TANFIELD GROUP PLC FINANCIAL STATEMENTS
TANFIELD GROUP PLC
REPORT AND FINANCIAL
STATEMENTS 2020
Registered in England & Wales
Company number 04061965
TANFIELD GROUP PLC FINANCIAL STATEMENTS
REPORT AND FINANCIAL STATEMENTS 2020
SUMMARY OF CONTENTS
Directors and Advisors
Strategic Report
Directors’ Report
Corporate Governance
Directors’ Remuneration Report
Statement of Directors’ Responsibilities
Report of the Independent Auditor
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity Attributable to Equity Shareholders
Cash Flow Statement
Accounting Policies
Critical Accounting Estimates and Key Judgements
Notes to the Accounts
2
3
6
7
8
9
10
13
14
15
16
17
19
21
1
TANFIELD GROUP PLC FINANCIAL STATEMENTS
DIRECTORS AND ADVISORS
Chairman
Non-Executive Director
NOMINATED ADVISOR
WH Ireland
24 Martin Lane
London
London
EC4R 0DR
NOMINATED BROKER
WH Ireland
24 Martin Lane
London
London
EC4R 0DR
DIRECTORS
NON-EXECUTIVE
D Robinson
M Groak
SECRETARY
D Robinson
REGISTERED OFFICE AND ADVISORS
REGISTERED OFFICE
c/o Weightmans LLP
1 St James’ Gate
Newcastle upon Tyne
Tyne and Wear
NE99 1YQ
AUDITOR
RSM UK Audit LLP
1 St James’ Gate
Newcastle upon Tyne
NE1 4AD
SOLICITOR
Weightmans LLP
1 St James’ Gate
Newcastle upon Tyne
Tyne and Wear
NE99 1YQ
REGISTRAR
Link Group
10th Floor
Central Square
29 Wellington Road
Leeds
LS1 4DL
2
TANFIELD GROUP PLC FINANCIAL STATEMENTS
STRATEGIC REPORT
CHAIRMAN’S STATEMENT
International"), was,
The Company’s main investment, Snorkel International Holdings
LLC ("Snorkel
like many businesses,
impacted by the Covid-19 pandemic resulting in the first annual
reduction in sales for several years. The Board continues to
closely monitor performance and is hopeful that 2021 will see
increased sales levels, although it is not expected that 2021 will
see a return to the pre Covid-19 sales levels. Following Tanfield’s
51% joint venture partner Xtreme Manufacturing LLC (“Xtreme”),
via
its subsidiary SKL Holdings LLC (“SKL”) and Snorkel
International, filing a Summons and Complaint (the “US
Proceedings”) against the Company and its subsidiary HBWP Inc
(“HBWP”), the Board remains disappointed that an amicable
resolution has not been possible. The Board therefore continues
to seek advice and vigorously defend its position.
investment
The
continues to be held at nil value.
in Smith Electric Vehicles Corp. ("Smith")
NON-EXECUTIVES' REVIEW
Background
The Company is defined as an investment company with two
passive investments. This definition resulted from the disposal of
the controlling interest in Smith in 2009 and the formation of a
joint venture between Tanfield and Xtreme relating to the Snorkel
division in October 2013 (the “Joint Venture”). Tanfield currently
owns 5.76% of Smith and 49% of Snorkel International.
OVERVIEW
to retain an
Snorkel International
Tanfield continues
in Snorkel
International (currently valued at £19.1m, 2019: £19.1m)
consisting of a 49% interest and a preferred interest position,
incorporating a Priority Amount and a Preferred Return
(collectively the “Preferred Interest”), which it has held since the
Joint Venture was established in October 2013.
investment
Since the injection of working capital following the Joint Venture,
Snorkel achieved increased year on year sales levels however,
during 2020 the impact of the Covid-19 pandemic saw the first
reduction of sales. A summary of sales (unaudited) and the
operating loss (unaudited), excluding depreciation is shown
below:
Year
Sales
2020
2019
2018
2017
2016
2015
2014
$110.8m
$220.8m
$200.5m
$165.8m
$130.5m
$109.9m
$85.3m
Increase/
(decrease)
(50%)
10%
21%
27%
19%
29%
-
Operating profit/
(loss) excluding
depreciation
($12.3m)
$0.3m
$2.9m
$1.6m
($2.8m)
($10.6m)
($14.9m)
Despite the ongoing impact of the Covid-19 pandemic, the Board is not
aware of any market factors and have not been made aware of any
specific reason why sales growth should not be achieved in 2021,
when compared to 2020 sales, as the impact of the pandemic
continues to subside.
In October 2019, the Board received the US Proceedings, in which
Xtreme, via its subsidiary SKL and Snorkel International, allege that
Tanfield has refused to comply with its contractual obligations by not
agreeing to sign over its interest in Snorkel International for £nil
consideration. It is the Board’s belief that the intent of Tanfield, its
non-conflicted directors at the time and its shareholders, as well as
the contractual terms, require that the Preferred Interest is paid to the
Company before its 49% holding in Snorkel International can be
acquired. Notwithstanding that, in the Board’s opinion, payment of
the Preferred Interest is a clear requirement described in the Circular
that was distributed to shareholders in advance of shareholders
approving the contemplated transaction, Xtreme allege that this was
not their intent or understanding of the contemplated transaction
despite both they, and their advisers, reviewing and commenting on
the Circular prior to its distribution. They also allege that they do not
believe payment of the Preferred Interest is a requirement of the
contractual agreements.
The position of Xtreme, which is the premise of the US Proceedings, is
that while they accept that Tanfield received a 49% interest in Snorkel
International and an adjusted priority amount of $22.5m (adjusted
from the headline $50m value detailed in the Circular, and with
interest accruing) in exchange for contributing the entire Snorkel
division, including all its assets and intellectual property, to the Joint
Venture, and gave Xtreme a 51% controlling interest, they allege that
because Snorkel International, under Xtreme’s control, failed to
achieve a 12 month EBITDA of $25m prior to 30 September 2018, that
Tanfield’s $22.5m adjusted Priority Amount, plus accrued interest,
simply disappeared; allowing Xtreme to acquire Tanfield’s 49%
interest for £nil consideration.
Accordingly, in summary, it is alleged by Xtreme that the terms of the
transaction were such that after (a) Tanfield contributed all of the
assets and intellectual property of its Snorkel division to the Joint
Venture, which Snorkel’s own tax returns declare as having a net fair
market value of $45.5m, (b) Tanfield conceded management control
of the Snorkel division to Xtreme, (c) Xtreme ran the business as it saw
fit for approximately 5 years and Snorkel International failed to
achieve an annualized $25m EBITDA, (d) Tanfield’s value disappears
completely and Xtreme can take 100% ownership of Snorkel
International without paying any consideration to Tanfield.
The Board vigorously deny that this was the intent of the parties, or
the meaning of the contractual agreements. It would have made
absolutely no commercial sense to contribute the considerable value,
trade and assets of the Snorkel division, which both parties agreed
from the outset was fundamentally a viable company, while also
relinquishing control of the division, to then receive no consideration
for the considerable value contributed to the Joint Venture, because
the controlling party failed to achieve the target. The Board therefore
continues to seek advice and vigorously defend its position.
3
TANFIELD GROUP PLC FINANCIAL STATEMENTS
STRATEGIC REPORT (Continued)
Despite the allegations, which the Board believe are without
merit, the Board is currently of the opinion that the investment in
Snorkel International will result in a return to shareholders in the
future, but would like to draw your attention to the “Valuation of
Snorkel International holding” below and the critical accounting
estimates and key judgments on pages 19 and 20 which further
explain the potential risks.
Due to the risks involved with the ongoing different opinions regarding
the contractual agreements, it is possible the actual realisation of
value could be less, or more, than the current valuation. A number of
factors could influence the valuation of Snorkel International between
now and a potential realisation date, including the outcome of all
relevant legal proceedings, Xtreme’s negotiating stance and the
exchange rate at the time of any realisation.
As a result of the issues arising from the US Proceedings, Tanfield
also sought to preserve its position against Ward Hadaway, the
Company’s former solicitor, as, depending on the outcome of the
US Proceedings, the Company may need to hold the firm to
account for its role in and/or advice to Tanfield in relation to the
Joint Venture transfer. Due to statutory time limitation issues,
and because a suitable Standstill Agreement - which would have
fully protected the Company - could not be agreed, it became
necessary for the Company to issue and serve a claim against
Ward Hadaway in the English High Court (the “UK Proceedings”)
in order to ensure that the Company's rights were fully protected
pending the outcome of the US Proceedings.
Both proceedings have continued to progress during 2020
however, due to Covid-19 and other factors, delays were
unavoidable. Further updates in relation to progress and timing
will be provided as and when appropriate. The outcome of the
US Proceedings, if completed before the UK Proceedings, may
have a direct and material impact on the UK Proceedings,
including the quantum of any claim.
Valuation of Snorkel International holding: £19.1
million (2019: £19.1 million)
On 30 September 2018 the fixed terms of the agreement came to
an end. In summary, if the trailing 12 month EBITDA had reached
$25m by 30 September 2018, this would have triggered payment
of the Preferred Interest, valued at £19.1m, which once paid,
would have allowed the Company to exercise its put option,
compelling the purchase / sale of Tanfield's remaining holding in
Snorkel International. As a $25m trailing 12 month EBITDA was
not reached by the deadline, the put option expired. Tanfield
retains a 49% interest in Snorkel International and, in the Board’s
opinion, the Preferred Interest, but it can no longer compel
Xtreme to pay the Preferred Interest and acquire its 49% interest.
The Board therefore remains of the opinion that the Preferred
Interest is the minimum payment required under the terms of the
contractual agreements for Xtreme to acquire Tanfield’s interest
and that this is therefore an appropriate basis for determining the
value the investment is to be carried at.
As the US Proceedings have been brought against Tanfield, it is
evident that Don Ahern, the owner of Xtreme, wishes to own
100% of Snorkel International. However, based on statements
within the US Proceedings, it is evident that Don Ahern does not
believe he should have to pay anything in order to acquire
Tanfield’s 49% of Snorkel International. One possible outcome is
that Tanfield continues to hold
interest for the
foreseeable future however, the Board does not believe such a
scenario would be in the best interest of shareholders given the
action taken by Don Ahern against the Company and, should it
become necessary, would consider options that may assist in
moving from this position.
its 49%
Due to these inherent uncertainties, the Board is unable to determine
whether the actual outcome will be less than the current valuation of
£19.1m, which it believes is underpinned by the value of the Preferred
Interest, so feel the valuation of £19.1m should be maintained. This
valuation has been assessed against various criteria, including
exchange rate fluctuations. The Board would like to draw the reader’s
attention to the critical accounting estimates and key judgments on
pages 19 and 20 which further explain the uncertainty and to the
Auditors’ report on pages 10 to 12 in which it is also highlighted.
Smith
In October 2014 Smith completed a restructuring exercise that saw it
convert debt to equity. As a result of this, they informed the Company
that its equity shareholding had reduced from 24% to 5.76% (excluding
warrants).
Since then, Smith has sought to raise funds which would allow it to
implement its strategic plan. To date, no significant fundraise has
been completed and the Board of Tanfield does not foresee this
happening in the immediate future.
Valuation of Smith holding
In 2015, the Board of Directors carried out a review of the investment
in Smith resulting in a decision to impair the investment value to £nil.
The Board understand that Smith has not been trading in recent years
and as Smith are unable to provide any certainty on its future, the
Board maintains its opinion that the investment value should be held
at £nil.
Strategy of Tanfield Board of Directors in relation to
its Investments
The Board believes its investment in Snorkel International will result
in a return of value to shareholders but cannot predict the timeframe
for such a return. With regard to Smith, due to the ongoing
uncertainty, the Board is unable to say, at this time, whether it will
result in a return of value to shareholders. The Directors will update
shareholders should this view change.
The strategy of the Company in relation to these investments is to
return as much as possible of any realised value to shareholders as
events occur and circumstances allow, subject to compliance with any
legal requirements associated with such distributions. The Board will
continue to fulfil its obligation to its shareholders in seeking to
optimise the value of its investments.
The investments are defined as passive investments and in line with
this definition Tanfield does not hold Board seats in either Snorkel
International or Smith. There is no limit on the amount of time the
existing investments may be held by the Company.
4
TANFIELD GROUP PLC FINANCIAL STATEMENTS
STRATEGIC REPORT (Continued)
Finance expense and income
Interest cost of £100k was incurred in the period (2019: £nil) and
interest income of £nil (2019: £1k) was received on bank
balances.
Loss from operations
The loss from operations before tax was £697k (2019: £317k), the
most significant difference compared to the prior year being
£100k of interest cost (2019: £nil) and an increase in legal fees
due to the ongoing US Proceedings and UK Proceedings.
Loss per share
Loss per share from continuing operations was 0.43 pence (2019:
0.20 pence). No dividend has been declared (2019: £nil).
Cash
At 31 December 2020, the Company had cash of £0.5m (2019:
£0.1m) and approximately £0.8m as at the date of this report.
£0.5m of cash is held on deposit with the English Court as security
in relation to the UK Proceedings.
Risks and uncertainties
Loan note instruments totalling £1.7m were put in place during
2020 with £1.5m of notes currently issued. Having discussed
matters with the Company’s shareholders, the directors believe
that, if required, the Company should be able to source sufficient
working capital, in the form of further loans, to provide the
resources to allow it to continue for a period of 12 months from
the date of this report. However, there is no guarantee if and
when a realisation of value from one of the investments will
happen, or of the costs associated in securing a realisation, and
the Board will closely monitor progress. It recognises that its
investments have a level of risk associated with them and is
somewhat reliant on their continued performance within their
markets.
The ongoing global Covid-19 pandemic is continuing to impact the
performance of the investment in Snorkel International but signs
are that Snorkel’s markets are starting to recover. However, at
this stage, it is not possible to estimate how long it will be until
the pandemic no longer impacts the performance of Snorkel. The
Board note that any impact would likely be limited to timing and
currently do not believe that it should alter what it believes to be
the minimum contractual value.
Section 172: Companies Act Statement
The Board takes seriously its duties towards a wide range of
stakeholders and acts in a way to ensure that its decision making
promotes the success of the Company for the benefit of these
stakeholders in accordance with Section 172. The Board’s ability
to do this is as a result of the Company status – as an investment
Company it has no employees or customers and its activities have
no impact on the wider community and environment. The
statements below provide further information as to how the
directors have had regard to the relevant matters.
The likely consequences of decisions in the long term. As discussed
earlier in this report, the sole aim of the Board is to maximise the
return to shareholders through its investment holdings. This is of
necessity a short-term focus, and the financial outcome will determine
the future position and strategy of the Company.
The need to foster the Company’s business relationships with suppliers
and the desirability of the Company to maintain a reputation for high
standards of business conduct. Engagement with suppliers is a key
part of the business as the Board looks to bring a resolution to its
investment position. Therefore, we are selective in the suppliers we
chose to work with, demonstrating the Board’s commitment to
maintaining high standards of business conduct and professionalism.
The need to act fairly between members of the Company.
Responsibility for investor relations rests with the Chairman. The
Board is committed to communicating openly with shareholders to
ensure that its strategy and performance are clearly understood.
The Annual General Meeting is the principal forum for shareholders,
and we encourage all shareholders to attend (where appropriate,
subject to Covid-19 restrictions) and participate. The notice of the
meeting is sent at least 21 days before the meeting. The Chairman of
the Board and other directors, where possible, are present and are
available to answer questions raised by shareholders. The Board
ensure regular communications are made to all shareholders via
periodic RNS announcements.
KPI's
The Board do not use any KPI's to monitor the performance of the
business.
Approved by the Board of Directors and signed on behalf of the Board
Daryn Robinson
Chairman
11 June 2021
5
TANFIELD GROUP PLC FINANCIAL STATEMENTS
DIRECTORS’ REPORT
The directors submit their report and the financial statements of
Tanfield Group Plc for the year ended 31 December 2020. Tanfield
Group Plc is a public listed company incorporated and domiciled
in England and quoted on AIM.
PRINCIPAL ACTIVITIES
The Company’s principal activity is that of an investment
company.
INVESTING POLICY
The holdings in Snorkel International Holdings LLC and Smith
Electric Vehicles Corp. are passive investments. It is the intention
that where distributions or realisations of such holdings are made
(or there is a receipt of marketable securities) that these are
distributed to shareholders, subject to compliance with any legal
requirements associated with such distributions. There
is
presently no anticipated limit on the amount of time the holdings
are to be held by the Company. The Company does not have and
will not make any cross holdings and does not have a policy on
gearing.
POLICY ON PAYMENT OF CREDITORS
It is Company policy to agree and clearly communicate the terms of
payment as part of the commercial arrangements negotiated with
suppliers and then to pay according to those terms based on the
timely receipt of an accurate invoice. The Company supports the CBI
Prompt Payers Code. A copy of the code can be obtained from the CBI
at Centre Point, 103 New Oxford Street, London WC1A 1DU.
Trade creditor days based on trade payables at 31 December 2020
were 37 days (2019: 72 days).
SUBSTANTIAL SHAREHOLDINGS
On 31 December 2020 the following held substantial shares in the
company. No other person has reported an interest of more than 3%
in the ordinary shares.
No.
%
HSBC GLOBAL CUSTODY NOMINEE
54,117,147
33.2%
CHASE NOMINEES LIMITED
36,746,672
20.7%
AURORA NOMINEES LIMITED
19,450,971
11.9%
RESULTS AND DIVIDENDS
The financial result for the year to 31 December 2020 reflects the
principal activity of the company being that of an investment
company.
VIDACOS NOMINEES LIMITED
12,734,252
THE BANK OF NEW YORK (NOMINEES)
12,507,684
LYNCHWOOD NOMINEES LIMITED
5,446,346
7.8%
7.7%
3.3%
Turnover for the year was £nil (2019: £nil). The operating loss in
the year of £597k (2019: £318k) arose from operating costs.
The statement of financial position shows total assets at the end
of the year of £19.6m (2019: £19.3m). Net Current Assets were
£0.5m (2019: £0.1m) with cash balances of £0.5m (2019: £0.1m).
Having discussed matters with the Company’s shareholders, the
directors believe that, if required, the Company should be able to
source sufficient working capital, in the form of further loans, to
provide the resources to allow it to continue for a period of 12
months from the date of this report. Note 19 provides details of
further loans already provided since the year end.
No dividend has been paid or proposed for the year (2019: £nil).
The loss of £697k (2019: £317k) has been transferred to reserves.
FINANCIAL INSTRUMENTS
The Company’s financial instruments comprise cash, non-current
investments, current receivables, current payables arising from
its operations and borrowings. The principal financial instruments
used by the Company during the year are cash balances raised
from borrowings. The Company has not established a formal
policy on the use of financial instruments but assesses the risks
faced by the Company as economic conditions and the Company’s
operations develop.
DIRECTORS’ INTEREST IN CONTRACTS
No director had a material interest at any time during the year in any
contract of significance, other than a service contract, with the
Company or any of its subsidiary undertakings.
AUDITOR
A resolution to reappoint RSM UK Audit LLP as auditor will be put to
the members at the annual general meeting. RSM UK Audit LLP has
indicated its willingness to continue in office.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR
The directors in office on the date of approval of the financial
statements have confirmed that, as far as they are aware, there is no
relevant audit information of which the auditor is unaware. Each of
the directors has confirmed that they have taken all the steps that they
ought to have taken as directors in order to make themselves aware
of any relevant audit information and to establish that it has been
communicated to the auditor.
DIRECTORS INDEMNITY
Every Director shall be indemnified by the Company out of its own
funds.
DIRECTORS
The present membership of the Board is set out on page 2.
Approved by the Board of Directors and signed on behalf of the Board
All directors have the right to acquire shares in the company via
the exercise of options granted under the terms of their service
contracts, copies of which may be inspected by shareholders
upon written application to the company secretary. Details of the
directors’ options to acquire shares are set out in the Directors’
Remuneration Report on page 8.
Daryn Robinson
Chairman
11 June 2021
6
The Board considers evaluation of its committees and individual
directors to be an integral part of corporate governance to ensure it
has the necessary skills, experience and abilities to fulfil
its
responsibilities. To ensure the skills and knowledge of the Board are
kept up to date, it works with its Nominated Advisor & Broker, Auditor
and Solicitor to ensure that any relevant new or amended accounting
standards and interpretations, AIM rules or Companies Act legislation
are fully understood and implemented.
The Board recognises that a corporate culture based on sound ethical
values and behaviours is an asset. In accordance with the Company’s
stated social responsibilities it endeavours to conduct its business in
an ethical, professional and responsible manner. As the Company has
no control over operational matters relating to its investments, it is
unable to influence the values and behaviours directly but it supports
a culture of dealings with both shareholders and investee companies
with integrity and respect.
The QCA Code is constructed around ten broad principles and a set of
disclosures. The QCA has stated what it considers to be appropriate
arrangements and asks companies to provide an explanation about
how they are meeting the principles through the prescribed
disclosures. We have considered how we apply each principle to the
extent that the board judges these to be appropriate in the
circumstances, and we provide a full explanation of the approach
taken in relation to each in the details of our approach to Corporate
Governance which can be found on the Company’s website
www.tanfieldgroup.com/about#governance. The board considers
that it does not depart from any of the principles of the QCA Code.
Going Concern
The directors are satisfied that the Company has access to adequate
resources to continue for a period of 12 months from the date of this
report. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
All members of the board believe strongly in the value and
in our
importance of good corporate governance and
accountability to all of Tanfield’s stakeholders,
including
shareholders and suppliers.
Changes to AIM rules on 30 March 2018 require AIM companies
to apply a recognised corporate governance code by 28
September 2018.
The corporate governance framework which the company
operates, including board leadership and effectiveness, board
remuneration, and internal control is based upon practices which
the board believes are proportional to the size, risks, complexity
and operations of the business and is reflective of the company’s
values. Of the two widely recognised formal codes, we have
therefore decided to adhere to the Quoted Companies Alliance’s
(QCA) Corporate Governance Code for small and mid-size quoted
companies (revised in April 2018 to meet the new requirements
of AIM Rule 26).
Tanfield is a passive investment company with investments in
Snorkel International and Smith. It is the intention that where
distributions or realisations are made that these are distributed
to shareholders, subject
legal
requirements associated with such distributions.
to compliance with any
The Board is mindful of and monitors its corporate risks. The main
risks the business faces are that the investments may not achieve
their operational goals, resulting in no realisation event and the
potential for disputes with the controlling shareholders as to the
terms of a realisation event should one occur. As a passive
investment company, the Board is not able to influence the
decision making or strategy of the investment companies and so
its ability to mitigate some risks is limited.
The Company operates as a passive investment company and has
put in place a board structure that can best provide the strategic
advice, leadership and continuity required. The board structure
consists of two non-executive directors, Daryn Robinson and
Martin Groak, both sitting on the PLC Board. Due to the nature of
the business, executive directors and an operational Board are
not deemed necessary and therefore the non-executive directors
are deemed not to be independent. During the year 8 board
meetings, all fully attended, took place.
The Board considers the Board composition in terms of skills,
experience and balance. Its committees seek external expertise
and advice where required. With only two Board members, due
to the limited activities of the Company, Board cohesion is
paramount and this is regularly reviewed. The Board members
have held roles and directorships in other publicly
listed
companies where they have gained a wealth of financial and
public market experience which collectively has provided them
with the balance of skills and expertise to deliver the business
strategy.
Daryn Robinson
Chairman
11 June 2021
7
TANFIELD GROUP PLC FINANCIAL STATEMENTS
DIRECTORS’ REMUNERATION REPORT
Remuneration committee
The company has established a Remuneration Committee which
is constituted in accordance with the recommendations of the
QCA Code. The members of the committee during the year were
D Robinson and M Groak and the committee was chaired by D
Robinson.
Remuneration policy
There were four main elements of the remuneration packages for
directors:
•
Basic annual salary (including directors’ fees) and
benefits;
Annual bonus payments;
Share option incentives; and
Pension arrangements.
•
•
•
Share options
The directors had options granted to them under the terms of the
Share Option Scheme which, as at the date of this report, have
expired. Share options were awarded as set out in the table below. No
new share options have been granted as at the date of this report.
Pension arrangements
Some directors were members of a money purchase pension scheme
to which the company contributed.
Directors interests
The interests of directors holding office at the year end in the
company’s ordinary 5p shares at 31 December 2020 and 31 December
2019 are shown below:
Number of shares
Basic salary
The basic salary of the directors is reviewed annually having
regard to the commitment of time required and the level of fees
in similar companies. Non-Executive Directors are employed on
renewable fixed term contracts not exceeding three years.
D Robinson
M Groak
Total
2020
942,785
40,000
982,785
2019
942,785
40,000
982,785
Annual bonus
The committee established the objectives which must be met for
each financial year if a cash bonus was to be paid. The purpose of
the bonus was to reward directors for achieving above average
performance which also benefits shareholders.
The directors, as a group, beneficially own 0.6% of the company’s
shares.
As at the date of this report, no director has any remaining right to
acquire shares in the company via the exercise of options granted
under the terms of their service contracts, copies of which may be
inspected by shareholders upon written application to the company
secretary.
Remuneration review
Directors emoluments for the financial year were as follows:
M Groak
D Robinson
Total
Salary
2020
£000's
20
61
81
Pension
2020
£000's
-
2
2
Total
2020
£000's
20
63
83
Salary
2019
£000's
20
52
72
Pension
2019
£000's
-
2
2
Total
2019
£000's
20
54
74
Directors share options held at 31 December 2020 were as follows:
M Groak
D Robinson
Total
31 December
2019
100,000
100,000
200,000
Granted/
(Lapsed)
(100,000)
(100,000)
(200,000)
Exercised
-
-
-
31 December
2020
-
-
-
a
On 31 December 2020 the market price of the ordinary shares was 2.54p. The range during 2020 was 1.45p to 4.79p
Option
price per
sharea
27p
27p
Date from
which normally
exercisable
02/02/2015
02/02/2015
Expiry Date
02/02/2020
02/02/2020
Approval
This report was approved by the board of directors and authorised for issue on 11 June 2021 and signed on its behalf by:
Daryn Robinson
Chairman
8
TANFIELD GROUP PLC FINANCIAL STATEMENTS
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Strategic
Report and the Directors’ Report and the financial statements
in accordance with applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law and the
AIM Rules of the London Stock Exchange the directors have
elected to prepare the financial statements of the company in
in
accordance with
conformity with the requirements of the Companies Act 2006.
international accounting standards
The financial statements are required by law and international
accounting standards in conformity with the requirements of
the Companies Act 2006 to present fairly the financial position
and performance of the company. The Companies Act 2006
provides
in relation to such financial statements that
references in the relevant part of that Act to financial
statements giving a true and fair view are references to their
achieving a fair presentation.
Under company law the directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the company and of
the profit or loss of the company for that period.
In preparing the financial statements, the directors are
required to:
a.
b.
c.
d.
select suitable accounting policies and then apply them
consistently;
make judgements and accounting estimates that are
reasonable and prudent;
state whether they have been prepared in accordance
with international accounting standards in conformity
with the requirements of the Companies Act 2006;
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that
the
the
Companies Act 2006. They are also responsible for safeguarding
the assets of the company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
statements
financial
comply
with
The directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Tanfield
Group Plc website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
9
TANFIELD GROUP PLC FINANCIAL STATEMENTS
REPORT OF THE INDEPENDENT AUDITOR
Independent auditor's report to the members of Tanfield Group Plc
Opinion
We have audited the financial statements of Tanfield Group
PLC (the ‘company’) for the year ended 31 December 2020
which comprise the Statement of Comprehensive Income, the
Statement of Financial Position, the Statement of Changes in
Equity Attributable to Equity Shareholders, the Cash Flow
Statement and notes to the financial statements, including
significant accounting policies. The
financial reporting
framework that has been applied in their preparation is
applicable law and International Accounting Standards in
conformity with the requirements of the Companies Act 2006.
In our opinion the financial statements:
•
give a true and fair view of the state of the company’s
affairs as at 31 December 2020 and of its loss for the
year then ended;
have been properly prepared
in accordance with
International Accounting Standards in conformity with
the requirements of the Companies Act 2006; and
in accordance with
have been prepared
requirements of the Companies Act 2006.
the
•
•
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the
company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to SME listed
entities and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our
evaluation of the directors’ assessment of the company’s
ability to continue to adopt the going concern basis of
accounting included a review of the forecasts prepared by
management and the assumptions underpinning these, along
with an assessment of the cash funding available to the
company to meet its commitments as they become due.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on
the company’s ability to continue as a going concern for a
period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Summary of our audit approach
•
Key audit matters - Carrying value of non-current investments
• Materiality - Overall materiality: £409,000 (2019: £405,000),
•
Performance materiality: £306,750 (2019: £304,000)
Scope - Our audit procedures covered 100% of revenue, 100%
of total assets and 100% of losses before tax.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on the overall audit strategy, the allocation of resources in the
audit and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Carrying value of non-current investment
Key audit matter description
Included in the Statement of Financial Position are non current
investments with a carrying value of £19.1m. This represents
holdings of 5% and 49% respectively in Smith Electric Vehicles US
Corp and Snorkel International Holdings LLC (‘Snorkel’). Note 6 and
the Accounting Policies of the financial statements describes the
judgements made by the Board with regards to the need for an
impairment to be booked in respect of each of these investments
and, in particular, the significant uncertainty concerning the
carrying value of the company’s £19.1m investment in Snorkel
International Holdings LLC. The investment in Smith Electric
Vehicles US Corp has already been fully impaired.
The investment in Snorkel represents the sole significant asset held
within the Statement of Financial Position of the company. As
described on pages 19 and 20 there are significant uncertainties
over the timing of any realisation, and the amount that might
ultimately be realised on this investment, that could have a
material effect on the recoverable amount. The realisation of this
investment for either more or less than its carrying value could
have a material impact on the financial statements.
The Board has limited financial and non-financial information upon
which to calculate/base its estimate of the realisation value and
timing thereof. The Critical Accounting Estimates and Key
Judgements disclosures on pages 19 and 20 set out the basis of the
Directors consideration of the fair value of the investment, based
on its expected recoverable amount, and the assumptions made
therein. The assessments and conclusion of the directors are based
on the Investment Circular setting out the Proposed Transaction
issued to Shareholders in September 2013, the legal advice
obtained at the time and subsequent to that date along with the
information received in respect of the financial performance and
position of Snorkel. The assessment made by the Directors as to
the sums falling due under the Investment Circular differs to the
assessment made by Xtreme, which has led to the commencement
of the initial stages of legal proceedings by Xtreme against the
company to obtain control of the remaining 49% of Snorkel. The
10
TANFIELD GROUP PLC FINANCIAL STATEMENTS
REPORT OF THE INDEPENDENT AUDITOR (CONTINUED)
directors have concluded that the most appropriate basis for
determining the carrying amount continues to be the amount
represented by the Preferred Interest element, which was
established at the time of the Transaction, and was the value
the investment in Snorkel was impaired to following the expiry
of the put option in 2018.
•
•
Basis for determining performance materiality - 75% of
overall materiality.
Reporting of misstatements to the Audit Committee -
Misstatements in excess of £4,090 and misstatements below
that threshold that, in our view, warranted reporting on
qualitative grounds.
As explained in the Critical Accounting Estimates and Key
Judgements section on pages 19 and 20, the timing of
realisation and the sum to be realised are dependent on
definitive clarification as to the legal position of the call option
still held by Xtreme. The eventual amount realised is also
dependent on the applicable rate of exchange at the time that
the US$ proceeds are converted into GBP.
As a result, there remains significant doubt over the timing and
value at which this asset will be realised.
How the matter was addressed in the audit
Our audit work has considered the nature of the financial and
other information held by management described above and
in the public domain, the assumptions used by management
to assess the estimated timing and realisable value of the
investment, and such other audit evidence as was available, to
form a view on the reasonableness of these assumptions,
estimates and calculations. We have also re-performed the
calculations undertaken by management of the expected
realisable value based on
information used by
management.
the
In carrying out our audit work we have considered and
challenged the range of outcomes used by the directors, the
conclusion the directors have reached about the reliability of
any alternative valuation and the disclosures made in the
financial statements, specifically in the Critical Accounting
Estimates and Judgements disclosures and in Note 6. We also
circularised the Company’s legal advisors in both the UK and
United States.
Our application of materiality
When establishing our overall audit strategy, we set certain
thresholds which help us to determine the nature, timing and
extent of our audit procedures. When evaluating whether the
effects of misstatements, both individually and on the financial
statements as a whole, could reasonably influence the
economic decisions of the users we take into account the
qualitative nature and the size of the misstatements. Based on
our professional judgement, we determined materiality as
follows:
• Overall materiality - £409,000 (2019: £405,000)
•
Basis for determining overall materiality - 2% of total
assets.
Rationale for benchmark applied - Consistent with prior
year, the company’s principal activity continues to be
that of an investment company. As such, we deemed
total assets to be the key benchmark for users of the
financial statements.
Performance materiality - £306,750 (2019: £304,000).
•
•
An overview of the scope of our audit
The company has been subject to a full scope audit.
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon.
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
course of 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
this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the
audit:
•
the information given in the Strategic Report and the
Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
the Strategic Report and the Directors’ Report have been
prepared in accordance with applicable legal requirements.
•
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the Strategic Report or the
Directors’ Report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
•
adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches
not visited by us; or
the financial statements are not in agreement with the
accounting records and returns; or
certain disclosures of directors’ remuneration specified by law
are not made; or
•
•
• we have not received all the information and explanations we
require for our audit.
11
TANFIELD GROUP PLC FINANCIAL STATEMENTS
REPORT OF THE INDEPENDENT AUDITOR (CONTINUED)
Responsibilities of directors
As explained more fully in the statement of directors’
responsibilities set out on page 9, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company’s ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the company or
to cease operations, or have no realistic alternative but to do
so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when
it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
The extent to which the audit was considered capable of
detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and
regulations. The objectives of our audit are to obtain sufficient
appropriate audit evidence regarding compliance with laws
and regulations that have a direct effect on the determination
of material amounts and disclosures
in the financial
statements, to perform audit procedures to help identify
instances of non-compliance with other laws and regulations
that may have a material effect on the financial statements,
and to respond appropriately to identified or suspected non-
compliance with laws and regulations identified during the
audit.
In relation to fraud, the objectives of our audit are to identify
and assess the risk of material misstatement of the financial
statements due to fraud, to obtain sufficient appropriate audit
the assessed
evidence
risks of material
regarding
through designing and
misstatement due
to
implementing appropriate
respond
appropriately to fraud or suspected fraud identified during the
audit.
responses and
fraud
to
However, it is the primary responsibility of management, with
the oversight of those charged with governance, to ensure
that the entity's operations are conducted in accordance with
the provisions of laws and regulations and for the prevention
and detection of fraud.
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud, the audit engagement
team:
•
obtained an understanding of the nature of the industry and
sector, including the legal and regulatory framework that the
company operates in and how the company is complying with
the legal and regulatory framework;
inquired of management, and those charged with governance,
about their own identification and assessment of the risks of
irregularities, including any known actual, suspected or
alleged instances of fraud;
discussed matters about non-compliance with laws and
regulations and how fraud might occur including assessment
of how and where the financial statements may be susceptible
to fraud.
•
•
The most significant laws and regulations were determined as:
in conformity with the
International Accounting Standards
Companies Act 2006 and the AIM listing rules. Additional audit
procedures performed by the audit engagement team were:
•
Review of the financial statement disclosures and testing
these to supporting documentation.
Completion of disclosure checklists to identify areas of non-
compliance.
Review of announcements made during the year via RNS.
•
•
The area that we identified as being susceptible to material
misstatement due to fraud was: the risk of management override
of controls. The audit procedures performed by the audit
engagement team included:
•
Testing the appropriateness of journal entries and other
adjustments;
Assessing whether
accounting estimates are indicative of a potential bias; and
rationale of any significant
Evaluating
transactions that are unusual or outside the normal course of
business.
judgements made
the business
in making
•
•
the
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting Council’s
website at: http://www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken 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.
ANDREW ALLCHIN FCA (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
1 St James’ Gate, Newcastle upon Tyne, NE1 4AD
11 June 2021
12
TANFIELD GROUP PLC FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Revenue
Staff costs
Other operating income
Other operating expenses
Loss from operations
Finance expense
Finance income
Loss from operations before tax
Taxation
Loss & total comprehensive income for the year attributable
to equity shareholders
Loss per share
Loss per share from operations
Basic and diluted (p)
Notes
2020
£000's
2019
£000's
1
3
2
2
4
-
(83)
18
(532)
(597)
(100)
-
(697)
-
(697)
-
(74)
23
(267)
(318)
-
1
(317)
-
(317)
5
(0.43)
(0.20)
13
TANFIELD GROUP PLC FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION (Company registration number 04061965)
AS AT 31 DECEMBER 2020
Non current assets
Non current Investments
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Non current liabilities
Borrowings
Current liabilities
Trade and other payables
Total liabilities
Equity
Share capital
Share premium
Share option reserve
Special reserve
Merger reserve
Retained earnings
Total equity attributable to equity shareholders
Notes
6
8
7
10
9
11
11
12
2020
£000's
19,100
19,100
24
524
548
2019
£000's
19,100
19,100
23
136
159
19,648
19,259
1,100
1,100
90
90
1,190
8,145
17,336
331
66,837
1,534
(75,725)
18,458
-
-
104
104
104
8,145
17,336
331
66,837
1,534
(75,028)
19,155
Total equity and liabilities
19,648
19,259
The financial statements on pages 13 to 27 were approved by the board of directors and authorised for issue on 11 June 2021 and
are signed on its behalf by:
Daryn Robinson
Chairman
14
TANFIELD GROUP PLC FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITY
SHAREHOLDERS
FOR THE YEAR ENDED 31 DECEMBER 2020
At 1 January 2019
Comprehensive income
Loss for the year
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:-
Issuance of new shares (note 11)
At 31 December 2019
Comprehensive income
Loss for the year
Total comprehensive income for
the year
At 31 December 2020
Total
£000's
19,247
(317)
(317)
Share
capital
Share
premiuma
£000's
7,920
£000's
17,336
Share
option
reserveb
£000's
331
Merger
reservec
Special
reserved
Retained
earningse
£000's
1,534
£000's
66,837
£000's
(74,711)
-
-
-
-
225
8,145
-
17,336
-
-
-
8,145
-
17,336
-
-
-
331
-
-
331
-
-
-
-
(317)
(317)
-
1,534
-
66,837
-
(75,028)
225
19,155
-
-
(697)
(697)
-
1,534
-
66,837
(697)
(75,725)
(697)
18,458
a The share premium account represents amounts subscribed for share capital in excess of nominal value, net of directly attributable share issue costs.
b The share option reserve represents the cumulative share-based payment expense.
c The merger reserve has arisen on the legal acquisition of subsidiary companies.
d The special reserve relates to a previous reclassification of the share premium account.
e The retained earnings represents the accumulated retained profits and losses less dividend payments.
15
TANFIELD GROUP PLC FINANCIAL STATEMENTS
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
Loss from operations
Adjustment for:
Finance costs
Changes in operating assets and liabilities / working capital:
Increase in receivables
(Decrease) / increase in payables
Net cash used in operating activities
Cash flow from Investing Activities
Interest received
Net cash from investing activities
Cash flow from financing activities
Proceeds from issuance of ordinary shares net of costs
Proceeds from borrowings
Net cash generated by financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the start of year
Cash and cash equivalents at the end of the year
2020
£000's
(697)
100
(1)
(14)
(612)
-
-
-
1,000
1,000
388
136
524
2019
£000's
(318)
-
(12)
52
(278)
1
1
225
-
225
(52)
188
136
16
TANFIELD GROUP PLC FINANCIAL STATEMENTS
ACCOUNTING POLICIES
(i) Basis of preparation of
the
financial
statements
Tanfield Group Plc is a public company incorporated in England
and quoted on AIM. These financial statements have been
prepared on the going concern basis in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006. The financial
statements have been prepared under the historical cost
convention, except for the revaluation of certain financial assets
and liabilities measured at fair value.
The financial statements present the company accounts only and
have not been consolidated as the adjustments made to the
financial statements upon consolidation would be immaterial.
The financial statements are prepared in sterling, which is the
functional currency of the company. Monetary amounts in these
financial statements are rounded to the nearest thousand.
the
financial
statements
The preparation of
requires
management to exercise its judgement in the process of applying
the company’s accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements, are
disclosed below in “Critical accounting estimates and key
judgements”.
(ii) Going concern
The financial statements have been prepared on the going
concern basis, which assumes that the Company will continue to
be able to meet its liabilities as they fall due for the foreseeable
future. At 31 December 2020 the Company had cash balances of
£0.5m and approximately £0.8m as at the date of this report,
with £0.5m held on deposit with the English Court as security in
relation to the UK Proceedings.
Having discussed matters with the Company’s shareholders, the
directors believe that, if required, the Company should be able to
source sufficient working capital, in the form of further loans, to
provide the resources to a) allow the Company to continue in
operation for a minimum of 12 months and b) see the legal
proceedings continue, possibly to a conclusion, during that
period. It is not currently expected that the ongoing Covid-19
pandemic will impact on this. Having taken the uncertainties into
account the Board believes it is appropriate to prepare the
financial statements on the going concern basis.
The Directors do not believe that the ongoing global Covid-19
pandemic will have a direct impact on the Company’s ability to
continue as a going concern due to the nature of its’ activities as
an investment company.
(iii) Foreign currencies
Transactions in currencies other than sterling, the presentational
currency of the company, are recorded at the rates of exchange
prevailing on the dates of the transactions. At each statement of
financial position date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the statement of financial position date.
17
Non-monetary assets and liabilities carried at fair value that are
denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined.
Gains and losses arising on retranslation are included in the income
statement for the period, except for exchange differences on non-
monetary assets and liabilities, which are recognised directly in
profit and loss.
(iv) Retirement benefit cost
The company operates a defined contribution pension scheme and
pays contributions to an externally administered pension plan. The
the
company has no
contributions have been paid. The contributions are recognised as
an employee benefit expense in the period in which they fall due.
further payment obligations once
(v) Share based payments
The Company issues equity-settled share-based payments to
certain employees and has applied the requirements of IFRS2
“Share-based payments”.
Equity settled share-based payments are measured at fair value at
the date of the grant. Fair value is measured using a Black-Scholes
model.
The fair value is expensed on a straight-line basis over the vesting
period, based on the Company’s estimate of shares that will
eventually vest.
(vi) Financial instruments
Recognition of financial assets and financial liabilities
Financial assets and financial liabilities are recognised on the
Company’s statement of financial position when the Company has
become a party to the contractual provisions of the instrument.
Financial assets
Investments
Investments are included at fair value with fair value gains and
losses recognised in profit or loss.
Trade and other receivables
Financial assets within trade and other receivables are initially
recognised at fair value, which is usually the original invoiced
amount and are subsequently carried at amortised cost less
provisions made for impairment.
Trade receivables do not carry any interest and are stated at their
nominal value as reduced by appropriate allowances for estimated
irrecoverable amounts.
An impairment loss is recognised for the expected credit losses on
receivables when there is an increased probability that the
counterparty will be unable to settle an instrument’s contractual
cash flows on the contractual due dates, a reduction in the
amounts expected to be recovered, or both.
Impairment losses and any subsequent reversals of impairment
losses are adjusted against the carrying amount of the receivable
and are recognised in profit or loss.
New and amended standards and interpretations
effective from 1 January 2021 not yet adopted by
the Company.
Certain new accounting standards and interpretations have been
published that are not mandatory for 31 December 2020 reporting
periods and have not been early adopted by the group. These
standards are not expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable future
transactions.
TANFIELD GROUP PLC FINANCIAL STATEMENTS
ACCOUNTING POLICIES (continued)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand less short-term
bank overdrafts.
liabilities and equity
Financial liabilities and equity
Financial
instruments are classified
according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences
a residual interest in the assets of the Company after deducting
all of its liabilities.
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction from the proceeds received.
Trade and other payables
Financial liabilities within trade and other payables are initially
recorded at fair value, which is usually the original invoiced
amount, and subsequently carried at amortised cost.
Borrowings
initially recognised at fair value, net of
Borrowings are
transaction costs
incurred. Borrowings are subsequently
measured at amortised cost. Borrowings are classified as current
liabilities unless the group has an unconditional right to defer
settlement of the liability for at least 12 months after the
reporting period.
(vii) Segmental reporting
In accordance with IFRS 8 operating segments are determined on
the basis of information reported to the chief operating decision-
maker for decision-making purposes. The Company considers
that it only has one segment and that the role of chief operating
decision-maker is performed by the Tanfield Group Plc's board of
directors.
(viii) Termination benefits
Termination benefits
(leaver costs) are payable when
employment is terminated before the normal retirement date, or
when an employee accepts voluntary redundancy in exchange
for these benefits. The Company recognises termination benefits
when it is demonstrably committed to the affected employees
leaving the Company.
Accounting standards,
amendments to published accounts
interpretations and
During the year ended 31 December 2020, the Company has
applied the following standards and amendments for the first
time:
•
•
Definition of Material – amendments to IAS 1 and IAS 8
Revised Conceptual Framework for Financial Reporting
The amendments listed above did not have any impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
18
TANFIELD GROUP PLC FINANCIAL STATEMENTS
CRITICAL ACCOUNTING ESTIMATES AND KEY JUDGEMENTS
The preparation of financial statements in conformity with IFRS
requires the use of accounting estimates and assumptions. It
also requires management to exercise judgement in the process
of applying the Company’s accounting policies. We continually
evaluate our estimates, assumptions and judgements based on
the most up to date information available.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below.
Investments
Smith
The status of the Company’s holding in Smith Electric Vehicles US
Corp was reviewed during the year. The Board previously advised
that the company had ceased operations and did not feel that
Smith had made sufficient progress towards achieving its plan of
obtaining a public listing to maintain the previous valuation and
had therefore decided to impair the investment in Smith to £nil.
Subsequently, no progress has since been made that gives rise to
an expectation of a realisation in value. As such, the Board is
maintaining its view that the investment currently has nil value.
Nevertheless, the Board acknowledges that there is a chance the
investment could result in a return to Shareholders and will
continue to monitor the investment. Should progress be made
in the future the valuation of the investment will be revisited.
Snorkel International
The status of the Company’s holding in Snorkel International
Holdings LLC was reviewed during the year. The Board has
concluded that, while Tanfield continues to retain an investment
in Snorkel International (currently valued at £19.1m), consisting
of a 49% interest and the Preferred Interest, under the terms of
the Joint Venture, they are unable to exercise significant
influence over the activities and strategic direction of Snorkel
International and therefore holding the investment as a trade
investment, as opposed to applying equity accounting, continues
to be the correct treatment.
Since the injection of working capital following the Joint Venture,
Snorkel achieved increased year on year sales levels however,
during 2020 the impact of the Covid-19 pandemic saw the first
reduction of sales. A summary of sales (unaudited) and the
operating loss (unaudited), excluding depreciation is shown
below:
Year
Sales
2020
2019
2018
2017
2016
2015
2014
$110.8m
$220.8m
$200.5m
$165.8m
$130.5m
$109.9m
$85.3m
Increase/
(decrease)
(50%)
10%
21%
27%
19%
29%
-
Operating profit/
(loss) excluding
depreciation
($12.3m)
$0.3m
$2.9m
$1.6m
($2.8m)
($10.6m)
($14.9m)
Despite the ongoing impact of the Covid-19 pandemic, the Board is
not aware of any market factors and have not been made aware of
any specific reason why sales growth should not be achieved in
2021, when compared to 2020 sales, as the impact of the pandemic
continues to subside.
Under the terms of the Joint Venture, the level of financial
information available to the Board to assess the fair value of the
investment in Snorkel International is limited to quarterly historical
financial
incorporating a consolidated operating
statement, balance sheet and cashflow.
information,
In 2018, the Board impaired Tanfield’s investment value in Snorkel
International down to £19.1m, from the previous valuation of
£36.3m. The valuation of £19.1m is based on the value of the
Preferred Interest which is made up of the priority amount, set in
2013 based upon the assets of the Snorkel division contributed to
the Joint Venture, plus the preferred return, being interest accruing
on the priority amount. This is the basis of valuation that was set
out in the Circular issued to Shareholders at the time of the Joint
Venture. The Board have not included the effect of discounting for
the timing of a future realisation as they do not believe this
materially impacts on the valuation.
The previous valuation of £36.3m was originally calculated in 2013
and assumed the $25m EBITDA trigger, compelling the payment of
the Preferred Interest and the purchase of Tanfield's interest in
Snorkel International by Xtreme, would be reached within the
predefined period ending 30 September 2018. As Snorkel
International, under Xtreme’s control, failed to achieve the EBITDA
trigger, Tanfield retains a 49% interest in Snorkel International and
the Preferred Interest, but it can no longer compel Xtreme to pay
the Preferred Interest and acquire its 49% interest.
In November 2018, the Board received a call option notice in which
Xtreme, via its subsidiary SKL, requested to exercise a call option to
acquire Tanfield's interest in Snorkel International. In the request,
SKL stated that the option price to acquire Tanfield’s holding was
$0 (nil) and that payment of the Preferred Interest was not
required.
The Board did not agree with this statement and does not believe
that the contractual agreements, or the Circular distributed to
shareholders to fully explain the terms of the transaction - and
thereby seek their authority to enter in to the transaction - allow
for a call option whereby Xtreme can acquire Tanfield’s interest in
Snorkel International for a nil value. The Board therefore rejected
the call option notice and sought to amicably resolve the dispute
with Tanfield’s 51% joint venture partner, Xtreme. As announced
on 22 October 2019, Xtreme (via its subsidiary SKL and Snorkel
International) filed the US Proceeding against Tanfield and its
subsidiary HBWP.
19
TANFIELD GROUP PLC FINANCIAL STATEMENTS
CRITICAL ACCOUNTING ESTIMATES AND KEY JUDGEMENTS (continued)
The Board, however, caveat that a number of factors could
influence the valuation and performance of Snorkel International
between now and a potential realisation date, including Xtreme’s
opinion of the contractual agreements which has resulted in the US
Proceedings (see Strategic Report on pages 3 to 5 for further
information), the outcome of the UK Proceedings and the ongoing
global Covid-19 pandemic. Due to the risks involved with the
ongoing different opinions regarding the contractual agreements,
it is possible the actual realisation of value could be less than the
current valuation, potentially as low as £nil as alleged by Xtreme
and depending on the outcome of ongoing legal proceedings. As the
global Covid-19 pandemic continues, it is not possible at this stage
to estimate what likely future impact the pandemic may have. The
Board note that any ongoing impact of Covid-19 would likely be
limited to the performance of Snorkel International and the timing
of a possible realisation but currently do not believe that it should
alter what it believes to be the minimum contractual value.
Given the risks, the Board has considered whether a further
impairment loss should be recognised but have concluded that
based on their understanding of the contractual agreements in
place, no further impairment is required at this time.
Whilst the timing and quantum of realisation of the investment
remains unclear, the Board is currently of the opinion that the
investment in Snorkel International will result in a return to
shareholders in the future, that the current value of the investment
of £19.1m remains appropriate and there is not an alternative,
more reliable valuation of the investment than the current
estimate.
As the US Proceedings have been brought against Tanfield, it is
evident that Don Ahern, the owner of Xtreme, wishes to own
100% of Snorkel International. However, based on statements
within the US Proceedings, it is evident that Don Ahern does not
believe he should have to pay anything in order to acquire
Tanfield’s 49% interest in Snorkel International. One possible
outcome is that Tanfield continues to hold its 49% interest for the
foreseeable future however, the Board do not believe such a
scenario would be in the best interest of shareholders and,
should it become necessary, would consider options that may
assist in moving from this position.
The Board has reviewed the historic financial information, along
with the global industrial and aerial work platform market
conditions and has concluded it is appropriate to value Tanfield’s
investment in Snorkel International based on what the Board
understands are the contractual arrangements and so at an
amount based on the Preferred Interest amount of £19.1m.
This valuation has been assessed against various criteria,
including past performance (including but not limited to a growth
improved operating
in sales, bill of material costs and
profitability), production capacity, market conditions, the
capability of the business to increase output and exchange rate
fluctuations. In coming to this opinion, the Board has considered
the trends within the business and their consistency;
in
particular:
•
the rate of sales growth being more or less than that
recently achieved by Snorkel International.
the level of operating profitability improvement being more
or less than that recently achieved by Snorkel International.
The impact of exchange rate movements given that any
proceeds will be received in USD, considering current,
historic and average exchange rates.
•
•
Between 1 January 2020 to 31 December 2020, the range of the
GBP to USD exchange rate has a low of 1.1475 and a high of
1.3652, the average being 1.2841. If £19.1m is assumed to
represent the average exchange rate then based on the low of
1.1475 the valuation increases by approximately 11% to £21.4m
and based on the high of 1.3652 the valuation reduces by
approximately 6% to £18.0m giving a potential movement of 17%
in the valuation. Whilst the Board is not in a position to mitigate
any potential exchange rate variation, until such time as the
realisation of the Snorkel International investment is known, it
will continue to consider such means as may be possible to
maximise the GBP return to shareholders.
If the assumption is made that both the progress within Snorkel
International and the wider global market conditions will
continue to improve, then the Board note that the valuation
could potentially
is
underpinned by the Preferred Interest element. However, the
Board has considered various Snorkel International trading
scenarios, based around historic sales growth trends and does
not believe the valuation is likely to materially increase from
£19.1m in the near future.
increase beyond the £19.1m which
20
TANFIELD GROUP PLC FINANCIAL STATEMENTS
NOTES TO THE ACCOUNTS
1. Staff costs
Aggregate remuneration comprised
Wages and salaries
Other pension costs
Total staff costs
Average monthly number of employees
Directors
Total
2020
£000's
81
2
83
2020
No.
2
2
2019
£000's
72
2
74
2019
No.
2
2
Details of Directors’ fees and salaries, bonuses, pensions, benefits in kind and other benefit schemes together with details in
respect of Directors’ share option plans are given in the Directors’ Remuneration Report on page 8.
2. Finance expense and finance income
Finance expense
Interest on borrowings
Total finance expense
Finance income
Interest on cash, cash equivalents & financial instruments
Total finance income
3. Other operating expenses
Property related expenses
Auditor's remuneration (see below)
Other operating expenses
Total operating expenses
2020
£000's
100
100
2020
£000's
-
-
2020
£000's
27
22
483
532
2019
£000's
-
-
2019
£000's
1
1
2019
£000's
33
25
209
267
Auditor's remuneration
Amounts payable to RSM UK Audit LLP and their associates in respect of both audit and non-audit services are as follows:
Audit Services
•
statutory audit of accounts
Other services relating to taxation
•
compliance services
Comprising
•
Audit services
• Non audit services
2020
£000's
2019
£000's
22
-
22
22
-
23
-
23
23
-
21
TANFIELD GROUP PLC FINANCIAL STATEMENTS
4. Taxation
Analysis of and factors affecting taxation charge
The taxation charge on the loss for the year differs from the amount computed by applying the corporation tax rate to the loss
before taxation as a result of the following factors:
Loss before taxation
Notional taxation charge at UK rate of 19% (2019: 19%)
Effects of:
Non-deductible expenses
Deferred tax asset not recognised in the period
Total taxation charge in the income statement
2020
£000's
(697)
(132)
80
52
-
2019
£000's
(317)
(60)
-
60
-
The Company has tax losses of approximately £4.3m (2019: £4.0m) available to carry forward against future profits of the same
trade. No deferred tax asset has been recognised due to the uncertainty of future profitability of the Company.
5. Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of
shares in issue during the period. In calculating the dilution per share, share options outstanding and other potential ordinary
shares have been taken into account where the impact of these is dilutive. As the potential dilutive ordinary shares from share
options reduce the loss per share these shares are omitted from the dilutive loss per share calculation. The average share price
during the year was 2.75p (2019: 5.36p).
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share
Effect of dilutive potential ordinary shares from share options
Weighted average number of ordinary shares for the purposes of diluted earnings per share
Loss
From operations
Loss for the purposes of basic earnings per share being net profit attributable to owners of the
parent
Potential dilutive ordinary shares from share options
Loss for the purposes of diluted earnings per share
Loss per share from operations
Basic and diluted (p)
6. Non current investments
A summary of the Non current investments is shown below:
Investment in Smith Electric Vehicles US Corp
Investment in Snorkel International Holdings LLC
Total non current investments
2020
No.
000’s
162,907
-
162,907
2020
£000's
(697)
-
(697)
2019
No.
000’s
160,971
-
160,971
2019
£000's
(317)
-
(317)
(0.43)
(0.20)
2020
£000’s
-
19,100
19,100
2019
£000’s
-
19,100
19,100
Smith Electric Vehicles US Corp
At 31 December 2020, the Company held a 5.76% (2019: 5.76%) share of the issued share capital of Smith Electric Vehicles US Corp,
a company registered in the US. In 2015 the Board decided to impair the investment in Smith to £nil and they continue to maintain
this position. However, the Board will continue to monitor the investment.
Snorkel International Holdings LLC
At 31 December 2020, the Company held a 49% (2019: 49%) share of the issued share capital of Snorkel International Holdings LLC,
a company registered in the US. This shareholding is being held as a non current investment at fair value (2020: £19,100k, 2019:
£19,100k). The cumulative impairment provision against this investment is £17,183k (2019: £17,183k). See Strategic Report for
further considerations.
22
TANFIELD GROUP PLC FINANCIAL STATEMENTS
7. Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term deposits held by the Company. The carrying amount of these assets
approximates their fair value. The Company primarily holds cash and cash equivalents in Sterling bank accounts.
Cash and cash equivalents a
a
At 31 December 2020 £500k was held on deposit with the English Court as security in relation to the UK Proceedings (2019:£nil)
8. Trade and other receivables
Receivable within one year
Other debtors and prepayments
2020
£000's
524
2020
£000's
24
24
The directors consider that the carrying amounts of trade and other receivables approximates to their fair value.
9. Trade and other payables
The directors consider that the carrying amounts of trade and other payables approximates to their fair value.
2020
£000's
Payable within one year
Trade payables
Social security and other taxes
Accrued expenses
Average credit period taken on trade purchases (days)a
a
Creditor days have been calculated as trade payables over other operating expenses multiplied by 365 days.
53
1
36
90
37
10. Borrowings
Unsecured
Loan notes
Total borrowings
2020
2019
Non-current
£000's
1,100
1,100
Total
£000's
1,100
1,100
Non-current
£000's
-
-
2019
£000's
136
2019
£000's
23
23
2019
£000's
52
1
51
104
72
Total
£000's
-
-
Unsecured 10% loan notes 2025
The Company issued 212,500 loan notes for £212,500 on 30 March 2020, 143,750 loan notes for £143,750 on 30 June 2020 and
143,750 loan notes for £143,750 on 14 September 2020. Interest is charged on the initial loan note value at 10% per annum which
is rolled up and included above. A loan note holder may at any time after 28 February 2025 serve notice upon the Company
requesting the redemption of all the Loan Notes, plus accrued interest, held by them. In the event of a realisation from the US
Proceedings and/or the UK Proceedings exceeding £2.5m, any amount in excess of £2.5m will be used to realise a proportion of
Loan Notes and accrued interest. Should a repayment take place prior to 28 February 2025, a 20% early redemption premium
shall apply.
Unsecured 10% second loan notes 2025
The Company issued 500,000 second loan notes for £500,000 on 29 July 2020. Interest is charged on the initial loan note value at
10% per annum which is rolled up and included above. A loan note holder may at any time after 28 February 2025 serve notice
upon the Company requesting the redemption of all the Loan Notes, plus accrued interest, held by them. In the event of a
realisation from the US Proceedings and/or the UK Proceedings exceeding £1.5m, any amount in excess of £1.5m will be used to
realise a proportion of Loan Notes and accrued interest. Should a repayment take place prior to 28 February 2025, a 20% early
redemption premium shall apply.
23
TANFIELD GROUP PLC FINANCIAL STATEMENTS
11. Share capital and share premium
The Company has one class of ordinary shares which carry no right to fixed income. All shares are fully paid up.
At 1 January 2019
New share issue 6 June 2019a
At 31 December 2019
At 31 December 2020
a
Nominal share
value
5p
5p
5p
Number of shares
158,406,850
4,500,000
162,906,850
Share capital
£000’s
7,920
225
8,145
Share premium
£000’s
17,336
-
17,336
5p
162,906,850
8,145
17,336
On 31 May 2019 the Company announced that it had conditionally raised gross proceeds of £225k. These funds were raised by way of a placing of 4,500,000 new Ordinary Shares of 5 pence
("Shares") with institutional investors at a price of 5.0 pence per Share which were issued onto the AIM market on 6 June 2019.
12. Share based payments
IFRS2 requires share based payments to be recognised at fair value. The company measures the fair value of its share based
payments to employees, “share options”, using the Black-Scholes valuation method at the date of grant. The share based
payment expense is recognised in profit or loss over the vesting period.
All share based payments are equity settled and details of the share option activity during 2020 and 2019 are shown below.
Outstanding at the beginning of the year
Lapsed
Outstanding at the end of the year
Exercisable
Number of
share options
4,100,000
(300,000)
3,800,000
3,800,000
2020
Weighted average
exercise price
(pence)
27
27
27
27
Number of
share options
4,100,000
-
4,100,000
4,100,000
2019
Weighted average
exercise price
(pence)
27
-
27
27
The outstanding options at 31 December 2020 had a weighted average remaining contractual life of 0.05 years (2019: 1.0
years)
The following table relates to share options outstanding and exercisable at 31 December 2020.
No of share options
No of exercisable options
Option exercise prices
27p
3,800,000
3,800,000
Total
3,800,000
3,800,000
A charge to the income statement of £nil (2019: £nil) and a credit directly to equity of £nil (2019: £nil) have been made during
the year in accordance with IFRS2 ‘Share-based payments’.
13. Financial risk management
The Company’s operations are exposed to various financial risks which are managed by various policies and procedures. The
main risk and their related management are discussed below:
Credit risk management
The Company’s exposure to credit risk arises from its trade and other receivables and cash deposits with financial institutions.
The Company’s maximum exposure to credit risk is summarised below:
Trade and other receivables
Cash and cash equivalents
2020
£000's
2
524
526
2019
£000's
2
136
138
2016
£000's
2015
£000's
330
192
4
134
61
269
Liquidity risk management
The Company is exposed to liquidity risk arising from having insufficient funds to meet the Company’s future financing needs.
The Company’s liquidity management process includes projecting cash flows and considering the level of liquid assets available
to meet future cash requirements along with monitoring statement of financial position liquidity. The Board reviews forecasts,
including cash flow forecasts on a quarterly basis.
24
TANFIELD GROUP PLC FINANCIAL STATEMENTS
13. Financial risk management (continued)
Maturity analysis
The table below analyses the Company’s financial liabilities on a contractual gross undiscounted cash flow basis into maturity
groupings based on amounts outstanding at the statement of financial position date up to the contractual maturity date.
2020
Trade and other payables
Borrowings
2019
Trade and other payables
Within 1 year
£000's
1 to 5 years
£000's
Over 5 years
£000's
90
-
90
104
104
-
1,100
1,100
-
-
-
-
-
-
-
Total
£000's
90
1,100
1,190
104
104
Foreign exchange risk management
The Company is exposed to movements in foreign exchange rates due to any realisation of its investment in Snorkel International
being denominated in foreign currencies. The carrying amount of the company’s investment in Snorkel International at 31
December 2020, which is denominated in USD, is £19.1m (2019: £19.1m). During 2020, the GBP to USD exchange rate averaged
1.2841 with a low of 1.1475 and a high of 1.3652. The company has no other material assets or liabilities denominated in foreign
currencies. If appropriate the Company can use currency derivative financial instruments such as foreign exchange contracts to
reduce exposure. These were not used in the period.
Capital management
The Company’s main objective when managing capital is to protect returns to shareholders. The Company also aims to maximise
its capital structure of debt and equity so as to minimise its cost of capital. The Company manages its capital with regard to risks
inherent in the business and the sector in which it operates by monitoring its net debt to capital gearing ratio on a regular basis.
The Company considers its capital to include share capital, share premium, special reserve, share option reserve, merger reserve
and retained earnings.
Net debt of the company (including changes in liabilities arising from financing activities)
Borrowings:
Loan notes
Opening balance of loan notes in issue
Loan notes issued in the year – cash flows
Other changes including accrued interest
Total Liability in respect of loan notes in issue
Less: cash and cash equivalents
Net debt / (cash) at year end
Total Capital
Net debt to capital ratio (%)
2020
£000's
-
1,000
100
1,100
(524)
576
2019
£000's
-
-
-
-
(136)
(136)
18,458
19,155
3.1%
-
During 2020, in order to fund the legal proceedings, the Company issued some loan notes resulting in a net debt position of £576k
at 31 December 2020 as opposed to a net cash position of £136k at 31 December 2019.
14. Contingencies
Authorised Guarantee Agreement
At the time of the Joint Venture between Tanfield Group Plc and Xtreme Manufacturing LLC relating to Snorkel International in
October 2013, Tanfield Group Plc was the tenant of the Vigo Centre manufacturing facility from which the Snorkel division carried
out its UK manufacturing operations. In order to gain permission to assign the lease to Snorkel Europe Limited, Tanfield Group Plc
entered into an authorised guarantee agreement on the 25-year lease which commenced 27 June 2006.
25
TANFIELD GROUP PLC FINANCIAL STATEMENTS
15. Related party transactions
Remuneration of key personnel
The remuneration of the key management personnel, which includes Directors, is set out below in aggregate for each of the
categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual directors is
provided in the Directors’ Remuneration Report on page 8.
Salaries and short term benefits including NI
Post employment benefits
16. Retirement benefits
2020
£000’s
81
2
83
2019
£000’s
72
2
74
The Company operates a defined contribution retirement benefit plan for all qualifying employees. The total cost charged to income
of £2k (2019: £2k) represents contributions payable to that scheme by the Company at rates specified in the rules of the scheme.
As at 31 December 2020, contributions of £nil (2019: £nil) due in respect of the current reporting period had not been paid over to
the scheme.
17. Financial instruments recognised in the statement of financial position
Amortised
cost
£000’s
2020
Fair value
through profit
and loss
£000’s
Total
Loans and
receivables
£000’s
£000’s
2019
Fair value
through profit
and loss
£000’s
Assets
Current financial assets
Trade and other receivables
Investments
Cash and cash equivalents
Total
Liabilities
Current liabilities
Trade and other payables
Borrowings
Total
2
-
524
526
Other
financial
liabilities
£000’s
90
1,100
1,190
-
19,100
-
19,100
2020
Held for
trading
2
19,100
524
19,626
Total
£000’s
£000’s
-
-
90
1,100
1,190
2
-
136
138
Other
financial
liabilities
£000’s
104
104
Total
£000’s
2
19,100
136
19,238
Total
-
19,100
-
19,100
2019
Held for
trading
£000’s
£000’s
-
-
104
104
Financial assets and liabilities measured at fair value are measured using a fair value hierarchy that reflects the significance of the
inputs used in making the fair value measurements, as follows:-
•
•
•
Level 1 – Unadjusted quoted prices in active markets for identical asset or liabilities (‘quoted prices’);
Level 2 – Inputs (other than quoted prices in active markets for identical assets or liabilities) that are directly or indirectly
observable for the asset or liability (‘observable inputs’); or
Level 3 – Inputs that are not based on observable market data (‘unobservable inputs’).
All of the company’s financial assets and liabilities measured at fair value are measured using level 3 valuations in both the year
ended 31 December 2020 and the year ended 31 December 2019.
The fair value investment is measured against the contractual terms of the Joint Venture with Xtreme, as detailed in the circular
distributed to shareholders to fully explain the terms of the transaction – and thereby seek their authority to enter into the
transaction. Further details are provided in the strategic report on pages 3 to 5 and in the critical accounting estimates and key
judgements on pages 19 and 20.
26
TANFIELD GROUP PLC FINANCIAL STATEMENTS
18. Investments
The tables below give brief details of the Company’s investments at 31 December 2020. The Company had no operating subsidiaries
as of 31 December 2020.
Investments
Smith Electric Vehicles US Corp
HBWP Inc
Snorkel International Holdings LLC
Tanfield Engineering Systems US (Inc) a
Snorkel Europe Ltd a
Snorkel International Inc a
Snorkel Australia Limited a
Snorkel New Zealand Limited a
The Company’s interest is held indirectly through HBWP Inc, a wholly owned subsidiary, and its investment in Snorkel International Holdings LLC
Principal activity
Electric vehicle manufacture
Holding Company
Holding Company
Powered Access
Powered Access
Powered Access
Powered Access
Powered Access
Group Interest in allotted
capital & voting rights
5.76%
100.00%
49.00%
49.00%
49.00%
49.00%
49.00%
49.00%
a
Country of
incorporation
US
US
US
US
UK
US
AUS
NZ
19. Post balance sheet events
The Company issued further unsecured 10% second loan notes 2025 amounting to £200,000 on 25 January 2021 and £250,000 on
1 June 2021.
All remaining share options lapsed on 21 January 2021.
27