Directors
SRJ Technologies Group Plc
Company information
Alexander Wood
Robin Pinchbeck
Grant Mooney
Andrew Mitchell
Company secretary
Benjamin Donovan
Registered number
115590
Registered office
Jersey
Australia
Independent auditor
Accountants
Bankers
Lawyers
Le Quai House
Le Quai d'Auvergne
St Helier
Jersey, JE2 3TN
Telephone: +(44) 01534 626818
Level 4, 225 St Georges Terrace
Perth
WA 6000
Telephone: +(61) 08 6162 6199
Grant Thornton Limited
Kensington Chambers
46/50 Kensington Place
St Helier
Jersey, JE1 1ET
Bracken Rothwell Limited
2nd Floor, The Le Gallais Building
54 Bath Street
St Helier
Jersey, JE1 1FW
Barclays Bank Plc
13 Library Place
St Helier
Jersey, JE4 8NE
Mourant
22 Grenville Street
St Helier
Jersey, JE4 8PX
SRJ Technologies Group Plc
Contents page
Chairman's Statement
Directors' Report
ASX Additional Information
Statement of Directors' Responsibilities
Independent Auditors' Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
1
2 - 9
10 - 11
12
13 - 16
17
18
19
20
Notes to the consolidated financial statements
21 - 33
SRJ Technologies Group Plc
Chairman's Statement
Dear Shareholder,
It is my pleasure to present the 2021 Annual Report for SRJ Technologies Group plc (SRJ or the Company), the second since our listing
on the Australian Securities Exchange (ASX) in September 2020, as we reflect on the achievements of our Company over the past 12
months.
During 2020 SRJ was focused on refining its strategy, its operations and its pathway to future growth, 2021 was all about delivering on
this. Whilst the results suggest the Company came up short, purchase orders secured for FY22 resulting from repeat business with the
strategy is working. External economic factors
likes of ADNOC, SBM Offshore and MODEC provide evidence that the
associated with the pandemic hindered progress, but the team worked hard to secure projects and drive demand for the
solutions. With early signs of a recovery or at least stability in the industry and markets, together with a strengthening oil price, we
confidently expect solid revenue growth in FY22. With secured purchase orders at the start of the year already more than double FY21
revenues, the Company is well placed to deliver revenue growth.
We provided the Company's growth plan in the prospectus of September 2020 and our Q3 and Q4 quarterly activity reports released in
2021 provided an update on progress and milestones achieved against this plan. Despite external factors continuing to weigh on
financial performance, there has been considerable progress: we have embedded ourselves with key strategic partners, built customers
relationships leading to repeat orders, gained vendor approval for key global operators and continued innovative product and services
design. Market uncertainty has provided an opportunity for building new relationships and planning our entry into new markets and we
are now well positioned to take advantage of the growth opportunities as market sentiment improves.
The execution of a Share Purchase Agreement to acquire 100% of STATS (UK) Limited, in December 2021, represents a key part of our
strategy of becoming a global
leader in asset integrity solutions for the energy industry. The operational and marketing synergies
resulting from the combination will deliver differentiation and scale to SRJ that we confidently expect will drive sustainable long-term
growth. Market volatility led to a temporary delay in the capital raise; a revised timetable for the capital will be released following signs of
stability in underlying market conditions.
I would like to thank our Management and staff for their efforts over the past year, which again have been considerable given the
challenging operating environment and due diligence activities in respect of the potential acquisition. I also thank my fellow Board
members for their contributions, and importantly I thank our Shareholders for your support.
Robin Pinchbeck
Chairman
SRJ Technologies Group plc
1
SRJ Technologies Group Plc
Directors' Report
For the year ended 31 December 2021
The directors present their report and the financial statements of SRJ Technologies Group Plc (the "Company") and its subsidiaries
(together the "Group") for the year ended 31 December 2021.
Principal activity
The principal activity of the Company is the holding of investments in the subsidiaries SRJ Limited incorporated in Jersey, Channel Islands,
SRJ Technology Limited incorporated in the United Kingdom and SRJ Tech Australia Pty Ltd incorporated in Australia which are all 100%
owned by the Company and are primarily involved in the development and distribution of a range of weld-free coupling and leak
containment solutions for pipeline and process pipework systems and leak containment solutions. The products are designed primarily for
pipe repair and the emergency replacement market but can also be integrated into new pipeline builds. The Company also offers Asset
Integrity Management consulting services to help asset owners to develop and implement an effective asset integrity strategy. The
Company also owns 100% of the issued share capital of Acorn Intellectual Properties Limited, a Company also incorporated in Jersey,
Channel Islands which has the primary activity of holding intellectual property.
Review of activities
A summary of key milestones achieved during 2021, include the following:
February 2021 - Launched SRJAnalytics, a new digital platform to create greater efficiencies and improve data consistency when it comes
to management, repair and maintenance of piping assets in the mining, oil and gas and other heavy industrial sectors.
April 2021
secured a purchase order from MODEC to develop a detailed work scope for a major hot bolting campaign using the SRJ
BoltEx ®
April 2021
received first order in Saudi Arabia through Zamil Operations and Maintenance Company (ZOMCO) agency agreement to
provide SRJ asset integrity solutions to Saudi Basic Industries Corporation (SABIC) in Jubail Industrial City.
July 2021 won consulting contract with SBM Offshore to support engineering design of general FPSO vessels as part of the SBM
Fast4Ward ® Program.
August 2021 won first contract with SEMBCORP Industries to supply BoltEx ® inventory for use in flange hot bolting campaigns for
facilities on the offshore Qatari Al-Shaheen Oil Field.
September 2021
announced a partnership with Curtin University and SixDe to develop and build Hydrogen compatible weld-free
coupling technology for pipelines with the project commencing in November 2021.
October 2021
received first order in the UAE with Abu Dhabi National Oil Company (ADNOC) to design, manufacture and install pipeline
asset integrity solutions. Initial Phase 1 of the order is the site survey and design engineering of the solutions with Phase 2 manufacture
and installation due in January 2022.
December 2021
announcement of the signing of a share purchase agreement to acquire STATS (UK) Limited a market leader in the
provision of innovative, technology-led pressurised pipeline integrity solutions. The Company is undertaking to raise A$142 million to fund
the purchase price for STATS and to provide working capital for the Combined Group wholly underwritten by Morgans Corporate.
Significant Changes in State of Affairs
Other than what is reported in the directors' report, there were no significant changes in the state of affairs of the Company during the
financial year.
Earnings Per Share
Loss for the year
Weighted average number of shares
Basic and diluted loss per share
2021
£
(4,392,002)
2020
£
(4,143,439)
119,015,380
35,289,358
(0.04)
(0.12)
Financial position
The
cash position as at 31 December 2021 was £1,097,367 (2020: £4,012,248). In order to ensure there are sufficient financial
resources to fund the anticipated revenue growth and support the operational activities, on 29 March 2022 the Company signed an
agreement to issue convertible securities that will provide A$2m of capital to support ongoing operational expenditure until the full capital
raise to acquire STATS (UK) Limited can be completed (see going concern).
2
SRJ Technologies Group Plc
Directors' Report
For the year ended 31 December 2021
Going Concern
The Group made a loss in the year in the amount of £4,392,002 (31 December 2020: £4,143,439) and as at 31 December 2021 was in a
net asset position of £1,547,997 (31 December 2020: £5,016,852).
The Directors have a reasonable expectation that both further sales of the product and/or consulting fees will be achieved on top of those
purchase orders already received for 2022 but there is no guarantee as to the level of additional sales that will occur or indeed the timing of
the cash inflows and it may not be sufficient to offset the current outflow from operational activities. The proposed capital raise to fund the
potential acquisition of STATS (UK) Limited and provide additional working capital has been temporarily delayed. To ensure there are
sufficient financial resources to fund the anticipated revenue growth and support the operational activities, on 29 March 2022 the Company
which accrue interest at 8% per annum payable
signed an agreement to issue A$2,000,000 of convertible securities (the
annually in cash or shares. The A$2,000,000 is repayable in 18 monthly instalments of A$111,111.11 payable in cash, shares or a
combination of both. The Company has the right to buy-back the outstanding face value of the securities at any time with no penalty and
the investor has the option to convert outstanding face value amounts into ordinary shares of the Company at a price of A$0.645 per share
at any time.
The Company also undertook an interim capital raise and has commitments of A$825,000 as at 31 March 2022 with a further A$820,000
expected to be finalised in the coming weeks. The financial resources to be provided by the most recent fund raising are sufficient for the
Directors to conclude that these circumstances do not cast significant doubt upon the Group's ability to continue as a going concern and
prepare the financial statements on a going concern basis.
The volatility created by COVID-19 has affected and will undoubtedly change business practices in the industry the Group operates in,
which the Group anticipates will see clients and target clients operating in different ways to the norm. The effect of lockdowns, and
workforce and other labour shortages resulted in expected operating expenditure on maintenance projects in 2020 and 2021 by potential
customers of the Group being delayed or cancelled. The COVID-19 pandemic continues to evolve and the Group anticipates that works
delayed in 2021 will begin to flow through as product sales and consulting work in 2022 and beyond. Receipt of recent purchase orders
support this view. The Directors consider the Group to be well positioned to deliver solutions on these delayed scopes and campaigns in
the future.
Dividends paid
There were no dividends paid in the year under review (2020 - £NIL).
Results
The Consolidated Statement of Comprehensive Income for the year is set out on page 17.
Directors
The directors who served during the year and subsequently were:
Alexander Wood
Robin Pinchbeck
Grant Mooney
Andrew Mitchell
Disclosure of information to independent auditor
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
so far as the director is aware, there is no relevant audit information of which the Company and the Group's independent auditor is
unaware, and
the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant information and to
make themselves aware and make that information available to the Group's auditor.
Post balance sheet events
Subsequent events have been evaluated up to the date that the financial statements were approved and authorised for issue by the Board
of Directors. There have been no material events requiring adjustment or disclosure in these financial statements further to the events
outlined below.
Likely Developments and Expected Results of Operations
Likely developments in the operations of the Group and the expected results of those operations in future financial years have not been
included in this report as the directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in
unreasonable prejudice to the Group.
Environmental issues
The Group is not subject to direct environmental regulations under Commonwealth or State legislation but seeks to assist its clients in leak
containment amongst other services.
3
SRJ Technologies Group Plc
Directors' Report
For the year ended 31 December 2021
On-Market buy back
The Company has not undertaken any on market buy backs.
Company secretary
The Company secretary who held office throughout the year and subsequently was Benjamin Donovan.
Information on directors and company secretary
Alexander Wood, Executive Director and Chief Executive Officer
Qualifications: -
Mr. Wood co-founded SRJ after 15 years working across the industrial and technology sectors in the UK, Africa and Middle East. Alex has
led
commercialisation as its CEO since inception, bringing a diverse range of skills spanning commercialisation, business
development, strategic sales, and investment attraction.
Mr. Wood's knowledge of the market comes from his experience in industrials, including his involvement in the acquisitions of Present
Platinum Properties, Star Developments and Diamond Properties. Mr. Wood was previously Commercial Director at Middle East Corrosion
Technologies.
Mr Wood has a relevant interest in ordinary fully paid shares of 27,334,755*, and 2,470,000 performance rights that will vest on 18
September 2022 if performance conditions are met.
Mr Wood has not held any directorships in other listed companies during the last 3 years.
*Interest includes ordinary shares held by AVI Partners Limited (AVI). Alexander Wood owns 19% of the issued share capital of AVI.
Robin Pinchbeck, Non-Executive Chair
Special Responsibilities: Chair of Remuneration and Nominations Committee, Member of Audit and Risk Committee
Qualifications: BSc MSc MA
Mr. Pinchbeck has more than 40 years of experience in the oil and gas industry, principally at BP and Petrofac Plc (FTSE: PFC), where he
founded and led the Operations Services division. As part of the senior management team, he was integral in the successful listing of
Petrofac on the London Stock Exchange in 2005 and subsequently served as Group Head of Strategy. Mr. Pinchbeck has lived and worked
in UAE, the UK, Australia, California and Texas.
Past non-executive directorships include Enteq Upstream Plc, Sondex Plc, Enquest Plc, IGas Plc, Seven Energy International Limited and,
as Chairman, Sparrows Offshore Limited and PTS Consulting Limited. He is currently a Chairman and a Trustee of the charity Orbis UK.
Mr. Pinchbeck holds a Bachelor of Engineering from Imperial College and Master of Business from Stanford.
Mr Pinchbeck has a relevant interest in 201,135 ordinary fully paid shares, 115,799 CDIs and 380,000 performance rights that will vest on
18 September 2022.
Mr Pinchbeck has not held any directorships in other listed companies during the last 3 years that is not disclosed above.
Grant Mooney, Independent Non-Executive Director
Special Responsibilities: Chair of Audit and Risk Committee, Member of Remuneration and Nominations Committee
Qualifications: BBus CA
Mr Mooney is the principal of Perth-based corporate advisory firm Mooney & Partners, specialising in corporate compliance administration
to public companies. Mr Mooney has gained extensive experience in the areas of corporate, financial and project management since
commencing Mooney & Partners over 20 years ago. His experience also extends to advice on capital raisings, mergers and acquisitions
and corporate governance.
Currently, Mr Mooney serves as a Director to ASX listed companies across a variety of industries including technology and resources. He is
currently a Director of the following ASX listed companies: Gibb River Diamonds Limited, Barra Resources Limited, Talga Resources
Limited, Riedel Resources Limited, Accelerate Resources Limited and Carnegie Clean Energy Limited. Mr Mooney is also a member of the
Institute of Chartered Accountants in Australia.
Mr Mooney has no relevant interest in the Company.
Mr Mooney has not held any directorships in other listed companies during the last 3 years that is not disclosed above.
4
SRJ Technologies Group Plc
Directors' Report
For the year ended 31 December 2021
Andrew Mitchell, Independent Non-Executive Director
Special Responsibilities: Member of Audit and Risk Committee, Member of Remuneration and Nominations Committee
Qualifications: BM MD FRCP FESC FACC FEHRA FEACVI
Dr Mitchell is a Non-Executive Director of Adams Plc, an AIM listed investment company primarily focused on special situation investment
opportunities in the small to middle market capitalisation sectors. Dr Mitchell is the founding Director of an innovative heart screening
company and acts as an advisor to digital and technological health start-up companies where he provides strategic advice and technical
resource in the development of MedTech health services. He is also a Consultant Cardiologist at Jersey General Hospital and Honorary
Consultant at Oxford University Hospitals.
Dr Mitchell has published over 170 clinical papers, book chapters and abstracts on areas of clinical cardiology focussing on novel digital
health and life science technologies. He brings a wealth of knowledge of technology companies and has applied his skills for the benefit of
numerous business enterprises.
Dr Mitchell holds a relevant interest in 36,000 CDI's.
Dr Mitchell has not held any directorships in other listed companies during the last 3 years that is not disclosed above.
Ben Donovan (Company Secretary)
Qualifications: B.Comm (Hons), ACG (CS)
Mr Donovan is a member of the Governance Institute of Australia and provides corporate advisory, IPO and consultancy services to a
number of companies. Mr Donovan is currently a Director and Company Secretary of several ASX listed and public unlisted companies
involved in the resources and technology industries.
He has extensive experience in listing rules compliance and corporate governance, having served as a Senior Adviser at the Australian
Securities Exchange (ASX) in Perth for nearly 3 years, including as a member of the ASX JORC Committee.
In addition, Mr Donovan has experience in the capital markets having raised capital and assisted numerous companies in achieving an
initial listing on the ASX, as well as for a period of time, as a private client adviser at a boutique stock broking group.
Board meetings held and attended
During the financial year ended 31 December 2021, the following director meetings were held:
Director
Alexander Wood
Robin Pinchbeck
Grant Mooney
Andrew Mitchell
*Excludes meetings held by circular resolution
Eligible to
attend*
9
13
13
13
Attended*
7
13
13
13
Remuneration Report
The remuneration report details the key management personnel remuneration arrangements for the Company, as if it was subject to the
requirements of the Corporations Act 2001 and the Corporations Regulations 2001. Key management personnel are those persons having
authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including all directors.
The key management personnel of SRJ Technologies Group Plc for the financial year are;
Key Management Personnel
Alexander Wood
Robin Pinchbeck
Grant Mooney
Andrew Mitchell
Roger Smith
Stefan McGreevy
Paul Eastwood
Position
Chief Executive Officer
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Managing Director, Europe and MENA
Chief Financial Officer
Technical Director
Group entity
SRJ Technologies Group Plc
SRJ Technologies Group Plc
SRJ Technologies Group Plc
SRJ Technologies Group Plc
SRJ Technology Limited
SRJ Limited
SRJ Technology Limited
5
SRJ Technologies Group Plc
Directors' Report
For the year ended 31 December 2021
Remuneration Report (continued)
Key Management Personnel (KMP) Remuneration and Incentive Policies
Given the size of the Company, all Non-Executive board members form part of the Remuneration and Nominations Committee
Remuneration levels for Directors and senior executives of
to attract and retain
appropriately qualified and experienced Directors and senior executives. The Board may obtain independent advice on the appropriateness
of remuneration packages given trends in comparative companies both locally and internationally and the objectives of the
remuneration strategy. No such advice was obtained during the current year.
the Company are competitively set
The remuneration structures explained below are designed to attract suitably qualified candidates, reward the achievement of strategic
objectives, and achieve the broader outcome of creation of value for shareholders.
The remuneration structures take into account:
· the capability and experience of the Directors and senior executives;
· the ability of each Director and senior executive to control the relevant performance;
In order to fulfil its responsibilities to the Board the Committee shall;
a) Executive Remuneration Policy
i. Review and approve the Company's recruitment, retention and termination policies and procedures for senior executives to enable the
Company to attract and retain executives and Directors who can create value for shareholders.
ii. Review the on-going appropriateness and relevance of the executive remuneration policy and other executive benefit programs.
iii. Ensure that remuneration policies fairly and responsibly reward executives having regard to the performance of the Company, the
performance of the executive and prevailing remuneration expectations in the market.
b) Executive Directors and Senior Management
i. Consider and make recommendations to the Board on the remuneration for each executive Director (including base pay, incentive
payments, equity awards, retirement rights, service contracts) having regard to the executive remuneration policy.
ii. Review and approve the proposed remuneration (including incentive awards, equity awards and service contracts) for the direct reports
of the CEO or equivalent. As part of this review the Committee will oversee an annual performance evaluation of the executive team. This
evaluation is based on specific criteria, including the business performance of the Company and its subsidiaries, whether strategic
objectives are being achieved and the development of management and personnel.
c) Non-Executive Directors
The Committee reviews and recommends to the Board the remuneration of Non-Executive Directors.
d) Executive Incentive Plan
Review and approve the design of any executive incentive plans.
e) Equity Based Plans
i. Review and approve any equity-based plans that may be introduced (Plans) in the light of
developments.
ii. For each Plan, determine each year whether awards will be made under that Plan.
iii. Review and approve total proposed awards under each Plan.
iv. In addition to considering awards to executive Directors and direct reports to the CEO or equivalent, review and approve proposed
awards under each Plan on an individual basis for executives as required under the rules governing each Plan or as determined by the
Committee.
v. Review, approve and keep under review performance hurdles for each equity based Plan.
legislative, regulatory and market
Before a determination is made by the Company in a general meeting, the aggregate sum of the fees payable by the Company to the Non-
Executive Directors is a maximum of A$500,000 per annum.
6
SRJ Technologies Group Plc
Directors' Report
For the year ended 31 December 2021
Remuneration Report (continued)
Details of the remuneration of key management personnel of the Company and of the entities within the Group is set out in the following table;
Key Management
Personnel
Robin Pinchbeck
Grant Mooney
Andrew Mitchell
Alexander Wood
Roger Smith
Stefan McGreevy
Paul Eastwood
Position
Commenced
Term
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Managing Director, Europe and MENA
Chief Financial Officer
Technical Director
19 November 2019
02 June 2020
18 June 2020
01 August 2011
01 October 2019
01 November 2019
01 January 2020
2
2
2
3 4
3 4
3 4
3 4
Short term benefits
Post employment benefits
Employee costs 1
Superannuation
2021
£
2020
£
50,000
21,906
21,851
232,069
169,482
138,453
159,922
793,683
50,000
12,902
13,028
231,863
167,869
133,008
159,934
768,604
2021
£
-
-
-
-
-
-
9,450
9,450
2020
£
-
-
-
-
-
-
9,450
9,450
Share based payments
Equity settled performance
rights
2021 5
£
2020 5
£
Total
2021
£
-
-
-
-
-
-
-
-
107,199
-
-
696,795
589,596
321,598
214,399
1,929,587
50,000
21,906
21,851
232,069
169,482
138,453
169,372
803,133
2020
£
157,199
12,902
13,028
928,658
757,465
454,606
383,783
2,707,641
Notes:
1) Employee costs comprise director salaries and fees and employer social security/national insurance contributions. No cash bonuses were paid in 2021 or 2020.
2) The term expires at the next annual meeting where the position is up for re-election.
3) No fixed term.
4) Comparative short term benefits restated to include employer social security/national insurance contributions.
5) Refers to the total value of new performance rights awarded in the year. The pro-rated expense for the year ended 31 December 2021 is included on page 9.
7
SRJ Technologies Group Plc
Directors' Report
For the year ended 31 December 2021
Remuneration Report (continued)
Share-based Compensation
Performance Rights issued as Remuneration
The terms and conditions of each performance right affecting key management personnel during 2021 are as follows:
Key Management
Personnel
Robin Pinchbeck
Alexander Wood
Grant Mooney
Andrew Mitchell
Roger Smith
Stefan McGreevy
Paul Eastwood
Number of
Performance
Rights
awarded
380,000
2,470,000
-
-
2,090,000
1,140,000
760,000
Grant Date
18/09/2020
18/09/2020
-
-
18/09/2020
18/09/2020
18/09/2020
Vesting Date
18/09/2022
18/09/2022
-
-
18/09/2022
18/09/2022
18/09/2022
Exercise Price
nil
nil
-
-
nil
nil
nil
Fair Value of
Right
A$0.50
A$0.50
-
-
A$0.50
A$0.50
A$0.50
Value of
Performance
Rights granted
A$190,000
A$1,235,000
-
-
A$1,045,000
A$570,000
A$380,000
There were no Performance Rights granted, vested or lapsed during 2021.
Performance Rights carry no dividend or voting rights. Each vested Performance Right enables the participant to be issued or to be
transferred one ordinary share/CDI subject to the rules governing the equity incentive plan and the terms of each offer.
The vesting conditions are based on a combination of:
and/or operational performance hurdles determined by the Board (applicable to a third of the overall performance rights for
Alexander Wood and Roger Smith only); and
As at the year end all the vesting conditions had been met except the financial/operational nor the continuity of employment/engagement
conditions which are conditional on being met by the end of 2022.
Additional Disclosures relating to Key Management Personnel
Shareholding
The number of shares in the Company held during 2021 by each director and other members of key management personnel of the
Company, including their personally related parties, is set out in the following table below:
Key Management
Personnel
Robin Pinchbeck
Alexander Wood 1
Grant Mooney
Andrew Mitchell
Roger Smith
Stefan McGreevy
Paul Eastwood
Balance at 1
January 2021
201,135
206,250
-
36,000
440,000
-
-
Received as
part of
remuneration
Additions
Disposals/other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 31
December 2021
201,135
206,250
-
36,000
440,000
-
-
1 excludes 27,334,755 ordinary shares and CDIs held by AVI Partners Limited. Alexander Wood owns 19% of the issued shares in AVI.
8
SRJ Technologies Group Plc
Directors' Report
For the year ended 31 December 2021
Remuneration Report (continued)
Performance Rights
The number of Performance Rights held during the financial year ended 31 December 2021 by the key management personnel, including
their personally related parties, is set out below:
Key Management
Personnel
Robin Pinchbeck
Alexander Wood
Grant Mooney
Andrew Mitchell
Roger Smith
Stefan McGreevy
Paul Eastwood
Balance at 1
January 2021
380,000
2,470,000
-
-
2,090,000
1,140,000
760,000
Granted
-
-
-
-
-
-
-
Exercised
Expired/ other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 31
December 2021
380,000
2,470,000
-
-
2,090,000
1,140,000
760,000
No Performance rights were awarded during the financial year ended 31 December 2021.
Other Transactions with Key Management Personnel and/or their Related Parties
There were no other transactions conducted between the Group and Key Management Personnel or their related parties, apart from those
disclosed above and reimbursement of allowable expenses, that were conducted other than in accordance with normal employee, customer
There were no other loans to/from related parties of key management personnel during the financial year.
During the year a wholly owned subsidiary of AVI continued to leases office space to the Company, the annual charge for this is £24,000.
The above concludes the Remuneration Report section of the Directors' Report.
Other information
Indemnification of Officers and Auditors
The Group has not otherwise, during or since the financial year, except to the extent permitted by law, indemnified or agreed to indemnify
an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.
Non-Audit Services
During the year, Grant Thornton Limited (Channel Islands) continued to provide statutory and interim audit services. Grant Thornton
Limited (Channel Islands), Grant Thornton UK LLP and Grant Thornton Australia Limited provided non-audit services to the Group. These
included tax compliance reporting and the investigating
report for the prospectus in respect of the listing. Both firms are
member firms of Grant Thornton International Limited. Details of the amounts paid to the auditor and its affiliate firms for non-audit services
provided during the financial year are outlined in Note 6.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on
the auditor's behalf), is compatible with the general standard of independence for auditors.
This report was approved by the board and signed on its behalf.
Alexander Wood
Director
Date: 30 March 2022
9
SRJ Technologies Group Plc
ASX Additional Information
For the year ended 31 December 2021
Substantial Holders
The names of the substantial shareholders (who hold 5% of more of the issue capital) are listed below:
Ordinary shares and CDI's combined
Name
AVI Partners Limited
Solibay Capital Partners Inc
Distribution of securities
Number of Ordinary Shares and CDI's combined
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Total
There were nil holders of securities holding less than a marketable parcel.
Top Twenty Securities
Number of
securities
27,334,755
8,876,541
% of Issued
Combined
22.97%
7.46%
Number of
holders
37
190
129
294
112
762
Number
combined
21,169
580,586
1,076,711
10,366,026
106,970,877
119,015,369
AVI Partners Limited
Solibay Capital Partners Inc
BNP Paribas Noms Pty Ltd
J P Morgan Nominees Australia Pty Limited
Jindabyne Capital Pty Ltd
Name
1
2
3
4 HSBC Custody Nominees (Australia) Limited
5 CS Third Nominees Pty Limited
6 National Nominees Limited
7
8
9 Raleigh Atlantic Limited
10 Sealyham Investments Limited
11 Estate Of Anthony Warburton
12 Enso Ventures 1 Ltd
13 Harry Mitchell
14 Alitime Nominees Pty Ltd
15 Citicorp Nominees Pty Limited
16 Mirdas Limited
17 Ann Manning
18 Mrs Quynh Chi Phan
19 Mitsui & Co (Australia) Ltd
20 John Jones
Top Twenty Securities Total
Remaining Securities
Number of
securities
27,334,755
8,876,541
6,147,305
5,781,787
4,141,062
4,139,197
2,731,697
2,463,558
2,414,005
2,376,000
1,798,500
1,760,000
1,520,530
1,404,195
1,180,441
1,133,000
1,107,480
1,057,505
1,000,010
990,000
79,357,568
39,657,801
119,015,369
Restricted Securities
Securities that are subject to voluntary restrictions are as follows:
Voluntary Restriction
24 months from IPO (expires 18/9/22)
Ordinary Shares
1,000,010
859,285
10
% of Issued
shares
22.97%
7.46%
5.17%
4.86%
3.48%
3.48%
2.30%
2.07%
2.03%
2.00%
1.51%
1.48%
1.28%
1.18%
0.99%
0.95%
0.93%
0.89%
0.84%
0.83%
66.68%
33.32%
100.00%
Performance
Rights
1,934,000
SRJ Technologies Group Plc
ASX Additional Information
For the year ended 31 December 2021
Use Proceeds
In accordance with listing rule 4.10.19 the Company confirms that it has used its cash and assets in a form readily convertible to cash in a
way consistent with its business objectives at the time of admission.
Corporate Governance Statement
The Board of SRJ Technologies Group Plc is committed to achieving and demonstrating the highest standards of Corporate Governance.
The Board is responsible to its shareholders for the performance of the Company and seeks to communicate extensively with shareholders.
The Board believes that sound Corporate Governance practices will assist in the creation of shareholder wealth and provide accountability.
In accordance with ASX Listing Rule 4.10.3, the Company has elected to disclose its Corporate Governance policies and its compliance
with them on its website, rather than in the Annual Report. Accordingly, information about the Company's Corporate Governance practices
is set out on the Company's website at www.srj-technologies.com/investors/
Voting Rights of Shares
Subject to the Companies (Jersey) Law 1991 and to any rights or restrictions attached to any shares, on a show of hands every
Shareholder present in person or by proxy has one vote, and where a proxy has been appointed by more than one Shareholder, such proxy
shall have one vote for each Shareholder. On a poll, every Shareholder present in person or by proxy has one vote for every share of which
he is a holder. If more than one of the joint holders of a share tenders a vote on the same resolution, whether in person or by proxy, the
vote of the joint holder named first in the register of members shall be accepted to the exclusion of the vote(s) of the other joint holders.
Voting Rights of CDI's
Under the ASX Listing Rules and the ASX Settlement Operating Rules, the Company must allow CDI holders to attend any meeting of
the holders of Shares unless relevant Jersey law at the time of the meeting prevents CDI holders from attending those meeting. In order to
vote holders must nominate Chess Despository Nominees to vote on their behalf.
11
SRJ Technologies Group Plc
Statement of Directors' Responsibilities
For the year ended 31 December 2021
The directors are responsible for preparing the Directors' Report and the consolidated financial statements in accordance with applicable
law and generally accepted accounting practice.
Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of
affairs of the Group and of the profit or loss of the Group for that year.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies for the Group's financial statements and then apply them consistently;
- make judgments and accounting estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and
disclose with reasonable accuracy at any time the financial position of the Group and to enable them to ensure that the financial statements
comply with the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The directors acknowledge the independent auditors' right of access at all times to the Group's records and acknowledge that it is an
offence for anyone to recklessly or knowingly supply information to the independent accountants which is false or misleading and to fail to
promptly provide information requested.
12
SRJ Technologies Group Plc
To the members of SRJ Technologies Group Plc
We have audited the consolidated financial statements of SRJ Technologies Group PLC for the year ended 31 December 2021 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash Flow 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 United
Financial Reporting Standard applicable in the UK and
Kingdom Accounting Standards including Financial Reporting Standard 102
In our opinion, the consolidated financial statements:
are in accordance with United Kingdom Generally Accepted Accounting Practice
comply with the Companies (Jersey) Law 1991
We conducted our audit in accordance with International Standards on Auditing (ISAs) and applicable law. Our responsibilities under those
section of our report. We are
standards are further described in the
independent of the Group in accordance with the International Ethics Standards Board for
International Code of Ethics for
Professional Accountants (including International Independence Standards) (IESBA Code), together with the ethical requirements that are
relevant to our audit of the consolidated financial statements in Jersey, and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
responsibilities for the audit of the financial
We draw attention to note 2.3 in the financial statements, which indicates that the Group made a loss in the year in the amount of
£4,392,002 (31 December 2020: £4,143,439) and as at 31 December 2021 was in a net asset position of £1,547,997 (31 December 2020:
£5,016,852). The Directors have a reasonable expectation that both further sales of the product and/or consulting fees will be achieved on
top of those purchase orders already received for 2022 but there is no guarantee as to the level of additional sales that will occur or indeed
the timing of the cash inflows and it may not be sufficient to offset the current outflow from operational activities. The proposed capital raise
to fund the potential acquisition of STATS (UK) Limited and provide additional working capital has been temporarily delayed. To ensure
there are sufficient financial resources to fund the anticipated revenue growth and support the operational activities, the Company has
issued A$2,000,000 of convertible securities (the
which accrue interest at 8% per annum payable annually in cash or shares.
The A$2,000,000 is repayable in 18 monthly instalments of A$111,111.11 payable in cash, shares or a combination of both. The Company
has the right to buy-back the outstanding face value of the securities at any time with no penalty and the investor has the option to convert
outstanding face value amounts into ordinary shares of the Company at a price of A$0.645 per share at any time.
The Company also undertook an interim capital raise and has commitments of A$820,000 as at 31 March 2022 with a further A$820,000
expected to be finalised in the coming weeks. The financial resources provided by the most recent fund raising activities are sufficient for
the Directors to conclude that these circumstances do not cast significant doubt upon the Group's ability to continue as a going concern and
prepare the financial statements on a going concern basis.
The volatility created by COVID-19 has affected and will undoubtedly change business practices in the industry the Group operates in,
which the Group anticipates will see clients and target clients operating in different ways to the norm. The effect of lockdowns, and
workforce and other labour shortages resulted in expected operating expenditure on maintenance projects in 2020 and 2021 by potential
customers of the Group being delayed or cancelled. The COVID-19 pandemic continues to evolve and the Group anticipates that works
delayed in 2021 will begin to flow through as product sales and consulting work in 2022 and beyond. Receipt of recent purchase orders
support this view. The Directors consider the Group to be well positioned to deliver solutions on these delayed scopes and campaigns in
the future.
As noted in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty
ability to continue as a going concern. Our opinion is not modified in respect of this
exists that may cast significant doubt in the
matter.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated financial
statements. In particular, we considered where the Directors made subjective judgements; for example, in respect of significant accounting
estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also
addressed the risk of the Directors override of internal controls, including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial
statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which
Group operates.
13
SRJ Technologies Group Plc
To the members of SRJ Technologies Group Plc
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the
consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They 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 the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall Group materiality
for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us
to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements,
both individually and in aggregate on the consolidated financial statements as a whole.
Overall group materiality
£38,000 (2020: £54,500)
How we determined it
Rationale for the materiality benchmark
We believe that total assets provides us with an appropriate basis for audit materiality as it is a key performance measure and is a key
metric used by management in assessing and reporting on overall performance. It will be reassessed throughout the audit process. We
have determined total assets as the benchmark for computing materiality on the basis that, although the Group is profit oriented, the group
is still in start-up position and has been in a net loss since 2014 from the time it began its operation. At this stage, the Group is developing
its intangibles assets for future sales so total assets as benchmark for materiality is more relevant. We have used 1.5% as a benchmark
percentage which is lower than the maximum percentage for the benchmark allowed by our audit methodology due to the consideration
that the Group is listed on a stock exchange and, therefore, is considered to be a Public Interest Entity.
In the opinion of the Directors there
is no one ultimate controlling party of the Group. The Group is listed and it published significant transactions in the ASX website.
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the Group financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that
we identified. These matters included those that 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 group financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Risk 1 Impairment of intangible assets
At 31 December 2021, the Group carried a balance on
Intangible Assets of £832,766. This comprised of both
patents and development expenditure. The Group
accounts for patent and development expenditure
initially at cost and thereafter after accumulated
amortisation and any accumulated impairment losses.
The intangible assets are considered significant as
they represent the intellectual property of the Group
and a key driver of future revenue. Furthermore, the
identification and calculation of any impairment charge
or useful economic life of
the intangible assets
requires management to use a number of judgements
and estimates.
Our audit work included, but was not restricted to:
·
the
We reviewed the basis of the carrying value of intangibles as at the balance
sheet date, which has been calculated as being cost less impairment with
intangibles are amortised over 13 years. We assessed this for compliance
with the accounting standards.
Tested additions on a sample basis to supporting documentation. We
assessed the appropriateness of
capitalisation policy to
accounting standards.
We reviewed the discounted cash flow projections for the Group until the
projected life of the intangibles which is up to 2029 carrying out sensitivity
analysis on the sales and growth rate. We also prepared independent
discounted sales projections and earnings for the Group until the end of life of
the intangibles. The sales projection we used for
the independent
computation is based on the historical sales and growth. We applied a
discount rate based on the average cost of capital for other companies with
the same industry group. We have doubled the rate available as there might
be a chance that the rate to be given to the group is higher than the sector
average. We also performed calculations to determine the headroom (present
value exceeds carrying amount) available and gauge impairment risk.
We inquired of management
impairment and
critically examined these assumptions based on our knowledge of the Group's
legal and economic environment.
there were indications of
if
·
·
·
The Group's accounting policy on intangibles is shown in Note 2.12 and related disclosures are included in Note 10 of the financial
statements.
As a result of our work, where management determined that no impairment was required, we found that these judgements were supported
by reasonable assumptions that would require significant downside changes before any material impairment arises.
14
SRJ Technologies Group Plc
To the members of SRJ Technologies Group Plc
Report
The directors are responsible for the other information. The other information comprises the information included in the
and Consolidated Audited Financial
report thereon. Our opinion on the
Group 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 Group 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 of the group 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.
other than the financial statements and our
We have nothing to report in respect of the following matters in relation to which the Companies (Jersey) Law 1991 requires us to report to
you if, in our opinion:
proper accounting records have not been kept by the Group; or
the Group financial statements are not in agreement with the accounting records; or
we have not obtained all the information and explanations, which to the best of our knowledge and belief, are necessary for the
purposes of our audit.
As explained more fully in the statement of
responsibilities set out on page 12, the directors are responsible for the preparation of
the consolidated financial statements which give a true and fair view in accordance with UK GAAP, 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 consolidated financial statements, the directors are responsible for assessing the
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 to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
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 will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit.
We also:
Identify and assess the risks of material misstatement of the consolidated 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
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
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
report. However, future events or
Our conclusions are based on the audit evidence obtained up to the date of our
conditions may cause the Group to cease to continue as a going concern.
use of the going concern basis of accounting and, based on the audit evidence
ability to
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and
whether the consolidated financial statements represent the 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 the directors 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.
15
SRJ Technologies Group Plc
To the members of SRJ Technologies Group Plc
We also provide the directors 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, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, 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
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.
This report is made solely to the
Our audit work has been undertaken so that we might state to the
an
members, as a body, in accordance with Section 113A of the Companies (Jersey) Law 1991.
members those matters we are required to state to them in
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
Alexander Ross Langley
For and on behalf of Grant Thornton Limited
Chartered Accountants
St Helier
Jersey
30 March 2022
16
SRJ Technologies Group Plc
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2021
Turnover
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating loss
Interest payable and expenses
Loss for the financial year
Other comprehensive income:
Gain/(loss) on translation of foreign subsidiary
Total comprehensive loss for the year
Total comprehensive loss for the year attributable to:
Ordinary equity holders of the parent
Earnings Per Share
Basic and diluted loss per share for the year attributable to
ordinary equity holders of the parent
Notes
4
5
Year ended 31
December 2021
£
Year ended 31
December
2020
£
323,091
(115,871)
196,925
(77,892)
207,220
119,033
(4,727,551)
(4,333,522)
130,062
71,425
(4,390,269)
(4,143,064)
(1,733)
(375)
(4,392,002)
(4,143,439)
6,325
(12,613)
(4,385,677)
(4,156,052)
(4,385,677)
(4,156,052)
(0.04)
(0.12)
There were no recognised gains and losses for the year ended 31 December 2021 or 2020 other than those included in the consolidated
statement of comprehensive income.
The notes on pages 21 to 33 form part of these financial statements.
17
SRJ Technologies Group Plc
Consolidated Statement of Financial Position
As at 31 December 2021
31 December 2021
£
31 December
2020
£
Notes
Fixed assets
Intangible assets
Tangible assets
Current assets
Inventory
Debtors: amounts falling due within one year
Cash at bank and in hand
Current liabilities
Creditors: amounts falling due within one year
Net current assets
Non-current liabilities
Creditors: amounts falling due after one year
Net assets
Capital and reserves
Called up share capital
Share premium account
Share based payment reserve
Translation reserve
Profit and loss account
10
11
12
13
14
15
16
17
17
7
832,766
273,456
897,779
40,842
1,106,222
938,621
24,516
-
277,405
18,125
145,937
1,097,367
4,012,248
1,399,288
4,176,310
(912,091)
(98,079)
487,197
4,078,231
(45,422)
-
1,547,997
5,016,852
21,639
21,639
13,606,004
13,606,004
1,176,588
(6,288)
259,766
(12,613)
(13,249,946)
(8,857,944)
1,547,997
5,016,852
The financial statements were approved and authorised for issue by the board on 30 March 2022 and were signed on its behalf by:
Alexander Wood
Director
Date: 30 March 2022
The notes on pages 21 to 33 form part of these financial statements.
18
SRJ Technologies Group Plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Called up
share
capital
£
Share
premium
£
Share based
payment
reserve
£
At 1 January 2020
Total comprehensive loss for the year
Shares issued during the year (note 17)
14,667
4,574,028
-
611
-
817,168
CDIs issued during the year (note 17)
6,361
8,214,808
-
-
-
-
Issue of share awards (note 7)
-
-
259,766
Translation
reserve
£
Profit and
loss account
£
Total equity
£
-
(4,714,505)
(125,810)
(12,613)
(4,143,439)
(4,156,052)
-
-
-
-
-
-
817,779
8,221,169
259,766
At 31 December 2020
21,639
13,606,004
259,766
(12,613)
(8,857,944)
5,016,852
Total comprehensive loss for the year
Issue of share awards (note 7)
-
-
-
-
-
6,325
(4,392,002)
(4,385,677)
916,822
-
-
916,822
At 31 December 2021
21,639
13,606,004
1,176,588
(6,288)
(13,249,946)
1,547,997
The notes on pages 2 to 32 form part of these financial statements.
19
SRJ Technologies Group Plc
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Cash flows used in operating activities
Loss for the financial year
Adjustments for:
Amortisation of intangible assets
Depreciation of tangible assets
Government grants
VAT liability written off
Interest paid
Bad debt written off
Share based payments for consultancy fees
Unvested share based payments awarded
Unrealised loss on foreign exchange
Increase in stocks
(Increase)/decrease in debtors
Increase/(decrease) in creditors
Net cash used in operating activities
Cash flows from investing activities
Purchase of intangible fixed assets
Purchase of tangible fixed assets
Government grants received
Net cash used in investing activities
Cash flows from financing activities
Issue of ordinary shares
Repayments towards finance lease
Payment of transaction costs relating to the issue of shares
Repayment of loans
Interest paid
Issuance of convertible loan notes
Net cash (used in)/provided from financing activities
Year ended
31 December
2021
£
Year ended
31 December
2020
£
(4,392,002)
(4,143,439)
104,488
74,125
-
-
1,733
-
-
916,822
118,224
(6,391)
(131,468)
805,825
100,171
9,181
(58,243)
(13,182)
383
3,270
817,767
259,766
56,905
(18,125)
61,301
(149,326)
(2,508,644)
(3,073,571)
(39,475)
(246,384)
-
(285,859)
-
(6,746)
-
-
(1,733)
(47,492)
(41,479)
58,243
(30,728)
4,562,808
-
(294,657)
(1,725)
(383)
-
1,728,039
(8,479)
5,994,082
Net (decrease)/increase in cash and cash equivalents
(2,802,982)
2,889,783
Effect of changes in foreign exchange rate
Effect of translating results of an overseas subsidiary
Effect of changes in foreign exchange rates on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at the end of year
Cash and cash equivalents at the end of year comprise:
6,325
(118,224)
(12,613)
(56,905)
(111,899)
(69,518)
4,012,248
1,191,983
1,097,367
4,012,248
Cash at bank and in hand
1,097,367
4,012,248
20
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
1.
General information
SRJ Technologies Group Plc (the "Company") is a Public company incorporated in Jersey, Channel Islands on 29 April 2014 in
accordance with the Companies (Jersey) Law 1991 with registration number 115590.
The registered office of the Company is Le Quai House, Le Quai d'Auvergne, St Helier, Jersey, JE2 3TN.
The principal activity of the Company is the holding of investments in the subsidiaries SRJ Limited incorporated in Jersey, Channel
Islands, SRJ Technology Limited incorporated in the United Kingdom and SRJ Tech Australia Pty Ltd incorporated in Australia which
are all 100% owned by the Company and are primarily involved in the development and distribution of a range of weld-free coupling
and leak containment solutions for pipeline and process pipework systems and leak containment solutions. The products are
designed primarily for pipe repair and the emergency replacement market but can also be integrated into new pipeline builds. The
Company also offers Asset Integrity Management consulting services to help asset owners to develop and implement an effective
asset integrity strategy.
2. Summary of significant accounting policies
2.1 Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting
policies and in accordance with Financial Reporting Standard 102 the Financial Reporting Standard in the UK and Republic of
Ireland (FRS 102) and the Companies (Jersey) Law 1991.
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires Group management
to exercise judgment in applying the Group's accounting policies (see Note 3).
The following principal accounting policies have been applied.
2.2 Basis of consolidation
The consolidated financial statements present the results of the Company and subsidiary entities controlled by the Company ("the
Group") as if they form a single entity. Control is achieved where the Group has the power to govern the financial and operating
polices of an entity so as to obtain benefits from its activities. Intercompany transactions and balances between group companies
are therefore eliminated in full.
In the
The consolidated financial statements incorporate the results of business combinations using the purchase method.
Consolidated Statement of Financial Position,
liabilities are initially
recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement
of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
the acquiree's identifiable assets, liabilities and contingent
The results of subsidiaries acquired or disposed of during the year are included in total comprehensive income from the effective
date of acquisition and up to the effective date of disposal as appropriate using accounting policies consistent with those of the
Parent. All intragroup transactions, balances, income and expenses are eliminated in full on consolidation.
2.3 Going concern
The Group made a loss in the year in the amount of £4,392,002 (31 December 2020: £4,143,439) and as at 31 December 2021 was
in a net asset position of £1,547,997 (31 December 2020: £5,016,852).
The Directors have a reasonable expectation that both further sales of the product and/or consulting fees will be achieved on top of
those purchase orders already received for 2022 but there is no guarantee as to the level of additional sales that will occur or indeed
the timing of the cash inflows and it may not be sufficient to offset the current outflow from operational activities. The proposed
capital raise to fund the potential acquisition of STATS (UK) Limited and provide additional working capital has been temporarily
delayed. To ensure there are sufficient financial resources to fund the anticipated revenue growth and support the operational
activities, on 29 March 2022 the Company signed an agreement to issue A$2,000,000 of convertible securities (the
which accrue interest at 8% per annum payable annually in cash or shares. The A$2,000,000 is repayable in 18 monthly instalments
of A$111,111.11 payable in cash, shares or a combination of both. The Company has the right to buy-back the outstanding face
value of the securities at any time with no penalty and the investor has the option to convert outstanding face value amounts into
ordinary shares of the Company at a price of A$0.645 per share at any time.
The Company also undertook an interim capital raise and has commitments of A$825,000 as at 31 March 2022 with a further
A$820,000 expected to be finalised in the coming weeks. The financial resources to be provided by the most recent fund raising are
sufficient for the Directors to conclude that these circumstances do not cast significant doubt upon the Group's ability to continue as
a going concern and prepare the financial statements on a going concern basis.
The volatility created by COVID-19 has affected and will undoubtedly change business practices in the industry the Group operates
in, which the Group anticipates will see clients and target clients operating in different ways to the norm. The effect of lockdowns,
and workforce and other labour shortages resulted in expected operating expenditure on maintenance projects in 2020 and 2021 by
potential customers of the Group being delayed or cancelled.
21
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
2. Summary of significant accounting policies (continued)
2.3 Going concern (continued)
The COVID-19 pandemic continues to evolve and the Group anticipates that works delayed in 2021 will begin to flow through as
product sales and consulting work in 2022 and beyond. Receipt of recent purchase orders support this view. The Directors consider
the Group to be well positioned to deliver solutions on these delayed scopes and campaigns in the future.
2.4 Foreign currency
Functional and presentation currency
The Company and the Group's functional and presentational currency is Pound Sterling (£).
Foreign translation
In the
financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than the £
are translated into £ upon consolidation. The functional currencies of entities within the Group have remained unchanged during the
reporting year.
On consolidation, assets and liabilities have been translated into £ at the closing rate at the reporting date. Income and expenses
have been translated into £ at the average rate over the reporting year. Exchange differences are charged or credited to other
comprehensive income and recognised in the currency translation reserve in equity. On disposal of a foreign operation, the related
cumulative translation differences recognised in equity are reclassified to profit or loss and are recognised as part of the gain or loss
on disposal.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at
transactions.
the dates of
the
At each year end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical
cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are
measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of
Comprehensive Income within administration expenses.
2.5 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
reliably measured. Revenue is measured as the fair value of the consideration received or receivable, including discounts, rebates,
value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
- the Group has transferred the significant risks and rewards of ownership to the buyer;
- the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control
over the goods sold;
- the amount of revenue can be measured reliably;
- it is probable that the Group will receive the consideration due under the transaction; and
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the
stage of completion of the contract when all of the following conditions are satisfied:
- the amount of revenue can be measured reliably;
- it is probable that the Group will receive the consideration due under the contract;
- the stage of completion of the contract at the end of the reporting period can be measured reliably; and
- the costs incurred and the costs to complete the contract can be measured reliably.
The Group is not significantly affected by seasonality or cyclicality of operations.
Other revenue comprises research and development tax credits granted by the UK and Australian tax authorities for qualifying
research and development expenditure alongside other sundry income sources which do not fall under supply of goods or services
to the Group's customers. Tax credits are recognised in the period to which the expenditure relates once agreed between the Group
and the relevant tax authority. All other revenue items are recognised on an accruals basis.
22
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
2. Summary of significant accounting policies (continued)
2.6 Research and development
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits
and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from
the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate
probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently
amortised on a straight line basis over their useful economic lives, which is estimated to be 13 years from the date in which the
production and sale of the product commenced.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is
treated as if it were all incurred in the research phase only.
2.7 Government grants
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are
credited to the Consolidated Statement of Comprehensive Income at the same rate as the depreciation on the assets to which the
grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the
related expenditure.
2.8 Interest income
Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.
2.9 Finance costs
Finance costs are charged to the Consolidated Statement of Comprehensive Income over the term of the debt using the effective
interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs such as arrangement and
transaction fees are deducted against the financial liability and recognised as a part of finance costs over the term of the instrument.
2.10 Pensions
Defined contribution
The Group operates a statutory defined contribution plan for its UK employees. A defined contribution plan is a pension plan under
which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further
payment obligations.
The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due.
Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held
separately from the Group in independently administered funds.
2.11 Share based payments
The Group provides share-based payment arrangements to certain employees, directors and consultants. Equity-settled
arrangements are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of the grant. The
fair value is expensed on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted to reflect
the actual number of shares or options that will vest.
Where equity-settled arrangements are modified, and are of benefit to the employee, the incremental fair value is recognised over
the period from the date of modification to date of vesting. Where a modification is not beneficial to the employee there is no change
to the charge for share-based payment. Settlements and cancellations are treated as an acceleration of vesting and the unvested
amount is recognised immediately in the Consolidated Statement of Comprehensive Income.
2.12 Intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less
any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life
shall not exceed ten years.
The patents and development costs first became available for use in 2017 when production and sale of the product commenced.
They are being amortised annually on a straight line basis up to 20 October 2029 which is the maximum duration the main patent
application can be extended to. The basis for this amortisation is 13 years.
The patents and development costs residual values, useful lives and amortisation methods are reviewed, and adjusted prospectively
if appropriate, or if there is an indication of a significant change since the last reporting date.
23
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
2. Summary of significant accounting policies (continued)
2.13 Impairment of assets
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective
evidence of impairment. If objective evidence of impairment is found, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual
asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. In such cases an
impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount
of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or
loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation
decrease.
2.14 Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the
straight-line method.
Depreciation is provided on the following basis:
Office equipment
Computer equipment
Plant and machinery
Seal moulds
Rental equipment
Motor vehicles
-
-
-
-
-
-
20%
33%
20%
33%
33%
10%
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there
is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the
Consolidated Statement of Comprehensive Income.
2.15 Investment in subsidiaries
Investments in subsidiaries are measured at cost less accumulated impairment.
2.16 Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost
is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price
less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
2.17 Debtors
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net
of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
2.18 Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24
hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that
are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on
demand and form an integral part of the Group's cash management.
24
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
2. Summary of significant accounting policies (continued)
2.19 Creditors
Short term creditors are measured at the transaction price. Other financial
transaction costs, and are measured subsequently at amortised cost using the effective interest method.
liabilities are measured initially at fair value, net of
2.20 Equity and reserves
Called up share capital represents the nominal (par) value of shares that have been issued.
Share premium includes any premiums received on the issue of share capital. Directly attributable costs in respect of the raising of
capital are offset against the total proceeds of the share issue in the Statement of Financial Position by deducting this from share
premium, net of any related income tax benefits.
Other components of equity include the following:
share based payment reserve
comprises the pro-rated expense of granted equity-settled share based payments which have met
the prerequisite performance criteria. Once the vesting period has expired the value of all eligible awards which comprise the share
based payment reserve will be transferred to share capital and share premium.
translation reserve
comprises foreign currency translation differences arising from the translation of financial statements of the
2.21 Financial instruments
The Group enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade
and other debtors and creditors, loans to and from other third parties and to related parties.
instruments that are payable or receivable within one year,
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other receivables and
payables, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective
interest method. Debt
typically trade debtors and creditors, are
measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.
However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred
beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is
measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and
subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity
concessionary loan.
2.22 Convertible debt
The proceeds received on issue of the Group's convertible debt are allocated into their liability and equity components and presented
separately in the Consolidated Statement of Financial Position.
The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that would be
payable on a similar debt instrument that did not include an option to convert.
The difference between the net proceeds of the convertible debt and the amount allocated to the debt component is credited directly
to equity and is not subsequently remeasured. On conversion, the debt and equity elements are credited to share capital and share
premium as appropriate.
Transaction costs that relate to the issue of the instrument are allocated to the liability and equity components of the instrument in
proportion to the allocation of proceeds.
3.
Judgments in applying accounting policies and key sources of estimation uncertainty
In preparing the consolidated financial statements management is required to make estimates and assumptions that affect amounts
presented therein. These estimates and assumptions are based on past experience or the other factors and are believed to be
reasonable in the circumstances.
Impairment of intangible assets
The carrying value of intangible assets, which comprise Intellectual Property in the form of patent and development costs (IP), are
dependent on the expected future revenue from product sales and services rendered in connection with the IP. Based on the
Board's expectations, as outlined in the going concern assessment of the Group, the Directors are confident that the future expected
return from sales and services for the Group is sufficient to assume there are no indicators of impairment in respect of the IP of the
Group.
Useful life of intangible assets
The basis for estimate the useful life of intangible assets is disclosed in note 10.
25
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
3.
Judgments in applying accounting policies and key sources of estimation uncertainty (continued)
Contingent liabilities
The Group is currently subject to a threatened patent infringement case by Irgens Engineering AS relating to the
product
that SRJ is planning to market in the United Kingdom versus an alternative device marketed by Hydratight. Hydratight purports to be
the exclusive licensee of
infringement comes from Hydratight, via Irgens
Engineering AS. Counsel for the Group has applied for revocation of the patent held by Irgens Engineering AS on the grounds of
invalidity for want of novelty and/or inventive step as well as for insufficiency. A hearing was held in relation to this on 18 December
2021 and the Group await a decision to be handed down by the UKIPO.
the Irgens patent, and so the allegation of patent
Counsel estimates that the likelihood of the application for revocation of the Irgens patent to be greater than 50%. Considering this
advice, the directors do not consider it probable that the patent be declared valid and that the threatened litigation be allowed to
continue. As the ultimate outcome cannot presently be determined and no provision for any liability that may result has been made in
the financial statements and the matter has been disclosed as a contingent liability.
4. Turnover
Turnover, analysed geographically between markets, was as follows:
Jersey
United Kingdom
Australia
Jersey
United Kingdom
Australia
5. Other operating income
R&D tax credits received
Loan written off
Government grants receivable
VAT liability written off
6. Auditor remuneration
Annual and interim audit
Non-audit services
31 December 2021
Services
rendered
£
-
166,267
2,731
168,998
31 December 2020
Services
rendered
£
51,682
9,165
6,601
67,448
Product sales
£
84,615
-
69,478
154,093
Product sales
£
-
-
129,477
129,477
Total
£
84,615
166,267
72,209
323,091
Total
£
51,682
9,165
136,078
196,925
Year ended 31
December
2021
£
Year ended 31
December
2020
£
127,489
2,572
-
-
130,061
-
-
58,243
13,182
71,425
Year ended 31
December
2021
£
Year ended 31
December
2020
£
54,511
456,875
511,386
31,000
64,078
95,078
Non-audit services are provided by Grant Thornton Limited (Channel Islands), Grant Thornton UK LLP and Grant Thornton Australia
Limited.
26
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
7. Share based payments
Non-Executive Directors and consultants
Management and employees
No of
Performance
Rights
580,000
7,434,000
8,014,000
Under the EIPs, 1 PR is the equivalent of 1 Chess Depositary Interest (CDI). The award date of the PRs was 14 August 2020 and
grant date was 18 September 2020 (the listing date of the Group shares). PRs issued will vest 24 months after the issue date and be
subject to the following vesting conditions;
- the Company's CDIs reaching a target 15 day VWAP post Listing; and
- continuity of engagement (for consultants and Non-Executive Directors) or continuity of employment (for management and
employees) for the period from Listing until the vesting date.
Tranche 1
Tranche 2
Tranche 3
Target 15-day
VWAP
A$
0.60
0.65
0.75
No of
Performance
Rights
4,024,000
2,470,000
1,520,000
The 15-day VWAP target for all three tranches was met during the year therefore the VWAP criteria of Tranches 1 and 2 were
achieved. Tranche 3 has additional performance criteria that will not become achievable until the vesting date in September 2022.
On the grant date, the CDIs had fair value of A$0.50 each. The expense to the Group in 2021 based on qualifying PRs issued is
analysed as follows;
Directors remuneration
Staff remuneration
Consultancy fees
Fair value per
CDI
A$
No of
Performance
Rights
0.50
0.50
0.50
5,320,001
973,999
200,000
Year ended 31
December
2021
£
Year ended 31
December
2020
£
751,077
135,256
30,490
916,823
212,804
38,323
8,639
259,766
The PRs will vest on 18 September 2022 for all parties that qualify under the vesting conditions.
8.
Remuneration of key management personnel and employees
Directors
Salaries, fees and superannuation
Share based payment awards
Employees and consultants
Wages and salaries
Pension and Superannuation costs
Health insurance
Share based payment awards
Year ended 31
December
2021
£
Year ended 31
December
2020
£
803,133
751,077
1,554,210
778,054
212,804
990,858
Year ended 31
December
2021
£
Year ended 31
December
2020
£
827,076
57,332
27,288
165,746
1,077,442
633,926
50,125
27,443
46,962
758,456
Directors and employee costs have been reallocated for the prior year in line with the key management personnel disclosure in the
remuneration report.
27
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
8.
Remuneration of key management personnel and employees (continued)
The average number of directors and employees of the Group during the year was 17 (2020: 13)
The cost of employees delivering consultancy services is charged to cost of sales in accordance with their hourly rate and time spent
in delivering the service contract. In 2021, wages and salaries of £47,100 (2020: £23,613) was charged to cost of sales.
9. Fixed asset investments
Investment in subsidiaries, at cost
Subsidiary undertakings
The following were subsidiary undertakings of the Company:
31 December 2021
£
22,783
31 December
2020
£
22,783
Name
SRJ Limited
SRJ Technology Limited
SRJ Tech Australia Pty Ltd
Acorn Intellectual Properties Limited
Country of
incorporation
Jersey
United Kingdom
Australia
Jersey
Class of shares
Ordinary
Ordinary
Ordinary
Ordinary
Holding
100%
100%
100%
100%
In November 2014, the Company acquired 100% of the issued share capital (10,613 Ordinary shares) of SRJ Limited, a Company
incorporated and domiciled in Jersey through a 1 for 1 swap of the Company's shares.
In March 2015, the Company acquired 100% of the issued share capital (2 £1 ordinary shares) of Acorn Intellectual Properties
Limited ("AIPL"), a Company incorporated and domiciled in Jersey.
In August 2016, the Company acquired 100% of the issued share capital (1 £1 Ordinary share) of SRJ Technology Limited, a
Company incorporated in the United Kingdom.
In September 2019, the Company acquired 100% of the issued share capital (1,000 A$1 Ordinary shares) of the newly incorporated
SRJ Tech Australia Pty Ltd, a Company incorporated and domiciled in Australia.
10.
Intangible fixed assets
Cost
At 1 January 2021
Additions
At 31 December 2021
Amortisation
At 1 January 2021
Charge for the year
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020
Patents
£
483,888
21,604
505,492
136,694
41,064
177,758
327,734
347,194
Development
expenditure
£
768,145
17,871
786,016
217,560
63,424
280,984
Total
£
1,252,033
39,475
1,291,508
354,254
104,488
458,742
505,032
832,766
550,585
897,779
The patents and development costs first became available for use in 2017 when production and sale of the product commenced.
They are being amortised annually on a straight line basis up to 20 October 2029 which is the maximum duration the main patent
application can be extended to.
The patents and development costs residual values, useful lives and amortisation methods are reviewed, and adjusted prospectively
if appropriate, or if there is an indication of a significant change since the last reporting date.
28
11.
Tangible fixed assets
Cost
At 1 January 2020
Additions
At 1 January 2021
Additions
At 31 December 2021
Depreciation
At 1 January 2020
Charge for the year
At 1 January 2021
Charge for the year
At 31 December 2021
-
-
-
60,355
60,355
-
-
-
9,010
9,010
-
-
-
231,659
231,659
-
-
-
51,260
51,260
At 31 December 2021
51,345
180,399
At 31 December 2020
-
-
SRJ Technologies Group Plc
Notes to the financial statements
For the year ended 31 December 2021
Motor
vehicles
£
Rental
equipment
£
Seal moulds
£
Plant and
machinery
£
Office
equipment
£
Computer
equipment
£
Total
£
21,468
41,479
62,947
306,739
369,686
12,924
9,181
22,105
74,125
96,230
14,601
9,413
24,014
6,507
30,521
8,421
4,808
13,229
5,964
19,193
11,328
273,456
10,785
40,842
-
24,860
24,860
7,820
32,680
-
3,149
3,149
5,670
8,819
23,861
21,711
6,867
4,985
11,852
398
12,250
4,503
1,062
5,565
1,522
7,087
5,163
6,287
-
2,221
2,221
-
2,221
-
162
162
699
861
1,360
2,059
2
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
12.
Inventory
Stock on hand
13. Debtors
Trade debtors
Other debtors
Prepayments and accrued income
14. Cash at bank and in hand
Bank and cash balances
15. Creditors: Amounts falling due within one year
Finance lease payable
Trade creditors
Accruals and other payables
31 December
2021
£
31 December
2020
£
24,516
18,125
31 December
2021
£
31 December
2020
£
206,011
24,490
46,904
90,896
18,706
36,335
277,405
145,937
31 December
2021
£
31 December
2020
£
1,097,367
4,012,248
31 December
2021
£
31 December
2020
£
8,187
112,070
791,834
912,091
-
21,767
76,312
98,079
The finance lease is with Power Alliance Finance and is in respect of the acquisition of a commercial vehicle by SRJ Tech Australia
Pty Ltd. The consideration paid for the vehicle was AU$111,924 (£60,355). The lease is for 60 months with interest accruing at
4.99%. During the year, £6,746 and £1,580 of capital and interest respectively was paid.
16. Creditors: Amounts falling due after one year
Finance lease payable
31 December
2021
£
45,422
31 December
2020
£
-
30
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
17.
Issued capital
Allotted, called up and fully paid
119,015,369 (2020 - 119,015,369) Ordinary shares of £0.00018181819 (2020 -
£0.00018181819 each)
31 December
2021
£
31 December
2020
£
21,639
21,639
Allotted, called up and fully paid
Allotted, called up and fully paid
At 1 January and 31 December 2021
Allotted, called up and fully paid
Brought forward
Shares issued to staff and consultants
Split shares 55:1
Conversion of loan notes
Shares issued on IPO
Issued to advisers and consultants for pre-IPO services
At 31 December 2020
18. Commitments under operating leases
31 December 2021
Shares in issue
Share
capital
£
Share
premium
£
119,015,369
21,639
13,606,004
31 December 2020
Shares in issue
1,466,735
61,072
82,501,562
17,500,000
16,000,000
1,486,000
119,015,369
Share
capital
£
14,667
611
-
3,182
2,909
270
21,639
Share premium
£
4,574,028
817,168
-
4,109,047
3,756,844
348,917
13,606,004
At 31 December 2021, the Group had future minimum lease payments under non-cancellable operating leases as follows:
Not later than 1 year
Later than 1 year and not later than 5 years
31 December
2021
£
-
-
31 December
2020
£
11,047
-
-
11,047
The lease with Le Quai House Holdings Limited expired during the year and as at the year end date a new lease was still being
negotiated. Until such point a new lease is agreed, the Group remains on a monthly rolling lease occupancy of the premises.
31
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
19. Related party transactions
Balances due to the Company
From SRJ Limited
From SRJ Technology Limited
From SRJ Tech Australia Pty Ltd
From Acorn Intellectual Properties Limited
Balances due between subsidiaries
Due to SRJ Limited by SRJ Technology Limited
Due to SRJ Limited from SRJ Tech Australia Pty Ltd
Due from SRJ Limited to Acorn Intellectual Properties Limited
31 December
2021
£
6,424,479
1,745,133
1,152,446
2,998
31 December
2020
£
5,700,980
947,833
505,948
250
9,325,056
7,155,011
5,645
10,000
5,225
-
-
4,735
SRJ Limited is a subsidiary of the Company. During the year the Company made net loans of £723,499 (31 December 2020:
£800,179) to support its ongoing operations. The loan is unsecured, interest free and repayable on demand although the Directors
have no current intention of recalling the loan within the next 12 months.
SRJ Technology Limited is a subsidiary of the Company and during the year the Company made additional net loans of £797,300
(31 December 2020: balance of £947,833) to support its ongoing operations. The loan is unsecured, interest free and repayable on
demand although the Directors have no current intention of recalling the loan within the next 12 months.
SRJ Tech Australia Pty Ltd is a subsidiary of the Company and during the year the Company made net loans in the total of £646,498
(31 December 2020: balance of £505,948) to support its ongoing operations. The loan is unsecured, interest free and repayable on
demand although the Directors have no current intention of recalling the loan within the next 12 months.
Acorn Intellectual Properties Limited (AIPL) is a subsidiary of the Company and during the year the Company made a loan of £2,748
(31 December 2020: £250) to support its ongoing operations. The loan is unsecured, interest free and repayable on demand
although the Directors have no current intention of recalling the loan within the next 12 months. AIPL and SRJ Limited are both
subsidiaries of the Company and during the year a net intercompany balance of £5,225 (2020: £4,735) was recognised in respect of
license fees payable to AIPL and expenses paid on behalf of AIPL by SRJ Limited. The loan is unsecured, interest free and
repayable on demand although the Directors have no current intention of recalling the loan within the next 12 months.
SRJ Limited and SRJ Technology Limited are both subsidiaries of the Company and during the year SRJ Limited made net loans in
the total of £5,645 (31 December 2020: repaid loans of £8,206) to support SRJ Limited's ongoing operations. An element of the net
loans paid was £10,000 due in licensing fees from SRJ Technology Limited in respect of the sub-lease of patents licensed by SRJ
Limited from AIPL.
SRJ Limited and SRJ Tech Australia Pty Ltd are both subsidiaries of the Company and during the year SRJ Limited generated
£10,000 of license fee income for the sub-license of patents licensed by SRJ Limited. The amount is unsecured, interest free and
repayable on demand although the Directors have no current intention of recalling the loan within the next 12 months.
AVI Partners Limited (AVI) is a related party by virtue of having a common shareholder with a significant shareholding in the
Company. A wholly owned subsidiary of AVI leases office space to the Company, the charge in the year was £24,000 (31 December
2020: £24,000), equivalent to £2,000 per month.
the Group received total
During the year key management personnel (defined as Directors and Non-Executive Directors) of
compensation of £803,133 of employment and post-employment benefits and £nil awards of share based payments (31 December
2020: £778,054 of employment and post-employment benefits and £1,929,587 awards of share based payments). See page 7 for
further analysis of directors' remuneration.
32
SRJ Technologies Group Plc
Notes to the consolidated financial statements
For the year ended 31 December 2021
19. Related party transactions (continued)
The interests of the Directors in the capital of the Company at the year end date are set out in the table below:
Director
Robin Pinchbeck
Alexander Wood
Grant Mooney
Securities
201,135 Ordinary shares
380,000 Performance Rights
115,799 CDIs
206,250 Ordinary shares
2,470,000 Performance Rights
Nil
Andrew Mitchell
36,000 CDIs
% (undiluted)
0.20%
0.20%
0%
0.03%
% (fully
diluted)
0.50%
2.10%
0%
0.03%
Further to the Ordinary Shares held directly by Alexander Wood there are 27,334,755 Ordinary Shares and CDIs held by AVI
Partners Limited, a company in which Alexander Wood holds 19.0% of the issued shares. AVI Partners has a shareholding of 23.0%
of the undiluted and 21.5% of the fully diluted shares in issue of the Company.
20. Analysis of changes in net debt
Cash and cash equivalents
Cash at bank and in hand
Borrowings
Finance lease
Net debt
At 1 January
2021
£
Cash flows
£
Other non-
cash changes
£
At 31
December
2021
£
4,012,248
(2,921,206)
6,325
1,097,367
-
(6,746)
60,355
53,609
4,012,248
(2,914,460)
(54,030)
1,043,758
Non-cash changes relate to:
Finance lease - during the year SRJ Tech Australia Pty Ltd acquired a motor vehicle on a finance lease. Cash flows relate to capital
repayments made by the Company against the finance lease.
There are no restrictions over the use of the cash and cash equivalents balances which comprises of cash at bank and in hand.
21. Post balance sheet events
On 14 December 2021 it was announced that the Company had executed a share purchase agreement to acquire 100% of the
issued share capital of UK based Company STATS (UK) Limited subject to customary conditions including the Company obtaining
the required shareholder approvals. The consideration payable to acquire STATS is to comprise a combination of SRJ CDIs and
cash, with the STATS shareholders holding approximately 5% on completion of the acquisition and re-compliance listing. To fund the
acquisition and additional working capital requirements the Company intends to raise A$142 million from investors.
On 4 February 2022 it was announced that the Company was voluntarily temporarily delaying the capital raise due to significant
changes to the underlying market conditions in Australia and globally since the start of 2022. It is intended that the Company will
recommence the capital raise once the underlying market conditions have stabilised.
which accrue
On 29 March 2022 the Company signed an agreement to issue A$2,000,000 of convertible securities (the
interest at 8% per annum payable annually in cash or shares. The A$2,000,000 is repayable in 18 monthly instalments of
A$111,111.11 payable in cash, shares or a combination of both. The Company has the right to buy-back the outstanding face value
of the securities at any time with no penalty and the investor has the option to convert outstanding face value amounts into ordinary
shares of the Company at a price of A$0.645 per share at any time.
The Company is also undertaking an interim capital raise and has commitments of A$825,000 as at 31 March 2022 with a further
A$820,000 expected to be finalised in April 2022.
22. Ultimate controlling party
In the opinion of the Directors there is no one ultimate controlling party of the Company.
33
ELEVATE ASSET INTEGRITY AND CONTAINMENT MANAGEMENT WITH SRJ TECHNOLOGIES
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