TIDMSNOX
RNS Number : 3715A
SulNOx Group PLC
29 September 2020
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
29 September 2020
SulNOx Group Plc (the "Company" or "SulNOx")
Final Results for the year ended 31(st) March 2020
(Aquis Stock Exchange: SNOX)
SulNOx is pleased to announce its audited final results for the
year ended 31(st) March 2020. The Annual Report and Accounts will
be posted to shareholders tomorrow and this will include the Notice
of Annual General meeting which will take place at 12 noon on
23(rd) October. In line with Government guidance, it will be a
closed meeting with all voting through proxy cards.
The period since March 2019 has been one of significant change
and development for the Company.
HIGHLIGHTS
-- May 2019 Advance Subscription Round raising GBP568,000 in
advance the of the Company's listing.
-- December 2019 Listing on the AQSE Growth Market raising GBP185,000 gross of expenses
-- May 2020 Placing to raise GBP230,000 in anticipation of
extended Coronavirus led trading restrictions
-- Agreement with co-venturer, Fuel Fusions (Pty) Ltd to act as
the Company's exclusive sales and marketing hub in South Africa -
significant opportunity in the mining, static power and
transportation industries.
-- Patent application process extended to include international via a PCT application
-- Renewed licence agreement with Nouryon BV for the Heavy Fuel
Oil emulsifier and a new supply agreement for SulNOxEco Diesel
Conditioner
-- Appointment of Allenby Capital as AQSE Growth Market adviser.
Allenby has a strong reputation in the City as a leading
stockbroking and corporate advisory firm.
Graham Lyon, Chairman, Commented:
"These are the Company's maiden results as a publicly listed
company. Whilst these results are backward looking, in the
Chairman's Statement and Chief Executive's report set out below, we
are happy to report various significant steps taken by the
Company.
"Most of our life since listing in December 2019 has coincided
with the world succombing to Covid-19 lockdowns with resulting
behavioural changes. This has resulted in major slowdown of
economies and whilst some are bouncing back, others are on a slower
trajectory. SulNOx faced its own restrictions but rose to the
challenge and was successful in raising a further GBP230,000 at 40p
per share during May. As we exit the global lock-down, SulNOx is
well positioned to target the users of increasing amounts of
fuel."
Enquiries:
SulNOx Group Plc
Nicholas Nelson, Chief Executive sulnox@flagstaffcomms.com
Media and Investors :
Flagstaff Strategic and Investor sulnox@flagstaffcomms.com
Communications 020 7129 1474
Tim Thompson / Fergus Mellon
----------------------------
AQSE Corporate Adviser :
Allenby Capital Limited
John Depasquale / Nick Harriss /
James Hornigold 020 3328 5656
----------------------------
The directors take responsibility for this announcement.
The Report and Accounts and Notice of AGM with proxy card can be
found on the Company's website www.sulnoxgroup.co
COMPANY INFORMATION
Directors Mr S Retter
Mr G V Lyon
Ms I Petersen
Secretary Mr N Nelson
Company number 08449586
Registered office 10-12 Orange Street
London
UK
WC2H 7DQ
Auditor Shipleys LLP
10 Orange Street
Haymarket
London
WC2H 7DQ
Registrar Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
Bankers Metro Bank
1 Southampton Row
London
WC1B 5HA
Nominated advisor Allenby Capital
5 St Helen's Pl
London
EC3A 6AB
Solicitors Bracher Rawlins LLP
77 Kingsway
Holborn
London
WC2B 6SR
Company website https://sulnoxgroup.com
Page
Chairman and Chief Executive Officer's Statement 1-2
Strategic report 3-8
Directors' report 9-12
Independent auditor's report 13-17
Group Income statement 18
Group Statement of comprehensive income 19
Group Statement of financial position 20
Company Statement of financial position 21
Group Statement of changes in equity 22
Company Statement of changes in equity 23
Group Statement of cash flows 24
Company Statement of cash flows 25
Notes to the financial statements 26-49
CHAIRMAN AND CHIEF EXECUTIVE STATEMENTS
I am pleased to be writing my first statement as Chairman for
what has been a successful and transitional year under the
difficult situation of COVID-19.
SulNOx Group Plc ("SulNOx" or the "Company", together with its
subsidiaries "the Group"), the hydrocarbon fuel emulsification
specialist, announces its final results for the year ended 31(st)
March 2020. These are the Company's maiden results as a publicly
listed company. Whilst these results are backward looking I am
happy to report various significant steps taken by the Company.
Since listing in December 2019 the world has succumbed to Covid-19
lockdowns with resulting behavioural changes. This has resulted in
major slowdown of economies and whilst some are bouncing back,
others are on a slower trajectory. SulNOx faced its own
restrictions but rose to the challenge and was successful in
raising a further GBP230,000 at 40p per share during May. As we
exit the global lock-down, SulNOx is well positioned to target the
users of increasing amounts of fuel.
SulNOx was established in 2013 to develop and commit to trial a
new type of fuel conditioner technology which reduces the emissions
of polluting gases in combustion engines and burners. The
technology is owned by the Company and we are advancing the Patent
applications. It is noteworthy that in March 2020 the UK Patent
application was augmented by the filing of a PCT or International
Patent application.
The Company has developed a methodology and process, capable of
emulsifying hydrocarbon fuels such as Heavy Fuel Oil ("HFO"), Ultra
Low Sulphur Fuel Oil ("ULSFO") and Diesel. The resultant emulsions
have long term stability and when added to the fuel, the Company's
products are capable of:
-- Reducing Oxides of Nitrogen, Sulphur and Carbon Dioxide and Sulphur Oxide gases
-- Removing free water from fuel
-- A more efficient combustion and therefore reduced fuel usage
-- Reducing Particulate Matter (Soot and Smoke)
-- Reducing viscosity of HFO and aiding the fuel usage efficiency.
The two initial products developed by the Company are being made
by a globally recognised speciality chemical manufacturer, Nouryon
BV. On 21 September 2020, we announced that Nouryon BV had renewed
its licence for the HFO Emulsifier for a further three years and
entered into a supply agreement for our SulNOxEco(TM) Diesel
Conditioner.
By way of a reminder, SulNOx's products are targeted at end
users which consume bulk amounts of Diesel (such as operators in
road transport, embedded power generation and mining) and HFO/ULSFO
(notably ship companies and fossil fuel power stations). Our Chief
Executive in his statement below, expands further on the technical
considerations and our plans to progress the Company into
sales.
On two final notes; it was with regret that in an act to protect
the Company against the recent unwarranted General Meeting
requisition, Nicholas Nelson chose to resign as a Director of the
Company. Happily he remains as our non-board Chief Executive, he is
also still a director of our two subsidiaries. Secondly, we were
delighted to report on the recent engagement of Allenby Capital Ltd
as our AQSE Growth Market corporate adviser. Allenby has a strong
reputation as a leading stockbroking and corporate advisory firm
and this helps position us strongly as SulNOx transitions into
sales and continues with its planned roll-out internationally.
Mr G V Lyon
Chairman
Chief Executive's Report
During the year the Group generated a net loss of GBP1,878,273
(2019: GBP538,926) predominantly driven by costs associated with
the IPO, ongoing testing and sales and marketing expenditure.
Turnover was GBP12,184 (2019: GBPnil) which represents the first
test samples sold to a potential customer. The Group held cash of
GBP87,734, as at the end
of the year, which was increased following the year end as a
result of a fund raise of GBP230,000 which closed in May 2020. The
Group had a strong net asset position of GBP8,586,920 at the end of
the year (2019: GBP8,700,555).
In his statement above, Graham Lyon examines the significance of
Covid-19 and it is worth my re-iterating that for us, the impact of
this started in early March, a little over two months following our
listing on the AQSE Growth Market. We had to prepare for the
inevitability that our hoped-for end customers in the UK and South
Africa would have to suspend plans to commence taking delivery of
our lead product; SulNOxEco(TM) Diesel Conditioner.
We had hoped to be underway with sales to end users in South
Africa, prior to lock-down which resulted in particularly robust
actions taken by the South African government to combat the
pandemic
To keep the opportunity alive, our action was to continue
developing and strengthening communication with the purchase
managers within these end users in order to build their
understanding and enthusiasm for the product. As part of this it
became evident that an extensive engine trial should be conducted
to add to the body of evidence supporting the efficacy of our
direct to Diesel additive.
As a reminder, SulNOxEco(TM) Diesel Conditioner is used as an
additive and a tiny quantity will isolate the free water component
which exists in all Diesel by forming a combustible emulsion. This
has been proven to enhance fuel lubricity and combustibility with a
host of benefits to engine performance and exhaust output.
Planning for the above mentioned trial started in July to
coincide with the earliest that slackened restrictions would allow
some movement in South Africa. In early September, we were in a
position to commission the trial which is being overseen and
co-funded by SulNOx's South African co-venturer; Fuel Fusions
Limited. Once the trial report has been finalised, we will make the
results known in a future announcement.
SulNOx's HFO/ULSFO Emulsifier works in conjunction with an
Ultrasonic mixing set-up and this is necessary given the high
viscosity of the fuel. Using Ultrasonic mixing, 18% water can be
added into the fuel with a small dosage of the emulsifier
formulation. This is predicted to provide enhancements to engine
performance, fuel consumption and toxic exhaust emissions.
Following the introduction of tough new emissions laws by the
International Maritime Organisation, ships have had no choice but
to fit expensive exhaust scrubbers (if they wish to continue using
HFO) or switch to the ultra low sulphur fuel. However, both come at
a price and SulNOx's methodology will greatly assist users in both
cases without major cost increases.
In recent studies for example, it has been recognised that the
addition of aromatics (oil based chemicals) to compensate for the
removal of the Sulphur from ULSFO, increases black smoke and can
damage engines as a result of lost lubricity. So this option is not
a sustainable long term environmental solution. The Company's
ultrasonically mixed emulsifier system is designed to be fitted to
ships' existing fuel delivery mechanism at relatively low cost. The
emulsifier when mixed with the ULSFO, is expected by the Company to
provide improved lubricity and reduce the harmful particulate
matter, the soot that causes air quality and breathing difficulties
for all.
It has been the Company's plan to engage with a ship owner and
enter into live trials. To overcome the expected reticence of
fitting something new and untested on board a sea going ship,
SulNOx will start this journey with a smaller ship engine or static
engine trial and discussions are advancing to this end. It goes
without saying that COVID-19 has significantly delayed a process
which could have been underway by now.
A similar emulsification system has been developed for
deployment in coal-fired power stations which use substantial
quantities of HFO as part of the fuel ignition process. The SulNOx
delivery system is perfectly suited to power stations with their
relatively simple combustion system and the anticipated benefits
could be substantial. The Directors are in early stage discussions
with a coal power station to install a system.
The Company continues to be active in marketing and promoting
the benefits of its products to customers and is negotiating
agreements with collaborators to take us into new market areas.
Mr N C P Nelson
Chief Executive
The directors present the strategic report for the year ended 31
March 2020.
Promoting the success of the Group for the benefit of the stakeholders
Section 172(1) Statement - Promotion of the Company for the benefit
of the members as a whole The Directors believe they have acted
in the way most likely to promote the success of the Company for
the benefit of its members as a whole, as required by s172 of the
Companies Act 2006. The requirements of s172 are for the Directors
to:
* Consider the likely consequences of any decision in
the long term,
* Act fairly between the members of the Company,
* Maintain a reputation for high standards of business
conduct,
* Consider the interests of the Company's employees,
* Foster the Company's relationships with suppliers,
customers and others, and
* Consider the impact of the Company's operations on
the community and the environment.
The Group has developed a methodology and process capable of emulsifying
hydrocarbon fuels such as diesel and Heavy Fuel Oil ("HFO"). Being
new products and trying to create a market for such products is
inherently speculative in nature and, without regular income, is
dependent upon fund-raising for its continued operation. The pre
significant revenue nature of the business is important to the understanding
of the Company by its members, employees and suppliers, and the
Directors are as transparent about the cash position and funding
requirements as is allowed under MAR regulations.
The application of the s172 requirements can be demonstrated in
relation to the some of the key decisions made during 2020:
* The filing of its Patent Cooperation Treaty ("PCT" or
International Patent) Application. The PCT provides a
unified procedure for filing patent applications in a
multitude of regions internationally. These regions
will be decided by the Group during the course of
this application process. The PCT application is in
addition to the existing UK patent application
'Patent Pending' and relates to exactly the same
invention. The filing of the PCT demonstrates the
focus of the Board on striving to create a long term
future for the products it develops and to protect
these for the future benefit of the Company and
thereby all its stakeholders.
* The successful completion of an Initial Public
Offering of shares in the Company on the Aquis Stock
Exchange provides the Company with a much higher
profile platform to undertake its business and
advance its profile for undertaking positive change
in the hydrocarbon industry. The listing provided
some additional investment and also provides the
optionality to raise further funds should these be
required over the coming periods. Having access to
capital is very important for any pre revenue company
and gives the Directors confidence to focus on
generating sales and create new markets for its
products.
In addition to the above key decisions, we follow international
best practise on environmental aspects of our work. Our goal is
to meet or exceed standards, in order to ensure we obtain and maintain
our social licence to operate from the communities with which we
interact. The interests of our employees, customers, suppliers and
host countries are a primary consideration for the Board.
Review of the business
SulNOx was established in 2013 to develop and commit to trial a
new type of fuel emulsifier technology which reduces emissions of
polluting gases in combustion engines. The technology is owned by
SulNOx and it is advancing a Patent application.
The Group has developed a methodology and process capable of emulsifying
hydrocarbon fuels such as diesel and Heavy Fuel Oil ("HFO"). The
resultant emulsions have long term stability. When added to the
fuel, the Company's products are capable of:
* reducing Nitrous Oxide, Cardon Dioxide and Sulphur
Oxide Gases
* removing free water from fuel and eradicating fungal
and bacterial growth
* more efficient combustion and therefore reduced fuel
usage
* reducing Particulate Matter (Smoke & Soot)
* reducing viscosity of Heavy Fuel Oil (HFO)
The Group's chemical formulations have been tested independently
and have been shown to deliver the above benefits.
In addition to SulNOx Group Plc, the Group operates through two
wholly owned subsidiaries, SulNOx Research and Development Limited
("SRD") and SulNOx Fuel Fusions Limited ("SFF").
On 17th December 2019, the Company was admitted on to the Aquis
Exchange (AQSE) Growth Market under ticker SNOX and ISIN number
GB00BJVQQP66.
The admission included a placing which raised gross proceeds of
GBP185,000 at 50p per share as well as the closure of an advanced
subscription round in May 2019 of GBP568,000 at a price of 42.5p
per share.
During the year the Group continued to focus on the commercialization
of its main emulsification products seeking to win new customers
in the haulage, power generation, shipping and other transport sectors.
Following the listing of the Company the business was making progress,
which was unfortunately hampered by the sudden onset of the global
Covid-19 pandemic in march, causing delays to some of the business
opportunities. The Company continues to work towards obtaining customers
for its products and is making progress on multiple fronts in this
regard.
Aims, Strategy & Business Plan
The Group's aim is to create value for shareholders through the
sale of its hydrocarbon emulsification products.
The Group's strategy is to generate sales and marketing opportunities
for its products and generate value for its stakeholders by improving
the efficiency of hydrocarbon products whilst simultaneously reducing
harmful emissions and to commercialise through a "royalty" model
with the manufacture of the products undertaken by a partner with
significant global capacity and experience in the sector.
The Group's business plan is to advance the sale of its products
globally in the Shipping, haulage, automobile, mining and other
transportations industries.
The Board seeks to run the Group with a low-cost base in order to
maximise the amount that is spent on product testing and sales and
marketing as this is where value can be added. To this extent, the
corporate office is run on a streamlined basis by a core team, and
specialist skills and activities are outsourced as appropriate.
The Group finances its activities through periodic capital raisings
with share placings. As the Group continues to develop its products
towards commercialisation, there may be opportunities to obtain
funding through other financial instruments, including debt or other
arrangements with strategic parties.
Business model
The Groups Business model is based upon the commercialisation of
its propriety emulsification products through various different
channels as well as the continued testing and development of improvements
to such products to ensure they evolve to remain relevant to the
market. The group is currently focused on using sales and marketing
arrangements with third parties to capture market share and generate
sales of its products which are manufactured and for one product
distributed by its partner, in doing so the model is to keep overheads
to a minimum level.
Principal risks and uncertainties
Set out below are the principal risks and uncertainties facing the
Group:
Requirement for further funds
The existing resources of the Group and the funds raised pursuant
to the placing will only be sufficient for the short-term working
capital requirements of the Group. It will therefore be necessary
for the Group to raise further funds, which may be by way of issue
of further Ordinary Shares or via alternative forms of finance.
The Board believes that such failure to secure further financing
may have a material effect on the business, financial condition,
results of operations and prospects of the Group.
Expansion Risks
The Group intends to pursue a growth strategy, subject to the availability
of funding. Such a strategy brings with it certain risks and will
place additional demand on the Group's management, financial and
operational resources. If the Group is unable to manage its growth
effectively, its business, operations or financial condition may
deteriorate.
No profit to date
The Group has incurred aggregate losses since its inception, and
it is therefore not possible to evaluate its prospects based on
past performance. Since the Group intends to continue investing
in the various projects described in this Document, the Directors
anticipate making further losses until at least the financial period
ending 31 March 2021. There can be no certainty that the Group will
achieve or sustain profitability or achieve or sustain positive
cash flow from its activities.
Reliance on third parties
The Group places a degree of reliance on third parties. Termination
of an arrangement (whether formal or informal) with a third party,
a change in the terms of a third party contract or a supplier experiencing
technical difficulties could result in the Group's access to services
being restricted or interrupted, which in turn may have an adverse
effect on the Group's business, prospects, results of operations
and financial condition.
The Group's objectives may not be fulfilled
The value of an investment in the Group is dependent upon the Group
achieving the aims set out in this Document. There can be no guarantee
that the Group will achieve the level of success that the Board
expects.
The technology utilised by the Group may become obsolete
The business of the Group will rely upon its fuel emulsion and fuel
conditioning technologies. Like any company using technology, the
Group is at risk from developments that make the technologies it
utilises obsolete or less attractive. The Group's inability to offer
technology that is desirable to its counterparties, such as customers
in the shipping, power generation and fuel emulsion industries,
could consequently limit its ability to retain existing counterparties
and attract new ones. This would adversely affect the Group's ability
to generate revenue and negatively impact its operating results.
Market risk
The marketability of the products is vulnerable to numerous factors
beyond the control of the Group. These include any price volatility
of the constituents of the products
Commercial risks
There is a risk that the Group will not achieve a commercial return
due to major unanticipated change in a key variable or, more likely,
the aggregate impact of changes to several variables which results
in sustained depressed margins. The Group's competitive position
could be affected by changes to government regulations concerning
taxation, duties, specifications, importation and exportation of
hydrocarbon fuels and environmental aspects.
Competition risks
There is a risk that new competition could emerge with similar technologies.
This could result, over time, in further price competition and a
pressure on margins beyond that assumed in the Group's business
planning, thereby reducing the Group's profits.
Joint venture parties and contractors
The Directors are unable to predict the risk of financial failure
or non-compliance with respective obligations or default by a participant
in any joint venture in which the Group is, or may become a party;
insolvency or other managerial failure by any of the contractors
used by the Group in its fuel processing and distribution activities;
or insolvency or other managerial failure by any of the other service
providers used by the Group for any activity.
Insurance risks
The Group insures its operations in accordance with industry practice
and insures the risks it considers appropriate for the Group's needs
and for its circumstances. Insurance cover will not be available
for every risk faced by the Group, including inventory risk.
Although the Board intends that the Group and/or its partners and
counter-parties should carry adequate insurance with respect to
its operations in accordance with industry practice, in certain
circumstances, the Group's or the partner's and counter-parties'
insurance may not cover or be adequate to cover the consequences
of such events. In addition, the Group may be subject to liability
for pollution, or other hazards against which the Group or its partners
and counterparties may elect not to insure because of high premium
costs or other reasons. The occurrence of an event that is not covered
or fully covered by insurance could have a material adverse effect
on the business, financial condition and results of operations of
the Group.
Intellectual property risks
The Group's business relies on a combination of trademarks, copyrights,
know-how, common law or statutory copyright protection and contractual
restrictions to establish and protect its brands, designs and trade
secrets. The protection provided by these intellectual property
rights, confidentiality laws and contractual restrictions is limited
and varies between the UK and other countries. Any third party may
challenge the Group's intellectual property and the Group may incur
substantial costs in defending any claims relating to its intellectual
property rights.
Whilst the Group has taken all reasonable steps to register and
protect its intellectual property, including benefiting from contracts
with established multinational industry partners, there can be no
guarantee that any applications for registered intellectual property
rights will be granted or that the Group's intellectual property
rights and contractual provisions will be adequate to prevent misappropriation,
infringement or other unauthorised use of the Group's intellectual
property by third parties. In addition, despite steps taken by the
Group to protect its proprietary rights, third parties may attempt
to copy aspects of the Group's products and seek to use information
that the Group regards as proprietary. Competitors may also independently
develop similar technologies, processes or operations of the Group.
There is a risk that the Group's means of protecting its intellectual
property rights may not be adequate and weaknesses or failures in
this area could adversely affect the Group's business. However,
even if competitors did develop the same effect through a different
chemical process, in operational terms the Group would be significantly
advanced by comparison.
Environmental risks
There is a risk that the Group will not achieve a commercial return
due to major unanticipated change in a key variable or, more likely,
the aggregate impact of changes to several variables which results
in sustained depressed margins. The Group's competitive position
could be affected by changes to government regulations concerning
taxation, duties, specifications, importation and exportation of
hydrocarbon fuels and environmental aspects.
Further, the Group may require approval from the relevant authorities
before it can undertake activities which are likely to impact the
environment. Failure to obtain such approvals may prevent or delay
the Group from undertaking its desired activities. The Group is
unable to predict definitively the effect of additional environmental
laws and regulations, which may be adopted in the future, including
whether any such laws or regulations would materially increase the
Group's cost of doing business, or affect its operations in any
area.
Currency risk
The Group reports its financial results in Pounds Sterling,
while many contracts in the oil and gas industry are principally
denominated in United States Dollars and production costs may be
denominated in Euros. Fluctuations in exchange rates between
currencies in which the Group operates may cause fluctuations in
its financial results and may have an adverse effect on income
and/or asset values.
Corporate and regulatory formalities
The conduct of petroleum processing and distribution requires
compliance by the Group with numerous procedures and formalities in
many different national jurisdictions. It may not in all cases be
possible to comply with or obtain waivers of all such
formalities.
Economic, political, judicial, administrative, taxation or other
regulatory factors
The Group may be adversely affected by changes in economic,
political, judicial, administrative, taxation or other regulatory
factors, in the areas in which the Group operates and conducts its
principal activities.
Dependence on Management
The Group's ability to provide returns to Shareholders and
achieve its investment objective is dependent on the performance of
the executive management team. The loss of the services of certain
employees could have a materially adverse effect upon the Group's
business and financial condition.
Covid-19
Starting prior to the year end, but predominantly post year end
there has been a significant global pandemic which has had
significant knock on effects for the majority of the world's
population, by way of the measures governments are taking to tackle
the issue. This represents a risk to the Group's operations by
restricting travel, the potential to detriment the health and
wellbeing of its employees, as well as the effects that this might
have on the ability of the Group to finance and advance its
operations in the time frames envisaged.
Financial Performance Review
The Group is not yet selling (other than small trial volumes) to
customers and so has no income other than bank interest.
Consequently, the Group is not expected to report profits until it
starts generating meaningful levels of revenues The principal
financial key performance indicators ('KPIs') monitored by the
Board concern levels and usage of cash.
The four main financial KPIs for the Group allow it to monitor
costs and plan future sales and marketing activities and are as
follows:
-- Revenue GBP12,184 (2019: GBP0)
-- Cash and cash equivalents GBP87,734 (2019: GBP206,841)
-- Funds raised GBP1,457,199 (2019: GBP0)
-- Administration expenses (cash basis) GBP1,868,064 (2019: GBP547,804)
-- Additions to intangible asset GBP0 (2019: GBP2,185)
KPI's are not GAAP measurements and are not intended to be a
substitute for these measures. The KPI's used by the Group may not
be the same as those used by other companies and so should not be
used as such.
Revenue increased during the period as a result of some initial
sales to a sales and marketing agent in anticipation of further
sales opportunities.
The Group held cash balances of GBP87,734 as at the end of the
year compared to GBP206,841 in the prior year. Following the year
end the Company raised a further GBP230,000 by way of a placing of
new ordinary shares to continue to advance its business plan.
Fundraising
In May 2019 the Company closed an advanced subscription round of
GBP568,000 at 42.5 pence per share followed by a placing of
GBP185,000 at 50 pence per share in December 2019 as part of the
IPO.
Non-Financial Key Performance Indicators ('KPIs')
The Board monitors the following non-financial KPIs on a regular
basis:
Health and Safety - number of reported incidents
There were no significant reportable incidents in the current or
prior year.
Operational performance
Good progress was made during the year despite the delays
encountered by the Covid-19 Pandemic, with key relationships
enhanced and significant steps made towards obtaining new
customers.
Financial Review
-- Loss before taxation increased by 242% to GBP1,889,866 (2019: GBP552,094)
-- Cash and cash equivalents decreased by 58% to GBP87,734 (2019: GBP206,841)
-- Intangible assets decreased by 5% to GBP8,680,881 (2019: GBP9,089,078)
-- Net assets decreased by 9% to GBP8,586,920 (2019: GBP9,434,370)
-- Loss per share (pence) GBP2.28
Loss for the year
The loss for the year increased to GBP1,878,273 from GBP538,926
in 2019 primarily due to an increase in the level of expenditure as
a direct result of the IPO and associated advisers costs in running
a publicly traded company.
The Group has continued to keep a tight control on its
administrative costs and is focussing as much of its resource as
possible on advancing testing, intellectual property registration
and sales and marketing expenditure.
Cash and cash equivalents
The Group held cash and cash equivalents of GBP87,734 compared
to GBP206,841 in the prior year. The decrease in cash was driven by
the expenditure on the IPO offset by funds raised as part of the
placing undertaken at the same time.
Net Assets
The net assets of the Group principally comprise the capitalised
intangible assets relating to its intellectual property and science
and know how behind its emulsification products. net assets have
decreased to GBP8,586,920 from GBP9,434,370 as a direct result of
the amortisation of the intangible asset offset by additional funds
raised during the period as a result of the IPO.
The strategic report was approved by the board on .... September
2020 and is signed on its behalf by Simon Retter
..............................
Mr S Retter
Director
.........................
The directors present their annual report and financial statements
for the year ended 31 March 2020.
Principal activities
The principal activity of the Group continued to be that of the
procurement of orders from customers wishing to use two fuel emulsifier
products previously developed by the Group and now owned under licence
to Nouryon BV. Nouryon BV will manufacture and deliver the products
exclusively to SulNOx's customers anywhere in the world.
The Group plans to conduct trials with customers who are bulk users
of heavy fuel oil such as those in shipping and power generation
and also large users of diesel such as mine operators and other
large scale commercial users.
More information may be found on the Group's website www.sulnoxgroup.com.
The Group is domiciled in the United Kingdom.
Going concern
The financial statements have been prepared on the going concern
basis, which assumes the Group will continue
to be able to meet its liabilities as they fall due for the foreseeable
future.
At the end of the year the Group is in a significant net asset position
of GBP8,586,920 which is broadly consistent with GBP8,700,555 in
the prior period.
The Group is currently still in the pre revenue stage of its development
and as such is reliant on the cash resources it currently has until
a date that future revenues materialise. Should the Group fail to
generate meaningful revenues over the next 12 months then there
will likely be a requirement for further funding to be obtained
to continue the development of the business. The directors are of
the opinion that should further funding be required there is a reasonable
chance that further shareholder support could be forthcoming, but
due to this reliance on external factors, there exists a material
uncertainty as to the Groups ability to continue as a going concern.
Additionally, the directors would like to note that the Coronavirus
disease was declared a pandemic on 11th March 2020, shortly before
the end of the financial reporting period, therefore the full implications
for the Group are unclear at the date of signing these accounts.
Whilst it is therefore difficult to evaluate the likely effect on
the Group's trade, customers, suppliers, employees and the wider
economy, the directors have assessed information available to conclude
that the Group is a going concern.
Results and dividends
The results for the year are set out on page 18.
No ordinary dividends were paid. The directors do not recommend
payment of a final dividend.
Directors
The directors who held office during the year and up to the date
of signature of the financial statements were as follows:
Mr S Retter (Appointed 11 April 2019)
Mr G V Lyon (Appointed 17 December 2019)
Mr N Nelson (Resigned 21 September 2020)
Ms I Petersen
Mr G Bostock (Resigned 22 July 2019)
Mr R Florescu (Resigned 14 May 2019)
Mr S Bamford (Resigned 28 May 2020)
Mr R Weinberg (Resigned 31 May 2019)
Directors' remuneration
During the year the Group paid Directors' remuneration totalling
GBP88,992 (2019: GBP0) for qualifying services.
Directors' share options
Details of directors' share options are as follows:
At 1 April Granted Exercised At 31 March Exercise Date from Expiry
2019 2020 date which exercisable date
Simon Retter 250,000 250,000 31/03/2019 31/03/2029
Simon Retter 250,000 250,000 17/12/2019 31/03/2029
Nicholas Nelson 350.000 350,000 14/05/2019 14/05/2029
Nicholas Nelson 325,000 325,000 17/12/2019 14/05/2029
Nicholas Nelson 325,000 325,000 02/01/2020 14/05/2029
Substantial shareholders
The Company has been informed that on 31st March 2020 the following
shareholders held substantial holdings in the issued ordinary shares
of the Company.
Mr S Bamford: 9,125,000 Ordinary shares (10.68% holding)
Nistad Group AS: 12,500,000 Ordinary shares (14.74% holding)
The Company has been informed that on 31st March 2020 the following
shareholders held substantial holdings in the issued ordinary shares
of the Company.
Mr S Bamford: 9,125,000 Ordinary shares (10.68% holding)
Nistad Group AS: 12,500,000 Ordinary shares (14.74% holding)
the issued ordinary shares of the Company.
Nistad Group AS: 12,500,000 (14.6%)
Mr S Bamford: 9,125,000 (10.6%)
Mr J Redman Jnr: 7,500,000 (8.8%)
Mr R Leggatt: 7,170,000 (8.4%)
Mr G Bostock and Ms B Shortt: 7,929,058 (9.2%)
Mr R Weinberg and Ms J Graham: 7,697,661 (9%)
Sungold Escrow Nominees Ltd and Ms A Bravo: 4,778,735 (5.6%)
Financial instruments
A review of the risks to the business have been included in the
strategic report on pages 3 to 8.
Research and development
The Group undertakes research and development and has chosen to
capitalise qualifying expenditure in non-current assets. This is
noted in more detail in the accounting policies.
Post reporting date events
On 19th May 2020, the Company concluded a fundraising round and
successfully raised funds totalling GBP230,000.
The Company also announced in May 2020 that it plans to raise further
funds generating a minimum of GBP100,000.
There are no other significant events to report.
Future developments
An indication of likely future developments in the business have
been included in the strategic report on pages 3 to 8.
Changes in presentation of the financial statements
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS). Previous periods were prepared
in accordance with Financial Reporting Standard 102 (FRS 102).
The Company became listed on the Aquis Exchange (AQSE) Growth Market
during the year and this resulted in the need to report under IFRS.
There were no transition adjustments arising from this change.
Auditor
Shipleys LLP were appointed as auditor to the Company and in accordance
with section 489 of the Companies Act 2006, a resolution proposing
that they be re-appointed will be put at Annual General Meeting.
Corporate governance
The Directors are committed to implementing and maintaining high
standards of corporate governance, and intend, so far as is practicable
given the Company's size and nature, to comply with the UK Corporate
Governance Code and the QCA Corporate Governance Code. In particular,
the Board will ensure that there is a clear allocation of responsibilities
between the running of the Board and the executive roles (at the
level of the Board and Senior Management) responsible for the running
of the Company's business. The Board shall at all times include
one independent non-executive director, and at the date of this
Document, Ingeborg Majken Korsgård Petersen and Graham Lyon
both qualify as being independent.
Due to the size and nature of the Company, audit and risk management
issues will be addressed by the Directors as a whole, rather than
by separate committees. As the Company develops, the Board will
consider establishing separate audit and risk management committees
and will consider developing further policies and procedures, which
reflect the principles of good governance.
The Company has adopted a share dealing code for dealings in securities
of the Company by the Directors and Persons Discharging Managerial
Responsibility which is appropriate for a company whose shares are
traded on the Aquis Exchange Growth Market. This will constitute
the Company's share dealing policy for the purpose of compliance
with UK Legislation including the Market Abuse Regulation and Rule
71 of the Aquis Exchange Rules. It should be noted that the insider
dealing legislation set out in the UK Criminal Justice Act 1993,
as well as provisions relating to market abuse, will apply to the
Company and dealings in Ordinary Shares.
The Company has adopted an anti-bribery and anti-corruption policy
and also implemented appropriate procedures to ensure that the Board,
employees and consultants comply with the UK Bribery Act 2010.
The Directors have established financial controls and reporting
procedures, which are considered appropriate given the size of and
structure of the Company. These controls will be reviewed in the
light of an investment or acquisition and adjusted accordingly.
The Company has put in place procedures to comply with the Company's
General Data Protection Regulation (GPDR) obligations relating to
personal data, including adopting a GDPR Privacy notice for employees,
workers and contractors and a new Privacy Standard.
Internal controls
Internal controls
The Board recognises the importance of both financial and
non-financial controls and has reviewed the Group's control
environment and any related shortfalls during the year. Since the
Group was established, the Directors are satisfied that, given the
current size and activities of the Group, adequate internal
controls have been implemented. Whilst they are aware that no
system can provide absolute assurance against material misstatement
or loss, in light of the current activity and proposed future
developments of the Group, continuing reviews of internal controls
will be undertaken to ensure that they are adequate and
effective.
Risk Management
The Board considers risk assessment to be important in achieving
its strategic objectives. The Board's current assessment of the
principle risks are set out in the Strategic Report and are
monitored by the Board at their meetings.
Relations with shareholders
The Board is committed to providing effective communication with
the shareholders of the Group. Significant developments are
disseminated through stock exchange announcements and regular
updates on the Company website. The Board views the Annual General
Meeting as a forum for communication between the Group and its
shareholders and encourages their participation in its agenda. As
part of the Group's AGM Horizonte releases the results of the votes
in a transparent fashion to all of the Group's stakeholders.
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 the directors have elected
to prepare the financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European
Union. Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or
loss of the Company for that period. In preparing these financial
statements, International Accounting Standard 1 requires that directors:
* properly select and apply accounting policies;
* present information, including accounting policies,
in a manner that provides relevant, reliable,
comparable and understandable information;
* provide additional disclosures when compliance with
the specific requirements in IFRSs are insufficient
to enable users to understand the impact of
particular transactions, other events and conditions
on the entity's financial position and financial
performance; and
* make an assessment of the Company's ability to
continue as a going concern.
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company's transactions
and disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
The directors are also responsible for the maintenance and integrity
of the SulNOx Group Plc website. Legislation in the
in the United Kingdom governing the preparation and dissemination
of the financial statement may differ from legislation
legislation in other jurisdictions.
Statement of disclosure to auditor
Each director in office at the date of approval of this annual report
confirms that:
* so far as the director is aware, there is no relevant
audit information of which the Company's auditor is
unaware, and
* the director has taken all the steps that he / she
ought to have taken as a director in order to make
himself / herself aware of any relevant audit
information and to establish that the Company's
auditor is aware of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of section 418 of the Companies Act 2006.
On behalf of the board
..............................
Mr S Retter
Director
Date: .................................
INDEPENT AUDITORS REPORT
Opinion
We have audited the financial statements of SulNOx Group plc
(the 'parent company)' and its subsidiaries (the 'group') for the
year ended 31 March 2020 which comprise the Consolidated Statement
of Profit or Loss and Other Comprehensive Income, Consolidated and
Company Statement of Financial Position, Consolidated and Company
Statement of Changes in Equity, Consolidated and Company Statement
of Cash Flows and notes to the financial statements, including
significant accounting policies. The financial reporting framework
that has been applied in the preparation of the group financial
statements is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union. The financial
reporting framework that has been applied in the preparation of the
parent company financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and of the parent company's affairs as at 31
March 2020 and of the group's loss for the year then ended;
-- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the European Union;
and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006; and, as regards
the group financial statements, Article 4 of the IAS
Regulation.
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 group
and the parent 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 listed
public interest 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.
The impact of macro-economic uncertainties on our audit
Our audit of the financial statements requires us to obtain an
understanding of all relevant uncertainties, including those
arising as a consequence of the effects of macro-economic
uncertainties such as Covid-19 and Brexit. All audits assess and
challenge the reasonableness of estimates made by the directors and
the related disclosures and the appropriateness of the going
concern basis of preparation of the financial statements. All of
these depend on assessments of the future economic environment and
the company's future prospects and performance.
Covid-19 and Brexit are amongst the most significant economic
events currently faced by the UK, and at the date of this report
their effects are subject to unprecedented levels of uncertainty,
with the full range of possible outcomes and their impacts unknown.
We applied a standardised firm-wide approach in response to these
uncertainties when assessing the company's future prospects and
performance. However, no audit should be expected to predict the
unknowable factors or all possible future implications for a
company associated with these particular events.
Material uncertainty relating to going concern
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosure made in
note 2 to the financial statements concerning the Company's ability
to continue as a going concern. The conditions described in note 2
indicate the existence of material uncertainties which may cast
significant doubt about the Company's ability to continue as a
going concern. The financial statements do not include the
adjustments that would result if the Company was unable to continue
as a going concern.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance on 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.
Risk Our response to the risk Our response and observation
Risk that group is not
going concern We read the Directors' assessment The disclosures in
There is a risk that the of the Going Concern and ability the financial statements
Group may not be considered to continue operating for adequately reflect
a going concern. at least twelve months after the Directors' conclusions
the approval of the these around the uncertainties
financial statement. We compared relating to the going
this assessment to our own concern assumption.
understanding of the risks,
and the nature of the Group's
operations, products and customer
base.
------------------------------------- ---------------------------------
Risk of fraud in revenue
recognition We reviewed the Group's revenue Revenue was recognized
There is a risk that revenue recognition policies and how in accordance with
is materially understated they are applied. Revenue the Group's accounting
due to fraud. was then tested on a sample policy and we concluded
basis to confirm that transactions that no evidence of
have been appropriately recorded fraud or other understatement
in line with IFRS 15. was identified.
------------------------------------- ---------------------------------
Risk that intangible assets We reviewed the Group's forecast The intangible value
have been overstated and valuation of intangible is correctly recongised
There is a risk that the assets and scrutinised the in the financial statement
intangible assets have assumptions and predictions. and no evidence was
been overstated and that The intangibles asset value found to suggest the
they have no cash generating was reviewed and impairment value was overstated
value and the risk that was considered,
they have been incorrectly
disclosed in the accounts.
------------------------------------- ---------------------------------
Risk that management is Risk that management override No evidence of management
able to override controls controls override during the
Journals can be posted We examined journals posted year and this has not
that significantly alter around the year end, specifically led to a material misstatement.
the financial statements. focusing on areas which are All transactions and
more easily manipulated. journals in line with
business
------------------------------------- ---------------------------------
Our application of materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be charged or
influenced. We use materiality both in planning and in the scope of
our audit work and in evaluating the results of our work.
We determine materiality for the Group to be GBP154,422 and this
financial benchmark, which has been used throughout the audit, was
determined by way of a standard formula being applied to key
financial results and balances presented in the financial
statements. Where considered relevant the materiality is adjusted
to suit the specific risk profile of the Group.
Performance materiality is the application of materiality at the
individual account or balance level set at an amount to reduce to
an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality.
Performance materiality was set at 75% of the above materiality
levels.
An overview of the scope of our audit
Our group audit was scoped by obtaining an understanding of the
group and its environment, including the group's system of internal
control, and assessing the risks of material misstatement in the
financial statements at the group level.
Whilst SulNOx Group plc is a company registered in England &
Wales and its head office is located in the UK.
Our group audit scope focused on the group's principal operating
subsidiary, being SulNOx Research & Development Ltd and SulNOx
Fuel Fusion Ltd, which was subject to a full scope audit together
with the parent company. Shipleys LLP performed the audit of the
parent company and subsidiaries.
Other Information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report other than the financial statements and our auditor's report
thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report in this regard.
We have nothing to report in respect of these matters.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
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 group and
the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters 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 by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements and the part of the
directors' remuneration report to be audited are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 12, 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.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at
https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor's report.
Other matters which we are required to address
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to
the audit committee.
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.
Stewart Jell (Senior Statutory Auditor)
For and on behalf of Shipleys LLP,
Chartered Accountants and Statutory Auditor
10 Orange Street
Haymarket
London
WC2H 7DQ
GROUP INCOME STATEMENT Year Period
ended ended
31 March 31 March
2020 2019
Notes GBP GBP
Revenue 3 12,184 - -
Cost of sales (32,493) -
Gross loss (20,309) -
Distribution costs (1,493) (4,290)
Administrative expenses (1,868,064) (547,804)
Operating loss 4 (1,889,866) (552,094)
Income tax expense 8 11,593 13,168
Loss for the year attributable
to equity shareholders (1,878,273) (538,926)
The income statement has been prepared on the basis that all operations
are continuing operations.
Adds
Loss per share (pence) 10
Basic and diluted 0.11 0.14
Loss per share
Basic (2.28) (0.66)
Diluted (2.28) (0.66)
GROUP STATEMENT OF COMPREHENSIVE INCOME Year Period
ended ended
31 March 31 March
2020 2019
GBP GBP
Loss for the year (1,878,273) (538,926)
Other comprehensive income: - -
Total other comprehensive income for the
year - -
Total comprehensive income for the year (1,878,273) (538,926)
GROUP STATEMENT OF FINANCIAL POSITION 2020 2019
Notes GBP GBP
Non-current assets
Intangible assets 11 8,680,881 9,089,078
Tangible assets 12 4,704 6,272
8,685,585 9,095,350
Current assets
Trade and other receivables 17 21,119 9,297
Inventories 16 111,438
Cash and cash equivalents 87,734 206,841
220,291 216,138
Total assets 8,905,876 9,311,488
Current liabilities
Trade and other payables 22 273,956 494,394
Loans 19 45,000 116,539
318,956 610,933
Net current assets/(liabilities) (98,665) (334,795)
Total liabilities 318,956 610,933
Net assets 8,586,920 8,700,555
Equity
Called up share capital 24 1,695,782 1,631,118
Share premium account 25 10,781,690 9,389,155
Share based compensation
reserve 26 307,439 -
Retained earnings 27 (4,197,991) (2,319,718)
Total equity 8,586,920 8,700,555
The financial statements were approved by the board of directors
and authorised for issue on ......................... and are signed
on its behalf by:
..............................
Mr S Retter
Director
Company Registration No. 08449586
COMPANY STATEMENT OF FINANCIAL POSITION 2020 2019
Notes GBP GBP
Non-current assets
Intangible assets 11 8,679,545 9,079,545
Investments 14 408,150 408,150
9,087,695 9,487,695
Current assets
Trade and other receivables 17 563,458 176,675
Cash and cash equivalents 70,168 -
633,626 176,675
Total assets 9,721,321 9,664,370
Current liabilities
Trade and other payables 22 49,273 230,000
Loans 19 45,000 -
94,273 230,000
Net current assets/(liabilities) 539,353 (53,325)
Total liabilities 94,273 230,000
Net assets 9,627,048 9,434,370
Equity
Called up share capital 24 1,695,782 1,631,118
Share premium account 25 10,781,690 9,389,155
Share based compensation
reserve 26 307,439 -
Retained earnings 27 (3,157,863) (1,585,903)
Total equity 9,627,048 9,434,370
The Parent Company loss for the year was GBP1,571,960 (2019 period:
GBP320,455).
The financial statements were approved by the board of directors
and authorised for issue on ......................... and are signed
on its behalf by:
..............................
Mr S Retter
Director
Company Registration No. 08449586
Share capital Share premium Share based Retained Total
account compensation earnings
reserve
Notes GBP GBP GBP GBP GBP
Balance at 1 July 2018 1,631,118 9,389,155 - (1,780,792) 9,239,481
Period ended 31 March
2019:
Loss and total
comprehensive
income for the period - - - (538,926) (538,926)
Balance at 31 March
2019 1,631,118 9,389,155 - (2,319,718) 8,700,555
Year ended 31 March
2020:
Loss and total
comprehensive
income for the year - - - (1,878,273) (1,878,273)
Issue of share capital
(net of costs) 24&25 64,664 1,392,535 - - 1,457,199
Issue of share based
payments 26 - - 307,439 - 307,439
Balance at 31 March 2020 1,695,782 10,781,690 307,439 (4,197,991) 8,586,920
GROUP STATEMENT OF CHANGES IN EQUITY
COMPANY STATEMENT OF CHANGES Share capital Share premium Share based Retained Total
IN EQUITY account compensation earnings
reserve
Notes GBP GBP GBP GBP GBP
Balance at 1 July 2018 1,631,118 9,389,155 - (1,265,448) 9,754,825
Period ended 31 March
2019:
Loss and total
comprehensive
income for the period - - - (320,455) (320,455)
Balance at 31 March
2019 1,631,118 9,389,155 - (1,585,903) 9,434,370
Year ended 31 March
2020:
Loss and total
comprehensive
income for the year - - - (1,571,960) (1,571,960)
Issue of share capital 24&25 64,664 1,392,535 - - 1,457,199
Issue of share based
payments 26 - - 307,439 - 307,439
Balance at 31 March 2020 1,695,782 10,781,690 307,439 (3,157,863) 9,627,048
GROUP STATEMENT OF CASH FLOWS 2020 2019
Notes GBP GBP GBP GBP
Cash flows from operating activities
Cash (absorbed)/generated
by operations 34 (1,516,360) 88,449
Tax received 11,593 13,168
Net cash outflow from operating
activities (1,504,767) 101,617
Investing activities
Purchase of intangible assets - (2,185)
Purchase of property, plant
and equipment - (2,239)
Net cash generated used in
investing activities - (4,424)
Financing activities
Proceeds from issue of shares 1,476,849 -
Share issue costs (19,650) -
Proceeds from loans - 101,981
Repayment of loans (71,539) -
Net cash generated from/(used
in) financing activities 1,385,660 101,981
Net (decrease)/increase in cash
and cash equivalents (119,107) 199,174
equivalents
Cash and cash equivalents at
beginning of year 206,841 7,667
Cash and cash equivalents
at end of year 87,734 206,841
COMPANY STATEMENT OF CASH FLOWS 2020 2019
Notes GBP GBP GBP GBP
Cash flows from operating activities
Cash absorbed by operations 35 (1,387,031) -
Net cash outflow from operating
activities (1,387,031) -
Financing activities
Proceeds from issue of shares 1,476,849 -
Share issue costs (19,650) -
Net cash generated from/(used
in) financing activities 1,457,199 -
Net increase in cash and cash
equivalents 70,168 -
Cash and cash equivalents at
beginning of year - -
Cash and cash equivalents
at end of year 70,168 -
NOTES TO THE FINANCIAL STATEMENTS
1 Accounting policies
Company information
SulNOx Group PLC is a public Company limited by shares, domiciled
and incorporated in England and Wales. The registered office
is 10-12 Orange Street, London, UK, WC2H 7DQ. The Group currently
operates under a full working from home policy and therefore
there is no formal trading address. The Group's principal activities
and nature of its operations are disclosed in the strategic report
and the directors' report.
The Group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group"). The
Parent Company financial statements present information about
the Company as a separate entity and not about its Group.
The Group consists of SulNOx Gruop PLC and its subsidiaries:
Sulnox Research and Development Limited
Sulnox Fuel Fusion Limited
1.1 Accounting convention
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted
for use in the European Union and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS, except
as otherwise stated.
These financial statements for the year ended 31 March 2020 are
the first financial statements of SulNOX Group PLC prepared in
accordance with International Financial Reporting Standards (IFRS)
and IFRS 1 has consequently been applied.
IFRS 1 grants certain exemptions from the full requirements of
Adopted IFRSs in the transition period. The following exemptions
have been taken in these financial statements:
* Business combinations - Business combinations that
took place prior to the transition date of 1st July
2018 have not been restated.
The financial statements are prepared in sterling, which is the
functional currency of the Group. Monetary amounts in these financial
statements are rounded to the nearest GBP.
The financial statements have been prepared under the historical
cost convention. The principal accounting policies adopted are
set out below.
1.2 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability
to affect those returns through its power over the entity. In
assessing control, the Group takes into consideration potential
voting rights. The acquisition date is the date on which control
is transferred to the acquirer. The financial statements of subsidiaries
are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
Losses applicable to the non-controlling interests in a subsidiary
are allocated to the non-controlling interests even if doing
so causes the non-controlling interests to have a deficit balance.
Change in subsidiary ownership and loss of control
Changes in the Group's interest in a subsidiary that do not result
in a loss of control are accounted for as equity transactions.
Where the Group loses control of a subsidiary, the assets and
liabilities are derecognised along with any related NCI and other
components of equity. Any resulting gain or loss is recognised
in profit or loss. Any interest retained in the former subsidiary
is measured at fair value when control is lost.
1 Accounting policies
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated.
Parent Company Income Statement
The Parent Company has applied the exemption contained in section
408 of the Companies Act 2006 and has not presented its individual
Income Statement.
1.3 Going concern
The financial statements have been prepared on the going concern
basis, which assumes the Group will continue to be able to meet
its liabilities as they fall due for the foreseeable future.
At the end of the year the Group is in a significant net asset
position of GBP8,586,920 which is broadly consistent with GBP8,700,555
in the prior period. Forecasts have been prepared for the next
12 months which show trading profits and positive cash flow.
The group is currently still in the pre revenue stage of its
development and as such is reliant on the cash resources it currently
has until a date that future revenues materialise. Should the
Group fail to generate meaningful revenues over the next 12 months
then there will likely be a requirement for further funding to
be obtained to continue the development of the business. The
directors are of the opinion that should further funding be required
there is a reasonable chance that further shareholder support
could be forthcoming, but due to this reliance on external factors,
there exists a material uncertainty as to the Groups ability
to continue as a going concern.
Additionally, the directors would like to note that the Coronavirus
disease was declared a pandemic on 11th March 2020, shortly before
the end of the financial reporting period, therefore the full
implications for the Group are unclear at the date of signing
these accounts. Whilst it is therefore difficult to evaluate
the likely effect on the Group's trade, customers, suppliers,
employees and the wider economy, the directors have assessed
information available to conclude that the Group is a going concern.
1.4 Revenue
Revenue is measured based on the consideration specified in a
contract with a customer and excludes amounts collected on behalf
of third parties. The Group recognises revenue when it transfers
control of a product or service to a customer.
Revenue from the provision of the principal activities is recognised
by reference to the stage of completion of the transaction at
the reporting date where the amount of revenue can be measured
reliably and sufficient work has been completed with certainty
to ensure that the economic benefit will flow to the Group.
1 Accounting policies
1.5 Goodwill
Goodwill represents the excess of the cost of acquisition of
unincorporated businesses over the fair value of net assets acquired.
It is initially recognised as an asset at cost and is subsequently
measured at cost less impairment losses.
The gain on a bargain purchase is recognised in profit or loss
in the period of the acquisition.
For the purposes of impairment testing, goodwill is allocated
to the cash-generating units expected to benefit from the acquisition.
Cash-generating units to which goodwill has been allocated are
tested for impairment at least annually, or more frequently when
there is an indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less than the
carrying amount of the unit, the impairment loss is allocated
first to reduce the carrying amount of any goodwill allocated
to the unit and then to the other assets of the unit pro-rata
on the basis of the carrying amount of each asset in the unit.
An impairment loss recognised for goodwill is not subsequently
reversed.
Amortisation is provided at 20% straight line.
Goodwill arising on acquisitions before the date of transition
to IFRS has been retained at the previous UK GAAP amounts subject
to being tested for impairment at that date.
1.6 Intangible assets other than goodwill
Intangible assets acquired separately from a business are recognised
at cost and are subsequently measured at cost less accumulated
amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised
separately from goodwill at the acquisition date where it is
probable that the expected future economic benefits that are
attributable to the asset will flow to the entity and the fair
value of the asset can be measured reliably; the intangible asset
arises from contractual or other legal rights; and the intangible
asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation
of assets less their residual values over their useful lives
on the following bases:
* Development costs - 4% straight line
* Trademarks - 25% straight line
Useful lives are also examined on an annual basis and adjustments,
where applicable are made on a prospective basis. The Group does
not have any intangible assets with indefinite lives.
1.7 Research and development expenditure
Research expenditure is written off against profits in the year
in which it is incurred. Identifiable development expenditure
is capitalised to the extent that the technical, commercial and
financial feasibility can be demonstrated.
1.8 Property, plant and equipment
Property, plant and equipment are initially measured at cost
and subsequently measured at cost or valuation, net of depreciation
and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation
of assets less their residual values over their useful lives
on the following bases:
Computer equipment 25% reducing balance
Research and development 25% reducing balance
1 Accounting policies
The gain or loss arising on the disposal of an asset is determined
as the difference between the sale proceeds and the carrying
value of the asset, and is recognised in the income statement.
1.9 Non-current investments
Interests in subsidiaries are initially measured at cost and
subsequently measured at cost less any accumulated impairment
losses. The investments are assessed for impairment at each reporting
date and any impairment losses or reversals of impairment losses
are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the Company. Control
is the power to govern the financial and operating policies of
the entity so as to obtain benefits from its activities.
1.10 Impairment of tangible and intangible
assets
At each reporting end date, the Group reviews the carrying amounts
of its tangible and intangible assets to determine whether there
is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the
asset belongs.
Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment annually,
and whenever there is an indication that the asset may be impaired.
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.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit or
loss, unless the relevant asset is carried at a revalued amount,
in which case the reversal of the impairment loss is treated
as a revaluation increase.
1.11 Inventories
Inventories are stated at the lower of cost and estimated selling
price less costs to complete and sell. Cost comprises direct
materials and, where applicable, direct labour costs and those
overheads that have been incurred in bringing the inventories
to their present location and condition.
Inventories held for distribution at no or nominal consideration
are measured at the lower of replacement cost and cost, adjusted
where applicable for any loss of service potential.
Cost is calculated using the weighted average method.
1.12 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held
at call with banks and other short-term liquid investments with
original maturities of three months or less.
1 Accounting policies
1.13 Financial assets
Financial assets are recognised in the Group's statement of financial
position when the Group becomes party to the contractual provisions
of the instrument. Financial assets are classified into specified
categories, depending on the nature and purpose of the financial
assets.
At initial recognition, financial assets classified as fair value
through profit and loss are measured at fair value and any transaction
costs are recognised in profit or loss. Financial assets not
classified as fair value through profit and loss are initially
measured at fair value plus transaction costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification
of financial assets is not met, a financial asset is classified
as measured at fair value through profit or loss. Financial assets
measured at fair value through profit or loss are recognized
initially at fair value and any transaction costs are recognised
in profit or loss when incurred. A gain or loss on a financial
asset measured at fair value through profit or loss is recognised
in profit or loss, and is included within finance income or finance
costs in the statement of income for the reporting period in
which it arises.
The fair values of other financial assets at FVTPL are determined
in accordance with generally accepted pricing models based on
discounted cash flow analysis.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured
at amortised cost where the objective is to hold these assets
in order to collect contractual cash flows, and the contractual
cash flows are solely payments of principal and interest. They
arise principally from the provision of goods and services to
customers (eg trade receivables). They are initially recognised
at fair value plus transaction costs directly attributable to
their acquisition or issue, and are subsequently carried at amortised
cost using the effective interest rate method, less provision
for impairment where necessary.
Impairment of financial assets
Financial assets, other than those requiring measurement at fair
value through profit or loss, are assessed for indicators of
impairment at each reporting end date.
Financial assets are impaired where there is objective evidence
that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future
cash flows of the investment have been affected.
In determining whether financial assets are impaired the Group
considers the following:
* significant financial difficulty of the counterparty
* default or delinquency in interest or principal
payments
* it becoming probable that the borrower will enter
bankruptcy or financial re-organisation.
For certain categories of financial asset, such as trade receivables,
assets that are assessed not to be impaired individually are,
in addition assessed for impairment on a collective basis. Objective
evidence of impairment for a portfolio of receivables could include
the Group's past experience of collecting payments, an increase
in the number of delayed payments or observable changes in national
to local economic conditions that correlate with default on receivables.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights
to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards
of ownership to another entity.
1 Accounting policies
1.14 Financial liabilities
The Group recognises financial debt when the Group becomes a
party to the contractual provisions of the instruments. Financial
liabilities are classified as either 'financial liabilities at
fair value through profit or loss' or 'other financial liabilities'.
Financial liabilities are classified as measured at fair value
through profit or loss when the financial liability is held for
trading. A financial liability is classified as held for trading
if:
* it has been incurred principally for the purpose of
selling or repurchasing it in the near term, or
* on initial recognition it is part of a portfolio of
identified financial instruments that the Group
manages together and has a recent actual pattern of
short-term profit taking, or
* it is a derivative that is not a financial guarantee
contract or a designated and effective hedging
instrument.
Financial liabilities at fair value through profit or loss are
stated at fair value with any gains or losses arising on remeasurement
recognised in profit or loss.
Other financial liabilities
Other financial liabilities, including loans, trade payables
and other short-term monetary liabilities, are initially measured
at fair value net of transaction costs directly attributable
to the issuance of the financial liability. They are subsequently
measured at amortised cost using the effective interest method.
For the purposes of each financial liability, interest expense
includes initial transaction costs and any premium payable on
redemption, as well as any interest or coupon payable while the
liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
Group's obligations are discharged, cancelled, or they expire.
1.15 Equity instruments
Equity instruments issued by the Group are recorded at the proceeds
received, net of direct issue costs. Dividends payable on equity
instruments are recognised as liabilities once they are no longer
at the discretion of the Company.
1.16 Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the reporting end
date.
1 Accounting policies
Deferred tax
Deferred tax is the tax expected to be payable or recoverable
on differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used
in the computation of taxable profit, and is accounted for using
the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it
is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition of other
assets and liabilities in a transaction that affects neither
the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each
reporting end date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered. Deferred tax
is calculated at the tax rates that are expected to apply in
the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income statement,
except when it relates to items charged or credited directly
to equity, in which case the deferred tax is also dealt with
in equity. Deferred tax assets and liabilities are offset when
the Group has a legally enforceable right to offset current tax
assets and liabilities and the deferred tax assets and liabilities
relate to taxes levied by the same tax authority.
1.17 Employee benefits
The costs of short-term employee benefits are recognised as a
liability and an expense, unless those costs are required to
be recognised as part of the cost of inventories or non-current
assets.
The cost of any unused holiday entitlement is recognised in the
period in which the employee's services are received.
Termination benefits are recognised immediately as an expense
when the Group is demonstrably committed to terminate the employment
of an employee or to provide termination benefits.
1.18 Share-based payments
Equity-settled share-based payments are measured at fair value
at the date of grant by reference to the fair value of the equity
instruments granted using the Black-Scholes model. The fair value
determined at the grant date is expensed on a straight-line basis
over the vesting period, based on the estimate of shares that
will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments
at the time they were granted are subsequently modified, the
fair value of the share-based payment under the original terms
and conditions and under the modified terms and conditions are
both determined at the date of the modification. Any excess of
the modified fair value over the original fair value is recognised
over the remaining vesting period in addition to the grant date
fair value of the original share-based payment. The share-based
payment expense is not adjusted if the modified fair value is
less than the original fair value.
Cancellations or settlements (including those resulting from
employee redundancies) are treated as an acceleration of vesting
and the amount that would have been recognised over the remaining
vesting period is recognised immediately.
In the case of options granted, fair value is measured by a Black-Scholes
pricing model.
1.19 Foreign exchange
Transactions in currencies other than pounds sterling are recorded
at the rates of exchange prevailing at the dates of the transactions.
At each reporting end date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the
rates prevailing on the reporting end date. Gains and losses
arising on translation in the period are included in profit or
loss.
2 Critical accounting estimates and judgements
In the application of the Group's accounting policies, the directors
are required to make judgements, estimates and assumptions about
the carrying amount of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised, if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of
causing a material adjustment to the carrying amount of assets
and liabilities are outlined below.
Critical judgements:
Bad debt provisions
Trade receivables are reviewed for impairment, where necessary,
provisions for old debts are included in the financial statements.
Calculation of these provisions requires judgements to be made,
which include an estimation of the recoverable amounts.
Inventories
Inventories are valued at the lower cost and net realisable value.
New realisable value includes, where necessary, provisions for
slow moving and obsolete stocks. Calculation of these provisions
requires judgements to be made, which include forecast consumer
demand, the promotional, competitive and economic environment
and inventory loss trends.
3 Revenue
An analysis of the Group's revenue is as follows:
Year Period ended
ended
2020 2019
GBP GBP
Revenue analysed by class of business
Fuel Emulsifier Products 12,184 -
Year Period ended
ended
2020 2019
GBP GBP
Revenue analysed by geographical market
United Kingdom 12,184 -
Revenue is all derived from the Group's principal activities
as noted in the director's report.
4 Operating loss
Year Period ended
ended
2020 2019
GBP GBP
Operating loss for the year is stated after charging/(crediting):
Depreciation of property, plant and equipment 1,568 520
Amortisation of intangible assets (included
within administrative expenses) 402,459 331,992
Cost of inventories recognised as an expense 32,493 -
Impairment loss recognised on trade receivables - 288
Impairment loss recognised on intangible assets 5,738 -
Share-based payments 307,439 -
The amortisation and impairment of intangible assets is included
within administration expenses.
5 Auditor's remuneration
Year Period ended
ended
2020 2019
Fees payable to the Company's auditor and associates: GBP GBP
For audit services
Audit of the financial statements of the Company 15,000 10,000
15,000 10,000
For other services
Tax services 20,750 -
Other services 41,846 -
Total non-audit fees 62,596 -
During the year , the Group incurred non-audit fees from its
auditor in respect of listing support, payroll implementation,
general business consultancy and prior year corporation tax services.
Non-audit services were provided prior to the Company's listing
on the Aquis Exchange Growth Market.
6 Employees
The average monthly number of persons (including directors) employed
by the Group and Company during the year was:
Group Company
Year ended Period ended Year Year ended
ended
2020 2019 2020 2019
5 - 5 -
Their aggregate remuneration comprised:
Group Company
Year ended Period ended Year Year ended
ended
2020 2019 2020 2019
GBP GBP GBP GBP
Wages and salaries 396,431 - 396,431 -
Social security costs 3,932 - 3,932 -
400,363 - 400,363 -
7 Directors' remuneration
Year Period ended
ended
2020 2019
GBP GBP
Remuneration for qualifying services 88,992 -
As total directors' remuneration was less than GBP200,000 in
both the current and the previous years, there is no disclosure
with regard to the highest paid director.
8 Income tax expense
Continuing Continuing
operations operations
Year ended Period ended
2020 2019
GBP GBP
Current tax
Adjustments in respect of prior periods (11,593) (13,168)
Total UK current tax (11,593) (13,168)
The charge for the year can be reconciled to the loss per the
income statement as follows:
2020 2019
GBP GBP
Loss before taxation (1,889,866) (552,094)
Expected tax credit based on a corporation tax
rate of 19.00% (2019: 19.00%) (359,075) (104,898)
Effect of expenses not deductible in determining
taxable profit 58,413 591
Unutilised tax losses carried forward 300,662 14,794
Adjustment in respect of prior years 11,593 13,168
Permanent capital allowances in excess of depreciation - 99
Amortisation on assets not qualifying for tax
allowances - 63,078
Taxation credit for the year (11,593) (13,168)
The Group have unused tax losses of GBP3,378,706 (2019: GBP1,797,846).
A deferred tax asset has not been recognised in respect of these
losses because it is not yet probable that the losses will be
utilised in future periods. Therefore, the Group has an unrecognised
deferred tax asset of GBP641,060 (2019: GBP341,591).
9 Loss per share 2020 2019
GBP GBP
Number of shares
Weighted average number of ordinary shares
for basic earnings per share 82,483,470 81,555,920
Loss
Continuing operations
Loss for the period from continued operations (1,878,273) (538,926)
Loss for basic and diluted loss per share being
net loss attributable to equity shareholders
of the Company for continued operations (1,878,273) (538,926)
Loss per share for continuing operations
Basic and diluted per share (pence) (2.28) (0.66)
Basic and diluted loss per share
From continuing operations (pence) (2.28) (0.66)
(2.28) (0.66)
The loss attributable to equity holders (holders of ordinary
shares) of the Company for the purpose of calculating the fully
diluted loss per share is identical to that used for calculating
the loss per share. The exercise of share options would have
the effect of reducing the loss per share and is therefore anti-dilutive
under the terms of IAS 33 'Earnings per Share'.
10 Impairments
Impairment tests have been carried out where appropriate and
the following impairment losses have been recognised in profit
or loss:
2020 2019
GBP GBP
In respect of:
Intangible assets 5,738 -
Recognised in:
Administrative expenses 5,738 -
11 Intangible assets
Group Goodwill Patents Development Total
& licences costs
GBP GBP GBP GBP
Cost
At 1 July 2018 43,424 - 10,045,984 10,089,408
Additions - 2,185 - 2,185
At 31 March 2019 43,424 2,185 10,045,984 10,091,593
At 31 March 2020 43,424 2,185 10,045,984 10,091,593
Amortisation and impairment
At 1 July 2018 34,740 - 635,783 670,523
Charge for the year 8,684 303 323,005 331,992
At 31 March 2019 43,424 303 958,788 1,002,515
Charge for the year - 546 401,913 402,459
Impairment loss - - 5,738 5,738
At 31 March 2020 43,424 849 1,366,439 1,410,712
Carrying amount
At 31 March 2020 - 1,336 8,679,545 8,680,881
At 31 March 2019 - 1,882 9,087,196 9,089,078
Company Goodwill Patents Development Total
& licences costs
GBP GBP GBP GBP
Cost
At 1 July 2018 - - 10,000,000 10,000,000
At 31 March 2019 43,424 - 10,000,000 10,000,000
At 31 March 2020 43,424 - 10,000,000 10,000,000
Amortisation and impairment
At 1 July 2018 - - 600,000 600,000
Charge for the year - - 320,455 320,455
At 31 March 2019 - - 920,455 920,455
Charge for the year - - 400,000 400,000
At 31 March 2020 43,424 - 1,320,455 1,320,455
Carrying amount
At 31 March 2020 - - 8,679,545 8,679,545
At 31 March 2019 - - 9,079,545 9,079,545
11 Intangible assets
Previously, the Company (and therefore Group) acquired from Technologies
& Systems, the exclusive rights to a suite of Emulsion Technologies
developed over the previous 25 years, for a consideration of
GBP10,000,000 in cash, to be paid at the rate of GBP1,000,000
per year for 10 years, subject to terms and conditions.
In a subsequent agreement dated 18th October 2013, the outstanding
consideration was satisfied by the placement of shares at value
of GBP1.50 each and the Company (Group) assumed unencumbered
ownership of the Emulsification Technologies.
Goodwill of GBP43,424 arises on consolidation as a consequence
of the Company's acquisition of subsidiary Sulnox Research and
Development Ltd. The goodwill has been fully amortised in prior
periods.
12 Property, plant and equipment
Group Computer Research Total
equipment & Development
GBP GBP GBP
Cost
At 1 July 2018 6,098 174,157 180,255
Additions 2,239 - 2,239
At 31 March 2019 8,337 174,157 182,494
At 31 March 2020 8,337 174,157 182,494
Accumulated depreciation and impairment
At 1 July 2018 1,545 174,157 175,702
Charge for the year 520 - 520
At 31 March 2019 2,065 174,157 176,222
Charge for the year 1,568 - 1,568
At 31 March 2020 3,633 174,157 177,790
Carrying amount
At 31 March 2020 4,704 - 4,704
At 31 March 2019 6,272 - 6,272
Company Computer Research Total
equipment & Development
GBP GBP GBP
Cost
At 31 March 2019 174,157 174,157 174,157
At 31 March 2020 174,157 174,157 174,157
Accumulated depreciation and impairment
At 31 March 2019 174,157 174,157 174,157
At 31 March 2020 174,157 174,157 174,157
Carrying amount
At 31 March 2020 - - -
At 31 March 2019 - - -
13 Financial instruments recognised in the statement of
financial position
Group Company
2020 2019 2020 2019
Held for trading: GBP GBP GBP GBP
Current financial assets
Trade and other receivables 4,442 4,442 548,925 176,675
Cash and cash equivalents 87,734 206,841 70,168 -
92,176 211,283 619,093 176,675
Current financial liabilities
Trade and other payables 317,128 610,933 54,273 205,000
317,128 610,933 54,273 205,000
14 Investments
Group
The Group does not hold any investments.
Company Current Non-current
2020 2019 2020 2019
GBP GBP GBP GBP
Investments in subsidiaries - - 408,150 408,150
The Company has not designated any financial assets that are
not classified as held for trading as financial assets at fair
value through profit or loss.
The Company's investments are not impaired.
The Company had owned a 50.1% shareholding in Sulnox Retail Limited
before the entity was dissolved on 20 August 2019. The investment
was fully impaired in previous periods. Sulnox Retail Limited
had been dormant since incorporation.
15 Subsidiaries
Details of the Company's subsidiaries at 31 March 2020 are as
follows:
Name of undertaking Registered office Principal activities % Held
Direct Voting
10 Orange Street, Haymarket, Fuel emulsifier
Sulnox Fuel Fusion Ltd London, WC2H 7DQ products 100.00 100.00
Sulnox Research &
Development 10 Orange Street, Haymarket, Fuel emulsifier
Ltd London, WC2H 7DQ products 100.00 100.00
16 Inventories
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
Finished goods 111,438 - - -
17 Trade and other receivables
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
VAT recoverable 14,975 4,856 14,533 -
Amounts owed by fellow group
undertakings - - 543,613 173,065
Other receivables 6,144 4,441 5,312 3,610
21,119 9,297 563,458 176,675
Amounts due from subsidiaries are repayable on demand, unsecured
and do not attract any interest.
18 Fair value of trade receivables
The directors consider that the carrying amount of trade and
other receivables is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting
end date.
19 Loans
Group Company
2020 2019 2020 2019
GBP GBP
Unsecured loans at amortised cost
Directors' loans 45,000 116,539 45,000 -
Analysis of loans
Loans are classified based on the amounts that are expected to
be settled within the next 12 months and after more than 12 months
from the reporting date, as follows:
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
Current liabilities 45,000 116,539 45,000 -
Director loans are unsecured, repayable on demand and are not
interest bearing.
20 Fair value of financial liabilities
The directors consider that the carrying amounts of financial
liabilities carried at amortised cost in the financial statements
approximate to their fair values.
21 Liquidity risk
The Group seeks to manage financial risk by ensuring that sufficient
liquidity is available to meet foreseeable needs.
22 Trade and other payables
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
Trade payables 96,399 100,275 6,715 -
Accruals 101,276 35,000 40,000 25,000
Other payables 76,281 359,119 2,558 205,000
273,956 494,394 49,273 230,000
23 Share-based payment transactions
During the year the Company implemented an equity settled share
based payment plan for certain consultants, employees and directors.
The options issued during the year were issued before the initial
public offering of the shares on the Aquis Stock Exchange and
are exercisable at par value which is GBP0.02 per share.
The options awarded vest as follows:
700,000 options: on grant
575,000 options: on the Company listing
325,000 options: on achieving certain Group sales targets
The options have no forfeiture provisions
The table below summarises the options granted, exercised, and
cancelled during the year.
Number of share options Weighted average
exercise price
2020 2019 2020 2019
GBP GBP
Outstanding at 1 April 2019 - - - -
Granted in the period 1,600,000 - 0.02 -
Outstanding at 31 March 2020 1,600,000 - 0.02 -
Exercisable at 31 March 2020 1,275,000 - 0.02 -
The options outstanding at 31 March 2020 had an exercise price
of GBP0.02 and a remaining contractual life of 10 years.
During the year, options were granted on 30 May 2019. The weighted
average fair value of the options on the measurement date was
GBP0.24. The weighted average fair values of the options on the
measurement date was GBP388,344. Fair value was measured using
the Black-Scholes option pricing model.
Inputs were as follows:
2020 2019
Weighted average share price 0.5 -
Weighted average exercise price 0.02 -
Expected volatility 50% -
Expected life 10 -
Risk free rate 2.83% -
Given the Company is newly listed on a stock exchange and there
is a lack of available historic trading data for its shares,
volatility was calculated based upon the anticipated volatility
of newly listed companies of a similar market capitalisation
and number of shareholders
23 Share-based payment transactions
Liabilities and expenses
Costs recognised in the year total GBP307,439 (2019: GBPnil).
24 Share capital
Company 2020 2019
GBP GBP
Ordinary share capital
Issued and fully paid
84,789,093 Ordinary shares of 2p each 1,695,782 1,631,118
The Company has only one class of ordinary share which carry
no right to fixed income.
Reconciliation of movements during the year:
Number
At 1 April 2019 81,555,920
Issue of fully paid shares 3,233,173
At 31 March 2020 84,789,093
Current year changes to Ordinary share capital
On 17 December 2019 the Company issued 1,863,173 ordinary shares
of 0.02p at a price of GBP0.425p per share and 1,370,000 ordinary
shares at a price of GBP0.50p per share for working capital purposes.
25 Share premium account
Group and Company 2020 2019
GBP GBP
At the beginning of the year 9,389,155 9,389,155
Issue of new shares 1,412,185 -
Share issue expenses (19,650) -
At the end of the year 10,781,690 9,389,155
Share premium represents the premium arising on issue of equity
shares, net of issue costs.
26 Share based compensation reserve
Share based
compensation
reserve
Group and Company GBP
Balance at 1 July 2018 -
Balance at 31 March 2019 -
Additions 307,439
Balance at 31 March 2020 307,439
The share-based compensation reserve represents the credit arising
on the charge for share options calculated in accordance with
IFRS 2.
27 Retained earnings
Group Company
2020 2019 2020 2019
GBP GBP GBP GBP
At the beginning
of the year (2,319,718) (1,780,792) (1,585,903) (1,265,448)
Loss for the year (1,878,273) (538,926) (1,571,960) (320,455)
At the end of the year (4,197,991) (2,319,718) (3,157,863) (1,585,903)
The retained earnings reserve represents all current and prior
period cumulative profits and losses.
28 Capital commitments
At 31 March 2020 the Company had no capital commitments.
29 Capital risk management
The Company is not subject to any externally imposed capital
requirements.
30 Events after the reporting date
On 19 May 2020 the Company issued a further 575,000 ordinary
shares of 0.02p at a price of GBP0.4p per share for working capital
purposes.
There are no additional significant post balance sheet events.
31 Related party transactions
Group and Company
Remuneration of key management personnel
The remuneration of the Directors, who are the key management
personnel of the Company, is set out on page 35.
Group
Other transactions with directors
Former director Mr G Bostock, who resigned from his directorships
on 22nd July 2019, converted debt into equity in the Company
on 17th December 2019. The debt cancelled was GBP101,600. During
the prior period, Mr G Bostock paid expenses on behalf of the
Group totalling GBP123,908, repayment of GBP13,958 was made and
therefore a balance of GBP116,539 was owed to Mr G Bostock at
the period end. GBP14,939 remains outstanding at the current
year end.
A former director of the Company, Mr R Weinberg, who resigned
from his directorship on 31st May 2019, also converted debt into
equity in the Company on 17th December 2019 date. The debt cancelled
was GBP102,600. Also during the prior period, Mr R Weinberg paid
expenses on behalf of the Group totalling GBP121,107, repayment
of GBP10,390 was made and therefore a balance of GBP118,685 was
owed to Mr Weinberg at the period end. GBP15,175 remains outstanding
at the current year end.
During the year, expenses totalling GBP47,313 (2019 period: GBP31,500)
were paid to Mr J Redman who is the son of Mr J Redman MBE, a
former director in SulNOx Group PLC, he resigned from his directorship
on 12 November 2018. These expenses related to consultancy fees
and at the period end GBP4,363 (2019: GBPnil) remained outstanding
to Mr J Redman.
Also during the year expenses totalling GBP54,482 (2019 period:
GBPnil) were paid to former director Mr G Bostock. These expenses
related to consultancy fees and at the period end GBP45,000 (2019:
GBPnil) remained outstanding to Mr G Bostock.
Company
Transactions with Group undertakings
During the year the Company made loans to its subsidiaries totalling
GBP370,548 (2019: GBP173,065). At the year end the amount owed
to the Company was GBP543,613 (2019: GBP173,065). All inter-group
debt is repayable on demand, unsecured and not subject to interest.
32 Directors' transactions
Group
During the year, expenses totalling GBP17,059 (2019: GBPnil)
was paid to director Mr N Nelson. These expenses related to consultancy
fees and at the period end GBPnil (2019: GBPnil) remained outstanding
to Mr N Nelson.
During the year director Mr S Bamford made advances to the Group
totalling GBP30,500 (2019: GBPnil). At the year end GBP30,500
(2019: GBPnil) remained outstanding to Mr S Bamford.
At the balance sheet date unpaid salaries were payable to director
Mr S Retter and Mr Nelson totalling GBP14,000 (2019: GBPnil)
and GBP7,500 (GBP2019: GBPnil) respectively. These amounts are
included in creditors as directors' loans.
Company
During the year director Mr S Bamford made advances to the Group
totalling GBP23,500 (2019: GBPnil). At the year end GBP23,500
(2019: GBPnil) remained outstanding to Mr S Bamford.
At the balance sheet date unpaid salaries were payable to director
Mr S Retter and Mr Nelson totalling GBP14,000 (2019: GBPnil)
and GBP7,500 (GBP2019: GBPnil) respectively. These amounts are
included in creditors as directors' loans.
33 Controlling party
In the opinion of the directors there is no ultimate controlling
party by virtue of a majority shareholding.
34 Cash absorbed by operations - Group
2020 2019
GBP GBP
Loss for the year after tax (1,878,273) (538,926)
Adjustments for:
Taxation charged (11,593) (13,168)
Amortisation and impairment of intangible assets 408,197 331,992
Equity settled share based payment expense 307,439 -
Depreciation and impairment of property, plant
and equipment 1,568 520
Movements in working capital:
Increase in inventories (111,438) -
Increase in trade and other receivables (11,822) (2,411)
(Decrease)/increase in trade and other payables (220,438) 310,442
Cash absorbed by operations (1,516,360) 88,449
35 Cash absorbed by operations - Company
2020 2019
GBP GBP
Loss for the year after tax (1,571,960) (320,455)
Adjustments for:
Amortisation and impairment of intangible assets 400,000 320,455
Equity settled share based payment expense 307,439 -
Movements in working capital:
Increase in trade and other receivables (386,783) (173,065)
(Decrease)/increase in trade and other payables (135,727) 173,065
Cash absorbed by operations (1,387,031) -
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END
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