TIDMFPP
RNS Number : 3942B
Fragrant Prosperity Holdings Ltd
30 September 2022
30 September 2022
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, WITHIN, INTO OR IN THE UNITED STATES, AUSTRALIA,
CANADA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR
JAPAN.
FRAGRANT PROSPERITY HOLDINGS LIMITED
("FPP" or "the Company")
Fragrant Prosperity Holdings Limited (LSE: FPP) announces its
audited annual financial results for the financial year ended 31
March 2022.
I have pleasure in presenting the financial statements of
Fragrant Prosperity Holdings Limited (the "Company" or "FPP") for
the financial year ended 31 March 2022.
During the year the Company entered into a letter of Intent to
acquire the entire issued share capital of CiiTech Ltd a leading
cannabis wellness company based in the UK and Israel for
consideration of GBP17.5m payable in newly issued shares in the
Company (subject to adjustment should the number of CiiTech
securities in issue change prior to completion of the acquisition).
Unfortunately, due to adverse market conditions the acquisition was
unsuccessful and the letter of intent was terminated.
The Board continued to review a number of potential acquisition
opportunities across the sector but none of which met the necessary
criteria for selection as at the end of the year.
During the financial year, the Company reported a net loss of
GBP697,706 (2021: GBP241,709) which represents costs incurred in
during the unsuccessful CiiTech Ltd acquisition, costs incurred
identifying potential transactions as well as ongoing
administrative expenses. As at 31 March 2022, the Company had cash
in bank balance of GBP281,448 (2021: GBP562,204).
The Board would provide further updates to shareholders in due
course.
Chairman
29 September 2022
Enquires:
Fragrant Prosperity Holdings Limited
Simon James Retter +44 (0) 20 3137 1902
Optiva Securities Ltd (Financial Adviser)
Vishal Balasingham +44 (0) 20 3137 1902
FRAGRANT PROSPERITY HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE FINANCIAL YEARED 31 MARCH 2022
Directors' report
The Directors present their report together with the audited
financial statements, for the financial year ended 31 March
2022.
The Company was incorporated on 28 January 2016 in the British
Virgin Islands, as a company limited by shares under the BVI
Business Companies Act, 2004. The registered office of the Company
is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town,
Tortola, VG1110, British Virgin Islands.
Its issued share capital, consisting of Ordinary Shares, are
currently admitted to a Standard Listing on the Official List in
accordance with Chapter 14 of the Listing Rules and to trading on
the London Stock Exchange's main market for listed securities.
On 12 December 2017 the company changed its name from Vale
International Group Ltd to Fragrant Prosperity Holdings Ltd.
The Company's nature of operations is to act as a special
purpose acquisition company.
Results and dividends
The results for the year are set out in the Statement of
Comprehensive Income on page 15. The Directors do not recommend the
payment of a dividend on the ordinary shares.
Company objective and future developments
The Company was formed to undertake an acquisition of a target
company or business. The Company does not have any specific
acquisition under consideration and does not expect to engage in
substantive negotiations with any target company or business in the
immediate future. The Directors believe that their network, and the
Company's cash resources and profile following Admission, mean that
the Company will target an Acquisition where the target company has
a value of up to GBP100 million. The Company expects that
consideration for the Acquisition will primarily be satisfied by
issue of new Shares to a vendor (or vendors), but that some cash
may also be payable by the Company. Any funds not used in
connection with the Acquisition will be used for future
acquisitions, internal or external growth and expansion, and
working capital in relation to the acquired company or
business.
Following completion of the Acquisition, the objective of the
Company will be to operate the acquired business and implement an
operating strategy with a view to generating value for its
Shareholders through operational improvements as well as
potentially through additional complementary acquisitions following
the Acquisition. Following the Acquisition, the Company intends to
seek re-admission of the enlarged group to listing on the Official
List and trading on the London Stock Exchange or admission to
another stock exchange.
The Company's efforts in identifying a prospective target
company or business will not be limited to a
particular industry or geographic region. However, given the
experience of the Directors, the Company expects to focus on
acquiring a company or business in the technology sector (in
particular focussing on technology and/or intellectual property
that is used in the financial services industry) or the medicinal
cannabis and CBD Wellness sector with either all or a substantial
portion of its operations in Europe or Asia. The Directors' initial
search will focus on businesses based in or with operations in Hong
Kong, Malaysia, or the United Kingdom.
Principal risks and uncertainties
Currently the principal risks relate to the completion of the
Acquisition, and whether, if unsuccessful, the Company could find
sufficient suitable investments to ensure compliance with the
requirements of its continued listing on the standard market.
An explanation of the Company's financial risk management
objectives, policies and strategies is set out in note 8.
Effect of Covid 19
During the first half of the calendar year 2020, the widely
reported Covid 19 pandemic effected business and economies
throughout the globe. Given the nature of operations of the Company
the effect has been minimal to date, although some added headwinds
might be experienced resulting in a longer period of time to
identify and execute a chosen acquisition of a business due to the
overall slowdown in the global economy and travel restrictions.
Key events
At the year end the Company had cash of approximately GBP281,448
and continues to keep administrative costs to a minimum so that the
majority of funds can be dedicated to the review of and potentially
investment in, suitable projects. The company is likely to receive
additional funds in order to continue its activities.
Directors
The Directors of the Company during the year were:
Mahesh s/o Pulandaran
Simon James Retter
Craig Marshak (resigned 10 November 2021)
Richard Samuel
Daniel Reshef (appointed 31 March 2021)
Director's interest
Mahesh s/o Pulandaran holds 1 share of the Company
Stonedale Management and Investments Ltd (a company which is
under control of Simon James Retter), holds an option to subscribe
for 2,500,000 shares for nil consideration.
Craig Marshak holds options to subscribe for 2,500,000 shares
for nil consideration.
Substantial shareholders
The Company has been notified of the following interests of 3
per cent or more in its issued share capital as at 29 September
2022.
Number of Ordinary % of
Shareholder Shares Share Capital
Peel Hunt Holdings Ltd 8,827,318 14.9%
Hargreaves Lansdown Nominees
Ltd 13,412,679 22.6%
Vidacos Nominees Ltd 5,301,550 8.9%
JIM Nominees Ltd 9,977,501 16.8%
Winterflood Securities Ltd 4,075,452 6.9%
Interactive Investor Services
Nominees Ltd 3,796,296 6.4%
Capital and returns management
The Directors believe that, following an acquisition, further
equity capital raisings may be required by the Company for working
capital purposes as the Company pursues its objectives. The amount
of any such additional equity to be raised, which could be
substantial, will depend on the nature of the acquisition
opportunities which arise and the form of consideration the Company
uses to make the acquisition and cannot be determined at this
time.
The Company expects that any returns for Shareholders would
derive primarily from capital appreciation of the Ordinary Shares
and any dividends paid pursuant to the Company's dividend
policy.
Dividend policy
The Company is primarily seeking to achieve capital growth for
its Shareholders.
It is the Board's intention during the current phase of the
Company's development to retain future distributable profits from
the business, to the extent any are generated. As a holding
company, the Company will be dependent on dividends paid to it by
its subsidiaries.
The Board does not anticipate declaring any dividends in the
foreseeable future but may recommend dividends at some future date
after the completion of the Acquisition and depending upon the
generation of sustainable profits and the Company's financial
position.
The Board can give no assurance that it will pay any dividends
in the future, nor, if a dividend is paid, what the amount of such
dividend will be.
The Company will only pay dividends to the extent that to do so
is in accordance with all applicable laws.
Section 172 Statement
The Directors of the Company, as those of all UK compa-nies,
must act in accordance with a set of general duties. These duties
are detailed in section 172 of the UK Compa-nies Act 2006 which is
summarized as follows:
"A director of a company must act in the way he consid-ers, in
good faith, would be most likely to promote the success of the
company for the benefit of its stakehold-ers as a whole, and in
doing so have regard (amongst other matters) to:
(a) the likely consequences of any decision in the long
term;
(b) the interests of the company's employees;
(c) the need to foster the company's business relation-ships
with suppliers, customers and others;
(d) the impact of the company's operations on the com-munity and
the environment;
(e) the desirability of the company maintaining a reputa-tion
for high standards of business conduct; and
(f) the need to act fairly as between stakeholders of the
Company"
As part of their induction, all Directors are briefed on their
duties and they can access professional advice on these, either
from the Company Secretary or, if they judge it necessary, from an
independent adviser. The Directors fulfil their duties partly
through a governance framework that delegates day-to-day
decision-making to employees of the Company and details of this can
be found in our Governance section of the Directors Report.
The following paragraphs summarise how the Directors fulfil
their duties:
Risk Management
The Company is currently undertaking due diligence and working
towards executing an acquisition of a target. It is therefore vital
that we effectively identify, evaluate, manage and mitigate the
risks we face, and that we continue to evolve our approach to risk
management.
For details of our principal risks and uncertainties and how we
manage our risk environment, please see page 4.
Our People
Our Company is committed to being a responsible business. Our
behaviour is aligned with the expectations of our people, clients,
investors, communities and society as a whole. We must also ensure
we share common values that inform and guide our behaviour so we
achieve our goals in the right way. The only employees are
currently the Directors of the company, who strive to adhere to the
highest ethical standards.
Shareholders
The Board is committed to openly engaging with our shareholders,
as we recognize the importance of contin-uing effective dialogue.
It is important to us that share-holders understand our strategy
and objectives, so these must be explained clearly, feedback heard
and any issues or questions raised properly considered. Our board
members, especially Simon Retter and Craig Marshak, hold a series
of shareholders meetings several times a year on the back of
financial and operational reporting.
Community and Environment
The Company's approach is to use our strengths to cre-ate
positive change for the people and communities with which we
interact. We want to leverage our expertise and enable colleagues
to support the communities around us.
Corporate governance
As a company with a Standard Listing, the Company is not
required to comply with the provisions of the UK Corporate
Governance Code. Although the Company does not comply with the UK
Corporate Governance Code, the Company intends to adopt corporate
governance procedures as are appropriate for the size and nature of
the Company and the size and composition of the Board. These
corporate governance procedures have been selected with due regard
to the provision of the UK Corporate Governance Code insofar as is
appropriate. A description of these procedure is set out below:
-- until an Acquisition is made, the Company will not have
nominations, remuneration, audit or risk committees. The Board as a
whole will instead review its size, structure and composition, the
scale and structure of the Directors' fees (taking into account the
interests of Shareholders and the performance of the Company), take
responsibility for the appointment of auditors and payment of their
audit fee, monitor and review the integrity of the Company's
financial statements and take responsibility for any formal
announcements on the Company's financial performance. Following the
Acquisition, the Board intends to put in place nomination,
remuneration, audit and risk committees;
-- the Board has adopted a share dealing code that complies with
the requirements of the Market Abuse Regulations. All persons
discharging management responsibilities shall comply with the share
dealing code since the date of Admission; and
-- Following the Acquisition and subject to eligibility, the
Directors may, in future, seek to transfer the Company from a
Standard Listing to either a Premium Listing or other appropriate
listing venue, based on the track record of the company or business
it acquires, subject to fulfilling the relevant eligibility
criteria at the time. However, in addition to or in lieu of a
Premium Listing, the Company may determine to seek a listing on
another stock exchange. Following such a Premium Listing, the
Company would comply with the continuing obligations contained
within the Listing Rules and the Disclosure and Transparency Rules
in the same manner as any other company with a Premium Listing.
The Company has not chosen to apply a particular corporate
governance code, as the directors consider that the most widely
recognised codes are not appropriate for companies with limited
board resources.
The Directors are responsible for internal control in the
Company and for reviewing its effectiveness. Due to the size of the
Company, all key decisions are made by the Board in full. The
Directors have reviewed the effectiveness of the Company's systems
during the period under review and consider that there have been no
material losses, contingencies or uncertainties due to the weakness
in the controls. The Board will be responsible for taking all
proper and reasonable steps to ensure compliance with the Model
Code by the Directors.
Emissions, Environmental & Social matters
The Company currently is not responsible for any emissions other
than indirectly through travel for undertaking due diligence on
target businesses. It is therefore not practical to quantify the
total emissions of the Company. Likewise, as the nature of the
Company is an acquisition company, it is the opinion of the
Directors that it has no direct social, community and human rights
issues are environmental matters on which it should disclose
information. Presently all of the Directors of the Company are
male, the Directors are actively seeking to balance the board with
some female representation although this would likely occur upon a
change in the board composition upon the completion of an
acquisition.
Responsibility Statement
The directors are responsible for preparing the annual report
and the non-statutory financial statements. The directors are
required to prepare financial statements for the Company in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the United Kingdom.
International Accounting Standard 1 requires that financial
statements present fairly for each financial period the Company's
financial position, financial performance and cash flows. This
requires the faithful representation of transactions, other events
and conditions in accordance with the definitions and recognition
criteria for the assets, liabilities, income and expenses set out
in the International Accounting Standards Board's "Framework for
the Preparation and Presentation of Financial Statements". In
virtually all circumstances, a fair representation will be achieved
by compliance with all IFRS as adopted by the United Kingdom.
Directors are also required to:
- select suitable accounting policies and then apply them consistently;
- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information; and
- provide additional disclosures when compliance with the
specific requirements in IFRS as adopted by the United Kingdom is
insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the Company's
financial position and financial performance.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time, the
financial position of the Company. 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 maintenance and integrity of the Fragrant Prosperity
Holdings Ltd website (http://www.fragrantprosperityholdings.com/)
is the responsibility of the Directors; work carried out by the
auditors does not involve the consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred in the accounts since they were initially
presented on the website.
Legislation in the British Virgin Islands governing the
preparation and dissemination of the financial statements and the
other information included in annual reports may differ from
legislation in other jurisdictions.
The Directors are responsible for preparing the Financial
Statements in accordance with the Disclosure and Transparency Rules
of the United Kingdom's Financial Conduct Authority ('DTR') and
with International Financial Reporting Standards as adopted by the
United Kingdom.
The directors confirm, to the best of their knowledge that:
-- the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company; and
-- the Chairman's Statement and Directors' Report include a fair
review of the development and performance of the business and the
financial position of the Company, together with a description of
the principal risks and uncertainties that it faces.
Auditors and disclosure of information
The directors confirm that:
-- there is no relevant audit information of which the Company's
non-statutory auditor is unaware; and
-- each Director has taken all the necessary steps he ought to
have taken as a Director in order to make himself aware of any
relevant audit information and to establish that the Company's
non-statutory auditor is aware of that information.
Going Concern
During the year the Company worked on acquiring the entire share
capital of a business that led to significant expenditure on legal,
due diligence and other associated costs. The acquisition was due
to be completed alongside a capital raise to provide working
capital for the enlarged group, due to adverse market conditions
the capital raise was unsuccessful and the result was the deletion
of the Companies existing cash reserves. As well as the
unsuccessful reverse takeover significant additional expenditure
was incurred as a result of a dispute that arose during the period
with a convertible loan note holder, which was subsequently settled
placing further strain on the cash resources of the Company. Due to
the limited cash balance as at the period end the Company is in the
process of seeking additional funding in order to purse its
strategy of making an acquisition to seek re-admission of the
enlarged group to listing on the Official List and trading on the
London Stock Exchange or admission to another stock exchange.
Should the raising of new capital be unsuccessful then the
Company faces significant uncertainty over its ability to continue
as a going concern. The Company has reduced its cash expenditure to
a minimum whilst it works on the recapitalisation of the
business.
Events after the reporting date
Events after the reporting date have been disclosed in note 13
to the financial statements.
This responsibility statement was approved by the Board of
Directors on 29 September 2022 and is signed on its behalf by;
Simon Retter
Director
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF FRAGRANT PROSPERITY
HOLDINGS LTD
Opinion
We have audited the financial statements of Fragrant Prosperity
Holdings Limited (the 'Company') for the year ended 31 March 2022
which comprise the statement of comprehensive income, statement of
financial position, statement of changes in equity, statement of
cash flows and the related notes, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in the preparation of the financial
statements is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the United Kingdom.
In our opinion, the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 March 2022 and of its loss for the year then
ended;
-- have been properly prepared in accordance with international
accounting standards in conformity with International Financial
Reporting Standards ("IFRSs") adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the United Kingdom ("UK");
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 believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our qualified
audit opinion.
Independence
We are independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard as
applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC's Ethical Standard were
not provided and that we have not provided any non-audit services
to the Company in the period under audit.
Material uncertainty relating to going concern
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors' assessment of the entity's
ability to continue to adopt the going concern basis of accounting
included carrying out a risk assessment which covered the nature of
the Company, its business model and related risks including where
relevant the impact of Coronavirus, the requirements of the
applicable financial reporting framework and the system of internal
control. We evaluated the directors' assessment of the group's
ability to continue as a going concern, including challenging the
underlying data and key assumptions used to make the assessment,
and evaluated the directors' plans for future actions in relation
to their going concern assessment.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
company's or group's ability to continue as a going concern for a
period of at least twelve months from when the financial statements
are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional
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 Our response and observation
risk
Revenue recognition We reviewed the Company's No revenue was recognised
There is a risk that revenue recognition policies in the year and this
revenue is materially and how they are applied. was in accordance with
understated due to the Company's accounting
fraud. policy and we concluded
that no evidence of
fraud or other understatement
was identified.
------------------------------ -------------------------------
Management override We examined journals We identified no evidence
of controls posted around the year of management override
Journals can be posted end, specifically focusing in respect of inappropriate
that significantly on areas which are more manual journals recorded
alter the financial easily manipulated. in any section of the
statements of the financial statements.
entity.
------------------------------ -------------------------------
In addition to the above identified key audit matters, Going
Concern has been identified as a key risk area within the financial
statements and the matter has been addressed within the "Material
uncertainty related to going concern" section of the audit report
above.
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.
Based on our professional judgement we determine materiality for
the Company to be GBP16,425 and this financial benchmark, which has
been used throughout the audit, is based on approximately 4% of the
Company's net assets at the year end. Where considered relevant the
materiality is adjusted to suit the specific risk profile of the
Company.
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 GBP12,319 (75%) of the above
materiality level. We agreed with the board that we would report to
the committee all individual audit differences identified during
the course of our audit in excess of GBP821 (5% materiality).
Errors below the threshold would also be reported, if in our
opinion the error warranted reporting on qualitative grounds.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the
Company and its environment, including the system of internal
control, and assessing the risks of material misstatement in the
financial statements. The audit work is conducted centrally by one
audit team, led by the Senior Statutory Auditor.
Other Information
The other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
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
course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
In this context, matters that we are specifically required to
report to you as uncorrected material misstatements of the other
information include where we conclude that:
-- Fair, balanced and understandable - the statement given by
the directors that they consider the annual report and financial
statements taken as a whole is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the Company's position and performance, business model and
strategy, is materially inconsistent with our knowledge obtained in
the audit; or
We have nothing to report in respect of these matters.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of Company and
its environment obtained in the course of the audit, we have not
identified material misstatements in the chairman's statement or
the directors' report.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 7, 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.
Explanation as to what extent the audit was considered capable
of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. Our approach was as
follows:
-- We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Coup and determined the most
significant are those that relate to the reporting framework (IFRS)
and the relevant tax compliance regulations in the jurisdictions in
which the Company operates.
-- We understood how the Company is complying with those
frameworks by making enquiries of management, the Company
Secretary, and those responsible for legal and compliance
procedures. We corroborated our enquiries through our review of
board minutes, papers provided to the board, discussion with the
board and any correspondence received from regulatory bodies.
-- We assessed the susceptibility of the Company's financial
statements to material misstatement, including how fraud might
occur by enquiring with management and the board during the
planning and execution phase of our audit. We considered the
programs and controls that the Company has established to address
risks identified, or that otherwise prevent, deter and detect fraud
and how senior management monitors those programs and controls.
Where the risk was considered to be higher, we performed audit
procedures to address each identified fraud risk including revenue
recognition as discussed above. These procedures included testing
manual journals and were designed to provide reasonable assurance
that the financial statements were free from fraud or error.
-- Based on this understanding we designed our audit procedures
to identify non-compliance with such laws and regulations. Our
procedures involved journal entry testing, with a focus on manual
journals and journals indicating large or unusual transactions
based on our understanding of the business; enquiries of the
Company Secretary and management; and focused testing, as referred
to in the key audit matters section above.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances on
non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the non-statutory
financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of
certain transactions and balances. However, it typically involves
selecting a limited number of items for testing, rather than
testing complete populations. We will often seek to target
particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to
enable us to draw a conclusion about the population from which the
sample is selected.
Other matters which we are required to address
We were appointed by the board on 25 June 2021 to audit the
financial statements for the period ending 31 March 2021. Our total
uninterrupted period of engagement is 2 years, covering the period
ending 31 March 2022.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Company and we remain independent of the
Company in conducting our audit.
Our audit opinion is consistent with the additional report to
the board.
Use of our report
This report is made solely to the Company's members, as a body,
in accordance with our engagement letter dated 22 July 2022. 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.
BENJAMIN BIDNELL (Senior Statutory Auditor)
For and on behalf of SHIPLEYS LLP,
Chartered Accountants and Statutory Auditor
10 Orange Street, Haymarket, London, WC2H 7DQ
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIALED 31 MARCH 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes GBP GBP
------ ------------- -------- -------------
Other operating expenses (673,033) (227,146)
------ ------------- -------- -------------
Interest charge (24,673) (14,563)
------ ------------- -------- -------------
OPERATING LOSS BEFORE TAXATION (697,706) (241,709)
------ ------------- -------- -------------
Income tax expense 3 - -
------ ------------- -------- -------------
LOSS FOR THE PERIOD ATTRIBUTABLE
TO EQUITY HOLDERS OF THE COMPANY (697,706) (241,709)
------ ------------- -------- -------------
OTHER COMPREHENSIVE INCOME
------ ------------- -------- -------------
Other comprehensive income - -
------ ------------- -------- -------------
TOTAL COMPREHENSIVE LOSS FOR
THE PERIOD (697,706) (241,709)
------ ------------- -------- -------------
Basic and diluted loss per share
(pence) 5 (1.12) (0.46)
------ ------------- -------- ---------------
The notes to the financial statements form an integral part of
these financial statement
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2022
As at As at
31 March 2022 31 March
2021
Notes GBP GBP
CURRENT ASSETS
Cash and cash equivalents 281,448 562,204
Prepayments - 23,638
TOTAL ASSETS 281,448 585,842
CURRENT LIABILITIES
Trade Creditors (189,192) (42,919)
Accruals (24,079) (7,500)
Convertible loan note (478,803) (274,166)
--------------- -------------
TOTAL LIABILITIES (692,074) (324,585)
--------------- -------------
NET ASSETS (410,626) 261,257
=============== =============
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE COMPANY
Share capital 6 1,492,146 1,492,146
Retained earnings (1,954,315) (1,281,286)
Convertible loan note Reserve 51,543 50,397
--------------- -------------
TOTAL EQUITY (410,626) 261,257
=============== =============
The notes to the financial statements form an integral part of
these financial statements
This report was approved by the board and authorised for issue
on and signed on its behalf by;
.....................
Simon Retter
Director
29 September 2022
STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEARED 31 MARCH 2022
Year ended Year ended
31 March 31 March 2021
2022
GBP GBP
Loss before tax (697,706) (241,709)
Interest charge (22,855) 14,563
Share based payment 24,677 50,000
----------- ---------------
Cash flow from operating activities (695,884) (177,147)
----------- ---------------
Changes in working capital
Movement in other payables 162,852 15,670
Movement in prepayments and other
debtor 47,276 (6,263)
----------- ---------------
Net cash outflow from operating
activities (485,756) (167,740)
----------- ---------------
Issue of equity - 543,930
Issue costs - (41,696)
Repayment of convertible loan (310,000) -
note
Issue of convertible loan note 515,000 100,000
----------- ---------------
Net cash flow from investing activities 205,000 602,233
----------- ---------------
Net decrease in cash and cash
equivalents (280,756) 434,494
Cash and cash equivalents at
beginning of period 562,204 127,710
----------- ---------------
Cash and cash equivalents at
end of period 281,448 562,204
=========== ===============
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEARED 31 MARCH 2022
Share capital Convertible Retained Total
Loan Note earnings
Reserve
GBP GBP GBP GBP
As at 31 March 2020 989,913 - (1,089,578) (99,665)
-------------- ------------ ------------ ----------
Issue of equity 543,930 - - 543,930
Issues of equity costs (41,696) - - (41,696)
Recognition of Convertible
Loan - 50,397 - 50,397
Loss for the year - - (241,709) (241,709)
Share based payment charge - - 50,000 50,000
-------------- ------------ ------------ ----------
Total comprehensive loss
for the year - - (191,709) (191,709)
-------------- ------------ ------------ ----------
As at 31 March 2021 1,492,146 50,397 (1,281,286) 261,257
-------------- ------------ ------------ ----------
Issue of equity - - - -
Issues of equity costs - - - -
Derecognition of Convertible
Loan - (50,397) - (50,397)
Recognition of Convertible
Loan - 51,543 - 51,543
Loss for the year - - (697,706) (697,706)
Share based payment charge - - 24,677 24,677
-------------- ------------ ------------ ----------
Total comprehensive loss
for the year - - (673,029) (673,029)
-------------- ------------ ------------ ----------
As at 31 March 2022 1,492,146 51,543 (1,954,315) (410,626)
============== ============ ============ ==========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 31 MARCH 2022
1. GENERAL INFORMATION
The Company was incorporated in the British Virgin Islands on 28
January 2016 as an exempted company with limited liability.
The Company's Ordinary shares are currently admitted to a
standard listing on the Official List and to trading on the London
Stock Exchange.
On the 12 December 2017 the company changed its name from Vale
International Group Ltd to Fragrant Prosperity Holdings Ltd.
The Company's nature of operations is to act as a special
purpose acquisition company.
2. ACCOUNTING POLICIES
The Board has reviewed the accounting policies set out below and
considers them to be the most appropriate to the Company's business
activities.
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the United Kingdom and IFRIC interpretations applicable to
companies reporting under IFRS. The financial statements have been
prepared under the historical cost convention as modified for
financial assets carried at fair value.
The financial information of the Company is presented in British
Pound Sterling ("GBP").
Standards and interpretations issued but not yet applied
At the date of authorisation of this financial information, the
Directors have reviewed the Standards in issue by the International
Accounting Standards Board ("IASB") and IFRIC, which are effective
for accounting periods beginning on or after the stated effective
date. In their view, none of these standards would have a material
impact on the financial reporting of the Company.
Going concern
Until such time as the Company makes a significant investment it
will meet its day to day working capital requirements from its
existing cash reserves and by raising new equity finance.
In the year ended 31 March 2022 the Company recorded a loss
after tax of GBP697,706 (2021: GBP241,709 ) and a net cash outflow
from operating activities of GBP485,756 (2021: GBP167,740 ).
The directors have prepared cash flow forecasts covering a
period of at least 12 months from the date of approval of the
financial statements which assume that no significant investment
activity is undertaken unless sufficient funding is in place.
The Company had cash of GBP281,448 at 31 March 2022 which the
directors believe is insufficient to undertake the required steps
to make an investment and fulfil its investment mandate and the
Company is therefore seeking to raise additional capital to proceed
with its strategy.
During the year the Company worked on acquiring the entire share
capital of a business that led to significant expenditure on legal,
due diligence and other associated costs. The acquisition was due
to be completed alongside a capital raise to provide working
capital for the enlarged group, due to adverse market conditions
the capital raise was unsuccessful and the result was the deletion
of the Companies existing cash reserves. As well as the
unsuccessful reverse takeover significant additional expenditure
was incurred as a result of a dispute that arose during the period
with a convertible loan note holder, which was subsequently settled
placing further strain on the cash resources of the Company. Due to
the limited cash balance as at the period end the Company is in the
process of seeking additional funding in order to purse its
strategy of making an acquisition to seek re-admission of the
enlarged group to listing on the Official List and trading on the
London Stock Exchange or admission to another stock exchange.
The Should the raising of new capital be unsuccessful then the
Company faces significant uncertainty over its ability to continue
as a going concern. The Company has reduced its cash expenditure to
a minimum whilst it works on the recapitalisation of the
business.
Cash and cash equivalents
The Company considers any cash on short-term deposits and other
short term investments to be cash equivalents.
Taxation
The tax currently payable is based on the taxable profit for the
period. 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 periods and it further
excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting date.
Deferred income tax is provided for using the liability method
on temporary timing differences at the reporting date between the
tax basis of assets and liabilities and their carrying amounts for
financial reporting purposes. Deferred income tax liabilities are
recognised in full for all temporary differences. Deferred income
tax assets are recognised for all deductible temporary differences
carried forward of unused tax credits and unused tax losses to the
extent that it is probable that taxable profits will be available
against which the deductible temporary differences and
carry-forward of unused tax credits and unused losses can be
utilised.
The carrying amount of deferred income tax assets is assessed at
each reporting 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 deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each
reporting date and are recognised to the extent that is probable
that future taxable profits will allow the deferred income tax
asset to be recovered.
Financial instruments
Financial assets and financial liabilities are recognised on the
statement of financial position when the company becomes a party to
the contractual provisions of the instrument.
Financial assets
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value through other
comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition
depends on the financial asset's contractual cash flow
characteristics and the Group's business model for managing
them.
The classification depends on the purpose for which the
financial assets were acquired. Management determines the
classification of its financial assets at initial recognition and
re-evaluates this classification at every reporting date.
As at the reporting date, the Group did not have any financial
assets subsequently measured at fair value.
Operating segments
The directors are of the opinion that the business of the
Company comprises a single activity, that of an investment company.
Consequently, all activities relate to this segment.
Critical accounting estimates and judgements
The preparation of financial statements in compliance with IFRS
as adopted for use by the United Kingdom requires the use of
certain critical accounting estimates or judgements. The directors
do not consider there to be any key estimation uncertainty. In
respect of critical judgements, the only key judgement is the
adoption of going concern on the basis for preparing the financial
statements, details of which are set out in note 2.
Share based payments
The Company operates equity-settled, share-based compensation
plans, under which the entity receives services from employees as
consideration for equity instruments (options) of the Company. The
fair value of employee services received in exchange for the grant
of share options are recognised as an expense. The total expense to
be apportioned over the vesting period is determined by reference
to the fair value of the options granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market
performance vesting conditions; and
-- including the impact of any non-vesting conditions.
Non-market performance and service conditions are included in
assumptions about the number of options that are expected to vest.
The total expense is recognised over the vesting period, which is
the period over which all of the specified vesting conditions are
to be satisfied. At the end of each reporting period the Company
revises its estimate of the number of options that are expected to
vest.
It recognises the impact of the revision of original estimates,
if any, in profit or loss, with a corresponding adjustment to
equity.
When options are exercised, the Company issues new shares. The
proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium.
The fair value of goods or services received in exchange for
shares is recognised as an expense.
3. INCOME TAX EXPENSE
The Company is regarded as resident for the tax purposes in
British Virgin Islands.
No tax is applicable to the Company for the year ended 31 March
2022 and 2021. Consequently no deferred tax is recognised as all
timing differences are permanent.
4. LOSS BEFORE TAXATION
The loss before income tax is stated after charging:
Year ended Year ended
31 March 31 March
2022 2021
GBP GBP
Staff costs (note 7) 77,500 15,200
Auditors' remuneration:
Fees payable to the Company's auditor
for the audit of the Company's annual
accounts 7,500 7,500
LOSS PER SHARE
Basic loss per ordinary share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. There are currently no
dilutive potential ordinary shares.
Loss per share attributed to ordinary shareholders
Year ended Year ended
31 March 2022 31 March 2021
Loss for the period (GBP) (697,706) (241,709)
Weighted average number of
shares (Unit) 62,223,386 52,506,310
Loss per share (pence) (1.12) (0.46)
5. SHARE CAPITAL
Number GBP
of shares
Balance at 31 March 2020 51,852,822 989,913
----------- ----------
Issued during the year 10,360,564 543,930
Issue costs - (41,696)
----------- ----------
Balance at 31 March 2021 and 2022 62,223,386 1,492,146
----------- ----------
On 3 March 2021 the Company issued 10,360,564 new ordinary
shares in the company at a price of 5.25 pence per share.
On the 6 December 2021 the company issued 17,500,000 options
with an exercise price of 2 pence per share as part of a settlement
of an ongoing dispute. The options were valued using a Black
Scholes model and resulted in a share based payment charge of
GBP24,677 during the year.
6. STAFF COSTS
Year ended Year ended
31 March 2021 31 March 2021
GBP GBP
Staff costs - -
Director fees 72,500 15,200
---------------
72,500 15,200
--------------- ---------------
The average numbers of person employed by the Company (including
directors) during the reporting period was 4 (2020: 4).
7. CAPITAL MANAGEMENT POLICY
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. The capital structure of the Company consists
of equity attributable to equity holders of the Company, comprising
issued share capital and reserves.
8. FINANCIAL RISK MANAGEMENT
The Company uses a limited number of financial instruments,
comprising cash and other payables, which arise directly from
operations. The Company does not trade in financial
instruments.
Financial risk factors
The Company's activities expose it to a variety of financial
risks: currency risk, credit risk, liquidity risk and cash ow
interest rate risk. The Company's overall risk management programme
focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the Company's financial
performance.
a) Currency risk
The Company does not operate internationally and its exposure to
foreign exchange risk is limited to the transactions and balances
that are denominated in currencies other than Pounds Sterling.
b) Credit risk
The Company does not have any major concentrations of credit
risk related to any individual customer or counterparty. Credit
risk arises from cash and cash equivalents and deposits with banks
and financial institutions. The Group has taken necessary steps and
precautions in minimising the credit risk by lodging cash and cash
equivalents only with reputable licensed banks.
c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and the Company ensures it has adequate resource to discharge
all its liabilities. The directors have considered the liquidity
risk as part of their going concern assessment. (See note 2). At
the date of approval of the financial statements there was a
material uncertainty in relation to liquidity risk.
d) Cash flow interest rate risk
The Company has no significant interest-bearing liabilities and
assets. The Company monitors the interest rate on its interest
bearing assets closely to ensure favourable rates are secured.
Fair values
Management assessed that the fair values of cash and short-term
deposits, trade receivables, trade payables, bank overdrafts and
other current liabilities approximate their carrying amounts
largely due to the short-term maturities of these instruments.
9. FINANCIAL INSTRUMENTS
The Company's principal financial instruments comprise cash and
cash equivalents and other payable. The Company's accounting
policies and method adopted, including the criteria for
recognition, the basis on which income and expenses are recognised
in respect of each class of financial assets, financial liability
and equity instrument are set out in Note 2. The Company do not use
financial instruments for speculative purposes.
The principal financial instruments used by the Company, from
which financial instrument risk arises, are as follows:
As at As at
31 March 31 March 2021
2022
GBP GBP
Financial assets
Loans and receivables
Cash and cash equivalents 281,448 562,204
-------------------------- --------------------------
Total financial assets 281,448 562,204
================== ==================
Financial liabilities measured
at amortised cost
Other payables 189,192 42,919
Convertible loan note 478,803 274,166
-------------------------- --------------------------
Total financial liabilities 667,995 317,085
================== ==================
On 29(th) July 2021 the Company repaid the existing convertible
loan notes with a value of GBP310,000 plus interest and issued a
new convertible loan note for GBP400,000 which carries interest at
5% per annum with an average exercise price of 3 pence per
share.
There are no financial assets that are either past due or
impaired.
10. RELATED PARTY TRANSACTIONS
Key management are considered to be the directors and the key
management personnel compensation as follow:
Year ended Year ended
31 March 2022 31 March 2021
GBP GBP
Simon James Retter* - -
Craig Marshak 35,000 -
Richard Samuel 7,500 -
Mahesh Pulandaran - -
--------------- ---------------
42,500 -
--------------- ---------------
*In 2022 GBP30,000 of fees were paid to Stonedale Management
& Investments Ltd a company controlled by Simon Retter
regarding work undertaken on the financial investment undertaken
during the year.
*In 2021 GBP15,200 of fees were paid to Stonedale Management
& Investments Ltd a company controlled by Simon Retter
regarding work undertaken on the financial investment undertaken
during the year.
In addition Stonedale management holds an option over 2,500,000
shares with an exercise price of 0p.
Craig marshak holds options over 2,500,000 shares with an
exercise price of 0p.
No pension contributions were made on behalf of the Directors by
the Company. No share options were granted to or exercised by a
Director in the reporting period.
During the reporting period, other than those noted above the
Company did not enter into any material transactions with related
parties. As at reporting date, the there was an amount of GBP16,579
accrued due the directors.
11. CONTROL
The Directors consider there is no ultimate controlling
party.
12. DESCRIPTION OF RESERVES
Retained Earnings comprises accumulated gains and losses
incurred to date.
Convertible Loan Note reserve comprises the fair value of the
equity component of the convertible loan notes held by the
Company.
13. SUBSEQUENT EVENTS
None
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END
FR SDIFESEESEDU
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September 30, 2022 08:39 ET (12:39 GMT)
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