Annual Report &
Audited Financial Statements
SRJ Technologies Group Plc
ARBN 642 229 856
31 December 2023
Contents
Chairman's Statement …………………………………………………………... ……… 1
Company Information ……………………………………………………………………. 2
Directors' Report ………………………………………………………………… ……… 3-13
ASX Additional Information ……………………………………………………………… 14-15
Statement of Directors Responsibilities…………………………………………………. 16
Independent Auditors' Report …………………………………………………………… 17-21
Consolidated Statement of Comprehensive Income…………………………………... 22
Consolidated Statement of Financial Position …………………………………………. 23
Consolidated Statement of Changes in Equity…………………………………………. 24
Consolidated Statement of Cash Flows ………………………………………………... 25
Notes to the Consolidated Financial Statements ……………………………………... 26-41
SRJ Technologies Group Plc
Chairman’s Statement
Dear Shareholder,
It is my pleasure to present the 2023 Annual Report for SRJ Technologies Group plc (SRJ or the Company) as we
reflect on the achievements over the past 12 month, a year of significant progress and strategic development of
our Company.
The year has seen SRJ undergo a transformative period, supported by a reset of our capital structure. We have
taken deliberate steps to strengthen our financial foundation, positioning the company for sustainable growth and
long-term success. This reset comes after a challenging couple of years where our focus was necessarily on
recovery and rebuilding. This year’s efforts have now provided us with the flexibility to pursue strategic initiatives
and enhancing shareholder value.
I am pleased to report that in parallel with this restructuring, SRJ has delivered healthy revenue growth,
underscored by robust performance across our client offerings. Our commitment to excellence and innovation
has enabled us to forge strong partnerships with blue chip clients, further solidifying our position as a trusted
industry operator and that will drive sales growth.
In 2024, we will maintain focus on driving value creation and sustainable growth, through a strategy the details of
which we recently announced that encompasses targeted market expansion and operational efficiency
enhancements. By leveraging our technological expertise and market insights, we are poised to capitalise on
emerging opportunities in the operational integrity space.
During the recent challenging years, our staff have laid a solid foundation for future success. I thank them on
behalf of the board for their commitment and energy. The circumstances have also required great patience on
the part of our investors; my board colleagues and I are confident that we can continue to build on our enhanced
platform, to generate the sustainable revenue growth that is now your reasonable expectation.
Yours sincerely,
Chairman
SRJ Technologies Group Plc
1
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
Directors
Alexander Wood
Robin Pinchbeck
Roger Smith
Grant Mooney
Company Secretary
Benjamin Donovan
Registered Number
115590
(appointed 15 January 2023)
(resigned 14 January 2023)
Registered Office
Jersey
Australia
Registry
Independent Auditor
Accountants
Bankers
Lawyers
Le Quai House
Le Quai d'Auvergne
St Helier
Jersey, JE2 3TN
Telephone: +(44) 01534 626818
c/- Argus Corporate Partners Pty
Limited
Level 4, 225 St Georges Terrace
Perth, WA 6000, Australia
Telephone: +(61) 08 6162 6199
Computershare Investor Services
Pty Limited
Level 17, 221 St Georges Tce
Perth,
WA 6000, Australia
Telephone: +61 08 9323 2000
Computershare Investor Services
(Jersey) Limited
13 Castle Street,
St Helier, Jersey,
Channel Islands JE1 1ES
Telephone: +44 (0) 1534 281 800
Grant Thornton
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
2
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
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 2023.
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 (AIM)
consulting services to help asset owners to develop and implement an effective asset integrity strategy. AIM seeks to
maintain an asset in a fit-for-service condition while extending its remaining life in the most reliable, safe, and cost-
effective manner. 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 2023 that generated revenue in the year are detailed below (further
details of each are available under the Company announcements on the ASX website):
-
-
-
-
-
-
-
-
-
Secured another contract with leading FPSO operator in West Africa.
Secured three-year contract to supply BoltEx® product to PTTEP in Malaysia with Malaysian Partner, EFTECH
International.
Signed Exclusive License Agreement with EFTECH International to represent SRJ in Malaysia such that all
opportunities in the region will be contracted through EFTECH which generated revenues of £620k (A$1.2m)
in 2023 and included a 10% revenue share from rentals generated by EFTECH
Secured order from MovementTrade for the sale of BoltEx® in West Africa.
Secured purchase order from Trident BMC LLC for the sale of BoltEx®.
SRJ Consulting Project extension for asset integrity scope for a leading FPSO operator.
Contract awarded by global energy company Baker Hughes for both training and asset integrity solutions.
Secured foothold in US market as first BoltEx® orders secured for two companies operating in American West
and Gulf of Mexico.
Awarded contract to supply flange products to Southey in Africa.
The revenue activities described above alongside operational efficiencies resulted in a decrease in the ‘Loss for the
financial year’ from £3.2m in 2022 to £1.3m in 2023, alongside a decrease in the ‘Operating cash outflow’ from £2.5m
to £0.8m in 2023.
Strategic Overview
SRJ is approaching profitability following Covid setbacks – the next phase of growth will be driven by demand for existing
SRJ products and solutions as well as the opportunity to capitalise on the industry’s transition to Digital Asset Integrity
Management. Key points to highlight in The Company’s strategic overview are:
-
-
-
Strong performance on a path to profitability in the near future supported by a growing pipeline of sales
opportunities
Clear and structured strategy to grow SRJ’s core business whilst supporting the energy industry transformation
towards digital solutions.
Adopting digital technologies via organic growth and partnering or potentially acquiring niche players in the
market that are driving this transformation
3
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
-
-
-
Capital structure reset, removed the debt and market overhang that was impacting the investment appeal in
the Company despite the improvement in operational performance and cash flow
Strategic Partnerships with Air Control Entech and Cokebusters in recent months, both niche players driving
digital transformation
Replication of License agreement secured with Malaysian entity EFTECH in negotiations for two further regions
in Far East
Industry trends and Investment priorities
With a focus on enabling technologies, SRJ has positioned itself to respond to the key industry trends that are driving
investment priorities in the energy industry:
Strategic Action Plan
Management have identified the following short-term action plan that will form the foundation to achieving SRJ’s
strategic plan:
-
-
-
-
-
-
Target Acquisition opportunities possessing world class technological solutions to support the digitisation of
clients’ Asset Integrity Management
Build Inventory to ensure timely provision of product to satisfy client-led demand
Expansion of Asset Integrity solutions through partnering with others to ensure complete coverage of a clients
AIM requirements
Expand SRJ Licensing into other key jurisdictions
Sales team expansion to support client-led demand
Strengthening of Strategic Partners through the provision of technologically advanced solutions
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.
4
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
Earnings Per Share
Loss for the year
Weighted average number of shares
Basic and diluted loss per share
Financial Position
2023
£
2022
£
(1,287,675)
148,661,857
(3,225,330)
123,095,666
(0.009)
(0.030)
The Group’s cash position as at 31 December 2023 was £128,456 (2022: £559,539). In order to ensure there are
sufficient financial resources to fund the anticipated revenue growth and support the operational activities, the Company
undertook a small equity fund raise in February/March 2024 that falls within the Company’s placement capacity. The
Company received binding commitments for A$601,250 via a placement of 8,016,666 CHESS Depositary Interests
(CDIs) representing underlying ordinary shares in the Company. Allotment of the CDIs is expected to occur on Thursday
28 March 2024.
Going Concern
The Group made a loss in the year in the amount of £1,287,675 (31 December 2022: £3,225,330) and as at 31
December 2023 was in a net asset position of £418,274 (31 December 2022: £667,553).
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 2024 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. To ensure there are sufficient financial resources to fund the anticipated revenue growth and
support the operational activities, the Company undertook an equity fund raise in February/March 2024 and received
binding commitments for A$601,250 (£311,528). However, it is acknowledged that the Company may be required to
undertake another fund raise in Q2 2024, either through debt or equity, as a result of material uncertainty over the
timing of cash flows and sales levels.
These circumstances indicate that a material uncertainty exists that may cast signficant doubt over the Group's ability
to continue as a going concern. However, the Directors remain confident that cash flows and increased sales can be
achieved and therefore the financial statements have been prepared on a going concern basis.
Dividends
There were no dividends paid in the year under review (2022 - £nil).
Results
The Consolidated Statement of Comprehensive Income for the year is set out on page 22.
Directors
The directors who served during the year and subsequently were:
Robin Pinchbeck
Alexander Wood
Grant Mooney
Roger Smith
(resigned 14 January 2023)
(appointed 15 January 2023)
5
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
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:
Equity raise in February/March 2024 of A$601,250
Likely Developments and Expected Results of Operations
Likely developments in the operations of the Group have been included in this report. SRJ’s vision is to become the
global leader in the provision of digitally integrated asset integrity services and solutions, and the strategy behind that
is to:
develop a group of digitally integrated asset integrity businesses through acquisition and synergistic growth;
and
acquire and grow established businesses and niche technology businesses and provide capital and
management expertise to scale up. All within an entrepreneurial and technological business culture.
Environmental issues
The Group is not subject to direct environmental regulations under Commonwealth or State legislation.
On-Market buy back
The Company has not undertaken any on market buy backs and there also is currently no on-market buyback.
6
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
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 SRJ’s 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 206,250 ordinary fully paid shares and 1,646,667 CDIs, which excludes ordinary
shares/CDI’s held by AVI Partners Limited (AVI). Alexander Wood owns 18% of the issued share capital of AVI.
Mr Wood has not held any directorships in other listed companies during the last 3 years.
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, 660,799 CDIs, and 226,250 NED Rights.
Mr Pinchbeck has not held any directorships in other listed companies during the last 3 years that is not disclosed
above.
7
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
Roger Smith, Executive Director (appointed 15 January 2023)
Qualifications: BSc
Roger is SRJ’s Managing Director of UK, Europe and Middle East for SRJ and a senior member of the executive
management team. Prior to this Mr Smith had been the Non-Executive Chairman of SRJ for 4 years. Mr Smith joined
SRJ with over 35 years’ experience in the oil and gas industry, having served as a Senior Vice President of Petrofac Plc
and as a Non-Executive Director of Haydale Graphene Industries plc. He has also held the post of commercial Director
with Bureau Veritas. Mr Smith holds a bachelor’s degree in physics from University of Southampton.
Mr Smith has a relevant interest in 2,530,000 CDI’s
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.
8
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
Board meetings held and attended
During the financial year ended 31 December 2023, the following director meetings were held:
Director
Robin Pinchbeck
Alexander Wood
Roger Smith
*Excludes meetings held by circular resolution
Unaudited Remuneration Report
Eligible to attend
12
12
12
Attended*
11
12
12
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
Roger Smith
Stefan McGreevy
Paul Eastwood
Grant Mooney
Andrew Mitchell
Position
Chief Executive Officer
Non-Executive Chairman
Managing Director, Europe and MENA
Chief Financial Officer
Technical Director
Non-Executive Director (resigned)
Non-Executive Director (resigned)
Group entity
SRJ Technologies Group Plc
SRJ Technologies Group Plc
SRJ Technology Limited
SRJ Limited
SRJ Technology Limited
SRJ Technologies Group Plc
SRJ Technologies Group Plc
The Company’s policy for determining the nature and amount of emoluments of key management personnel is set out
below;
Key Management Personnel (KMP) Remuneration and Incentive Policies
Due to the resignation of two Non-Executive board members the duties of the Remuneration and Nominations
Committee (“the Committee”) has been assumed back into the board. Remuneration levels for Directors and senior
executives of the Company are competitively set 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 Group’s remuneration
strategy. No such advice was obtained during the current year.
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;
the Group’s performance; and the amount of incentives within each Director's and senior executive’s
remuneration
9
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
Unaudited Remuneration Report (continued)
In order to fulfil its responsibilities the Board shall;
a) Executive Remuneration Policy
i.
ii.
iii.
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.
Review the on-going appropriateness and relevance of the executive remuneration policy and other executive
benefit programs.
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.
ii.
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.
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 Board 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 Board reviews 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.
ii.
iii.
iv.
v.
Review and approve any equity-based plans that may be introduced (Plans) in the light of legislative, regulatory
and market developments.
For each Plan, determine each year whether awards will be made under that Plan.
Review and approve total proposed awards under each Plan.
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 Board.
Review, approve and keep under review performance hurdles for each equity-based Plan.
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.
10
SRJ Technologies Group Plc
Directors’ Report
For the year ended 31 December 2023
Unaudited 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:
Short term benefits
Employee costs 1
Post employment benefits
Superannuation
Share based payments
Equity settled performance
rights
Total
Key Management
Personnel
Position
Commenced
Term
2023
£
2022 8
£
2023
£
2022 8
£
2023
£
2022 5,8
£
2023
£
2022 8
£
Robin Pinchbeck Non-Executive
19/11/2019
Grant Mooney
Chairman
Non-Executive Director
02/06/2020
Andrew Mitchell
Non-Executive Director
18/06/2020
Alexander Wood Chief Executive Officer
01/08/2011
Roger Smith
Stefan
McGreevy
Paul Eastwood
Managing Director,
Europe and MENA
Chief Financial Officer
01/10/2019
01/11/2019
Technical Director
01/01/2020
2
2 7
2 6
3 4
3 4
3 4
3 4
25,000
24,547
-
-
10,479
11,338
-
-
-
144,221
235,177
6,336
134,678
173,499
173,741
172,942
-
-
-
-
-
-
-
-
166,632
167,537
9,730
9,730
-
-
-
-
-
-
-
25,453
25,000
50,000
11,951
11,951
-
-
22,430
23,289
-
-
-
-
150,557
235,177
134,678
173,499
173,741
172,942
176,362
177,267
644,272
795,519
16,066
9,730
49,355
660,338
854,604
Notes:
1) Employee costs comprise director & management fees/salaries, employer social security/national insurance, private medical cover and commercial vehicle benefit (A. Wood only). No cash bonuses were paid in 2023
or 2022.
2) The term expires at the next annual meeting where the position is up for re-election. Appointed Director on 19 November 2019
3) No fixed term. A Wood appointed Director on 29 April 2014 and R Smith appointed on 15 January 2023
4) Comparative short-term benefits restated to include private medical cover (all) and commercial vehicle benefit (A. Wood only)
5) Refers to the total value of new performance rights awarded in the year (share based payments).
6) Resigned on 29 December 2022.
7) Resigned on 14 January 2023
8) The 2022 comparatives have been restated to include health insurance (see note 8 in the Financial Statements).
11
SRJ Technologies group Plc
Directors’ Report
For the year ended 31 December 2023
Unaudited Remuneration Report (continued)
Share-based Compensation
Performance/NED Rights* issued as Remuneration
There were no performance rights issued during 2023.
Additional Disclosures relating to Key Management Personnel
Shareholding
The number of shares/CDI’s in the Company held during 2023 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
Roger Smith
Stefan McGreevy
Paul Eastwood
Balance as at
1 January 2023
Additions/(disposals)
696,934*
206,250
2,530,000*
-
760,000*
165,000
1,646,667*
-
1,140,000*
-
Balance as at
31 December 2023
861,934
1,852,917
2,530,000
1,140,000
760,000
* this includes Performance Rights exercised in 2022 and 2023 but not NED Rights held by Robin Pinchbeck or shares
held by AVI Partners Limited, a company which Alexander Woods holds 18% of the issued share capital.
12
SRJ Technologies group Plc
Directors’ Report
For the year ended 31 December 2023
Performance/NED Rights
The number of Performance/NED Rights held during the financial year ended 31 December 2023 by the key
management personnel, including their personally related parties, is set out below:
Key Management
Personnel
Alexander Wood
Robin Pinchbeck
Roger Smith
Stefan McGreevy
Paul Eastwood
Grant Mooney
Andrew Mitchell
Balance as at
1 Jan 2023
1,646,667
226,250
-
1,140,000
-
106,237
106,237
Exercised
NED Rights
-
-
-
-
-
(106,237)
(106,237)
Performance
Rights forfeited
-
-
-
-
-
-
-
Performance
Rights exercised
(1,646,667)
-
-
(1,140,000)
-
-
-
Balance as at
31 Dec 2023
-
226,250
-
-
-
-
-
Other Transactions with Key Management Personnel and/or their Related Parties
On 22 December 2023, Alexander Wood provided the Company with a short term unsecured, interest free loan to
cover working capital requirements which was settled on 4 January 2024. 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
or supplier relationships on terms no more favourable than those reasonably expected under arm’s length dealings with
unrelated persons.
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 Partners Limited, continued to rent office space to the Company, the
annual charge for this is £24,000 but reduced to £15,000 because of an internal move within the offices from 1
December 2023
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.
Details of the amounts paid to the auditor 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, 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: 27 March 2024
13
SRJ Technologies Group Plc
ASX Additional Information
For the year ended 31 December 2023
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
Jindabyne Capital Pty Ltd
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
Top Twenty securityholders
Ordinary shares and CDI’s combined
Number of
securities
26,541,164
23,923,992
9,381,474
% of issued
combined
15.64%
14.10%
5.53%
Number of
holders
Number
combined
37
21,182
432,689
141
829,304
102
244
9,605,760
139 158,775,995
663 169,664,930
The names of the twenty largest holders of Ordinary shares and CDI’s combined are listed below:
Name
AVI Partners Limited
Jindabyne Capital Pty Ltd
Solibay Capital Partners Inc
Raleigh Atlantic Ltd
BNP Paribas Noms Pty Ltd
Mr Xuan Khoa Pham
Citicorp Nominees Pty Limited
Smarim Pty Ltd
Steadygrowth Fund Pty Ltd
J P Morgan Nominees Australia Pty Limited
H Custody Nominees (Australia) Limited
Sealyham Investments Limited
Eftech International Sdn Bhd
Dropmill Pty Ltd
Alexander Wood
Harry Mitchell
Roger Smith
New Street Trust Limited
Warbont Nominees Pty Ltd
Mr D Milner & Mrs A Milner
Top Twenty Security holders total
Remaining Securityholders
14
Number of
securities
26,541,164
23,923,992
9,381,474
7,720,936
7,532,955
4,464,041
3,825,878
3,386,272
3,000,000
2,977,559
2,753,405
2,376,000
1,999,704
1,933,362
1,852,916
1,850,530
1,833,333
1,798,500
1,529,151
1,430,926
112,112,098
57,552,832
169,664,930
% of issued
combined
15.64%
14.10%
5.53%
4.55%
4.44%
2.63%
2.25%
2.00%
1.77%
1.75%
1.63%
1.40%
1.18%
1.14%
1.09%
1.09%
1.08%
1.06%
0.90%
0.85%
66.08%
33.92%
100.00%
SRJ Technologies Group Plc
ASX Additional Information
For the year ended 31 December 2023
Restricted Securities
There are no restricted securities at present.
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/corporate
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 Depository Nominees to vote on their behalf.
Marketable securities
There are no holders holding less than a marketable parcel of securities.
15
SRJ Technologies Group Plc
Statement of Directors Responsibilities
For the year ended 31 December 2023
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.
16
INDEPENDENT AUDITOR’S REPORT
To the members of SRJ Technologies Group PLC
Opinion
We have audited the consolidated financial statements of SRJ Technologies Group PLC for the year ended
31 December 2023 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 Kingdom Accounting Standards including Financial Reporting Standard 102
‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally
Accepted Accounting Practice).
In our opinion, the consolidated financial statements:
give a true and fair view of the state of the Group’s affairs as at 31 December 2023 and of the Group’s
loss for the year then ended;
are in accordance with United Kingdom Generally Accepted Accounting Practice
comply with the Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and applicable law.
Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the
audit of the financial statements’ section of our report. We are independent of the Group in accordance with
the International Ethics Standards Board for Accountants’ 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.
Material uncertainty related to going concern
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 £1,287,675 (31 December 2022: £3,225,330) and as at 31 December 2023 was in a
net asset position of £418,274 (31 December 2022: £677,553). The Directors’ evaluation of the Group’s
ability to continue as a going concern is also described in note 2.3. The Directors acknowledge the
uncertainty over the timing of cash inflows and forecasted additional sales. To ensure there are sufficient
financial resources to fund the anticipated revenue growth and support the operational activities, the
Company undertook an equity fund raise in February and March 2024, and received binding commitments
for £311,528 (A$601,250). It is however acknowledged that they, the Company, may be required to
undertake another fund raise in Q2 2024 either through debt or equity as a result of a material uncertainty
over the timing of cash inflows and sales levels. These events or conditions, along with other matters set
forth in note 2.3, indicate that a material uncertainty exists that may cast a significant doubt in the ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
Audit scope
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.
17
Materiality
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
£19,000 (2022: £28,000)
How we determined it
1.5% (2022: 1.5%) of the Group’s
total assets as of 31 December 2023
Rationale for the materiality benchmark
We believe that total assets is 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 the financial position of the
Group. 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, and 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 with the consideration that the
Group is listed on the Australian Stock
Exchange and, therefore, is considered to be
a Public Interest Entity. .
Key audit matters
Key audit matters, in addition to the matter described in the Material uncertainty related to going concern
section are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated 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.
The key audit matter
Under ISA 240 there is a presumed risk
that revenue may be misstated due to the
improper recognition of revenue
Revenue is a significant driver of the
Group’s operations and is a key focus of
the board. The increase in revenues
during the period required specific
attention and focus.
The Group’s accounting policy on revenue
is shown in Note 2.5 and the related
How the matter was addressed in our audit
Our audit work included, but was not restricted
to:
Obtained our understanding of
the
processes, policies, and controls in relation
to the recognition of revenue;
Compared the revenue recognition policies
the
financial reporting
the Group against
adopted by
requirements of
framework;
the
We tested revenue on a sampling basis and
supporting documentation
agreed
to
18
The key audit matter
disclosures are included in Note 4 of the
consolidated financial statements
Impairment of intangible assets
At 31 December 2023, the Group carried
a balance on Intangible Assets of
£669,601. 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.
The Group’s accounting policy on
intangible assets is shown in Note 2.11
and 2.12 and the related disclosures are
included in Note 10 of the consolidated
financial statements
How the matter was addressed in our audit
including subsequent receipts of
income earned during the year.
those
We have assessed the revenue recognition
policy and its application and challenged
management on its implementation; and
We considered the appropriateness of the
debtors included at year end and agreed
significant amounts to supporting invoices
and subsequent bank
receipts where
appropriate.
Key observations
As a result of our work, we noted an issue in the
application of the company’s revenue recognition
policy. After discussion with those charged with
governance the company made a decision to
reverse the invoice.
Our audit work included, but was not restricted
to:
We assessed the accounting policies for
intangible assets to ensure that this was
compliant with the requirements of the
United Kingdom Generally Accepted
Accounting Practices and reviewed the
basis of the carrying value of the intangible
assets as at the balance sheet date which
has been calculated at cost less impairment
and amortised over 13 years.
We tested additions on a sample basis to
supporting documentation, and assessed
the Group’s
the appropriateness of
capitalisation
accounting
standards.
policy
to
We obtained and reviewed management’s
assessment of the indications of impairment
as at year end. We
the
assessment and critically evaluated the
judgement made by management based on
our knowledge of the Group’s legal and
economic environment. Consideration was
given
internal
the
indications of impairment;
to external and
reviewed
to
whether the market value of the
intangible assets has declined
during the year as a result of the
passage of time or normal use;
whether significant changes with an
adverse effect on the Group have
taken place during the period, or will
take place in the near future , in the
technological, market, economic or
legal environment in which the
Group operates;
whether significant changes with an
adverse effect on the Group have
taken place during the year or are
19
The key audit matter
How the matter was addressed in our audit
expected to take place in the near
future, in the extent to which, or
manner
the asset
underlying the intangible asset is
expected to be used
in which
Any evidence available
from
internal reporting that indicates that
the economic performance of the
intangible asset is, or will be, worse
than expected.
Key observations
As a result of our work, there were no issues noted. In
that no
addition, where management determined
these
that
impairment was
judgements were
reasonable
assumptions that would require significant downside
changes before any material impairment arises.
required, we
supported
found
by
Other information in the Annual Report
The directors are responsible for the other information. The other information comprises the information
included in the ‘Directors Report and Consolidated Audited Financial Statements’, other than the financial
statements and our auditor’s 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.
Matters on which we are required to report by exception
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:
we have not received proper returns adequate for our audit from branches not visited by us; or
we have not obtained all the information and explanations, which to the best of our knowledge and
proper accounting records have not been kept by the Group; or
the Group financial statements are not in agreement with the accounting records; or
belief, are necessary for the purposes of our audit.
Responsibilities of the directors for the consolidated financial statements
As explained more fully in the statement of directors’ 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 Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
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 auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs 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,
20
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 circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors.
Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
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.
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 auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Section 113A of the
Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Company and the Company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
Alexander Ross Langley
For and on behalf of Grant Thornton Limited
Chartered Accountants
St Helier
Jersey
27 March 2023
21
SRJ Technologies Group Plc
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2023
Turnover
Cost of sales
Gross profit
Administrative expenses
Other operating income (R&D tax credits)
Operating loss
Interest payable
Loss for the financial year
Other comprehensive income:
Gain 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
2023
£
Year ended
31 December
2022
£
1,561,020
932,206
(251,986)
(391,470)
1,309,034
540,736
(2,539,029)
(3,798,423)
84,326
35,097
(1,145,669)
(3,222,590)
(142,006)
(2,740)
(1,287,675)
(3,225,330)
2,058
12,700
(1,285,617)
(3,212,630)
(1,285,617)
(3,212,630)
(0.009)
(0.030)
There were no recognised gains and losses for the year ended 31 December 2023 or year ended 31 December 2022 other than those
included in the consolidated statement of comprehensive income.
The notes on pages 26 to 41 form part of these financial statements.
22
SRJ Technologies Group Plc
Consolidated Statement of Financial Position
As at 31 December 2023
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
Loans payable
Net current assets / (liabilities)
Non-current liabilities
Creditors: amounts falling due after one year
Net assets
Capital and reserves
Issued share capital
Share premium account
Share based payment reserve
Translation reserve
Retained earnings
Notes
9
10
11
12
13
14
15
17
17
7
31 December
2023
£
31 December
2022
£
669,601
38,082
762,853
161,108
707,683
923,961
84,470
-
25,980
369,473
128,456
366,610
559,539
582,399
952,129
(793,130)
(738,174)
(50,000)
(421,350)
(843,130)
(1,159,524)
(260,731)
(207,395)
(28,678)
418,274
(39,013)
677,553
30,848
24,197
18,141,907
15,216,406
-
1,905,814
8,470
6,412
(17,762,951)
(16,475,276)
418,274
677,553
The financial statements were approved and authorised for issue by the board on …................ and were signed on its behalf by:
Alexander Wood
Director
Date:
The notes on pages 26 to 41 form part of these financial statements.
23
27 March 202427 March 2024
SRJ Technologies Group Plc
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2023
At 1 January 2022
Total comprehensive loss for the year
CDIs issued during the year (note 17)
Issue of share awards (note 7)
Called up
share
capital
£
Share
premium
£
Share based
payment
reserve
£
Translation
reserve
£
Retained
earnings
£
Total equity
£
21,639
13,606,004
1,176,588
(6,288)
(13,249,946)
1,547,997
-
2,558
-
-
1,610,402
-
-
-
729,226
12,700
(3,225,330)
(3,212,630)
-
-
-
-
1,612,960
729,226
At 31 December 2022
24,197
15,216,406
1,905,814
6,412
(16,475,276)
677,553
Total comprehensive loss for the year
CDIs issued during the year (note 17)
Issue of share capital in lieu of fees and repayment of convertible
loan notes (note 17)
-
3,117
-
629,751
2,273
415,850
-
-
-
Issue of share capital on exercise of employee and NED rights
(note 7)
1,261
1,879,900
(1,881,161)
Adjustment to SBPR re previous year (note 7)
-
-
(24,653)
2,058
(1,287,675)
(1,285,617)
632,868
418,123
-
(24,653)
-
-
-
-
-
-
At 31 December 2023
30,848
18,141,907
-
8,470
(17,762,951)
418,274
The notes on pages 26 to 41 form part of these financial statements.
24
SRJ Technologies Group Plc
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2023
Cash flows used in operating activities
Loss for the financial year
Adjustments for:
Amortisation of intangible assets
Depreciation of tangible assets
Loss on disposal of fixed assets
Interest paid
Share based payments for directors' fees
Fees settled by issue of CDIs
Unvested share based payments awarded
Unrealised (gain)/loss on foreign exchange
Decrease/(increase) in inventory
Decrease in BoltEx® stock inventory
Increase in debtors
Increase/(decrease) in creditors
Net cash used in operating activities
Cash flows from investing activities
Purchase of intangible fixed assets
Adjustment re GST refund
Net cash used in investing activities
Cash flows from financing activities
Issue of ordinary shares/CDIs
Repayments towards finance lease
Interest paid
Directors' loans
Repayment of directors' loans
Drawdown of convertible loan notes
Repayment of convertible loan notes
Net cash provided/(used in) from financing activities
Notes
Year ended
31 December
2023
£
Year ended
31 December
2022
£
(1,287,675)
(3,225,330)
112,237
23,417
2,178
142,006
(24,653)
175,899
-
(9,094)
1,194
37,747
(2,863)
55,374
109,537
108,392
-
2,740
72,175
-
657,052
12,002
(1,464)
-
(89,205)
(174,308)
10
(774,232)
(2,528,409)
(18,985)
-
(18,985)
(39,624)
3,956
(35,668)
632,868
(10,754)
(142,006)
50,000
(421,350)
775,602
(497,845)
386,515
1,612,960
(6,019)
(2,740)
421,350
-
666,185
(666,185)
2,025,551
Net decrease in cash and cash equivalents
(406,702)
(538,526)
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
Realised foreign exchange gain on repayment of convertible loan notes
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:
Cash at bank and in hand
The notes on pages 26 to 41 form part of these financial statements.
25
2,058
9,094
(35,533)
(24,381)
559,539
128,456
12,700
(12,002)
-
698
1,097,367
559,539
128,456
559,539
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
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. The Company also owns 100% of the issued share capital of Acorn Intellectual Properties Limited,
a Company incorporated in Jersey which has the primary activity of holding intellectual property.
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
management to exercise judgment in applying the Group's accounting policies (see Note 3).
financial statements requires the use of certain critical accounting estimates.
It also requires Group
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, the acquiree's identifiable assets,
liabilities and contingent 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 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 £1,287,675 (31 December 2022: £3,225,330) and as at 31 December 2023
was in a net asset position of £418,274 (31 December 2022: £677,553). In assessing the going concern of the Group, management
have prepared cash flow forecasting and performed sensitivity analysis as to whether the Group has adequate funding to meet its
short-term liabilities in the 12 months following approval of the financial statements. Key considerations are outlined below.
26
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
2. Summary of significant accounting policies (continued)
2.3 Going concern (continued)
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 2024 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. To ensure
there are sufficient financial resources to fund the anticipated revenue growth and support the operational activities, the Company
undertook an equity fund raise in February/March 2024 and received binding commitments for A$601,250 (£311,528). However, it
is acknowledged that the Company may be required to undertake another fund raise in Q2 2024, either through debt or equity, as
a result of material uncertainty over the timing of cash flows and sales levels.
These circumstances indicate that a material uncertainty exists that may cast signficant doubt over the Group's ability to continue
as a going concern. However, the Directors remain confident that cash flows and increased sales can be achieved and therefore
the financial statements have been prepared on a going concern basis.
2.4 Foreign currency
translation
Functional and presentation currency
The Company's functional currency is Pound Sterling (£) which is the presentation currency of the group consolidated financial
statements.
Foreign translation
In the Group’s 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 the dates of the
transactions.
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.
27
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
2. Summary of significant accounting policies (continued)
2.5 Revenue
Turnover
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, after considering 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.
The Group received revenue from operating leases in relation to rental equipment. The revenue was recognised and accounted for
on a straight line basis over the term of the lease. The risks and rewards incidental to ownership remained with the Group.
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 receives revenue from a revenue sharing agreement. The Group receives 10% of revenues generated by the customer
from the rental by the customer of SRJ BoltEx® products. Revenues due under the agreement are declared to the Group monthly
and recognised as revenue in the period to which the rentals relate.
The Group is not significantly affected by seasonality or cyclicality of operations.
Other operating income
Other income 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.
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 set out in FRS102 relating to such costs 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 Interest income
Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.
2.8 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.
28
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
2. Summary of significant accounting policies (continued)
2.9 Pensions
Defined contribution
pension plan
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.
2.10 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.
2.11 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
prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
lives and amortisation methods are reviewed, and adjusted
2.12 Impairment of assets
Non-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.
29
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
2. Summary of significant accounting policies (continued)
2.13 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, with the exception of motor vehicles which is on a reducing balance 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%
25%
Straight line basis
Straight line basis
Straight line basis
Straight line basis
Straight line basis
Reducing balance basis
* Reclassified as rental equipment during 2022.
** Reclassified as inventory during the year (see note 11).
The depreciation method for the motor vehicle was changed from a straight line basis to a reducing balance basis during the year
ended 31 December 2022.
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.
2.14 Inventories
Inventories of parts 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.
The rental equipment initially used by the Group for leasing to third parties and therefore classified as fixed assets changed to
primarily being a selling model from the start of 2023. As such, the fixed assets were reclassified to inventory at a value equivalent
to the net book value brought forward, and subsequently adjusted for stock movements. The net realisable value of such assets on
reclassification is considered to be in excess of the existing net book value of the fixed assets reclassified based on selling price
achieved.
2.15 Debtors
Debtors 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.
2.16 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.
2.17 Creditors
Financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost
using the effective interest method.
30
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
2.18 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
Group’s foreign entities into £.
2.19 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.
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 instruments that are payable or receivable within one year, 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.
2.20 Convertible debt
A convertible loan note whereby the issuer is obligated to pay principal and interest, but the holder has an option to convert their
holding into a fixed number of equity shares of the issuer is classified as a compound financial
instrument. From the issuer’s
perspective such notes contains two elements, a financial liability represented by the obligation to deliver cash payments and an
equity element, represented by the obligation to deliver a fixed number of equity shares. For the conversion right to be classified as
an equity instrument, it must meet the 'fixed for fixed' criterion. This requires that a fixed amount of cash or other financial asset be
exchanged for a fixed number of equity instruments. A convertible loan note that allows for conversion into a variable number of
shares has no equity element.
The proceeds received on issue of the Group's convertible debt are allocated between a liability component and an equity
component in accordance with the substance of the agreement and FRS 102.
The amount initially attributed to the debt component (other than those with a maturity within one year) equals the discounted cash
flows using a market rate of interest that would be payable on a similar debt instrument without the option to convert. On
conversion, the debt element is credited to share capital and share premium as appropriate.
Where applicable,
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 equity element is 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.
After initial recognition the equity component is not remeasured, and the liability is measured at amortised cost where it meets the
criteria to be accounted for as a basic financial instrument.
31
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
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. 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. In assessing if there has been an indication of
impairment the Directors considered both external and internal factors dictated by FRS 102 alongside other considerations as to
the current position of the Company. A key factor considered was that revenues has increased in excess of 100% compared to the
previous period. An impairment assessment was performed and it was concluded that there was no impairment.
Useful life of intangible assets
The basis for estimate the useful life of intangible assets is disclosed in note 9.
Impairment of debtors
The Group makes an estimate of the recoverable value of trade and other debtors. When assessing the impairment of trade and
other debtors, the directors consider factors including current credit rating of the debtor, ageing profile of debtors and historical
experience.
4. Turnover
Turnover, analysed geographically between markets, was as follows:
Jersey
United Kingdom
Australia
Jersey
United Kingdom
Australia
5.
Interest payable
Finance lease interest
Interest on drawdown of convertible loan notes ("OID")
Interest on early repayment of convertible loan notes
General interest expense
31 December 2023
Rental
income
£
-
-
20,509
20,509
Services
rendered
£
26,301
55,112
5,146
86,559
31 December 2022
Rental
income
£
-
-
68,716
68,716
Services
rendered
£
47,666
150,158
8,576
206,400
Total
£
773,598
64,752
722,670
1,561,020
Total
£
654,064
189,288
88,854
932,206
Year ended
31 December
2023
£
Year ended
31 December
2022
£
2,063
111,012
28,611
320
142,006
2,740
-
-
-
2,740
Product
sales
£
747,297
9,640
697,015
1,453,952
Product
sales
£
606,398
39,130
11,563
657,091
32
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
6. Auditor remuneration
Annual audit
Interim review
Non-audit services
Year ended
31 December
2023
£
44,000
15,000
1,620
60,620
Year ended
31 December
2022
£
40,550
19,570
11,982
72,102
Non-audit services are provided by both Grant Thornton Limited (Channel Islands) and Grant Thornton Audit Pty Ltd. The non-
audit services in 2023 relate to the work performed by Grant Thornton Audit Pty Ltd for the review of the half yearly financial
statements (2022: IAR services for cleansing prospectus and the balance of fees in respect of financial, tax and other due diligence
in relation to a potential acquisition).
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 Employee Incentive Program (EIP), 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 - forfeited as performance criteria not met
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 at IPO therefore the performance criteria of Tranches 1 and 2 were
achieved on IPO. Tranche 3 had additional performance criteria relating to revenue targets that were not achieved and as such this
tranche of performance rights was forfeited and advised to the respective parties on 5 August 2022. The forfeiture had no profit or
loss impact due to the fact that management did not expect those revenue targets to be met and therefore no amounts were
recognised in relation to those awards.
On the grant date, the CDIs had fair value of A$0.50 each which represents the price at listing of the CDI's on the same date. The
expense to the Group in 2023 based on qualifying PRs issued is analysed as follows;
Directors remuneration
Staff remuneration
Consultancy fees
Fair value per
CDI
A$
0.50
0.50
0.50
No of
Performance
Rights
5,320,001
973,999
200,000
Year ended
31 December
2023
£
-
-
-
-
Year ended
31 December
2022
£
538,268
96,933
21,851
657,052
Performance Rights of 3,707,333 amounting to £1,046,799 were issued in March 2023 as CDIs.
33
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
7. Share based payments (continued)
Vested Performance Rights of 2,786,667 (including 1,646,667 to Alexander Wood) amounting to £786,841 were issued as CDI's in
September 2023.
NED Rights
Non-Executive Directors
No of
Performance
Rights
438,724
A NED Right is an entitlement to one fully paid ordinary share in the Company, issued under the SRJ Equity Incentive Plan. NED
Rights were granted to the Company’s non-executive Directors, being Mr Robin Pinchbeck, Mr Grant Mooney and Mr Andrew
Mitchell on 16 December 2022 for nil consideration and with a nil exercise price. These non-executive Directors agreed to forgo
their entitlement to be paid director fees in cash for the following amounts in 2022:
a) Mr Robin Pinchbeck - A$45,250;
b) Mr Grant Mooney - A$21,247; and
c) Mr Andrew Mitchell A$21,427.
These Directors instead received such number of NED Rights equal in value to these cash fees. NED Rights will lapse if it is not
exercised within 15 years of the grant date. The NED Rights may not be exercised within 90 days of the grant date. The NED Rights
are ‘restricted rights’ in that the NED Rights, and any Shares/CDIs issued upon exercise of a NED Right, may not be disposed of
prior to the date that the non-executive director ceases to hold office or employment with the Company, or prior to 15 years from
the grant date (if earlier) (Disposal Restriction).
The NED rights shares of 438,724 amounting to £47,521 were issued as CDIs in March 2023.
In the December 2022 financial statements, it was believed fees for October-December 2022 amounting to £24,653 would be
settled in CDIs. However, it subsequently transpired only fees owing as of September 2022 (£47,521) were to be settled in CDIs,
with the fees for October-December 22 remaining as a payable to the directors. An adjustment from the equity reserve was made
to payables, reducing the amount from the £72,174 initially provided to £47,521, as set out above.
8.
Remuneration of key management personnel and employees
Directors
Salaries and fees
Pension and superannuation costs
Health insurance
Share based payment awards
Employees and consultants
Wages and salaries
Pension and superannuation costs
Health insurance
Share based payment awards
Year ended
31 December
2023
£
Year ended
31 December
2022
£
As restated
635,349
16,066
8,923
-
660,338
835,196
9,730
9,678
538,268
1,392,872
Year ended
31 December
2023
£
Year ended
31 December
2022
£
As restated
587,315
52,277
15,169
-
654,761
684,204
69,175
18,891
118,784
891,054
The comparatives have been restated to disclose the health insurance costs for key management personnel separately from
employees and consultants.
34
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
8.
Remuneration of key management personnel and employees (continued)
Key management personnel are considered to be all directors of the Company, the Chief Financial Officer and Technical Director.
The average number of directors and employees of the Group during the year was 11 (2022: 13)
The cost of employees delivering consultancy services and engineering/operational support in delivering products is charged to
cost of sales in accordance with their hourly rate and time spent in delivering the service contract. In the year, wages and salaries
of £48,868 (2022: £147,839) was charged to cost of sales.
9.
Intangible fixed assets
Cost
At 1 January 2023
Additions
At 31 December 2023
Amortisation
At 1 January 2023
Charge for the year
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
Patents
£
545,116
18,985
564,101
223,847
48,801
272,648
Development
expenditure
£
Total
£
786,016
1,331,132
-
18,985
786,016
1,350,117
344,432
63,436
407,868
568,279
112,237
680,516
291,453
378,148
669,601
321,269
441,584
762,853
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
prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
lives and amortisation methods are reviewed, and adjusted
It should be noted that amortisation costs are included within administrative expenses within the Consolidated Statement of
Comprehensive Income.
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. An impairment
assessment was conducted and in assessing if there was an indication of impairment, the Directors considered both external and
internal factors dictated by FRS 102 alongside other considerations as to the current position of the Company. It was concluded
that no impairment was identified.
35
10.
Tangible fixed assets
Cost
At 1 January 2023
Additions
Reclassification
Disposals
At 31 December 2023
Depreciation
At 1 January 2023
Charge for the year
Reclassification
Written back on disposals
At 31 December 2023
At 31 December 2023
At 31 December 2022
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
Motor
vehicles
£
Rental
equipment
£
Plant and
machinery
£
Office
equipment
£
Computer
equipment
£
56,399
-
-
-
56,399
21,778
8,584
-
-
30,362
26,037
34,621
233,880
-
(233,880)
-
-
133,300
3,149
(136,449)
-
-
-
100,580
32,680
-
-
(9,354)
23,326
15,341
6,417
-
(7,176)
14,582
8,744
17,339
12,250
-
-
-
12,250
8,651
1,529
-
-
10,180
2,070
3,599
30,521
-
-
-
30,521
25,553
3,738
-
-
29,291
1,230
4,968
Total
£
365,730
-
(233,880)
(9,354)
122,496
204,622
23,417
(136,449)
(7,176)
84,414
38,082
161,108
Rental equipment was previously used by the Group for leasing to third parties and was subject to operating lease agreements. During 2023, the use of the rental equipment (BoltEx®
stock) changed primarily to being a selling model. As such, the fixed assets were reclassified as inventory at a value equivalent to the net book value (£97,431) at the time they were
transferred to stock. It should be noted that any equipment rented out under an operating lease continued to be classified as a fixed asset until such agreement ended, at which point it
was transferred to stock.
The vehicle cost was reduced in 2022 after an adjustment was subsequently made for GST reclaimable. This has not been accounted for as a prior year adjustment. The depreciation
policy of the vehicle changed at the beginning of the year from 10% straight line to 25% reducing balance. This has been applied prospectively as it is a change in estimation technique
not a change in accounting policy.
It should be noted that the motor vehicle is under a finance lease.
No indicators of impairment were noted during the period hence no impairment expense was recognised (2022: £nil). Assets on the fixed asset register that could not be located have
been written off as disposals.
36
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
11.
Inventory
BoltEx® stock
Inventory of parts - at cost
31 December
2023
£
31 December
2022
£
59,684
24,786
-
25,980
84,470
25,980
Management undertook an assessment of the value of parts alongside a Senior Engineer from SRJ. Such is the mark up
achievable on the finished products, the conclusion was made that the NRV was not lower than the cost.
The rental equipment fixed assets (BoltEx® stock) initially used by the Group for leasing to third parties changed to primarily being
a selling model during the year. As such, the fixed assets were reclassified to inventory at a value equivalent to the net book value
at the time of reclassification (£97,431), and subsequently adjusted for stock movements. The net realisable value of such assets
on reclassification is considered to be in excess of the existing net book value of the fixed assets reclassified based on selling price
achieved.
12. Debtors
Trade debtors
Other debtors
Prepayments and accrued income
Called up share capital not paid
13. Creditors: Amounts falling due within one year
Finance lease payable
Trade creditors
Deferred income
Accruals and other payables
31 December
2023
£
31 December
2022
£
261,554
204,968
50,465
36,877
57,454
91,015
-
33,750
369,473
366,610
31 December
2023
£
31 December
2022
£
8,160
8,578
474,109
101,101
209,760
793,130
536,568
-
193,028
738,174
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 (£56,399 excluding GST). The lease is for 60 months with interest
accruing at 4.99%. During the year, £10,753 and £2,063 of capital and interest respectively was paid.
37
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
14. Loans payable
Convertible loan notes (see note 16)
Directors' loans
31 December
2023
£
31 December
2022
£
-
50,000
50,000
-
421,350
421,350
In the year ended 31 December 2022, two directors agreed to provide an unsecured, interest free bridging facility of £421k in total,
with no fees, whilst the new convertible loan facility was being agreed. This was subsequently repaid on 11 January 2023. A further
£50,000 was loaned to the Group by one of the directors in December 2023. The loan is unsecured, interest free and repayable by
15 January 2024. This was subsequently repaid on 4 January 2024.
15. Creditors: Amounts falling due after one year
Finance lease payable
16. Convertible debt
31 December
2023
£
31 December
2022
£
28,678
39,013
On 15 February 2023 the Company signed an agreement for a convertible loan facility of A$3,500,000 of convertible securities (the
“Facility”).
Tranche 1 of the Facility with Mercer Street Global Opportunity Fund LLC ("Mercer") consisted of 1,610,000 Convertible Notes,
comprised of A$1,400,000 principal (“Principal Amount”) and A$210,000 Original
Issue Discount (“OID”) (Tranche1). Of this
amount, 862,500 Convertible Notes for A$750,000 (£422,495) was drawn down on 24 February 2023 with the remaining 747,500
Convertible Notes for a total of A$650,000 (£353,107) drawn down on 29 March 2023.
During the year, Mercer converted 525,000 of notes (value £278,863), equating to 10,500,000 shares.
Under the agreement, a further tranche of Convertible Notes in respect of the Second Convertible Security ("Second Tranche")
could be issued with an individual face value of A$1. This tranche was not drawn upon and the ability to issue notes under this
tranche has expired. The Tranche 1 Notes were convertible into common shares at 90% of
two (2) VWAPS
(“Conversion Price A”) during the fifteen (15) trading days immediately prior to notice of conversion by the Investor subject to a
minimum conversion price of A$0.05. As part of the fee for the facility, the Company issued to Mercer CDIs for nil consideration
equal to 3% of the Total Facility Amount of A$3,500,000, being 763,864 CDIs, calculated based on the 15 day VWAP of CDIs prior
to the date of the Convertible Securities Agreement. These CDIs were issued to Mercer at the same time as the Tranche 1
Convertible Notes.
the lowest
In September 2023, the Company repaid 1,085,000 of notes (value £572,218), being full settlement of the remaining convertible
including OID. Further to this, early repayment interest amounting to £28,611 ($54,250) was paid to Mercer on
loan notes,
settlement.
On issuing convertible debt, the Company allocates the proceeds between a liability component and an equity component in
accordance with the substance of the agreement and FRS 102. For the convertible loan facility signed in February 2023, the
Company had no unconditional ability to avoid settling at the maturity date. Mercer retained control and could either convert or
request repayment at the maturity date. As such, the amount drawn down is considered to be wholly debt in nature until any
conversion occurs. For the conversion right to be classified as an equity instrument, it must meet the 'fixed for fixed' criterion. This
requires that a fixed amount of cash or other financial asset be exchanged for a fixed number of equity instruments. The 'fixed for
fixed' criterion is not met here as the holder has the option to convert into a variable number of shares, hence the convertible debt
liability. The liability has been treated as a basic
does not contain an equity component and is wholly classified as a financial
financial
instrument measured at amortised costs as FRS 102 does not use the term 'embedded derivative' and there is no
requirement or ability for a company which chooses to account for financial instruments in accordance with the requirements of
sections 11 and 12 of FRS 102 to separate the host contract and embedded derivative.
38
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
16. Convertible debt (continued)
As part of the Facility the Company issued 10,400,238 Options to Mercer. The exercise price of each Option is A$0.168 and will
equate to one Ordinary share/CDI in the Company. The expiry date is March 2026. Management considered the fair value of the
Options with reference to the current Company share price and concluded it would not be appropriate to allocate any expense in
relation to the Options in this periods Statement of Comprehensive Income. Management will undertake a similar assessment at
the end of each reporting period.
The Company also previously issued 9,270,949 options to other parties as approved in the Company AGM in December 2022. The
exercise price of each Option is A$0.25 and will equate to one Ordinary share/CDI in the Company. The expiry date is October
2025. Management also considered the fair value of these options with reference to the current Company share price and
concluded it would not be appropriate to allocate any expense in relation to the options in this periods Statement of
Comprehensive Income. Management will undertake a similar assessment at the end of each reporting period.
17.
Issued capital
Allotted, called up and fully paid
169,664,930 (2022: 133,082,177) Ordinary shares of £0.00018181819 (2022:
£0.00018181819 each)
31 December
2023
£
31 December
2022
£
30,848
24,197
Movements in share capital during the year are reconciled as below;
31 December 2023
Allotted, called up and fully paid
Brought forward
Issued to investors (i)
At 31 December 2023
Shares in issue
133,082,177
36,582,753
169,664,930
Share
capital
£
24,197
6,651
30,848
Share premium
£
15,216,406
2,925,501
18,141,907
During the year an additional 36,582,753 shares were issued for total consideration of £2,932,152 (A$5,484,143).
Included in the above are the following:
Fees settled in CDI's (i)
Repayment of convertible loan notes and OID (ii)
31 December 2023
Shares in issue
2,007,173
10,500,000
12,507,173
Share
capital
£
364
1,909
2,273
Share premium
£
138,896
276,954
415,850
(i) Fees settled in CDI's were largely in respect of consulting fees payable by the Company for investor relations services,
conversion of performance rights as set out in IPO prospectus, fees in connection with the provision of the Mercer financing facility
and fees in relation to raising capital.
(ii) Relates to the conversion of 525,000 notes (10,500,000 shares) valued at £278,863 (£242,224 loan notes plus £36,639 OID).
39
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
17.
Issued capital (continued)
Allotted, called up and fully paid
At 31 December 2022
31 December 2022
Shares in issue
Share
capital
£
Share
premium
£
133,082,177
24,197
15,216,406
The ASX uses an electronic system called CHESS for the clearance and settlement of trades. The Company is a Jersey Company
incorporated under the Companies (Jersey) Law 1991, which does not recognise the CHESS system of holding securities.
Accordingly, to enable the securities to be cleared and settled electronically through CHESS, depositary instruments called CDIs
are issued. CDIs represent the beneficial interest in the underlying shares in a foreign company listed on the ASX and are traded in
a manner similar to shares of listed Australian companies. Each CDI represents an interest in one share of SRJ.
18. Related party transactions
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 £23,250 (31
December 2022: £24,000), equivalent to £2,000 per month to November 2023 and £1,250 per month from December 2023.
The Company has a Strategic Management Services consultancy agreement with Devi5e Pty, a Company owned by David Milner
who is a director of SRJ Tech Australia Pty Ltd. The expense in the year was £66,082 (2022: £99,198).
Jindabyne Capital Pty Ltd, a related party by virtue of having a significant shareholding in the Company, charged consultancy fees
of £32,107 ($60,000) to the Company during the year.
During the year key management personnel (defined as all directors of the Company, the Chief Financial Officer and Technical
Director) of the Group received total compensation of £660,338 (31 December 2022: £844,926) of employment and post-
employment benefits and £nil awards of share based payments (31 December 2022: £nil). See note 7 for further analysis of
directors' remuneration.
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
Roger Smith
Securities
861,934 Ordinary shares/CDIs
226,250 NED rights issued as CDIs
1,852,917 Ordinary shares/CDIs
2,530,000 Ordinary shares/CDIs
Further to the Ordinary Shares held directly by Alexander Wood there are 26,541,164 Ordinary Shares held by AVI Partners
Limited, a company in which Alexander Wood holds 18.0% of the issued shares. AVI Partners has a shareholding of 15.64% of the
undiluted shares in issue of the Group.
19. Leases for premises
The lease between SRJ Limited and AVI Partners Limited for the premises "Le Quai House" expired on 18 June 2021. Whilst a new
lease has not been signed, monthly rentals of £2,000 continued to be paid until November 2023. Following an internal office move
this monthly amount reduced to £1,250 from December 2023.
SRJ Technology Limited, rents offices for £15,500 per annum under a lease that expired on 6 January 2024. New lease terms are
currently being renegotiated.
SRJ Tech Australia Pty Ltd rents offices for A$1,600 per month on a rolling three-month lease.
40
SRJ Technologies Group Plc
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2023
20. Analysis of changes in net debt
Cash and cash equivalents
Cash at bank and in hand
Borrowings
Finance lease
Convertible loan notes
Borrowings total
Net debt
Non-cash changes relate to:
At 1 January
2023
£
559,539
Cash flows
£
(433,141)
Other non-
cash changes
£
2,058
At 31
December
2023
£
128,456
(47,591)
-
(47,591)
10,753
(277,757)
(267,004)
-
(36,838)
277,757
277,757
-
(36,838)
511,948
(700,145)
279,815
91,618
Cash at bank and in hand - relates to the gain on translation of the foreign subsidiary.
Convertible loan notes - relates to the conversion of 525,000 notes (10,500,000 shares) valued at £242,224 and a realised foreign
exchange gain of £35,533.
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
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.
The Company undertook a small equity fund raise in February/March 2024 that falls within the Company’s placement capacity. The
Company received binding commitments for A$601,250 via a placement of 8,016,666 CHESS Depositary Interests (CDIs)
representing underlying ordinary shares in the Company. Allotment of the CDIs is expected to occur on Thursday 28 March 2024.
22. Ultimate controlling party
In the opinion of the Directors there is no one ultimate controlling party of the Company due to no one investor having sufficient
voting rights to direct the operations of the company.
41