorded initially at their fair value and subsequently at amortised cost. They are
classified as non-current when the payment falls due greater than 12 months after
the year end date and are described in note 18.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks,
other short term highly liquid investments with original maturities of three months
or less, and bank overdrafts.
Revenue recognition
Revenue is measured based on the consideration to which the Group expects to be
entitled in a contract with a customer and excludes amounts collected on behalf of
third parties. The Group recognises revenue when it transfers control of a product
or service to a customer.
Revenue from sale of goods is recognised when signed agreements are exchanged
between the two parties for the manufacture and/or delivery of goods. Where the
Group is responsible for the project management of the installations, revenue is
normally recognised upon installation at the customer site, however there are
occasions when the sale of the product and the installation are invoiced and
recognised separately when each element is complete. Where goods are delivered
to overseas distributors, revenue is recognised at the time of shipment from the
company’s warehouse.
Revenue from services generally arises from pilot projects for customers and is
recognised once the pilot has been completed and the results notified to the
customer. Pilot projects generally have a duration of between 1 and 3 months.
Revenue from operating lease services rendered to customers is recognised on a
straight-line basis.
Revenue is shown net of value-added tax, returns, rebates and discounts and after
eliminating sales within the Group.
Interest income is accrued on a time basis by reference to the principal outstanding
and at the effective interest rate applicable.
k)
Share-based payments
The Group has applied the requirements of IFRS2 Share-based Payments. The
Group issues options to certain employees. These options are measured at fair
value (excluding the effect of non-market based vesting conditions) at the date of
grant. The fair value determined at the grant date is expensed on a straight-line
basis over the vesting period based on the Group’s estimate of the shares that will
eventually vest and adjusted for the effect of non-market based vesting conditions.
Fair value is measured by use of the Black-Scholes model. The expected life used
in the model has been adjusted, based on management’s best estimate for the
effects of non-transferability, exercise restrictions and behavioural conditions.
l)
Operating leases (Group as lessee)
At inception of a contract, the Group assesses whether a contract is, or contains a
lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right
to use an asset (the underlying asset) for a period of time in exchange for
consideration’.
At lease commencement date, the Group recognised a right of use asset and a
39
lease liability on the balance sheet. The right of use asset is measured at cost,
which is made up of the initial measurement of the lease liability, any initial direct
costs incurred by the Group, an estimate of any costs to dismantle and remove the
asset at the end of the lease and any lease made in advance of the lease
commencement date (net of any incentives received).
The Group depreciates the right of use asset on a straight-line basis from the lease
commencement date to the earlier of the end of the useful like of the right of use
asset or the end of the lease term. The Group also assesses the right of use asset
for impairment when such indicators exist. At the commencement date, the Group
measures the lease liability at the present value of the lease payments unpaid at
the date, discounted using the interest rate implicit in the lease if that rate is readily
available or the Group’s incremental borrowing rate. Lease payments included in
the measurement of the lease liability are made up of fixed payments, variable
payments based on an index or rate, amounts expected to be payable under a
residual value guarantee, and payments arising from purchase and extension
options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made
and increased for interest. It is remeasured to reflect any reassessment or
modification, or if there are changes to fixed payments. When the lease liability is
remeasured, the corresponding adjustment is reflected in the right of use asset, or
profit and loss if the right of use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low value
assets using the practical expedients. Instead of recognising a right of use assert
and lease liability, the payment in relation these are recognised as an expense in
profit or loss on a straight-line basis over the lease term. applicable to operating
leases where substantially all of the benefits and risks of ownership remain with
the lessor are charged to profit and loss on the straight-line basis over the lease
term.
Operating leases (Group as lessor)
Assets leased to customers under operating leases are included in property, plant
and equipment and are depreciated over their lease term down to their anticipated
realisable value on a straight-line basis. Anticipated realisable values are regularly
reassessed and the impact upon the depreciation charge is adjusted prospectively.
Taxation
The charge for current tax is based on the results for the year as adjusted for items
that are non-assessable or disallowed. It is calculated using rates that have been
enacted or substantively enacted by the year end date.
Deferred tax is accounted for using the balance sheet liability method in respect of
temporary differences arising from differences between the carrying amount of
assets and liabilities in the financial statements and the corresponding tax basis
used in the computation of taxable profit. In principle, deferred tax liabilities are
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction which affects neither the tax profit nor the accounting
profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on
investments in subsidiaries and associates, and interest in joint ventures, except
where the Group is able to control the reversal of the temporary difference and it
is probable that the temporary difference will not reverse in the foreseeable future.
40
m)
n)
o)
p)
g)
Deferred tax is calculated at the rates that are expected to apply when the asset
or liability is settled. Deferred tax is charged or credited in the statement of
comprehensive income, except when it relates to items credited or charged directly
to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its current tax assets
and liabilities on a net basis.
Adoption of new and revised standards
There are no IFRSs or IFRIC interpretations that are effective for the first time for
the financial year beginning 1 July 2020 that would be expected to have a material
impact on the Group.
New and revised standards not yet effective
Certain new accounting standards and interpretations have been issued but have
not been applied by the Group in preparing these financial statements as they are
not as yet effective. These standards are not expected to have a material impact
on the Group in the current or future periods and on foreseeable future
transactions.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates
of exchange ruling at the statement of financial position date. Transactions in
foreign currencies are translated into sterling at the rate of exchange ruling at the
date of transaction. Exchange differences are taken into account in arriving at the
operating result.
Profit and losses of overseas subsidiary undertakings are translated into sterling at
average rates for the year. The statements of financial position of overseas
subsidiary undertakings are translated at the rate ruling at the statement of
financial position date. Differences arising from the translation of Group
investments in overseas subsidiary undertakings are recognised as a separate
component of equity.
Net exchange differences classified as equity are separately tracked and the
cumulative amount disclosed as a translation reserve.
The principal place of business of the Group is the United Kingdom with sterling
being the functional currency.
2.
Financial risk management
Financial Risk Factors
The Group’s activities expose it to a variety of financial risks arising from its use of
financial instruments: credit risk, liquidity risk and market risk. This note describes
the Group’s objectives, policies and processes for managing those risks and the
methods used to measure them.
Further quantitative information in respect of these risks is presented throughout
these financial statements. So far, there have been no substantive changes in the
Group’s exposure to financial instrument risks, its objectives, policies and processes
for managing those risks or the methods used to measure them from previous
periods unless otherwise stated in this note.
41
The principal financial instruments used by the Group, from which the financial
instrument risk arises, are as follows:
• trade and other receivables;
• cash and cash equivalents;
• trade and other payables; and
• borrowings.
The Board has overall responsibility for the determination of the Group’s risk
management objectives and policies and, whilst retaining ultimate responsibility for
them, it has delegated the authority for designing and operating processes that
ensure the effective implementation of the objectives and policies to the Group’s
finance function. The Board reviews regular finance reports from the Finance
Director through which it evaluates any risk exposures with a view to minimising
any potential adverse effects on the Group’s financial performance. So far, the
Group has not used derivative financial instruments to hedge risk exposures as its
activities and operations exposure to such risks are not deemed significant.
Transactions that are speculative in nature are expressly forbidden.
Details regarding the policies that address financial risk are set out
below:
(i) Credit Risk
Credit risk arises principally from the Group’s trade receivables and cash and cash
equivalents. It is the risk that the counterparty fails to discharge its obligation in
respect of the instruments.
Trade Receivables
The nature of the Group’s operations means that all of its current key customers
are established businesses and organisations in both the public and private sector.
The credit risks are minimised due to the nature of these customers and the
concentration of sales to date within established economies. The Group will
continually review its credit risk policy, taking particular account of future exposure
to developing markets and associated changes in the credit risk profile.
The carrying amount in the Consolidated Statement of Financial Position, net of
any applicable provisions for loss, represents the amount exposed to credit risk and
hence there is no difference between the carrying amount and the maximum credit
risk exposure.
(ii) Liquidity Risk
Liquidity risk arises from the Group’s management of working capital. It is the risk
that the Group will encounter difficulty in meeting its financial obligations as they
fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to
meet its liabilities when they become due and have the availability of such funds
for its operations. Management monitors rolling forecasts of the Group’s liquidity
reserve which comprises cash and cash equivalents on the basis of expected cash
flow. At the year end date, these projections indicate that the Group expects to
have sufficient liquid resources to meet its obligations under all reasonable
expected circumstances for the forthcoming year. The Group continues to monitor
its liquidity position through budgetary procedures and cash flow analysis.
The table below analyses the Group’s financial liabilities into relevant maturity
groupings based on the remaining period from the year end date to the contractual
maturity date. The amounts disclosed in the table are the contractual undiscounted
42
cash flows. Balances due in less than 1 year equal their carrying balances as the
impact of discounting is not significant.
At 30 June 2021
Trade and other
payables
Borrowings
At 30 June 2020
Trade and other
payables
Borrowings
Less than 1
year
£’000
Between 1
and 2 years
£’000
Between 2
and 5 years
£’000
Over 5
years
£’000
161
36
-
36
-
109
-
-
627
-
-
36
-
109
-
36
The Group does not have any derivative financial instruments.
(iii) Market Risk
Market risk arises from the Group’s use of interest bearing, tradable and foreign
currency financial instruments. There is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of changes in interest rates
(interest rate risk), foreign exchange rates (currency risk) or other market factors
(other price risk).
•
Interest Rate Risk
The Group invests its surplus cash in a spread of fixed rate short term bank deposits
to minimise risk and maximise flexibility. In doing so it limits its exposure to
fluctuations in interest rates that are inherent in such a market. Overall risk is not
regarded as significant and the effect of a one percentage point increase in the
average interest rate during the year would have resulted in an increase in loss
after tax for the year of £1k (2019: £1k).
• Currency Risk
The Group operates internationally through its distributorship arrangements in
Europe and the US and is exposed to currency risk arising from the Euro and the
US dollar. Currency risk arises from future commercial transactions and recognised
assets and liabilities. Given the current scale of the Group’s overseas operations,
overall currency risk is considered to be low.
An increase of one percentage point in the average 2021 Euro and US dollar
exchange rates would have increased the Group’s loss after tax by less than £1k
(2020: £1k).
• Other Price Risk
The Group holds some strategic equity investments in other companies where those
complement the Group's operations. The directors believe that the exposure to market
price risk from this activity is acceptable in the Group's circumstances. The effect of a
10% increase in the value of the equity investments held at the reporting date would, all
other variables held constant, have resulted in an increase in the fair value through other
comprehensive income reserve and net assets of £10k (2020: £nil). A 10% decrease in
their value would, on the same basis, have decreased the fair value through other
comprehensive income reserve and net assets by the same amount.
43
Capital risk management
The Group’s objective when managing capital is to safeguard the Group’s ability to
continue as a going concern in order to provide future returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital. The Group seeks to maintain, at this stage of its
development, sufficient funding drawn primarily from equity to enable the Group
to meet its working and strategic needs. The Group may issue new shares or realise
value from its existing investments and other assets as may be deemed necessary.
The Group centrally manages borrowings, investment of surplus funds and financial
risks. The objective of holding financial investments is to provide efficient cash and
tax management and effective funding for the Group.
Fair value estimation
Holding trade receivables and payables at book value less impairment provision is
deemed to approximate their fair values. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the future contractual cash flows
at the current market interest rate that is available to the Group for similar financial
instruments.
3.
Critical accounting estimates and judgements
Key sources of Estimation Uncertainty
The preparation of the consolidated and company financial statements requires the
Group and Company to make estimates, judgements and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities. The directors base their estimates on
historical experience and various other assumptions that they believe are
reasonable under the circumstances, the results of which form the basis for making
judgements about the carrying value of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under
different assumptions or conditions.
In the process of applying the Group’s and Company’s accounting policies,
management has made a number of judgements and estimations, of which the
following are considered to have the most significant effect on amounts recognised
in the financial statements:
(i) Revenue Recognition
No significant criteria are required by the Group in regard to revenue recognition
that are not covered by the accounting policy.
(ii) Share-based Payments
The calculation of the estimated fair value of share options and warrants granted
can only reasonably be assessed once such options and warrants are exercised. To
date, no options or warrants have been exercised and the Group is therefore reliant
upon the calculations as explained in the accounting policy and note 22 to the
accounts in arriving at an estimated fair value in line with the requirements of
IFRS2.
(iii) Going Concern
The key performance indicator for the Group is M2G unit sales which showed a
increase to 450 units in the year (2020: 193 units).
Despite the increase in sales revenue the Group incurred a loss of £509,000 in the
year (2020: loss of £1,409,000). £180,000 of the loss were exceptional non-
44
recurring costs related to the aborted PHD transaction. The directors are taking
steps to return the Group to profitability. Whilst the loss indicates an uncertainty
in relation to going concern, the directors consider the Group’s year end cash
balance of £1.4m provides sufficient headroom to counteract this uncertainty.
The directors have also considered the continued impact of the COVID-19
pandemic, and the measures taken to control it, on the Group. The directors have
taken steps to mitigate the impact including the furloughing of staff under the job
retention scheme and taking advantage of the Coronavirus Business Interruption
Loan Scheme. The directors have therefore taken steps to safeguard the assets of
the Group and to enable the Group to continue in business and meet its liabilities
as they fall due.
The directors have prepared cash flow forecasts to 31 December 2022 based on
the conversion of sales pipeline to contracted sales revenue although there can be
no certainty that the sales pipeline will be converted into sales revenue in
accordance with the cash flow forecasts.
The cash flow forecasts confirm that the Group will have sufficient working capital
to settle its liabilities as they fall due for a period of not less than twelve months
from the date of the approval of these consolidated financial statements.
Consequently, the consolidated financial statements have been prepared on a
going concern basis.
(iv) Impairment of investments
Based on their best estimate of likely future developments within the business, the
directors consider that the impairment provision against the carrying value of
Investment in Subsidiaries in the Company’s Statement of Financial Position as at
the year end date remains valid and reasonable, as detailed in note 14.
(v) Deferred Tax Assets
Management judgement is required to determine the amount of deferred tax asset
that can be recognised, based upon the likely timing and level of future taxable
profits together with an assessment of the effect of future tax planning strategies.
In 2015, the directors decided that it would be prudent not to recognise any
deferred tax asset in the financial statements until recurring profitability is attained.
The Group and Company was loss making in the prior and current financial years
and thus a deferred tax asset has not been recognised in the financial statements
for the year under review.
The tax losses available to offset against future taxable profits, subject to HMRC
agreement, are estimated at £6.54m.
(vi) Impairment of Intellectual Property
As a result of a review by the directors of the unit sales likely to arise over the next
year, no change in the value of Intellectual Property has been deemed to be
necessary and consequently no provision has been made for impairment.
45
4.
Segmental reporting
Based on risks and returns, the Directors consider that the primary reporting business format
is by business segment which is currently just the supply of energy efficiency products, as this
forms the basis of internal reports that are regularly reviewed by the Group’s chief operating
decision maker in order to allocate resources to the segment and assess its performance.
Therefore, the disclosures for the primary segment have already been given in these financial
statements. The secondary reporting format is by geographical analysis by destination. Non-
UK revenues amounted to 4% of the total and are analysed as follows:
Geographical information
UK
Other
Total
Year
ended 30
June 2021
Year
ended 30
June 2020
Sales
revenue
£’000
930
41
971
% of
total
revenue
96
4
100
Sales
revenue
£’000
434
20
454
% of
total
revenue
96
4
100
During the period, sales to the group’s largest customers were as follows:
Customer 1
Customer 2
Sales
revenue
£’000
636
151
% of total
revenue
65
16
No other single customer represented more than 10% of the sales revenue for the year.
5.
Operating loss
Operating loss is stated after charging/(crediting):
Depreciation of property, plant & equipment
Amortisation of intangible assets
Cost of inventories recognised as an expense
6.
Exceptional item
Legal and professional fees
Year ended
30 June 2021
£’000
4
47
102
Year ended
30 June 2020
£’000
6
47
55
Year ended
30 June 2021
£’000
180
180
Year ended
30 June 2020
£’000
579
579
Exceptional legal and professional fees comprise costs incurred in respect of the PHD acquisition
and reverse takeover project which was subsequently aborted and also costs in respect of the
readmission to AIM.
46
7. Auditors’ remuneration
Fees payable to the Company’s auditors for:
- the audit of the Company’s annual accounts
Fees payable to the Company’s auditors for other
services to the Group:
- the audit of the Company’s subsidiary
Total audit fees
Fees payable to the Company’s auditors for:
- other services
- corporate finance
Total other fees
8. Staff costs
Wages and salaries
Social security costs
Pension costs
Year ended
30 June 2021
£’000
Year ended
30 June 2020
£’000
13
21
34
10
20
30
-
23
23
5
100
105
Year ended
30 June 2021
£’000
595
Year ended
30 June 2020
£’000
760
46 63
7
830
7
648
The average monthly number of employees, including directors, during the year was as follows:
Directors
Administration
Year ended
30 June 2021
Nos.
4
7
11
Year ended
30 June 2020
Nos.
4
8
12
The remuneration of key management personnel are detailed in note 23 and in the Remuneration
Report.
9. Other income
Furlough grants
Year ended
30 June 2021
£’000
35
35
Year ended
30 June 2020
£’000
55
55
Other income in the year represents furlough grants received under the UK government’s
Coronavirus job retention scheme.
47
10. Corporation tax
Current tax
Total tax for the year
Loss before tax
Tax on loss on ordinary activities at standard UK
corporation tax rate of 19% (2019: 19%)
Expenses not deductible for tax purposes
Depreciation in excess of capital allowances
Utilised tax losses
Tax losses carried forward
Foreign losses of subsidiary
Current tax
Year ended
30 June 2021
£’000
-
-
Year ended
30 June 2020
£’000
-
-
(509)
(1,409)
(97)
39
(6)
(47)
104
7
-
(268)
128
-
(9)
149
-
-
Deferred tax:
As detailed in note 3 (v), in 2015 the Group reviewed the carrying value of the deferred tax
asset recognised in previous years and decided that it would be prudent to derecognise the total
asset in view of the uncertainty as to the timing of a return to recurring profitability.
The aggregate amount of deductible temporary differences, parent company unused tax losses
and unused tax credits for which no deferred tax asset is recognised in the Consolidated
Statement of Financial Position is estimated at £6.69m (2020: £6.4m) which at the current tax
rate would equate to £1.27m (2020: £1.22m).
11. Earnings per share
The calculation of earnings per share is based on the loss for the year attributable to equity
holders of £509k (2020: £1,409k loss) and a weighted average number of shares in issue during
the period of 8,190,696 (2020: 1,270,881,220). At the year end, options over 35,000 shares
(2020: 35,000) were in issue, but have not been taken into account in calculating diluted
earnings per share as they are anti-dilutive.
12. Property, plant and equipment
Group
Cost
At 1 July
Additions
Transfer to inventories
Disposals
At 30 June
Depreciation
At 1 July
Charge for the year
Transfer to inventories
Reversed on disposals
At 30 June
Net Book Value
At 30 June 2021
At 30 June 2020
2021
£’000
28
33
(15)
(9)
37
11
4
(8)
(5)
2
35
17
2020
£’000
148
3
-
(123)
28
128
6
-
(123)
11
17
20
The Company held no property, plant and equipment at 30 June 2020 and 2019.
48
13. Intangible assets
Group
Intellectual Property
Cost
At 1 July and 30 June
Amortisation
At 1 July
Charge for the year
At 30 June
Net Book Value
At 30 June 2021
At 30 June 2020
2021
£’000
2020
£’000
943
943
839
47
886
57
104
792
47
839
104
151
Intellectual Property represents the rights to the M2G product acquired from the inventors. An
impairment review performed in accordance with IAS 36 ‘Impairment of Assets’ as detailed in
note 14, determined that no impairment was necessary at 30 June 2021.
The remaining amortisation period for Intellectual Property is 2 years. The Company held no
intangible assets at 30 June 2021 and 2020.
14. Investments
Group
Cost
At 1 July
Additions
At 30 June
Impairment provision
At 1 July
Impairment in year
At 30 June
Net Book Value
At 30 June 2021
At 30 June 2020
Company
Cost
At 1 July
Additions
At 30 June
Impairment provision
At 1 July
Impairment in year
At 30 June
Net Book Value
At 30 June 2021
2021
£’000
-
100
100
-
-
-
100
-
2021
£’000
6,457
100
6,557
6,457
-
6,457
2020
£’000
-
-
-
-
-
-
-
-
2020
£’000
6,297
160
6,457
6,297
160
6,457
100
-
49
At 30 June 2020
-
-
Details of the fixed asset investments at the year end date are as follows:
Name of company
Country of
incorporation
Class of
share
Nature of business
Proportion
of voting
rights
Sabien Technology
Limited
England
& Wales
Ordinary Managing carbon
100%
through energy
reduction
Sabien
Technology IP
Limited
Sabien Inc.
Northern
Ireland
Ordinary Ownership of
100%
Intellectual Property
Delaware
(USA)
Common
Stock
Managing carbon through
energy reduction
100%
Aeristech Limited
England &
Wales
Ordinary Manufacture power-dense
0.3%
compressors used within
hydrogen fuel cells
In February 2021 the Company acquired 0.3% of the issued share capital of Aeristech Limited
for a consideration of £100k. As part of the investment, Aeristech has issued the Company with
10,417 warrants with a two-year term, each warrant carrying the right to subscribe for one
share in Aeristech at the issue price of £2.40.
In March 2021 the Company incorporated Sabien Inc. as a wholly owned US subsidiary in the
State of Delaware. Sabien Inc. has been consolidated within the Group financial statements.
The Company performs an annual impairment review in accordance with IAS 36 ‘Impairment
of Assets’. In accordance with IAS 36, the recoverable amount is calculated being the higher of
value in use and fair value less costs to sell.
The value in use is determined using cash flow projections covering a ten year period which
have been approved by the Board. They reflect the directors’ expectations of the level and
timing of revenue and expenses, working capital and operating cash flows based on past
experience and future expectations of business performance.
The pre-tax discount rate of 9.6% (2020: 9.6%) applied to the cash flow projections is derived
from the Group’s weighted average cost of capital. An average growth rate of 8% (2020: 8%)
(rental revenue growth rate 8% (2020: 8%) has been applied over the ten years of the cash
flow forecast.
15. Inventories
Group
Goods held for resale
The Company held no inventories at 30 June 2021 and 2020.
2021
£’000
24
2020
£’000
39
50
16. Trade and other receivables
Trade receivables
Other receivables
Amounts due from group undertakings
2021
Group
£’000
1
50
-
2020
2020
2021
Group Company Company
£’000
£’000
£’000
-
-
41
400
37
42
50
143
-
51
83
180
450
The value of trade receivables quoted in the table above also represents the fair value of these
items and are due within one year.
Amounts due from group undertakings includes £100k which is covered by a £250k loan facility
(2020: £250k) advanced to Sabien Technology Limited. The loan facility is secured by way of
a debenture over the assets of Sabien Technology Limited. The loan facility is interest free and
repayable on demand. The balance of £43k is due from Sabien Inc. The balance is interest free,
unsecured and repayable on demand.
Trade receivables are considered impaired if they are not considered recoverable. As at 30 June
2021, the Group had no receivables which were considered to be impaired and against which
a full provision has been made. Trade receivables of £1k (2020: £14k) were past due but not
impaired. The ageing analysis of these trade receivables is as follows:
Up to 3 months
3 to 6 months
More than 6 months
2021
£’000
1
-
-
1
2020
£’000
41
-
-
41
The carrying amounts of the Group’s trade and other receivables are denominated in the
following currencies:
Pounds sterling
Euros
17. Cash and bank balances
Cash and bank balances
18. Trade and other payables
Trade payables
Social security and other taxation
Accruals and deferred income
Other payables
2021
£’000
51
-
51
2020
£’000
83
-
83
2021
Group
£’000
1,399
2020
2020
2021
Group Company Company
£’000
£’000
£’000
596
977
778
2021
Group
£’000
45
4
84
28
2020
2020
2021
Group Company Company
£’000
£’000
£’000
317
36
368
-
12
-
193
45
239
5
18
8
51
161
627
99
515
Sabien Technology Limited is party to an invoice financing agreement. The amounts
outstanding under this agreement are secured by way of a debenture over the assets of the
Company, attracts interest at a variable rate and are repayable on demand. The balance
outstanding on the invoice financing agreement is £nil (2020: £nil).
19. Borrowings
Borrowings
2021
Group
£’000
181
181
2020
2020
2021
Group Company Company
£’000
£’000
£’000
-
-
181
-
-
181
The Group drew down a Coronavirus Business Interruption Loan in June 2020. The loan is
interest free for the first twelve months and at 5% per annum for five years. The balance is
unsecured and is repayable in monthly instalments from July 2021.The maturity profile of the
loan is shown below:
Within 1 year
1-2 years
2-5 years
Over 5 years
20. Share capital
2021
Group
£’000
36
36
109
-
181
2020
2021
2020
Group Company Company
£’000
£’000
£’000
-
-
-
-
-
36
-
-
109
-
-
36
-
-
181
Allotted, called up and fully paid
14,574,260 Ordinary shares of 3p each (2020: 1,453,673,157 of 0.01p
each)
44,004,867 Deferred shares of 4.5p each (2020: 44,004,867)
190,254,867 New Deferred shares of 0.49p each (2020: 190,254,867)
Total
2021
£’000
2020
£’000
438
146
1,980
932
3,350
1,980
932
3,058
On 24 February 2021, the Company raised £1,700k (gross) by the issue of 2,500,000,000
Ordinary shares of 0.01p each at a cash price of 0.05p per share and by the issue of 418,604,651
Ordinary Shares at 0.001075p per share. Net proceeds after expenses amounted to £1,620k.
On 29 March 2021 the Company issued 192 Ordinary shares of 0.01p at par. On 29 March
2021, the Company consolidated its share capital of 4,372,278,000 Ordinary shares of 0.01p to
14,574,260 Ordinary shares of 3p each.
Share options (see note 22)
At the year end date, the following options had been granted:
Date of Grant
31 October 2014
Total
At 1 July
2020
35,000
35,000
At 30 June
2021
35,000
35,000
Exercise
price
54.5p
Exercisable
from
Exercisable
to
October 2017 October 2024
52
21.Financial instruments
Financial assets
Amortised
cost (loans
and
receivables)
Group
£’000
Fair value
through
profit and
loss
Total
Amortised
cost (loans
and
receivables)
Fair value
through
profit and
loss
Total
Group Group
£’000 £’000
Company Company Company
£’000
£’000
£’000
Trade and
other
receivables
(excluding
prepayments)
Financial liabilities
1
1
-
-
1
1
-
-
-
-
-
-
Amortised
cost (loans
and
payables)
Group
£’000
Fair value
through
profit and
loss
Group
£’000
Total
Group
£’000
Total
Fair value
through
profit and
loss
Amortised
cost (loans
and
payables)
Company Company Company
£’000
£’000
£’000
Trade and
other
payables
Borrowings
161
181
342
-
-
-
161
181
342
99
-
99
-
-
-
99
-
99
22. Share based payments
The Company has issued share options under a share option scheme for directors and
employees set up in November 2006 under which approved and unapproved share options
were granted prior to the flotation of the Company in December 2006. The Company adopted
the “Sabien Technology Group Share Option Plan” at the time of flotation and it is intended
that options will only be granted under this scheme in future.
Under this scheme, directors and employees hold options to subscribe for 15p Ordinary shares
in Sabien Technology Group Plc at prices based on the mid-market price on the day preceding
the relevant share option grant. See note 20 for details of options in issue at the year end date.
There are no performance conditions attached to these options. No options were granted in
the financial year.
The value of the options is measured using the QCA-IRS Option Valuer based on the Black
Scholes model. The inputs into the Black Scholes model were as follows:
Share price at date of grant
Exercise price at date of grant
Weighted average fair value
Volatility
Expected life
53
2021
-
54.5p
-
30%
3 years
2020
-
54.5p
-
30%
3 years
Risk free interest rate
4.75%
4.75%
Expected volatility was determined by reference to volatility used by other similar companies.
The expected life used in the model reflects the lack of performance conditions attached to the
options granted.
The Group has recognised a charge of £nil (2020: £nil) arising from the share based payments
noted above in profit and loss for the year ended 30 June 2021.
The following reconciles the outstanding share options granted under the employee share
option scheme at the beginning and end of the financial year:
Weighted
average
exercise price
2021
Number
2021
Weighted
average
exercise price
2020
Number
2020
35,000
54.00
316,371
54.00
-
-
-
-
-
(281,371)
-
-
35,000
54.00
35,000
54.00
3.34 years
-
4.34 years
-
Balance at
beginning of the
financial year
Granted during
the year
Cancelled
during the year
Balance at end
of the financial
year
Weighted
average
remaining
contractual life
At the 2020 Annual General Meeting in March 2021, a new Long Term Incentive Plan (“LTIP”)
was approved by shareholders. At the date of this report no options have yet been issued
under the LTIP.
23. Related party transactions
Key management personnel are those persons having authority and responsibility for planning,
controlling and directing the activities of the Group. In the opinion of the Board, the Group’s
key management personnel are the Directors of Sabien Technology Group Plc. Information
regarding their remuneration is given in the Remuneration Report.
The Company has entered into service agreements with Richard Parris, Charles Goodfellow and
Ranald McGregor-Smith with entities either controlled by them or in which they have an interest
as shareholders. Fees are paid in accordance with those agreements. The remuneration of key
management is analysed in the Remuneration Report.
The aggregate remuneration compromises:
Aggregate emoluments
Fees
2021
£’000
2020
£’000
13
186
199
120
204
324
The remuneration of the highest paid director during the year was £75k (2020: £120k). The
remuneration of individual Directors is disclosed in the Remuneration Report.
Charles Goodfellow is employed by the Group’s broker, Peterhouse Capital Limited. Fees paid
54
to Peterhouse Capital Limited are proposed to the Board and approved by the Board as a whole.
Fees paid to Peterhouse Capital Limited in the year were £88k (2020: £58k) and at the year
end the amounts due to Peterhouse Capital Limited were £nil (2020: £8k).
During the year, the Company charged its subsidiary, Sabien Technology Limited, £50k (2020:
£50k) by way of management charges. The Company was also charged by Sabien Technology
Limited £13k (2020: £nil) in relation to staff costs. Sabien Technology Limited repaid £36k
(2020: £564k) during the year in respect of working capital loans and at the year end the
amount outstanding was £100k (2020: £50k).
During the year the Company advanced working capital loans of £43k (2020: £nil) to its
subsidiary, Sabien Inc. At the year end the amount due from Sabien Inc. was £43k (2020: £nil).
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