TIDMQBIT
RNS Number : 2856G
Quantum Exponential Group PLC
18 July 2023
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18 July 2023
Quantum Exponential Group plc
(the "Company" or "Quantum Exponential")
Final Results
Quantum Exponential Group plc (AQUIS: QBIT), a company focused
on investing in quantum technologies, is pleased to announce its
audited final results for the year ended 30 April 2023.
Highlights
-- Excellent progress made during the year and our status as a
leading UK expert and pure-play quantum technology investor is
growing.
-- Portfolio currently at 7 investments; added Universal
Quantum, QLM Technology and Oxford Quantum Circuits during the
period and Delta g post period end.
-- Continually working to raise profile among industry bodies
and academic organisations, including partnerships such as with the
Institute of Physics sponsoring the Quantum Business Innovation and
Growth Group Award ('qBIG Award').
-- Increasing government support for the sector evidenced by the
UK Government's publication in March 2023 of its 10-year GBP2.5
billion National Quantum Strategy.
-- Continuing to provide investors, who would otherwise not be
able to do so, with exposure to early-stage investment in
quantum-driven businesses.
Commenting on the results, CEO of Quantum Exponential Group,
Steve Metcalfe said:
"The year under review has been one of significant progress for
Quantum Exponential as we continue our journey to provide
investors, who would otherwise not be able to do so, with exposure
to early-stage investment in quantum-driven businesses. We find
ourselves at an opportune moment to take advantage of the sector's
growth, particularly with the support Quantum Technology is
experiencing from the UK Government and beyond, which is testament
to the company being in the right place at the right time to build
an exciting portfolio of investee companies that we expect will
increase shareholder value over time.
"With seven investments now made, our most recent being in Delta
g, a UK based gravity sensing hardware and technology development
company, we are increasingly excited about the pipeline of
businesses we are seeing, and in our ability to add to our investee
portfolio going forward."
This announcement contains information which, prior to its
disclosure, was inside information as stipulated under Regulation
11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310
(as amended).
The Directors take responsibility for this announcement.
**S**
For more information, visit the Company's website:
www.quantum-exponential.co.uk or contact:
Company Contact
Quantum Exponential plc
Steven Metcalfe, Chief Executive c/o quantum@stbridespartners.co.uk
Officer
-------------------------------------
Novum Securities (AQSE Corporate Tel: +44 (0)20 7399 9400
Adviser)
David Coffman, George Duxberry
-------------------------------------
Oberon Capital ( Broker) Tel: + 44 (0)20 3179 5344
Mike Seabrook, Chris Crawford
-------------------------------------
St Brides Partners Limited quantum@stbridespartners.co.uk
(Financial PR)
Catherine Leftley, Ana Ribeiro,
Isabelle Morris
-------------------------------------
About Quantum Exponential Group plc
Quantum Exponential is the first of its kind, AQSE Growth Market
enterprise company, focused on opportunities in quantum technology
and the wider quantum computing sector, with an advisory board made
up of industry advisors, entrepreneurs, and technology investment
professionals with broad access to quantum opportunities and
markets. Quantum Exponential's investment strategy is to assemble a
portfolio of minority investments in early-stage global quantum
technology companies, primarily in NATO-allied countries, offering
institutional and private investors access to revolutionising
technologies and industries in the realms of artificial
intelligence, manufacturing and healthcare.
Quantum Exponential trades on AQSE Growth Market under the
ticker symbol "QBIT'.
Chairman's Statement
I am pleased to introduce the second Annual Report of Quantum
Exponential Group plc, following the Company's listing on the AQUIS
exchange in November 2021.
It is with great sadness that I begin by noting the death on 7
April 2023 of Nigel McNair Scott who was a director of the Company
and chair of the Audit Committee. Nigel was wise, generous and
kind; and a passionate supporter of technological innovation and of
Quantum Exponential. He will be missed by all whose lives he
touched. A process is in place to find a successor to step into his
very large shoes.
Growing reputation and portfolio
During the year the team at Quantum Exponential has made
excellent progress and our status as a leading UK expert and
pure-play quantum technology investor is growing. We are
continually working to raise our profile among industry bodies and
academic organisations, such as our partnership with the Institute
of Physics in sponsoring the Quantum Business Innovation and Growth
Group Award ('qBIG Award'), and we are attracting a high calibre of
investment opportunities.
In addition to the investments in Aegiq, Arqit Quantum and
Siloton that were made during our first year, we added investments
in Universal Quantum, QLM Technology and Oxford Quantum Circuits
during the period. You can find details on our growing portfolio in
the Chief Investment Officer's report.
Clear ethos, focus and strategy
The ethos behind Quantum Exponential remains unchanged: it is to
provide investors, who would otherwise not be able to do so, with
exposure to early-stage investment in quantum-driven
businesses.
We identify businesses that have the potential to both grow and
scale to be hugely successful, and which are focused on tackling
global problems - from combating climate change to global cyber
security and to improvements in healthcare and medical
procedures.
Since our inception the Company's focus has been firmly on
investments in NATO and NATO friendly countries.
The war in Ukraine and current and future geopolitical
developments and trends reinforce the validity of this focus, and
we see emerging opportunities with governments in the US, Europe
and UK who all are actively supporting quantum research and seeking
to drive its commercialisation. Quantum Exponential will continue
to look to identify and support the best of the emerging companies
who are taking advantage of government support.
We believe our strategy of investing in a portfolio of quantum
technology companies with exponential growth potential - and adding
value by supporting them with marketing, strategic and operational
expertise as well as financial capital - is uniquely attractive in
providing our investors with diversified opportunities for value
creation.
Deep expertise and execution capability
Through our advisory board, which met regularly throughout the
year, the Company has deep sector expertise which enables us to
identify segments and opportunities early. We have a proven
execution capability and an experienced, collaborative
international team with an active management approach to
investments.
During the year Helen Reynolds joined as a member of the
Investment Committee. A Cambridge physics graduate, she has over 20
years' experience in early-stage technology investing.
In March 2023 we further strengthened the team with the
appointment of Stuart Woods as Chief Operating and Strategy
Officer. Stuart has extensive knowledge in the quantum and deep
tech sectors that he brings to identifying new opportunities and
working with existing portfolio companies. He was previously
managing director and executive board member at Oxford Instruments
Nanoscience.
Financial performance
Our pre-tax operating loss for the year widened slightly to
GBP825,824 (2022 loss GBP743,889) reflecting the building out of
capabilities and positioning ourselves for future growth in assets
under management.
The Company's unlisted portfolio is performing at or above
management's expectations and we see the potential for sizeable
gains in valuations in the future. We have taken an appropriately
cautious approach to valuation of these private company investments
that has been agreed with our auditors. Details of the investments
can be found in the Chief Investment Officer's report.
The financial results in our second full year are heavily
influenced by the downward change in valuation of our one publicly
quoted investment, Arqit Quantum inc, where we have a share option
that is valued on a 'mark to market' basis. The unrealised loss on
the fair value adjustment to this investment amounted to
GBP1,108,190 essentially reversing the unrealised gain of 1,087,817
booked in 2022 .
Prospects and next steps
We are completing the creation of an initial portfolio of
investments that we believe have the prospect of attractive returns
for our shareholders in the medium term.
Notwithstanding the ongoing macro-economic uncertainty, there is
a level of interest that makes me confident there is an appetite
for growth companies in the quantum sector, and I anticipate this
will get stronger in the future. Support for quantum technology is
a key priority for governments in many advanced countries, as
evidenced by the UK Government's publication in March 2023 of its
10-year GBP2.5 billion National Quantum Strategy.
Having laid the foundations for future growth the team are now
discussing how the Quantum Exponential platform can be leveraged
with a range of potential government and private sector investor
investors. We are exploring setting up a limited partnership fund
as well as a range of other opportunities to grow the business.
I would like to take this opportunity to thank shareholders for
their continued support and look forward to updating shareholders
on our progress in due course.
Ian Pearson
Non- Executive Chairman
17 July 2023
Chief Executive Officer's Report
I am pleased to report on the progress of the Company over the
past year. As the only UK quoted pure quantum focused company we
continue to stand at the forefront of having the opportunity to
invest in exciting early-stage quantum technology companies. This
opportunity comes through our relationships, partnerships, and
technical expertise which had given us credibility in the sector.
This has been achieved through the hard work of the whole team and
our exceptional advisory board.
Despite the ongoing challenges in the global economy, we have
remained committed to our investment strategy and have seen
encouraging developments in our portfolio. With the three new
investments added during this last financial year, we believe all
have significant potential for growth and innovation in the coming
years which in turn will provide opportunities for the Company to
generate returns for shareholders.
With the UK Government's commitment in the spring budget of
GBP2.5 billion over 10 years into quantum technology, this goes to
show that the Company is on the right path with its strategy of
investing in early-stage quantum technology companies now.
In addition to our investment activities, we have also been
actively engaging with industry experts, governments, and
stakeholders in the quantum technology ecosystem to stay at the
forefront of industry trends and developments. With the quality and
expertise that Quantum Exponential has shown since inception we are
now starting to get the recognition and traction from overseas
like-minded countries too.
Looking ahead, we will continue to monitor market conditions and
trends closely, and to adjust our investment strategy as needed to
ensure that we are well positioned to capitalise on emerging
opportunities.
I would like to thank our shareholders for their continued
support and confidence in our team and strategy. We remain
committed to delivering value and growth for our shareholders, and
we look forward to sharing further updates with you in the coming
months.
Steven Metcalfe
Chief Executive Officer
17 July 2023
Chief Investment Officer's Report
It has been a productive year of investment assessment and
investment. The Company made three further investments during the
year ended 30 April 2023. In addition, since period end the Company
has made one additional investment.
The investment team has grown since inception and currently
consists of the Chief Investment Officer, investment manager,
quantum physicist and investment analyst. The team is further
supported by an active advisory board, access to sector-specific
data sources and partnerships with organisations fostering
innovation in quantum technology.
The Company has added value to its investees via strategic
advice and introductions to potential customers, investors, and
suppliers.
At the year end, in addition to our Arqit option we held five
investments. These are as follows:
Aegiq Limited
On 30 April 2022, the Company invested GBP406,050 in two parts
in Aegiq Limited, a hardware photonics company using quantum
technologies to address the global cybersecurity threat posed by
the rise of quantum computing.
Following the investment, Quantum Exponential had a c.4.06%
stake in Aegiq's issued share capital on a fully diluted basis.
Aegiq raised close to GBP4m in its investment funding rounds. This
is supplemented by a number of grants which have recently been
bolstered by further funding from Innovate-UK.
On 15 Sep 2022, Aegiq announced that it had received a grant
from Innovate UK to develop a field-deployable quantum light
source.
The system intends to underpin scalable applications in quantum
computing and quantum communications and is part of a GBP500,000
project in collaboration with Fraunhofer CAP. (
https://www.aegiq.com/ ).
Arqit Quantum Inc.
Prior to listing, the Company secured an option to acquire
199,993 ordinary shares in Arqit Quantum Inc. Arqit is a UK-based
Company listed on NASDAQ with a market capitalisation of USD 173M
as at trading on 17 July 2023.
A global leader in quantum encryption technology, Arqit has
successfully demonstrated a quantum safe communication channel to
secure data transmissions for both UK sensors and IoT as well as a
US manufacturer of military drones. ( https://arqit.uk/ ).
Oxford Quantum Circuits
On 3 Feb 2023 the Company invested GBP299,997 into Oxford
Quantum Circuits ('OQC') , one of Europe's leading quantum
companies. Other participants in the fundraise include the Japanese
private equity firm HiJoJo Partners.
Proceeds will be used for research and development and to
accelerate OQC's expansion into Asia Pacific, with a focus on
Japan, where there is significant demand for quantum computers
across multiple sectors, including financial services and
pharmaceuticals.
OQC designs unique super conducting circuits, it successfully
raised GBP38 million last year as part of a Series A fundraise
co-led by Lansdowne Partners, one of Europe's leading investment
firms, and UTEC, Japan's largest deeptech VC fund.
The key challenge of superconducting circuits for quantum
computation is the ability to scale qubit numbers whilst
maintaining qubit quality and control to reach a commercially
useful level of processing power. 'Traditional' 2D circuits require
increasingly intricate engineering to route control wiring across
the chip to the qubit. This both degrades the quality of the qubits
and increases the chance of costly engineering errors.
OQC's patented 3D architecture, the Coaxmon, solves this
challenge by combining unparalleled scalability with world-class
performance. In February 2022 OQC became the first European company
to be featured in Amazon Web Services ('AWS') following the launch
of its latest system, Lucy. AWS is the world's most comprehensive
and broadly adopted cloud platform, offering over 200 fully
featured services from data centres globally. Millions of
customers-including the fastest-growing start-ups, largest
enterprises, and leading government agencies-are using AWS to lower
costs, become more agile, and innovate faster.
Following the investment, Quantum Exponential holds 47,164 of
Series A2 shares in OQC representing 0.34% on a fully diluted
basis.
Siloton Limited
On 1 March 2022, the Company led a c.GBP470,000 initial
financing round, investing c.GBP300,000 into Siloton Limited. The
Company holds 2,752 ordinary shares in Siloton representing 12.79%
of Siloton's enlarged issued share capital.
Siloton is a technology company that uses quantum techniques and
photonic integrated circuits ('PICs') for use in sub-surface
optical scanning devices with applications across healthcare, and
non-destructive testing.
Siloton will initially focus on advancing the development of a
technology called Optical Coherence Tomography ('OCT') for the
assessment of age-related macular degeneration ('AMD'), a condition
that if untreated can lead to blindness and is estimated to affect
approximately 288 million patients worldwide by 2042.
Since our investment Siloton has been awarded an
Innovate-UK-funded grant. This project sees Siloton working
alongside the Macular Society to understand whether the UK is
suitable for a home-based monitoring service for patients with wet
AMD, allowing them to receive specialist eye scans in the comfort
of their own home. ( https://www.siloton.com/news ).
QLM Technology Ltd
On 4 Aug 2022, the Company invested GBP450,000 as part of a
GBP12,000,000 Series A funding round in QLM Technology Ltd ('QLM'),
a UK-based photonics hardware and technology development company
that has developed a cutting-edge gas imaging camera based on
quantum technology termed a Quantum Gas Imaging Lidar.
Beyond emissions monitoring for the oil and gas market, the QLM
solution is well-suited for use in tracking and reducing methane
emissions in other applications such as in biogas production,
landfills, wastewater treatment plants, and coal mines.
Following the Investment, Quantum Exponential holds 1,203,208 B
Ordinary Shares at a price of GBP0.374 in QLM representing 1.6% of
QLM's fully diluted share capital.
The funding round was led by Schlumberger and included new
investment from existing investors Green Angel Syndicate,
Enterprise 100 Syndicate, the Development Bank of Wales, Newable,
BritBots, and BPEC. ( https://qlmtec.com ).
Universal Quantum Limited ("Universal Quantum")
On 16 May 2022, the Company invested GBP450,000 through an
Advanced Subscription Agreement ("ASA") in Universal Quantum
Limited ("Universal Quantum"), a company focused on building the
world's first million quantum bit ("qubit") quantum computers. The
funds will be used to continue Universal Quantum's focus on its
integrated Quantum Processing Unit. The funds invested under the
ASA will convert into ordinary shares in Universal Quantum on the
earlier of a further financing round of at least GBP10m, a sale, or
a liquidation event.
The team at Universal Quantum has over 15 years of quantum
computing experience and is backed by a number of institutional
investors such as Hoxton Ventures, Village Global, FoundersX,
Luminous Ventures, and 7Percent. Its activity is further supported
by several grants. ( https://universalquantum.com )
Stuart Nicol
Chief Investment Officer
17 July 2023
Consolidated Statement of Comprehensive Income
For the year ended 30 April 2023
Period
Year to 9 April
30 April 2021 to 30
2023 April 2022
Notes GBP GBP
Revenue 4 20,045 9,497
------------ -------------
Gross profit 20,045 9,497
Operating expenses (845,869) (753,386)
------------ -------------
Operating loss (825,824) (743,889)
Finance income 8 8,233 5
Gain / (Loss) on fair value adjustments
on investments 17 (1,108,190) 1,087,817
------------ -------------
Profit / (Loss) before tax 5 (1,925,781) 343,933
Taxation on operations 9 121,812 (121,812)
------------ -------------
Profit / (Loss) for the year /
period (1,803,969) 222,121
------------ -------------
Earnings per share from loss attributable
to the ordinary equity holders
of the company
Total - Basic EPS 10 (0.006p) 0.001p
Total - Diluted EPS 10 (0.005p) 0.001p
The notes to the accounts form an integral part of these
financial statements.
Consolidated Statement of Financial Position
As at 30 April 2023
2023 2022
Notes GBP GBP
Assets
Non-current assets
Investments 16 2,085,318 1,993,512
------------
Total non-current assets 2,085,318 1,993,512
------------ ------------
Current assets
Cash and cash equivalents 1,665,463 3,694,790
Other receivables 11 51,325 71,900
------------ ------------
Total current assets 1,716,788 3,766,690
------------ ------------
Total assets 3,802,106 5,760,202
------------ ------------
Current liabilities
Trade payables and other payables 12 (89,288) (80,131)
------------
Total current liabilities (89,288) (80,131)
------------ ------------
Provision for liabilities 13 - (121,812)
Total liabilities (89,289) (201,943)
------------ ------------
Net assets 3,712,818 5,558,259
------------ ------------
Equity
Share capital 14 3,283,750 3,283,750
Share premium 14 2,114,610 2,114,610
Merger reserve 16 (261,810) (261,810)
Capital contributions 16 199,732 199,732
Other reserves 16 (41,616) (144)
Retained profit (1,581,848) 222,121
------------ ------------
Total equity 3,712,818 5,558,259
------------ ------------
Approved by the Board on and signed on its behalf by:
Steven Metcalfe
Chief Executive Officer
The notes to the accounts form an integral part of these
financial statements.
Consolidated Statement of Cash Flows
For the year ended 30 April 2023
2023 2022
GBP GBP
Profit/(loss) before tax for the
year/period (1,925,781) 222,121
Adjustments for:
Interest income (8,233) (5)
(Increase) in trade and other receivables 20,575 (71,900)
Increase in trade and other payables 9,157 80,131
Provisions - 121,812
Net fair value adjustment gain 1,108,190 (1,087,817)
------------ ------------
Cash (outflow)/inflow from operating
activities (796,092) (735,658)
------------ ------------
Investing activities
Purchase of investments (1,199,996) (705,963)
------------
Net cash used in investing activities (1,199,996) (705,963)
------------ ------------
Financing activities
Proceeds from issue of ordinary
share capital - 5,136,550
Purchase of own shares via EBT (41,472) (144)
Interest income 8,233 5
------------ ------------
Net inflow of cash generated from
financing activities (33,239) 5,136,411
------------ ------------
Net increase in cash and cash
equivalents (2,029,327) 3,694,790
Cash and cash equivalents at beginning 3,694,790 -
of period
------------ ------------
Cash and cash equivalents at end
of period 1,665,463 3,694,790
------------ ------------
The notes to the accounts form an integral part of these
financial statements.
Consolidated Statement of Changes in Equity
For the year ended 30 April 2023
Retained
Share Share Merger Capital Other profits/
capital premium reserve contribution reserves (losses) Total equity
Note GBP GBP GBP GBP GBP GBP GBP
Balance At 30 April
2022 3,283,750 2,114,610 (261,810) 199,732 (144) 222,121 5,558,259
Profit for the period - - - - - (1,803,969) (1,803,969)
Issue of shares - - - - - -
Gifted shares - - - - -
Purchase of own shares - - - - (41,472) - (41,472)
At 30 April 2023 3,283,750 2,114,610 (261,810) 199,732 (41,616) (1,581,848) 3,712,818
---------- ---------- ------------ --------------- -------------- -------------- --------------
The to the account form an integral part of these financial
statements.
Notes to the financial statements
For the year ended 30 April 2023
1. Corporate information
Quantum Exponential Group Plc is a public limited company,
incorporated and domiciled in England and Wales under the Companies
Act 2006. The address of its registered office is Fladgate LLP, 16
Great Queen Street, London, United Kingdom, WC2B 5DG. The Company's
ordinary shares are traded on the Aquis Stock Exchange (AQSE), a
primary and secondary market for equity and debt securities. The
financial statements of Quantum Exponential Group plc for the year
ended 30 April 2023 were authorised for issue by the Board on 17
July 2023 and the balance sheets signed on the Board's behalf on 17
July 2023.
The nature of the Group's operations and its principal activity
is to assemble a portfolio of potential investments in leading
quantum technology companies globally.
2. Accounting Policies
The principal accounting policies adopted in the preparation of
the financial statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated.
New standards, interpretations and amendments adopted from 1 May
2022
The following amendments are effective for the accounting period
beginning on or after 1 May 2022:
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
-- Annual Improvements to IFRS Standards 2018--2020 (Amendments
to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
-- References to Conceptual Framework (Amendments to IFRS 3).
These new standards, interpretations and amendments to the
standards did not have a significant impact on the financial
statements.
New standards, interpretations and amendments not yet
effective
There are a number of standard, amendments to standards and
interpretations which have been issued that are effective in future
account periods that the Group as decided not to adopt early.
The following amendments are effective for the period beginning
1 January 2023:
-- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
-- Definition of Accounting Estimates (Amendments to IAS 8); and
-- Deferred Tax Related to Assets and Liabilities from a Single
Transaction (Amendments to IAS 12).
-- IFRS 17 Insurance contracts
The following amendments are effective for the period beginning
1 January 2024:
-- IFRS 16 Leases (Amendment -- Liability in a Sale and Leaseback)
-- IAS 1 Presentation of Financial Statements (Amendment --
Classification of Liabilities as Current or
Non--current)
-- IAS 1 Presentation of Financial Statements (Amendment --
Non--current Liabilities with Covenants)
The Group is currently assessing the impact of these new
standards, interpretations and amendments but does not expect these
to have significant impact on the financial statements in the year
of adoption.
2. Accounting Policies (continued)
Basis of preparation
The Group's consolidated financial statements have been prepared
in accordance with UK--adopted international accounting standards
and in accordance with those parts of the Companies Act 2006 that
are applicable to group reporting under UK--adopted international
accounting standards. The Company's individual financial statements
were prepared in accordance with Financial Reporting Standard 101
'Reduced Disclosure Framework' (FRS 101). The consolidated
financial statements have been prepared under the historical cost
convention, except for, where applicable, the revaluation of
financial assets and liabilities at fair value through profit and
loss.
The financial statements are presented in Pounds Sterling (GBP)
which is the functional currency of the Company and Group.
The Company has taken advantage of the exemption available under
section 408 of the Companies Act 2006 and elected not to present
its own Statement of Comprehensive Income in these financial
statements.
Disclosure exemptions - Parent Company individual financial
statements
In preparing its individual financial statements under FRS 101,
the Company has taken advantage of the following disclosure
exemptions permitted by FRS 101:
-- the requirements of paragraphs 62, B64(d), B64(e), B64(g),
B64(h), B64(j) to (m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii),
B66 and B67 of IFRS 3 Business Combinations
-- the requirements of IFRS 7 Financial Instruments: Disclosures
-- the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement
-- the requirements of the second sentence of paragraph 110 and
paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129
of IFRS 15 Revenue from Contracts with Customers
-- the requirements of paragraph 52, the second sentence of
paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases, as
well as the requirements of paragraph 58 of the same standard,
provided that the disclosure of details of indebtedness relating to
amounts payable after 5 years required by company law is presented
separately for lease liabilities and other liabilities, and in
total
the requirements in paragraph 38 of IAS 1 Presentation of
Financial Statements to present comparative information in respect
of:
-- paragraph 79(a)(iv) of IAS 1
-- paragraph 73(e) of IAS 16 Property, Plant and Equipment
-- paragraph 118(e) of IAS 38 Intangible Assets
-- the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B,
38C, 38D, 40A, 40B, 40C, 40D, 111 and 134--136 of IAS 1
Presentation of Financial Statements
-- the requirements of paragraphs 30 and 31 of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors
-- the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures
-- the requirements in IAS 24 Related Party Disclosures to
disclose related party transactions entered into two or more
members of a group, provided that any subsidiary which is a party
to the transaction is wholly owned by such a member
-- the requirements of paragraphs 130(f)(ii), 130(f)(iii),
134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairment of
Assets
2. Accounting Policies (continued)
Basis of consolidation
The Group financial statements consolidate the results of
Quantum Exponential Group plc and its subsidiary undertakings for
the year to 30 April 2023.
The financial statements of subsidiaries are prepared for the
same reporting years using consistent accounting policies.
Subsidiaries are entities controlled by the Group. Control
exists when the Group has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control,
potential voting rights that are currently exercisable or
convertible are taken into account. The financial information of
subsidiaries is included from the date that control commences until
the date that control ceases. Intra-group balances and
transactions, and any unrealised income and expenses arising from
intra-group transactions, are eliminated in preparing the
consolidated financial information.
Critical accounting estimates
The preparation of the financial statements requires the use of
certain critical accountimng estimates. It also requires mamagement
to exercise its judgement in the process of applying the Group's
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, as disclosed in note
3.
Going concern
In determining the basis for preparing the financial statements,
management are required to consider whether the Group and Company
can continue in operational existence for the foreseeable future,
being a period of not less than twelve months from the date of the
approval of the financial statements. The Directors have prepared
forecasts of the Group's and Company's financial performance over
the next twelve months from the date of this report.
The forecasts include assumptions regarding the opportunity
funnel, growth plans, risks and mitigating actions. The Board are
exploring a number of such opportunities which are available to the
Group, and are confident that the required financing is
available.
The Group's forecasts, assumptions and projections, taking
account of sensitivities, support the conclusion that the Company
and the Group have adequate resources to continue in operational
existence for the foreseeable future, a period of not less than
twelve months from the date of this report. The Group and Company,
therefore, continues to adopt the going concern basis in preparing
the financial statements.
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the
consideration to which the consolidated entity is expected to be
entitled in exchange for transferring services to a customer. For
each contract with a customer, the consolidated entity: identifies
the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which
takes into account the time value of money; allocates the
transaction price to separate performance obligations on the basis
of the relative standalone selling price of each distinct service
to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to
the customer of the service provided.
Other revenue
Other revenue is recognised when it is received or when the
right to receive payment is established.
Income tax
The tax expense comprises current and deferred tax. Tax
currently payable, relating to corporation tax, is calculated on
the basis of the tax rates and laws that have been enacted or
substantively enacted as at the reporting date.
Deferred tax is recognised on all timing differences that have
originated but not reversed at the reporting date. Transactions or
events that result in an obligation to pay more tax in the future
or a right to pay less tax in the future give rise to a deferred
tax liability or asset. Timing differences are differences between
taxable profits and total comprehensive income as stated in the
financial statements that arise from the inclusion of income and
expenses in tax assessments in years different from those in which
they are recognised in the financial statements.
Deferred tax is measured using the tax rates and laws that have
been enacted or substantively enacted as at the reporting date, and
that are expected to apply to the reversal of the timing
difference. The tax expense is recognised in the same component of
comprehensive income or equity as the transaction, or other event,
that resulted in the tax expense.
Deferred income tax assets are recognised only to the extent
that, on the basis of all available evidence, it is deemed probable
that there will be suitable taxable profits from which the future
reversal of the underlying timing differences can be deducted.
Current and deferred tax assets and liabilities are offset only
when there is a legally enforceable right to set off the amounts,
and there is the intention either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at
call with financial institutions, and other short-term highly
liquid investments that are readily convertible into known amounts
of cash and which are subject to an insignificant risk of changes
in value. An investment with a maturity of three months or less is
normally classified as being short term. Bank overdrafts are shown
within borrowing in current liabilities.
Trade and other receivables
Trade receivables are measured at initial recognition at fair
value and are subsequently measured at amortised cost using the
effective interest rate method, less provision for impairment.
Other receivables are recognised at amortised cost, less any
allowance for expected credit losses.
Current and non-current classification
Assets and liabilities are presented in the statement of
financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to
be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of
trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless
restricted from being exchanged or used to settle a liability for
at least 12 months after the reporting period. All other assets are
classified as non-current.
A liability is classified as current when: it is either expected
to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled
within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at
least 12 months after the reporting period. All other liabilities
are classified as non-current
2 Accounting Policies (continued)
Investments and other financial assets
Investments and other financial assets, other than investments
in subsidiaries undertakings, are initially measured at fair value.
Transaction costs are included as part of the initial measurement,
except for financial assets at fair value through profit or loss.
Such assets are subsequently measured at either amortised cost or
fair value depending on their classification. Classification is
determined based on both the business model within which such
assets are held and the contractual cash flow characteristics of
the financial asset unless an accounting mismatch is being
avoided.
Financial assets are derecognised when the rights to receive
cash flows have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
When there is no reasonable expectation of recovering part or all
of a financial asset, its carrying value is written off.
Investment in subsidiary undertakings are recorded at cost less
any provision for impairment.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value
through other comprehensive income are classified as financial
assets at fair value through profit or loss. Typically, such
financial assets will be either: (i) held for trading, where they
are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii) designated
as such upon initial recognition where permitted. Fair value
movements are recognised in profit or loss.
Fair value measurement
When an asset or liability, financial or non-financial, is
measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes
that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most
advantageous market.
Fair value is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-
financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified
into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest
level of input that is significant to the fair value
measurement.
Impairment of financial assets
The Group recognises a loss allowance for expected credit loss
on financial assets. The measurement of the loss allowance depends
upon the Group's assessment at the end of each reporting period as
to whether the financial instrument's credit risk has increased
significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or
effort to obtain. Th Group applies the IFRS 9 simplified approach
to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables and contract assets.
Lifetime ECL represents the expected credit losses that will result
from all possible default events over the expected life of
financial instrument.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount
by which the asset's carrying amount exceeds its recoverable
amount.
Recoverable amount is the higher of an asset's fair value less
costs of disposal and value-in-use. The value-in-use is the present
value of the estimated future cash flows relating to the asset
using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not
have independent cash flows are grouped together to form a
cash-generating unit.
Trade and other payables
Trade payables are initially measured at fair value and are
subsequently measured at amortised cost using the effective
interest rate method.
Provisions
Provisions are recognised when the Group has a present (legal or
constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation. The
amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties
surrounding the obligation. If the time value of money is material,
provisions are discounted using a current pre-tax rote specific to
the liability. The increase in the provision resulting from the
passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits liabilities for wages and salaries,
including non-monetary benefits, annual leave and long service
leave expected to be settled wholly within 12 months of the
reporting date are measured at the amounts expected to be paid when
the liabilities are settled.
Issued shares
Ordinary shares are classified as equity.
Foreign currency translation
Monetary assets and liabilities denominated in foreign
currencies are translated into sterling at the rates of exchange
ruling at the balance sheet date. Transactions in foreign
currencies are recorded at the rate ruling at the date of the
transaction. All differences are taken to the profit and loss
account.
3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements.
Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors,
including expectations of future events, management believes to be
reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual
results. The judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities (refer to the respective notes)
within the next financial year are discussed below:
3. Critical accounting judgements, estimates and assumptions (continued)
Investment valuation
The Group has a number of investments in unlisted entities
whereby their valuation is determined in whole or in part using
valuation techniques based on assumptions that are not supported by
prices from observable market transactions in the same instrument
and not based on available observable data and therefore involves a
degree of judgement and estimation by Directors.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary
differences only if the Group considers it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses.
Impairment of non-financial assets other than goodwill and other
indefinite life intangible assets
The Group assesses impairment of non-financial assets other than
goodwill and other indefinite life intangible assets at each
reporting date by evaluating conditions specific to the Group and
to the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the asset is
determined. This involves fair value less costs of disposal or
value-in-use calculations, which incorporate a number of key
estimates and assumptions.
4. Operating segments
For management purposes, the Group is organised into a single
geographic area from which the Group operates, namely, the UK and
it is this operating segment for which the Group is providing
disclosure. The chief operating decision maker is the Board of
Directors, which assesses the performance of the operating segments
using key performances: turnover, operating profit and net asset
position.
Revenue by business activity (All UK) is analysed below. No
additional disclosure of results and net asset has been made since,
in the opinion of the Board, there is only one operating
segment.
2023 2022
GBP GBP
Management and arrangement fees 20,045 9,497
------
Total revenue 20,045 9,497
------ -----
5. Profit/(loss) before tax for the period
Profit/(loss) before tax for the period has been arrived at
after charging/(crediting):
2023 2022
GBP GBP
Exchange loss/(gain) (713) (30,136)
Auditor's remuneration 12,000 12,000
Staff costs 301,508 207,957
------------- -------------
6. Auditor's Remuneration
2023 2022
GBP GBP
Audit services
Fees payable to the Group's auditor for
the audit of the Group's
annual accounts 12,000 12,000
Total audit fees 12,000 12,000
------- -------
7. Staff costs
The average monthly number of employees (excluding non-executive
directors) was:
2023 2022
Number Number
Directors (executive) 2 2
Other employees 1 -
3 2
------- -------
Their aggregate remuneration comprised:
2023 2022
GBP GBP
Wages and salaries 247,575 190,500
Social security costs 32,433 12,707
Pension scheme contributions 21,500 4,750
-------
301,508 207,957
------- -------
The total Directors' emoluments (including non-executive
directors' remuneration of GBP60,000) was GBP275,000. The aggregate
value of contributions paid to money purchase pension schemes was
GBP21,500 in respect of two directors.
The highest paid director received emoluments of GBP115,000 and
amounts paid to money purchase pension schemes was GBP11,500.
Key management comprise the Executive Directors and the Group
has one other employee.
8. Finance income
2023 2022
GBP GBP
Interest income 8,233 5
----- ----
Total finance income 8,233 5
----- ----
9. Tax
Recognised in the income statement
2023 2022
GBP GBP
Current tax credit:
UK corporation tax on losses in the period - -
---------- -----------
Total current tax - -
Deferred tax:
Capital gains/(losses) (271,954) 271,954
Losses 150,142 (150,142)
---------- -----------
Total deferred tax - 121,812
---------- -----------
Total tax charge in income statement - 121,812
---------- -----------
Effects of future tax rate changes
Up to 31 March 2023 the standard rate of UK corporation tax was
19%. A rate increase to 25% comes into effect from 1 April 2023.
This was substantively enacted on 24 May 2021 and as such deferred
tax has been calculated accordingly at this rate.
Reconciliation of tax credit
The charge for the period can be reconciled to the profit in the
income statement as follows:
2023 2022
GBP GBP
Profit/(loss) before tax (1,925,781) 343,933
Tax at the UK corporation tax rate of 19% (365,898) 65,347
Expenses not deductible 2,778 27,230
Fair value gains not allowable/(taxable) 210,556 (206,685)
Increase in UK potential tax losses 152,564 114,108
Deferred tax charge (121,812) 121,812
------------- -----------
Total tax charge for the period (121,812) 121,812
------------- -----------
10. Profit/(loss) per share
2023 2022
Profit/(loss) GBP GBP
Profit / (Loss) for the purposes of basic
profits per share being net profit attributable
to owners of the Group (1,803,969) 222,121
----------- -----------
2023 2022
Number of shares Number Number
Weighted average number of ordinary shares
for the purposes of basic profits/(loss)
per share 311,475 172,605,545
----------- -----------
2023 2022
Basic (p) (0.006)p 0.001p
----------- -----------
The calculation of the basic earnings per share is based on the
following data:
The calculation of the diluted earnings per share is based on
the following data:
2023 2022
Profit/(loss) GBP GBP
Profit / (loss)for the purposes of basic
profits per share being net profit attributable
to owners of the Group (1,803,969) 222,121
----------- ------------
2023 2022
Number of shares Number Number
Weighted average number of ordinary shares
for the purposes of diluted profits/(loss)
per share 369,586,666 230,717,211
----------- ------------
2023 2022
Basic (p) (0.005)p 0.001p
----------- ------------
11. Trade and other receivables
Receivable within one year:
Group Group Company Company
2023 2022 2023 2022
GBP GBP GBP GBP
Other receivables 20,002 10,005 20,002 10,005
Prepayments 11,875 28,147 11,875 28,147
Current tax assets 19,448 33,748 19,448 33,748
------ ------ ------- -------
51,325 71,900 51,325 71,900
------ ------ ------- -------
The expected maturity date of other receivables is 1 to 3
months.
12. Trade and other payables
Payable within one year:
Group Group Company Company
2023 2022 2023 2022
GBP GBP GBP GBP
Trade payables 53,782 27,787 53,782 27,787
Other payables 14,174 9,846 14,174 9,846
Accruals 18,334 39,999 18,334 39,999
Deferred income 2,499 2,998 2,499
Amounts owed by group companies 2,998 2,462,500 2,462,500
------- ------- ---------- ----------
89,288 80,131 2,551,788 2,542,631
------- ------- ---------- ----------
The contracted maturity date of trade and other payables is 1 to
3 months.
13. Deferred tax
Group Company
2023 2023
GBP GBP
30 April 2022 121,812 121,812
Change in period (121,812) (121,812)
30 April 2023 - -
----------- -----------
Elements of deferred tax are as follows:
Group Company
2023 2023
GBP GBP
Capital gains/(losses) - 271,954
Losses and other deductions - (150,142)
----------- -----------
- 121,812
----------- -----------
14. Share capital
GBP
Authorised:
500,000,000 Ordinary shares of GBP0.01 each 5,000,000
Allotted, called up and fully paid:
Balance at 30 April 2023 and 30 April 2022
328,375,000 Ordinary shares of GBP0.01 each 3,283,750
----------
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company. All ordinary shares rank equally
with regard to the Company's residual assets.
15. Warrants
In the financial period ending 30 April 2022 the Company issued
warrants to the investors in the IPO and they were issued at no
cost. The Company has 58,111,666 investor warrants in circulation
at an exercisable price of 7.5p per share for two years following
admission. In the opinion of the Directors the fair value of the
warrants at date of grant was GBPnil.
Date Date Exercise Number of warrants
of grant of expiry price
Granted Exercised Lapsed Unexercised
at year-end
01-11-21 31-10-23 7.5p 58,111,666 - - 58,111,666
58,111,666 - - 58,111,666
=========== ========== ======= =============
16. Financial assets
Summary of financial assets
2023 2022
GBP GBP
Non-Current
Investments in financial assets designated
at fair value through profit or loss 2,085,318 1,993,512
------------ ----------
2,085,318 1,993,512
------------ ----------
Analysis of movement of non-current investments
2023 2022
Financial assets designated at fair value GBP
through profit or loss
Non - Current
Brought forward at 1 May 2022 1,993,512
Purchases during the year 1,199,996 705,963
Gifted shares during the year - 199,732
Net unrealised gain / (loss) in fair value (1,108,190) 1,087,817
------------ ----------
Fair value of investments carried forward 2,085,318 1,993,512
------------ ----------
17. Investments in subsidiary undertakings
2023 2022
GBP GBP
1 May 2022 2,462,500 -
Additions - 2,462,500
---------- ----------
30 April 2023 2,462,500 2,462,500
---------- ----------
Subsidiary undertakings
At the reporting date the Company had the following investments
in subsidiary undertakings whose registered office is situated at
16 Queen Street, London, England, WC2B 5DG.
17. Investments in subsidiary undertakings (continued)
Undertaking Country Class Proportion Nature of business
of incorporation of shares of
shares held
Quantum England Ordinary 100% Dormant subsidiary
Exponential
Limited
Quantum England Ordinary 100% Acting as a nominee for
Exponential the Quantum Exponential
EBT Limited Group plc Employee Benefit
Trust
The Quantum Exponential Group plc Employee Benefit Trust holds
16,900,000 ordinary shares in Quantum Exponential Group plc. Based
on the quoted market price at 30 April 2023 of 2.12p these shares
were valued at GBP358,280.
18. Financial instruments
IFRS 9 requires the Group to classify financial instruments at
fair value using a fair value hierarchy that reflects the
significance of the inputs used in making the measurement. The fair
value hierarchy has the following levels:
-- quoted prices (unadjusted) in active markets for identical
assets or liabilities (Level 1);
-- inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (Level
2);inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level
3).
(a) Financial instruments classified as level 1
The fair value of financial instruments traded in active markets
is based on quoted market prices at the end of the reporting
period. A market is regarded as active if quoted prices are readily
and regularly available from an exchange, dealer, broker, industry
group, pricing service or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an
arm's length basis. The quoted market price used for financial
assets held by the Group is the current bid price. These
instruments are included in Level 1. Instruments included in Level
1 comprise equity investments classified as trading securities or
available-for-sale
(b) Financial instruments classified as level 2
The fair value of financial instruments that are not traded in
an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. These valuation
techniques maximise the use of observable market data where it is
available and rely as little as possible on entity-specific
estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in Level
2.
If one or more of the significant inputs is not based on
observable market data, the instrument is included in Level 3.
Specific valuation techniques used to value financial
instruments include:
-- quoted market prices or dealer quotes for similar instruments.
-- the fair value of interest rate swaps is calculated as the
present value of the estimated future cash flows based on
observable yield curves.
-- the fair value of forward foreign exchange contracts is
determined using forward exchange rates at the end of the reporting
period, with the resulting value discounted back to present
value.
-- other techniques, such as discounted cash flow analysis, are
used to determine fair value for the remaining financial
instruments.
(c) Financial instruments classified as level 3
The fair value of financial instruments that are not traded in
an active market (for example, over-the-counter derivatives) and
determined by using valuation techniques. which require significant
adjustment based on unobservable inputs are included in level
3.
The determination of what constitutes observable requires
judgement by the Group. The Group considers observable data to be
market data that is readily available, regularly distributed or
updated, reliable and verifiable, not proprietary, and provided by
independent sources that are actively involved in the relevant
market.
For financial instruments classified as level 3 the Group uses a
combination of internal and external valuations. Where management
determines an external valuation is appropriate the group engages
with professional service providers. Specific valuation techniques
include:
-- Market approach (utilising EBITDA or Revenue multiples,
industry value benchmarks and available market prices
approaches);
-- Net asset approach;
-- Income approach (utilising Discounted Cash Flow, Replacement Cost and Net Asset approaches);
-- Desktop valuations based on price of a recent transaction
when transaction price/cost is considered indicative of fair value;
and
-- Actuarial valuations using Monte Carlo, Black Scholes and adjusted binomial models.
18. Financial instruments (continued)
The following table presents the Group's assets that are
measured at fair value at 30 April 2023:
Level Level 3 Total
1
GBP GBP GBP
Held at fair value
At 1 May 2022 1,287,549 705,963 1,993,512
------------- ---------- -------------
- 1,199,996 1,199,996
Additions during the year
FV adjustment (1,108,190) - (1,108,190)
------------- ---------- -------------
At 30 April 2023 179,359 1,905,959 2,085,318
------------- ---------- -------------
Net book value
At 30 April 2023 179,359 1,905,959 2,085,318
------------- ---------- -------------
There were no transfers between levels during the year.
Financial Instruments
Financial risk management objectives
The Group uses a limited number of financial instruments
comprising mainly of cash and investments in companies. The Group
has other financial instruments such as trade and other receivables
and payables, that arise directly from operations.
Group Group Company Company
2023 2022 2023 2022
GBP GBP GBP GBP
Financial assets
Shares 2,085,318 1,993,512 2,085,318 1,993,512
Cash at bank 1,665,463 3,694,790 1,665,463 3,694,790
Other receivables excluding taxation 31,877 38,152 31,877 38,152
---------- ---------- ---------- ----------
Total 3,782,658 5,726,454 3,782,658 2,726,454
---------- ---------- ---------- ----------
Financial liabilities
Other payables 74,890 74,890 2,537,390 2,530,430
---------- ---------- ---------- ----------
Total 74,890 74,890 2,537,390 2,530,430
---------- ---------- ---------- ----------
The Directors consider the carrying amounts of financial assets
and financial liabilities recognised in the financial statements to
approximate their fair value.
18. Financial instruments (continued)
Exposure to currency, credit, liquidity and interest rate risk
arise in the normal course of the Group's business. The Directors
review and agree policies for managing each of these risks to
minimize potential adverse effects on the Group's financial
performance. Sensitivity analysis indicates none are likely to have
a material impact on the profitability or net assets of the
Group.
Foreign currency risk
Foreign exchange risk arises from future commercial transactions
and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional
currency.
The Group is exposed to foreign currency risk in that it holds
options over shares that are denominated is US dollars. At 30 April
2023 these options were valued at $ 225,992.
Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
company.
The maximum exposure to credit risk is limited to the carrying
amount of the financial assets recognised at the reporting date net
of any provisions for impairment of those assets, as disclosed in
the statement of financial position and notes to the financial
statements.
Generally, trade and other receivables are written off when
there is no reasonable expectation of recovery.
Interest rate risk
The Group is not exposed to material interest rate risk. The
Group finances its operations through cash reserves. The cash
reserves held by the Group are with a major bank and have negated
the need to use significant interest-bearing short-term
borrowings.
Liquidity risk
Vigilant liquidity risk management requires the Group to
maintain sufficient liquid assets (mainly cash and cash
equivalents) to be able to pay debts as and when they become due
and payable.
The Group manages liquidity risk by maintaining adequate cash
reserves by continuously monitoring actual and forecast cash flows
and matching the maturity profiles of financial assets and
liabilities.
Fair value risk
The aggregate net fair value and carrying amounts of all other
assets and liabilities, including financial assets and financial
liabilities, are disclosed in the Statement of Financial Position
and the Notes.
Capital risk factors
The Group's primary source of capital is equity. The Board
considers that a key operating risk is insufficient working capital
to fund the planned growth of the Group. Funding is regularly
assessed against forecasts and managed accordingly to minimize this
risk. The Group is not subject to any externally imposed capital
requirements.
Market risk
The Group may be affected by general market trends, which are
unrelated to the performance of the Group itself.
Market opportunities targeted by the Group may change and this
could lead to an adverse effect upon its revenue and earnings.
19. Capital management
The Group's objectives when managing capital are to safeguard
the ability of the Group to continue as a going concern, so that it
can continue to provide returns for shareholders and benefits for
other stakeholders, and to provide an adequate return to
shareholders.
The Group sets the amount of capital in proportion to risk. The
Group manages the capital structure and makes adjustments to it in
the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares, or sell assets to reduce debt.
The Group monitors capital on the basis of the debt to capital
ratio. Net debt is calculated as total debt (as shown in the
statement of financial position) less cash and cash equivalents.
Capital comprises all components of equity. The debt to capital is
set out in the table below. The Group does not have a net debt
position.
Group Group Company Company
2023 2022 2023 2022
GBP GBP GBP GBP
Debt 89,288 80,131 2,551,788 2,452,631
Cash and cash equivalents (1,665,463) (3,694,790) (1,665,463) (3,694,790)
------------ ------------ ------------ ------------
Net surplus / ( deficit ) 1,576,175 3,614,659 (886,325) 1,242,159
------------ ------------ ------------ ------------
Total equity 3,712,888 5,558,259 3,712,888 5,558,259
------------ ------------ ------------ ------------
20. Reserves
Share premium
The share premium reserve represents the additional amount
shareholders paid for their shares in excess
of the par value less any transaction costs associated with the
share issue.
Capital contributions
The capital contributions reserve represents the value of shares
gifted to the Company.
Merger reserve
The merger reserve reflects the movement arising on the
acquisition of the subsidiaries undertakings.
Other reserves
Other reserves represent investment in the Company's own shares
by the Employee Benefit Trust (EBT).
21. Related party transactions
At 30 April 2023 the Company owed GBP2,462,500 to a subsidiary
undertaking. This amount is eliminated on consolidation.
22. Director's transactions
There were no transactions with Directors during the period.
23. Events after the balance sheet date
There have been no further events after the reporting date that
require adjustment or disclosure in line with IAS10 events after
the reporting period.
24. Ultimate controlling party
The company is quoted on the AQSE market and there is no single
controlling party.
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END
NEXNKOBPABKDDOD
(END) Dow Jones Newswires
July 18, 2023 02:00 ET (06:00 GMT)
Quantum Exponential (AQSE:QBIT)
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