TIDMHELD
RNS Number : 7324H
Hellenic Dynamics PLC
31 July 2023
31 July 2023
Hellenic Dynamics Plc
("Hellenic" or the "Company")
Annual Report & Financial Statements for the Period Ended 31
March 2023
Hellenic Dynamics Plc (LON: HELD) , the cultivator of
tetrahydrocannabinol (" THC") dominant strains of medical cannabis
flowers, operating a 40,000 square meter cultivation licence from
its 195,506 square meter facility in Northern Greece and focused on
the supply of medical cannabis to the growing markets across Europe
is pleased to announce its full year audited results for the period
ended 31 March 2023.
Highlights for the period and post period end
Corporate:
o Completed the reverse takeover ("RTO") of UK SPAC PLC and
achieved admission to the Official List (by way of a Standard
Listing) and to trading on the London Stock Exchange 's main market
for listed securities ("Admission") as the first medical cannabis
cultivator, with funds of approximately GBP2.626m being available
to the Company on Admission
o Signed a five year memorandum of understanding ("MoU") with
Elgo Dimitra, the Institute of Plant Breeding and Genetic Resources
functioning under the Greek Ministry of Agriculture, which could
allow Hellenic to gain European intellectual property ("IP")
protection on medical cannabis flowers cultivated at the
facility
o Appointed Carl Haffner to the Company's cultivation team. Carl
was previously the Co-founder and CEO of Avida Global SAS, a
vertically integrated cannabis business which achieved all
necessary certifications including ISO, GACP & EU-GMP.
o Appointed Katherine Fleming to its Advisory Board. Katherine
is currently the President and CEO of the J. Paul Getty Trust, the
international cultural and philanthropic institution, overseeing
its 1,500 employees and US $8.5 billion fund. Katherine holds a
number of honours including being decorated by the Greek Government
as a commander in the Order of Beneficence.
Activity:
o Expanded its cultivation strategy to move into white label
contract cultivation under the Company's new Product Outsourcing
Development ("POD") concept. Under this strategy, Hellenic will
provide a fully turn-key and EU-GACP certified 1,000 square meter
cultivation POD to fully licensed EU-GMP distributors across
Europe
o Signed a MoU with Deutsche Medizinalcannabis GmbH which trades
as Demecan Holding ("Demecan") . Demecan is the only licensed
independent German company that covers the entire value chain for
medical cannabis from cultivation through processing to
distribution. Under the MoU, Hellenic will grow and supply medical
cannabis flowers from Demecan provided cultivars producing circa
1,200 kg of medical cannabis flowers per annum for a minimum of 2
years with the option of a further 2 years by mutual agreement.
o E ntered into advanced discussion with a well known financial
provider to support the acceleration of our contract cultivation
PODs by way of a capital financing instrument.
o On track to produce its first crop for commercial sale, under
its existing off-take agreements, during Q2 of the Company's fiscal
year.
Financial:
o Repaid a Convertible Loan Note ("CLN") of GBP375,000 based on
the cost savings against the Company's initial equipment costs.
o Made two grant applications both at EU and at domestic Greek
level to support the Company in best agricultural practices.
o In advanced discussion to move to 100% renewable energy, which
is anticipated to bring the overall production costs down even
further, whilst providing our customers with a sustainably grown
quality product.
Davinder Rai, CEO of Hellenic, commented:
"2022 was a strong year for Hellenic following the completion of
the RTO and being the first medical cannabis cultivator to gain
Admission, providing us with the first mover advantage as we enter
into cannabis 2.0, which has seen a shake up on the European
cannabis industry and a market expected to reach EUR43.3 billion
per annum by 2027, twice the size of the current north American and
Canadian markets combined. The period covered in this annual
financial report deals with the period leading up to the
acquisition of Hellenic and Admission where the entire process with
the FCA took over 18 months from the signing of the sales purchase
agreement with UK SPAC Plc. This process showed the tenacity and
commitment of all the experienced members of the Hellenic team and
our shareholders. Being based in Greece provides an excellent cost
base and legislative framework for medical cannabis cultivation
and, as such, we have the opportunity to become the leading
supplier of quality medical cannabis to all 25 counties in Europe
that allow medical cannabis via prescriptions. As we move through
our 2023 financial year, I am confident that we will sign a number
of additional POD agreements and evolve with the sector by
listening to the markets and our customers' demands. I personally
look forward to reporting on our 2023 financial year end and would
also like to thank our shareholders for their continued
support."
CHAIRMAN'S REPORT
I am pleased to present the annual report and financial
statements for the period ended 31 March 2023 for Hellenic Dynamics
Plc ("Hellenic" or the "Company"). UK SPAC PLC, which was renamed
Hellenic Dynamics Plc on 17 November 2022, acquired Hellenic
Dynamics SA ("Hellenic Dynamics" or the "Company") and gained
admission to the Official List (by way of a Standard Listing) and
to trading on the London Stock Exchange's ("LSE") main market for
listed securities ("Admission") with effect from 08:00 on the 5
December 2022.
I am extremely proud of the whole Hellenic team, its advisers
and management in the continuing roles they play, not only in
gaining a main market listing as the first medical cannabis company
to do so, but also with their continued work on the Company's
facility in Greece. It has been a long process with the Financial
Conduct Authority and LSE and this commitment alone shows that the
experienced operational and cultivation teams have led the Company
to be a market leader in the cultivation and supply of medical
cannabis flowers for the European markets.
Having been involved since the admission process, I was
fortunate enough to witness first-hand the positive impact medical
cannabis is having on patients across a various range of chronic
pain indicators and I believe the low-cost base we enjoy together
with the supportive legislative framework in Greece, will support
Hellenic in its endeavour for European dominance in the supply of
medical cannabis.
Milestones
The law changed in Greece in 2017 allowing the cultivation of
tetrahydrocannabinol ("THC") medical cannabis. Since that time,
members of the Hellenic team have navigated the changing landscape
of this exciting new industry culminating in the Company achieving
the milestone of working with the FCA and LSE to become the first
medical cannabis cultivator to gain admission to the Official List
and to trading on the LSE's main market.
In addition to the Admission process, significant work and
capital has been invested since the formation of the Group in 2019,
leading Hellenic to move towards a contract cultivation expanded
strategy with the first cultivation anticipated to occur in the
second quarter of the Company's 2023 fiscal year.
Board changes
As a result of the acquisition of Hellenic Dynamics and
Admission, there was a change of the Company's board of directors
("Board"). I was appointed as Non-executive Chairman, replacing
Peter Jay who stepped down on 16 December 2022.
At the time of the acquisition, Nigel Brent Fitzpatrick
("Brent") and Simon Grant-Rennick both Non-executive Directors
stepped down and the appointments of Davinder Rai as CEO, Filippos
Papadopoulos as Executive Director and Joseph Colliver as a
Non-executive Director were completed.
I would like to thank Peter, Brent and Simon for their
contributions.
Appointments
During the reporting period and post Admission, I am pleased to
welcome both Carl Haffner who was appointed as a consultant to our
cultivation team and Katherine Fleming who was appointed to our
Advisory Board. Carl was previously the Co-founder and CEO of Avida
Global SAS, a vertically-integrated cannabis business which
achieved all the necessary certifications including ISO, GACP &
EU-GMP. Carl is a great addition to the Hellenic team of
experienced cannabis professionals.
Katherine is currently the President and CEO of the J. Paul
Getty Trust, the international cultural and philanthropic
institution, overseeing its 1,500 employees and US$8.5 billion fund
and holds a number of honours including being decorated by the
Greek Government as a commander in the Order of Beneficence. With
Katherine's appointment we believe that we ensure our further
exposure both domestically in Greece and in other international
markets.
Employees
Together with the board, I would like to thank our entire
Hellenic team for their total commitment and approach to our
business which they have demonstrated through real world experience
in the work they have done to date both on the Hellenic facility
and in the wider business. Despite many challenges faced,
especially with regards to the Admission process, I feel confident
that under their stewardship Hellenic can achieves its goals of
European dominance in the supply of medical cannabis.
Sustainability
With the advanced discussions underway for a move to using solar
power as sustainable, low-cost energy, this will in turn lower the
cost base for our operations and production and also allow our
customers to benefit from a sustainable product. The Company has
opted to cultivate in a fully indoor facility, rather than a
glasshouse, to save on the additional power required to heat
glasshouses in winter and cool during the summer, by then combining
solar energy with indoor cultivation, the Company hopes to be a
market leader in sustainable medical cultivation.
Dividends
Given the Group is continuing to invest in growing the business,
the Board does not recommend the payment of a dividend (2021:
GBPNil).
Looking ahead
Despite the extended period working with the FCA to achieve
Admission, the Group has made significant progress during the
period. The number of European medical cannabis prescriptions and
the number of European countries that are legalising medical
cannabis is growing. However, the number of producing European
medical cannabis cultivators is shrinking due to the challenges
they have faced from inflation and increasing energy costs. By
being agile, listening to not only its customers but also ensuring
its competent understanding of the fast-evolving European cannabis
industry, coupled with the low cost of operations, I believe, set
Hellenic apart from its competitors.
Hellenic is constantly educating itself as the industry shifts
into its new phase, not only from a legislative viewpoint but also
firmly with the end patient in mind. The Group has moved with the
recent changes in the industry and is now well placed to the reap
the incoming rewards.
With industry leaders joining the Company's team, the signing of
the first POD MoU with Deutsche Medizinalcannabis GmbH which trades
as Demecan Holding ("Demecan") (post period end) and with further
expressions of interest in POD contracts resulting in active
discussion, all demonstrate the Company's growing reputation within
the sector.
I remain confident in Hellenic's strategic direction as a white
label contract cultivator of tetrahydrocannabinol (" THC") dominant
strains of medical cannabis flowers, where I have seen first-hand
how this improves the quality of patients' lives for the better.
Achieving our goals during the coming year, I expect Hellenic to
deliver growth for our investors.
I am pleased to present the 2023 first full results to
shareholders for the period ended 31 March 2023.
Once published, hard copies will be available to shareholders
upon request to the Company Secretary at Shakespeare Martineau, 60
Gracechurch Street, London, EC3V 0HR soft copies will be available
for download and inspection from the Company's website at
www.hellenicdynamics.com in due course.
The Company will also upload the annual report and accounts for
the period ended 31 March 2023 to the FCA's National Storage
Mechanism at
www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism
in due course.
The financial information set out below does not constitute the
Company's statutory accounts for the periods ended 31 March 2023 or
31 December 2021 within the meaning of Section 434 of the Companies
Act 2006, but is derived from those accounts. Statutory accounts
for 2021 have been delivered to the Registrar of Companies and
those for 2023 will be delivered in due course. The auditor's
report on the statutory accounts for the period ended 31 March 2023
were unqualified. The statutory accounts for the year ended 31
December 2021 were not audited given that they solely relate to the
financial information of the subsidiary Hellenic Dynamics S.A.
which was acquired through a reverse takeover.
The announcement has been prepared on the basis of the
accounting policies as stated in the financial statements for the
period ended 31 March 2023. The information included in this
announcement is based on the Company's financial statements which
are prepared in accordance with UK-adopted International Accounting
Standards ("IAS"). The Company will publish full financial
statements that comply with IAS on its website in due course.
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 as
amended by regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310. With the publication of this announcement,
this information is now considered to be in the public domain.
The Directors of the Company take responsibility for this
announcement.
Enquires:
Hellenic Dynamics Plc +44 (0)20 3818 7850
Davinder Rai info@hellenicdynamics.com
Cairn Financial Advisers LLP
Emily Staples / Jo Turner +44 (0)20 7213 0880
Peterhouse Capital - Brokers
Lucy Williams / Charles Goodfellow +44 (0)20 7469 0930
J&H Communications - PR
George Hudson +44(0)7803 603 130
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.
CHIEF EXECUTIVE OFFICER'S REPORT
I am delighted to report on the significant number of
achievements and strategic progress for Hellenic in the period.
These are the first results for Hellenic as a public company
following the successful completion of the reverse takeover of UK
SPAC Plc (renamed Hellenic Dynamics Plc), where the balance of
GBP2.626 million was available to the Company on Admission to
support the Company's plans, which are detailed in the enlarged
Company's prospectus dated 14 November 2022. On Admission Hellenic
became the first medical cannabis cultivator to be admitted to the
Official List and to trade on the main market of the London Stock
Exchange and remains the only one as of the date of this report,
further details of which can be found in the financial review
section on page 7 of the Report and Accounts.
Hellenic aims to be the dominant wholesale cultivator of medical
cannabis flowers in Europe. With the numerous advantages available
to us in Greece, which covers a low cost base, clear legislation
and a supportive government, Hellenic has the ability to export its
medical cannabis products to all 25 European countries that allow
medical cannabis by prescription, with no limitation on THC content
nor export quantity.
Hellenic's strategy is to work closely with licensed medical
cannabis distributors in our key target markets and allow these
distributors the ability to take one step up the vertical by way of
the Hellenic POD concept we announced post period end on 6 June
2023. This strategy has been well received by the wider European
cannabis markets resulting in the signing of a MoU with Demecan as
per our announcement dated 13 June 2023. With numerous other
advanced discussions on-going with other well established European
licensed distributors, I believe the Company has skilfully
navigated the evolving medical cannabis sector and positioned
itself to reap the rewards as we enter into our first full year as
a listed entity.
Market
25 countries now allow medical cannabis prescriptions for
patients across Europe, with the total European market expected to
reach EUR43.3 billion per annum by 2027, twice the size of the
American and Canadian markets combined. Presently there are circa
29,000 private patients who receive medical cannabis prescriptions
in the UK and over 1.4m people in the UK using illegal cannabis for
medical reasons.
Opioid alternative
Approximately 26% of the UK population suffer from chronic pain,
this number increases to 60% of the population over aged over 75.
This has resulted in the UK being the largest prescriber of opioids
per capita in the world with circa 40 million annual opioid
prescriptions. Presently opioid prescriptions lead to 4.6 million
UK GP visits per annum, however 90% of patients prescribed opioids
state they are ineffective for long term pain management.
Furthermore, the UK presently has approximately 540,000 patients
with some form of dependency prescription opioids. This gives an
idea of the total addressable market where medical cannabis could
replace opioid prescriptions in the UK
Strategy
In line with the Company's expanded strategy, Hellenic will
continue to fulfil its current off-take term sheets as per the
Company's prospectus and further sign and develop more PODs on the
Company's near 200,000 square meter facility. Each Pod occupies
1,000 square meters and is capable of producing 1,200 kg per annum
of wholesale flowers. With just four POD agreements (of which
Hellenic currently has 1 MoU in place) Hellenic would have a total
production of 4,800 kg per annum and all devoid of any cost of
sales. Hellenic's licence of 40,000 square meters is capable of
producing circa 54,000 kg of flowers per annum. Each POD to be
entered into moving forwards would be for a minimum of 2+2 years.
This tenure is linked to the advanced discussion the Company is
currently having with a well-known financial institution in
relation to a capital loan facility, covering the entire capital
expenditure of four PODs in this phase of the Company's expansion
strategy.
Adapting to the evolving European medical cannabis industry in
the way Company has and will continue to do so, allows Hellenic to
concentrate on the wholesale commercial and contract cultivation of
medical cannabis flowers. Many of our current and new customers are
well advanced in several aspects of the medical cannabis value
chain, however the main resource is a quality and consistent
wholesale product. This can then be used for a number of drug
development programmes along with batch release to pharmacies.
Furthermore, Hellenic has opted to arrange forward sales of its
products prior to expansion. This devoids the Company of any over
production or any potential inability to sell its product. In
essence every phase of expansion of the cultivation facility will
be based by a 2 + 2 year off-take agreement, where Hellenic
cultivate the specific cultivars our customers want for their
respective markets.
Update
Since Admission on 5 December 2022, Hellenic has moved full
force into the completion of its facility in northern Greece and it
is expected that its first commercial cultivation will occur in the
coming months from the publication of this document.
Environment
As a company, we recognise the importance of operating to the
highest standards of compliance across the business, and we have
continued to advance our approach to environmental, social and
governance "ESG", focusing on identifying those issues that are
most material to Hellenic's business. This work will form part of a
comprehensive ESG strategy in due course.
Future
I look forward to updating shareholders in due course on our
production of medical cannabis flowers for our current off-takers,
further to agreements to be signed with third parties, and to
reporting on our first full year as a listed entity and showcasing
the dedication of our team and our commitment to shareholders by
delivering on our strategy.
Davinder Rai
Executive Chairman
STRATEGIC REPORT
Section 172(1) Statement - Promotion of the Company for the
benefit of the members as a whole
The Directors believe they have acted in the way most likely to
promote the success of the Company for the benefit of its members
as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
-- Consider the likely consequences of any decision in the long term;
-- Act fairly between the members of the Company;
-- Maintain a reputation for high standards of business conduct;
-- Consider the interests of the Company's employees;
-- Foster the Company's relationships with suppliers, customers, and others; and
-- Consider the impact of the Company's operations on the community and the environment.
The Company operated as a cash shell, which was successful in
sourcing a business to acquire and was in the process of applying
to the FCA to re-admit to trading on the LSE's main market. The
pre-revenue nature of the business prior to the acquisition of
Hellenic Dynamics SA is important to the understanding of the
Company by its members and suppliers, and the Directors were as
transparent about the cash position and funding requirements as is
allowed under the relevant regulations.
The application of the s172 requirements can be demonstrated in
relation to some of the key decisions made during the period:
Shareholders
The Company publishes regular announcements to ensure shareholders
are kept up to date with developments within the Group. Going forward
the Directors expect to increase the number of face-to-face meetings
with its shareholders and potential investors.
Employees and contractors
During the period under review the Company directly employed agronomists
and when required engaged contractors to provide specialist technical
and cultivation services. Management and the Company's Directors maintain
regular direct contact with all employees and contractors to ensure
any concerns they have are considered and action taken if necessary.
Each employee or contractor is given the Company's employee handbook
which sets out the provisions for any concerns.
Suppliers
Procurement of technical and cultivation such as construction, irrigation
and lighting rely on the expertise of management and the availability
of those services at the time (both geographically and the supplier's
capacity). Relations with suppliers is maintained through regular
contact, prompt payment and where necessary ensuring high standards
of health and safety are maintained or implemented. Health and safety
management by the Company is most important during construction works.
Any contracts for services provided have been undertaken with a clear
cap on financial exposure.
Local community
At the subsidiary level, management and the Company's employees maintain
excellent relationships with the local communities where they operate.
During the year under review, the Company used local businesses for
the provision of certain services, specifically for construction,
earth works and fabrications. This created and will continue to create
increased economic activity in the areas in which the Company operates.
Local management also maintains regular dialogue with the local population
and government officials to ensure support for and an informed view
of its activities.
Environment
The Company's current activities are restricted to the construction
and installation of its cultivation buildings with groundworks the
most environmentally impactful due to the small-scale earth works
required. Considerations include choosing the right cement suppliers
and waste companies. As part of the Company's construction phase,
baseline environmental studies were undertaken by the chosen construction.
company.
As a company, the Board seriously considers its ethical
responsibilities to the communities and environment. we recognise
the importance of operating to the highest standards of compliance
across the business, and we have continued to advance our approach
to environmental, social and governance, focusing on identifying
those issues that are most material to Hellenic's business.
The Company started in early 2023 implementing a Corporate
Social Responsibility ("CSR") policy designed to support the United
Nations Sustainable Development Goals ("UN SDG") by actively
engaging the local communities, with a focus on youth and student
populations. Further details can be found in the Task Force on
Climate related financial disclosures ("TCFD") in the Company's
strategic report on pages 10 to 12 of the Report and Accounts.
Review of Business in the Period
Operational review
The Company's principal activity is specifically focused on the
cultivation and supply of tetrahydrocannabinol ("THC") - dominant
strains of medical cannabis flowers, destined for the growing
medical cannabis markets across Europe. Hellenic's core strategy is
to develop and operate its 40,000 square metre active cultivation
licence from its 195,506 square metre facility located near
Thessaloniki in Northern Greece. In full production, Hellenic is
capable of producing over 54,000 kg of dried flowers per annum.
On 2 August 2021, the Company signed the Sales Purchase
Agreement ("SPA") with Hellenic Dynamics SA and suspension of
trading of the company's ordinary shares on AIM took place with
immediate effect. Following the publication of the Company's
prospectus dated 14 November 2022 and the subsequent AGM on 15
November 2022, the Company published its prospectus and completed
its proposed acquisition of Hellenic Dynamics SA achieving
admission to the Official List (by way of a standard Listing) and
to trading on the London Stock Exchange's main market for listed
securities at 08:00am on 5 December 2022.
Business strategy
Hellenic will take advantage of its relatively low-cost base
resulting from a comparatively low cost of power, having its own
running water supply and the labour rates for skilled and
semi-skilled labour in Northern Greece. The expanded strategy of
contract cultivation under the Company's expanded POD strategy will
be increased to allow more licensed medical cannabis distributors
to move up the vertical and have the ability to control their own
cultivation strategies utilising the experience of the Hellenic
Dynamics team to produce consistent, quality THC dominant strains
of medical cannabis flowers.
Financial review
On 30 October 2008, U.K. SPAC Plc was admitted to trading on the
AIM, a market operated by the London Stock Exchange. On 3 March
2021, the Company disposed of its assets and became a cash shell
under AIM Rule 15, with the purpose of acquiring a target company
or business or asset(s).
On the 5 December 2022, U.K. SPAC Plc (renamed Hellenic Dynamics
Plc) acquired Hellenic Dynamics S.A. via a reverse takeover, with
the enlarged Group's issued share capital admitted to the Official
List (by way of a Standard Listing) and to trading on the London
Stock Exchange's main market for listed securities.
At the date of the acquisition, U.K. SPAC Plc had 1,852,219,137
Ordinary Shares in issue. Upon Admission, the Company approved the
issue and allotment of 250,000,000 subscription shares, 13,333,333
fee shares and 10,414,447,530 consideration shares. Immediately on
Admission, the enlarged issued share capital of the Company was
12,530,000,000 Ordinary Shares in issue, all of which were fully
paid.
The acquisition of Hellenic Dynamics S.A. by the Company via a
reverse takeover, resulted in the Company becoming the ultimate
holding company of the Group.
Accordingly:
-- The consolidated statement of financial position at 31 March
2023 shows the share capital and premium of Hellenic Dynamics
Plc.
-- The consolidated statement of comprehensive income for the
15-month period to 31 March 2023 represents the results of both
Hellenic Dynamics Plc from the reverse takeover date and Hellenic
Dynamics S.A. for the full period.
-- The comparatives within the consolidated statement of
financial position, the consolidated statement of comprehensive
income, consolidated statement of changes in equity and the
consolidated cashflow statement represent that of the legal
subsidiary and accounting acquirer, Hellenic Dynamics S.A. for the
year-ended 31 December 2021.
The transaction was accounted for as a reverse acquisition but
as U.K. SPAC Plc did not meet the definition of a business it was
not treated as a business combination under IFRS 3. Instead, in
accordance with IFRS 2, the deemed issue of shares to the original
U.K. SPAC Plc shareholders by Hellenic Dynamics Plc was accounted
for as a share-based payment, which gives rise to a non-cash charge
in the consolidated statement of comprehensive income of
GBP3.7million, which is included within the reverse acquisition
reserve.
The Reverse Acquisition Accounting is described in more detail
in note 9 to these financial statements.
Revenue and cost of sales - no trading activity was recorded in
the period, as the Company is completing the build and fit-out of
its cultivation facilities.
Administrative expenses - total costs of GBP1,147,442 incurred
in the 15 month period to 31 March 2023 (12 months to 31 December
2021: GBP334,560), incorporate staff costs of GBP296,668 (2021:
GBP81,315), professional service fees (predominately relating the
reverse takeover of U.K. SPAC Plc) of GBP361,422 (2021: GBP66,578),
promotion and advertising GBP87,743 (2021: GBP49,256), and non-cash
share based payment charges of GBP62,921 (2021: GBPNil).
Operating loss - is gross profit less administrative expenses
and equates to GBP1,147,442 in the period to 31 March 2023 (2021:
GBP334,560).
Reverse acquisition expense - as detailed above, the reverse
acquisition of U.K. SPAC Plc by the Company, resulted in a non-cash
share-based payment charge of GBP3,700,209, due to the difference
between the deemed cost and the fair value of the net assets at
acquisition.
Total comprehensive loss for the period - was GBP4,853,146
(2021: GBP342,012) after incorporating GBP15,388 of finance costs
(2021: GBP14,840) and GBP9,893 of positive exchange differences
(2021: GBP7,388), in addition to the charges detailed above.
Non-current assets - increased by GBP106,421 to GBP961,726 at
the period ended 31 March 2023, primarily due to a net GBP104,103
increase in property, plant and equipment, and by GBP1,753 increase
in the value of the right-of-use assets.
Current assets - increased by GBP2,130,760 to GBP2,304,055 at
the period end 31 March 2023, resulting from the GBP1,781,047 cash
balance realised from the reverse acquisitions of U.K. SPAC Plc,
and GBP834,652 of funds arising from the subscription and issue of
the convertible loan note on 5 December 2022.
Current liabilities - increased by GBP683,738 to GBP947,695 at
the period end 31 March 2023, predominantly due to amounts owed to
professional advisers relating to transaction costs.
Non-current liabilities - increased by GBP327,012 to a balance
of GBP636,695 at 31 March 2023, relating to GBP333,695 of
convertible loan notes issued as part of the acquisition, off-set
by a reduction in the lease liability.
Total equity and liabilities - at 31 March 2023 were
GBP3,265,781.
Cash flow
Net cash outflow in the 15 month period to 31 March 2023 was
GBP2,112,139 (2021: outflow GBP4,060), resulting from GBP294,684 in
cash outflows from operating activities (2021: GBP381,323),
GBP1,682,722 of net cash flows from investing activities (2021:
GBP87,036 outflow), and GBP724,101 net cash flows from financing
activities (2021: 464,299).
Closing cash
As at 31 March 2023, the Company held GBP2,117,159 of cash and
cash equivalents (2021: GBP5,020).
Key Performance Indicators
The KPI for the Company during the accounting period to the year
ended 31 March 2023 has been to achieve Admission along with
continued works on its facility in Greece to begin the commercial
cultivation of medical cannabis flowers for sales to the growing
medical cannabis markets in Europe, in addition to exploring all
cost saving measures where possible.
Future Developments and Events Subsequent to the Period End
The Company repaid a convertible loan note post period end and
also signed a MoU with Demecan. Further details can be found in the
Chairman's report on pages 2 to 3 of the Report and Accounts.
The Board seeks to maximise shareholder value and is in the
process of establishing financial and operational KPIs ahead of the
first cultivation. Financial KPIs are not deemed relevant at this
stage by the Directors.
Position of Company's Business
At the period end the Company's Statement of Financial Position
shows net assets totalling GBP32,937,760 (2022: GBP2,312,553).
Environmental, Social and Governance Statement
The Company is committed to providing a safe working environment
for all its employees and to responsibly manage all of the
environmental interactions of its business.
Health & Safety
The Company is committed to provide a safe working environment.
A health and safety policy in place which is given to all employees
of the Company.
Communities
The Company started in early 2023 implementing a Corporate
Social Responsibility ("CSR") policy designed to support the United
Nations Sustainable Development Goals ("UN SDG") by actively
engaging the local communities, with a focus on youth and student
populations. Objective: facilitate school education in the
municipality of Kilkis on issues related to sustainability &
biodiversity by:
-- Providing educational hardware.
-- Pictorial learning material related to the biodiversity of
their region created by the local.
-- Civil society group "Flora Kristonia".
-- Educational projects designed by a content expert in order to
help the teachers utilise the material provided.
-- Digital networking to encourage the extroversion of the
schools and motivate teacher & pupil engagement through
networking.
UN SDGs addressed:
-- Goal 4: Ensure inclusive and quality education for all and promote lifelong learning
-- Goal 13: Take urgent action to combat climate change and its impacts
In early 2023 the Company entered into advanced discussion with
solar power providers with a view to being reliant on sustainable
energy in due course.
-- Goal 15: Sustainably manage forests, combat desertification,
halt and reverse land degradation, halt biodiversity loss.
The Company looked at its facility and took the decision not to
use pesticides for its grassland rather took the approach to
maintain its grassland by way of regular trimming.
Following consultations with local civil society organisations,
in the coming fiscal year, the company's CSR policy will be
expanded to (a) systematically support the 2nd experimental High
School of Kilkis with its sustainability and digital technology
student projects, and (b) additionally cover UN SDGs:
-- Goal 12: Ensure sustainable consumption and production patterns
-- Goal 14: Conserve and sustainably use the oceans, seas and marine resources
Environment
The Company recognises the importance of cultivating and
processing medicinal cannabis in a responsible manner, reducing,
where possible, its carbon emissions, water and energy usage, and
impact on biodiversity The Company is in the early stages of
devising a policy to incorporate decision metrics and benchmarks in
order to set targets for continuous improvement.
Task Force on Climate-related Financial Disclosures (TCFD)
The Board recognises the importance of taking climate related
risks and opportunities into account within the Company's decision
making and governance frameworks, and the need to measure and
report on climate related metrics.
Given the very limited timeframe since the reverse acquisition,
and the early-stage nature of its operations during the period
under review, the Board is taking steps to address the eleven TCFD
recommendations within the four thematic areas detailed below.
Further reporting and disclosure will be made in future annual
reports. The Board envisages that all of the eleven recommendations
will be implemented, where possible prior to the publication of the
next set of the Company's annual accounts.
Governance
1. Describe the Board's oversight of climate related risks and
opportunities.
2. Describe management's role in assessing and managing climate
related risks and opportunities.
The Company does not currently have a climate risk committee,
and the Directors are evaluating how to practically and effectively
incorporate the evaluation of climate related risks and
opportunities within Board, sub-committee and management
decision-making and reporting. Climate related risks and
opportunities are discussed at the Board level when relevant.
Dr Filippos Papadopoulos (Executive Director) currently leads on
climate related issues at the Board, based on his prior Corporate
Social Responsibility experience and on-going professional
involvement on issues related to sustainability, biodiversity,
agro-ecology and civil society engagement via his role as Director
of the Strategic Project Management Office of the American Farm
School (AFS). Joseph Colliver (Non-Executive Director) also
provides oversight, and has completed a short-course in Business
Sustainability Management from the Cambridge Institute for
Sustainability Leadership (CISL).
3. Describe the climate related risks and opportunities the
organisation has identified over the short, medium, and
long-term.
4. Describe the impact of climate related risks and
opportunities on the organisation's businesses, strategy, and
financial planning.
5. Describe the resilience of the organisation's strategy,
taking into consideration different climate related scenarios,
including a 2degC or lower scenario.
The Board has identified two climate related issues:
1) Energy inputs required to cultivate and process medicinal cannabis.
2) Sourcing of reliable water supply, without polluting the local water table.
Strategy
The Company has taken the following initial actions to address
these issues:
-- Performed a strategic pivot in June 2021 away from plans to
cultivate under glass, reverting instead to a controlled indoor
grow environment, partly to ensure reduce the energy required to
cool the facility in the summer and less heat required in
winter.
-- The management team of Hellenic Dynamics S.A., supported by
the Company's Board of Directors, are actively pursuing contractual
negotiations to, on the one hand source a renewable and
cost-effective solar energy source, and on the other acquire energy
storage capacity as a means of harnessing excess PV capacity.
-- Currently installing a closed-loop irrigation systems,
sourced from an on-sight bore hole (reducing carbon emissions
related to the transport of water), with wastewater purified to
ensure excess nutrients and other waste products such as
fertilisers are not released into the local water supply, by way of
a water remediation system utilising ultraviolet light.
The Company is evaluating the impact of climate related
opportunities and risks within its business strategy and financial
plan and will be in a position to report further in future annual
reports.
Risk management
6. Describe the organisations processes for identifying and
assessing climate related risks.
7. Describe the organisations processes for managing climate
related risks.
8. Describe how processes for identifying, assessing, and
managing climate related risks are
integrated into the organisation's overall risk management.
The Company is in the process of embedding climate
considerations within the risk management framework of its
controlled environment operating model.
The following climate change related risks have been identified
initially:
-- Potential for higher input costs from increased temperatures
to maintain an optimum grow environment in terms of temperature,
humidity, and air purity (via a heating, ventilation and air
conditioning (HVAC) systems) and exposure to microbiology.
-- Competition for equity and debt capital to fund storage or
excess PV capacity, and competition to source solar energy
supplies.
-- Potential for higher input costs for building materials.
-- Potential disruption to the supply of clean water from the
on-site bore hole, requiring costly alternative water supply from
external suppliers.
-- Supplier disruption.
-- Future patient / consumer demand for lower carbon emission product.
-- Increased frequency of wildfires.
Metrics & targets
9. Disclose the metrics used by the organisation to assess
climate related risks and opportunities in line with its strategy
and risk management process.
10. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3
greenhouse gas (GHG) emissions and the related risks.
11. Describe the targets used by the organisation to manage
climate related risks and opportunities and performance against
targets.
The Directors are aware of need to measure and control
emissions. However, due to the limited activities in the period
under review, the Company did not consume more than 40,000kWh of
energy, and its emissions are therefore not disclosed.
In the future, the Company will only measure the impact of its
direct activities, as the full impact of the entire supply chain of
its suppliers cannot be measured practically.
Due to the nature of the pre-production early stage of the
Company the Board feels that exposure to climate related risks is
low at present, however will look more closely at this issue once
the Company is in it's operational phase and will put in place a
climate related strategy. In addition the Company will obtain
relevant data, wherever possible to comply with the TCFD
recommendations, however based on the current stage of the Company
we have not acquired any data at of the date of this document and
therefore have not faced any challenges in the gathering of any
data.
Hellenic Dynamics headquartered in the United Kingdom which has
made a commitment in the Climate Change Act 2008 (2050 Target
Amendment) Order 2019. Due to the early stage of the Company there
is currently no transition plan in place. As the Company moves into
its operational phase this position will be reconsidered prior to
the publication of the Company's next set of annual accounts.
Employee information
At present, there are no female Directors in the Company. The
Company has a Non-Executive Chairman and one Non-Executive Director
and two Executive Directors. There are also five members of the
Advisory Board. The Company is committed to equality and, if future
roles are identified, a wide-ranging search would be completed with
the most appropriate individual being appointed irrespective of
gender or race.
Human rights matters
The Company ensures that employment practices take into account
the necessary diversity requirements and compliance with all
employment laws. The Board has experience in dealing with such
issues and sufficient training and qualifications to ensure they
meet all requirements.
Anti-corruption and anti-bribery policy
The government of the United Kingdom has issued guidelines
setting out appropriate procedures for companies to follow to
ensure that they are compliant with the UK Bribery Act 2010. The
Company has conducted a review into its operational procedures to
consider the impact of the Bribery Act 2010 and the Board has
adopted an anti-corruption and anti-bribery policy.
Principal Risks and Uncertainties
The Company operates in an uncertain environment and is subject
to a number of risk factors. The Directors consider the following
risk factors are of particular relevance to the Company's
activities although it should be noted that this list is not
exhaustive and that other risk factors not presently known or
currently deemed immaterial may apply.
Risks/Uncertainties to the Company
Issue Risk/Uncertainty Mitigation
--------------------------------- --------------------------------------------
Hellenic will The licencing structure The licence awarded to the Company
not undertake of the Greek government is for 40,000 square meters of
business activities is based on a phased active cultivation of THC dominant
until it has approach, where the Company strains of medical cannabis. The
obtained all must have an operational progression to the commercial stage
relevant licences, licence to commercially is based on the submission of four
approvals, and cultivate medical cannabis self-certified affidavits, confirming
consents flowers for commercial the Company does not use port facility,
sale does not use propane, has full
fire and safety measures and lastly
has taken a full power reading
of power consumption. The Company
will submit the last power self-certified
affidavit within a few weeks of
the publication of this report
to commence commercial cultivation
activities.
--------------------------------- --------------------------------------------
The Group may All markets the Group The Company will only cultivate
fail to meet is looking to sell medical medical cannabis in a fully indoor
import requirements, cannabis products into and fully controlled environment.
in respect of vary with regards to In such an environment cannabis
its medical the import requirements. crops are considered to have significantly
cannabis flowers Germany is the Company's less exposure to microbiology and
and non-compliance initial target market, by utilising the correct substrate,
could limit, which has one of the which the Company has chosen to
restrict, or strictest quality controls be a mixture of rock wool and coconut
delay the generation with regards to microbiology husk, devoid the plant of heavy
of revenues and heavy metals in Europe. metals. Furthermore, by moving
within the primary Failure to comply to to a POD contract cultivation strategy,
target markets. these quality control the POD owners are the end buyers
import requirements may and can ensure further quality
delay the Company's generation issues are adhered to for their
of revenues. own products for export from Greece
to the distributors target market.
--------------------------------- --------------------------------------------
The operations Hellenic Dynamics has Having gone through the process
of Hellenic only been operating its of gaining its Admission, the Company
are subject business since 2019 and has obtained significant information
to a new and with a limited operational about the legislative nature of
evolving sector history, there is inherent the medical cannabis industry across
and are subject uncertainty in relation Europe. The Company has continued
to change to Hellenic's business to ensure it is always informed
strategy. There can be about changes in the industry and
no guarantee that Hellenic's is ready and agile enough to adapt
business model and development wherever necessary, as it proved
initiatives will be successful, by the move to a POD concept.
or even if they are successful,
able to generate the
revenue which is anticipated.
--------------------------------- --------------------------------------------
The Group is Since inception the progress The Company offers incentives to
reliant on a of Hellenic to date has its directors and management teams
small number been in large part due through participation in an options
of key employees to the experience of scheme, linking them to the to
and consultants. its founders, Directors the long-term success of the business.
There is no and management team. The Company also offers education
guarantee that There is no assurance and training to personnel and has
employment agreements, that Hellenic will be been successful in its recruitment
service contracts able to retain the services endeavours.
or consulting of these persons
agreements will The team is well motivated for
not be terminated, the success of the business and
or that they its long-term ambitions.
will be renewed
--------------------------------- --------------------------------------------
Hellenic Dynamics As at the date of this The Company's management and Directors
has to date document, Hellenic had have made significant in-roads
been loss making not generated any revenues. to medical cannabis distributors
and remains The ability of the Company across Europe to increase the addressable
at an early to generate revenues market for its products. It is
stage of development is dependent upon the envisaged that the cultivation
factors listed above. and production in the first phase
of the Company's growth will be
sold through the Company's existing
term-sheets. Further supply agreements
are at an advanced stage.
Failure to adhere Hellenic must at all The management and Directors of
to the licence times be in adherence the Company are in direct contact
regulations to the regulations set with the Greek cannabis cultivation
could result out in the Company's licensing authorities, thus keeping
in loss of license licence and all future the Company informed for any changes
licences granted by the or potential changes to the licensing
Greek government. If requirements. Company's management
Hellenic or its management discusses its licensing obligations
team, Directors and employees on monthly basis to ensure adherence.
are found in breach of Furthermore, the Company will conduct
any conditions of its a full criminal back ground check
licence(s) this could on key management personnel on
result in the loss of an annually basis and currently
licence. ensures the Company's Greek Good
Standing status is met. Both criminal
background checks and a certificate
of good standing with the Greek
tax office are considered to be
the most important elements of
adhering to the Company's licence
obligations.
------------------------------- -------------------------------------------
Composition of the Board
A full analysis of the Board, its function, composition and
policies, is included in the Corporate Governance Report on pages
16 and 17 of the Report and Accounts.
Capital structure
The Company's capital consists of ordinary shares which rank
Pari passu in all respects and which are admitted to the Official
List (by way of a Standard Listing) and are traded on which are
traded on Main Market of the London Stock Exchange. There are no
restrictions on the transfer of securities in the Company or
restrictions on voting rights and none of the Company's shares are
owned or controlled by employee share schemes. There are no
arrangements in place between shareholders that are known to the
Company that may restrict voting rights, restrict the transfer of
securities, result in the appointment or replacement of Directors,
amend the Company's articles of association or restrict the powers
of the Company's Directors, including in relation to the issuing or
buying back by the Company of its shares or any significant
agreements to which the Company is a party that take effect after
or terminate upon, a change of control of the Company following a
takeover bid or arrangements between the Company and its Directors
or employees providing for compensation for loss of office or
employment (whether through resignation, purported redundancy or
otherwise) that may occur because of a takeover bid.
Approved by the Board and signed on its behalf by:
Sir Anthony Jolliffe
Non-Executive Chairman
CORPORATE GOVERNANCE REPORT
Introduction
The Directors recognise the importance of sound corporate
governance and seek to apply The Quoted Company Alliance Corporate
Governance Code for Small and Medium size Companies (2018) (the
'QCA Code'), which they believe is the most appropriate recognised
governance code for a company of the Company's size admission to
the Official List (by way of a Standard Listing) and to trading on
the London Stock Exchange's main market for listed securities. The
Directors believe that the QCA Code will provide the Company with
the framework to help ensure that a strong level of governance is
developed and maintained, enabling the Company to embed a
governance culture into its organisation. A copy of the QCA Code is
publicly available at www.theqca.com.
The QCA Code has ten principles of corporate governance that the
Company has committed to apply within the foundations of the
business. These principles are:
1. establish a strategy and business model which promote
long-term value for
shareholders;
2. seek to understand and meet shareholder needs and
expectations;
3. take into account wider stakeholder and social
responsibilities and their
implications for long term success;
4. embed effective risk management, considering both
opportunities and threats,
throughout the organisation;
5. maintain the Board as a well-functioning balanced team led by
the Chair;
6. Ensure that between them the Directors have the necessary up
to date
experience, skills and capabilities;
7. evaluate Board performance based on clear and relevant
objectives, seeking
continuous improvement;
8. promote a corporate culture that is based on ethical values
and behaviours;
9. maintain governance structures and processes that are fit for
purpose and
support good decision-making by the Board; and
10. Communicate how the Company is governed and is performing by
maintaining a
dialogue with shareholders and other relevant stakeholders.
Here follows a short explanation of how the Company applies each
of the principles, including where applicable any deviation from
those principles.
Business model and strategy
The Board believes that considerable shareholder value can be
delivered if the Company remains focused on its strategy of medical
cannabis contract cultivation aligned to the growing medical
cannabis markets across Europe. In our efforts to be the dominant
wholesale supplier of medical cannabis flowers in Europe, we have
established a solid network of key strategic partners to assist us
in achieving our goals.
Understanding shareholder needs and expectations
The Board is committed to maintaining good communication and
having constructive dialogue with its shareholders. During the
period the Directors have met with shareholders to discuss issues
and provide feedback over the Company's evolving strategy. In
addition, all shareholders were invited to attend the annual
general meeting ("AGM") that was held in 2022 and are again
encouraged to attend the next AGM, details of which will be
published in due course. Investors also have access to current
information on the Company through its website,
www.hellenicdynamics.com and the various Hellenic social media
channels
Considering wider stakeholder and social responsibilities
The Board recognises that the long-term success of the Company
is reliant upon open communication with its internal and external
stakeholders: employees, investee companies, shareholders,
contractors, suppliers, regulators and other stakeholders. The
Company has an ongoing relationship with a broad range of its
stakeholders as part of the Company's corporate social
responsibility ("CSR") strategy and has regular and direct
interaction where it provides these stakeholders with opportunities
to raise issues and provide feedback to the Company. Further
details on the Company's corporate social responsibility can be
found in the strategic report on page 9 of the Report and
Accounts.
Risk management
The Board is responsible for ensuring that procedures are in
place and being implemented effectively to identify, evaluate and
manage the significant risks faced by the Company. It has an
established a framework of internal financial controls to address
financial risk and is regularly reviewing the non-financial risks
to ensure all exposures are adequately managed. Due to the early
stage and size of the Company the Board has not set an internal
audit procedure in place in this period. The principal risks and
uncertainties are as set out in the Strategic and Corporate
Governance Report on pages 13 to 14 of the Report and Accounts.
Well functioning Board of Directors
The Board currently comprises of a Non-Executive Chair, Sir
Anthony Jolliffe, the Chief Executive, Davinder Rai, Filippos
Papadopoulos as Executive Director and Joseph Colliver as a
Non-Executive Director. Both Sir Anthony and Joseph Colliver
considered to be a fully independent Non-Executive Directors with
neither holding any Ordinary Shares in the Company.
Board of Directors
Sir Anthony Jolliffe - Non-Executive Chairman (appointed 5
December 2022)
City accountant and international trade pioneer, Sir Anthony
formed his own accountancy practice in 1965 which he grew into a
multinational operation with offices in 44 countries and over 200
partners. Sir Anthony's global career included many directorships
of private and public companies in the UK, USA, China, Japan,
Canada and South America. After leading the sale of DHL to Japan
Airlines, Sir Anthony embarked on numerous business projects in
international trade, he was on the board of Walker Greenbank, which
currently trades on AIM as Sanderson Design Group PLC (SDG), Sir
Anthony has also been the chairman of Smart Pensions, which is
authorised and supervised by the Pensions Regulator. He was
knighted GBE in 1982 and also holds the Knight Order of St. John,
Order of Adbul Azziz - Saudi Arabia, Order of Nepal, Order of the
Orange - Netherlands, Hon Doctor of science - City of London
University and Hon Doctor of Music - Guildhall school of music.
Some of his past public duties have included being the Lord Mayor
of London, Sheriff of London, President of the London Chamber of
Commerce, Chairman of the Police Dependants Trust, Chairman of
Stoke Mandeville Hospitals and Treasurer and Vice President of the
European League for Economic Co-operation.
Joseph Colliver - Non-Executive Director (appointed 5 December
2022)
A qualified Fellow Chartered Accountant with finance,
regulatory, commercial and management consulting experience across
the life sciences, professional services, and other sectors. Joseph
is currently the CFO and main board director of Phytome Life
Sciences Plc, a CRO and early-stage drug developer of advanced
agro-pharmaceutical technologies and plant-derived biotherapeutics,
and non-executive Chairman of Psych Capital PLC, a biotech company
developing therapeutic treatments, drug development, and media and
communication platforms. Previously CFO of Sativa Group Inc.
(renamed Goodbody Health Ltd) a life sciences company operating in
the CBD wellness and medical cannabis space, where Joseph led the
reverse takeover of Stillcanna Inc, via a scheme of arrangement.
Prior to this, Joseph held senior finance and commercial roles
within the Kantar arm of WPP Group Plc for a decade, after
qualifying in audit with Mazars LLP.
Dr Filippos Papadopoulos - Executive Director (appointed 5
December 2022)
Dr. Filippos Papadopoulos holds a PhD from London School of
Economics and M.A. in International Relations from the University
of Sussex; he is currently the Director of the Strategic Project
Management Office of the American Farm School (AFS). In this
capacity he is responsible for the two Agricultural
Entrepreneurship Centres run by AFS and oversees projects in over
thirty locations throughout Greece. In addition, he is coordinating
EU- funded research & innovation projects, the Internet of Food
Alliance (InoFA) cluster and oversees the AFS private LoRaWAN pilot
network throughout Greece. Building and managing multi-actor
alliances between research institutes, civil society organisations
and the real economy is one of his core activities. His fields of
interest include Diffusion of Technical Innovation, Community of
Practice Building, Consumer Behaviour, Entrepreneurship,
Organisational Culture & Climate, Leadership and
Management.
Davinder Rai - Chief Executive Officer (appointed 5 December
2022)
Davinder has a wide breath of experience, actively investing in
and operating businesses and interests with a focus on natural
resources, technology and entertainment, globally. Davinder has
held senior board positions for a number of private and public
companies spanning Europe and North America. Having left
university, Davinder went on to become an independent commodities
trader, specifically involved in the sale and purchase of minerals
from West Africa and Asia. Davinder has daily interactions with
global leaders and industry pioneers.
All Directors are subject to re-election in accordance with both
the requirements of the UK Companies Act 2006. The letters of
appointment for all Directors stipulate the time commitment that
each Director is expected to provide to the Company. The Executive
Directors are contracted to provide these services on an exclusive
basis, though Board approval may be given to engage in outside paid
work. The Non-Executive Directors acknowledge in their letter of
appointment that the nature of the role makes it impossible to be
specific on maximum time commitment, but that there will be a
minimum of 2-3 days a month, which will include preparation for and
attendance at monthly board meetings. The Board Non-Executive
Chairman serves as chair of every meeting of the Board of
Directors.
The Board is expected to meet at least 6 times per year. It has
established an Audit and Risk Committee, Remuneration Committee and
Nomination Committee, particulars of which can be found on pages 29
to 35 of the Report and Accounts.
Attendance at Board and Committee meetings
The Company will report annually in the Directors' Report on the
number of committee meetings held during the year and the
attendance record of individual Directors. Directors meet formally
and informally both in person and by telephone.
Board Meeting frequency and attendance
Member Position Appointed Resigned Meetings attended
Peter Jay Chairman 16/12/2022 12 of 12
----------------------- ----------- ----------- ------------------
Brent Nigel Fitzpatrick Non-Executive Director 05/12/2022 12 of 12
----------------------- ----------- ----------- ------------------
Simon Grant-Rennick Non-Executive Director 05/12/2022 12 of 12
----------------------- ----------- ----------- ------------------
Sir Anthony Jolliffe Non-Executive Chairman 05/12/2022 3 of 3
----------------------- ----------- ----------- ------------------
Joseph Colliver Non-Executive Director 05/12/2022 3 of 3
----------------------- ----------- ----------- ------------------
Filippos Papadopoulos Executive Director 05/12/2022 3 of 3
----------------------- ----------- ----------- ------------------
Davinder Rai CEO 05/12/2022 3 of 3
----------------------- ----------- ----------- ------------------
Appropriate skills and experience of the Directors
The Board currently consists of two Executive Directors and two
Non-Executive Directors and, in addition, the Company has employed
the outsourced services of Ben Harber of Shakespeare Martineau LLP
(SGH Company Secretaries Limited), appointed 16 December 2022, to
act as the Company Secretary. The Company believes that the
Directors have wide ranging experience working for, and, or
advising businesses operating within the public markets and
cannabis space. They also have an extensive network of
relationships to reach key decision-makers to help achieve their
strategy.
The Board recognises that it currently has a limited, all male,
Board and does not have a Finance Director. This will form a part
of any future recruitment consideration if the Board concludes that
replacement or additional Directors are required. The Board is
aware, that as it grows, it will look to recruit and develop a
diverse and gender-balanced team.
There is no formal process to keep Directors' skill sets
up-to-date given their wealth of experience. However, the Company's
auditors, brokers and financial advisers provide regular updates on
governance, financial reporting and the Listing Rules and the Board
is able to obtain advice from other external bodies when
necessary.
Evaluation of Board performance
Internal evaluation of the Board, the Committees and individual
Directors will be undertaken on an annual basis in the form of peer
appraisal and discussions to determine the effectiveness and
performance against targets and objectives. As a part of the
appraisal the appropriateness and opportunity for continuing
professional development whether formal or informal is discussed
and assessed.
Corporate culture
The Board recognises that their decisions regarding strategy and
risk will impact the corporate culture of the Company as a whole
which in turn will impact the Company's performance. The Directors
are very aware that the tone and culture set by the Board will
greatly impact all aspects of the Company and the way that
consultants or other representatives behave. The corporate
governance arrangements that the Board has adopted are designed to
instil a firm ethical code to be followed by Directors, consultants
and representatives alike throughout the entire organisation. The
Company strives to achieve and maintain an open and respectful
dialogue with representatives, regulators, suppliers and other
stakeholders. Therefore, the importance of sound ethical values and
behaviours is crucial to the ability of the Company to successfully
achieve its corporate objectives. The Board places great importance
on this aspect of corporate life and seeks to ensure that this
flows through all that the Company does. The Directors consider
that at present the Company has an open culture facilitating
comprehensive dialogue and feedback and enabling positive and
constructive challenge. The Company has adopted, with effect from
the date on which its shares were admitted to the LSE's main market
for listed securities, a code for Directors' dealings in securities
which is appropriate for a company whose securities are traded on
the main market of the LSE and is in accordance with the
requirements of the Market Abuse Regulation which came into effect
in 2016.
Issues of bribery and corruption are taken seriously. The
Company has a zero-tolerance approach to bribery and corruption and
has an anti-bribery and corruption policy in place to protect the
Company, its employees and those third parties to which the
business engages with. The policy is provided to staff upon joining
the business and training is provided to ensure that all employees
within the business are aware of the importance of preventing
bribery and corruption. Each employment contract specifies that the
employee will comply with the policies. There are strong financial
controls across the business to ensure on going monitoring and
early detection.
Bribery & Corruption
The Company takes bribery and corruption seriously as such the
Company has a robust Bribery and Corruption policy in place that is
presented to all members of the Hellenic team.
Annual General Meeting
The Company will announce the date of the next AGM in Q3 of the
Company's fiscal year and details will be published via the
regulatory news service ("RNS").
Maintenance of governance structures and processes
The Company's governance structures are appropriate for a
company of its size. The Board also meets regularly, and the
Directors continuously maintain an informal dialogue between
themselves. The Non-Executive Chairman is responsible for the
effectiveness of the Board and the Chief Executive Officer has
primary contact with shareholders. The execution of the Company's
investment strategy is a matter also reserved for the Chief
Executive Officer.
Remuneration Committee
The Company has established a Remuneration Committee, to assist
the Board in determining its responsibilities in relation to
remuneration, including making recommendations to the Board on the
policy on remuneration.
The report of the Remuneration Committee is included in this
Annual Report. Formal terms of reference for the Remuneration
Committee have been documented and will be made available for
review at the next AGM.
As of the 5 December 2022, Sir Anthony Jolliffe was appointed as
chair of the Remuneration Committee as independent Non-Executive
Director along with Davinder Rai (CEO).
Audit and Risk Committee
The Company has established an Audit and Risk Committee with
delegated duties and responsibilities. During the period, there
were two members of the Audit and Risk Committee being Joseph
Colliver (chair) as independent Non-Executive Director and Amit
Parhar. Joseph who is a fellow chartered accountant who qualified
in audit practice with Mazars LLP, and is an experienced board
director and chief financial officer who has significant corporate
governance, financial control and risk management experience. Amit
is the Company's Head of financial Operations and during his career
has held budget and P&L responsibilities and fully understands
the requirements of independent audit. The Audit and Risk Committee
is responsible, amongst other things, for making recommendations to
the Board on the appointment of auditors and the audit fee,
monitoring and reviewing the integrity of the Company's financial
statements and any formal announcements on the Company's financial
performance as well as reports from the Company's auditor on those
financial statements. In addition, the Audit and Risk Committee
will review the Company's internal financial control and risk
management systems to assist the Board in fulfilling its
responsibilities relating to the effectiveness of those systems,
including an evaluation of the capabilities of such systems in
light of the expected requirements for any specific acquisition
target.
The Audit and Risk Committee meets with the auditors at least
twice a year and more frequently if required.
Terms of reference of the Audit and Risk Committee will be made
available upon written request.
The Audit and Risk Committee report is included on pages 32 to
34 of the Report and Accounts.
Nomination Committee
The Company has established a Nomination Committee, the members
of which are Sir Anthony Jolliffe, Davinder Rai and Filippos
Papadopoulos. The committee meets as required to fulfil its duties
of reviewing the Board structure and composition and identifying
and nominating candidates to fill Board vacancies as they
arise.
Terms of reference of the Nomination Committee will be made
available upon written request.
The Nomination Committee report is included on page 35 of the
Report and Accounts.
Other governance matters
All of the Directors are aware that independent professional
advice is available to each Director in order to properly discharge
their duties as a Director. In addition, each Director and Board
committee has access to the advice of the Company Secretary.
The Company Secretary
The Company Secretary is SGH Company Secretaries Limited who are
responsible for the Board complying with UK procedures.
Effectiveness
For the period under review the Board comprised of a Chairman
and two Non-Executive Directors prior to the completion of the
Admission and reverse takeover of Hellenic Dynamics SA after which
the Board comprised of two Directors and two Non-Executive
Directors.
The Directors are of the view that the Board and its committees
consist of Directors with an appropriate balance of skills,
experience, independence and diverse backgrounds to enable them to
discharge their duties and responsibilities effectively.
Independence
The Non-Executive Directors bring a broad range of business and
commercial experience to the Company. The Board considers all the
Non-Executive Directors to be independent in character and
judgement; this has been explored in more detail on pages 16 to 17
of the Report and Accounts.
Appointments
The Board is responsible for reviewing the structure, size and
composition of the Board and Advisory Board and making
recommendations to the Board with regards to any required
changes.
Commitments
All Directors have disclosed any significant commitments to the
Board and confirmed that they have sufficient time to discharge
their duties.
Induction
All new Directors received an informal induction as soon as
practical on joining the Board. No formal induction process exists
for new Directors, given the size of the Company, but the
Non-Executive Chairman and CEO ensures that each individual is
given a tailored introduction to the Company and fully understands
the requirements of the role.
Conflict of interest
A Director has a duty to avoid a situation in which he or she
has, or can have, a direct or indirect interest that conflicts, or
possibly may conflict with the interests of the Company. The Board
had satisfied itself that there is no compromise to the
independence of those Directors who have appointments on the Boards
of, or relationships with, companies outside the Company. The Board
requires Directors to declare all appointments and other situations
which could result in a possible conflict of interest.
Board performance and evaluation
The Non-Executive Chairman normally carries out an annual formal
appraisal of the performance of the other Directors which takes
into account the objectives set in the previous year and the
individual's performance in the fulfilment of these objectives.
Although the Board consisted of four male Directors, the Board
supports diversity in the Boardroom and the Financial Reporting
Council's aims to encourage such diversity and has an equality,
diversity and inclusion policy in place. Aside from the Directors,
there are five members of the management team and five members of
the Advisory Board. The following table sets out a breakdown by
gender at 31 March 2023:
Number Percentage Number of senior Number Percentage
of board of the board positions on the in executive of executive
members board (CEO, CFO, management management
SID and Chair)
Men 4 100% 100% 4 100%
---------- -------------- ------------------ -------------- --------------
Women 0 0% 0% 0 0%
---------- -------------- ------------------ -------------- --------------
Not specified/prefer
not to say 0 0% 0% 0 0%
---------- -------------- ------------------ -------------- --------------
The Board has not met the following targets on board diversity
as at 31 March 2023:
1. at least 40% of the individuals on its board of directors are women;
2. at least one of the following senior positions on its board
of directors is held by a woman: (A) the chair; (B) the Chief
Executive; (C) the senior independent director.
Due to the size of the Company at present the Company has opted
to operate a small board, where 50% of the Board comprises of the
original founding shareholders it has therefore not been possible
for the Board to meet the target above. As the Company progresses
to its next stage of revenue generation and expansion the Company
has and always will implement an equal opportunities programme for
employment.
Number of
senior positions
Number on the board Number Percentage
of board Percentage (CEO, CFO, in executive of executive
members of the board SID and Chair) management management
White British
or White (including
minority-white
groups) 3 75% 3 1 50%
---------- -------------- ------------------ -------------- --------------
Mixed/Multiple
Ethnic Groups 0 0% 0 0 0%
---------- -------------- ------------------ -------------- --------------
Asian/Asian
British 1 25% 1 1 50%
---------- -------------- ------------------ -------------- --------------
Black/African/Caribbean/Black
British 0 0% 0 0 0%
---------- -------------- ------------------ -------------- --------------
Other ethnic
group, including
Arab 0 0% 0 0 0%
---------- -------------- ------------------ -------------- --------------
Not specified/prefer
not to say 0 0% 0 0 0%
---------- -------------- ------------------ -------------- --------------
The Board has met the following targets on Board diversity as at
31 March 2023;
1. at least one individual on its board of directors is from a
minority ethnic background, such data is collected as part of the
enrolment strategy for all members of the wider Group and covered
in the Company's Employee Handbook.
Due to the size of the Company in its pre-revenue stage and with
regards to its operations in Greece, the Directors do not foresee
any risks in being able to meet or continue to meet the board
diversity targets in the next accounting period.
The Board will pursue an equal opportunity policy and seek to
employ those persons most suitable to delivering value for the
Company.
Management
The Group has five members of its management team in the wider
Group:
Number of Management Percentage of management
Men 3 60%
--------------------- -------------------------
Women 2 40%
--------------------- -------------------------
Not specified/prefer
not to say 0 0%
--------------------- -------------------------
Due to the size of the Group in its pre-revenue stage and with
regards to its operations in Greece, the Directors do not foresee
any risks in being able to meet or continue to meet the management
diversity targets in the next accounting period, only of such
positions and applicants for such positions are deemed suitable for
the roles.
The Group will pursue an equal opportunity policy and seek to
employ those persons most suitable to delivering value for the
Company.
Accountability
The Board is committed to providing shareholders with a clear
assessment of the Company's position and prospects. This is
achieved through this report and as required other periodic
financial and trading statements. The Board has made appropriate
arrangements for the application of risk management and internal
control principles. The Board has delegated to the Audit and Risk
Committee oversight of the relationship with the Company's auditors
as outlined in the Audit and Risk Committee report on pages 32 to
34 of the Report and Accounts.
Going concern
The Directors, whilst they draw attention to the material
uncertainty that exists at the date of these financial statements,
nevertheless consider it appropriate to continue to adopt the going
concern basis of accounting in preparing the financial statements.
In making their assessment of going concern, the Directors have
reviewed forecasts for the newly formed Group, for a period of at
least 12 months from the date of approval of these financial
statements. The Group is not currently generating revenues, and
therefore an operating loss has been reported in the period.
Revenues from the first cultivation cycle are expected in the
second half of the calendar year.
Taking into account the redemption of the GBP375,000 convertible
loan note in early July and the realisation of significant cost
savings against its initial budget for the purchase of plant and
equipment, the Directors have assessed the cash requirements of the
Group in terms of operational costs, capital expenditure, gross
profit contribution from the initial sales of product and the
financial resources available to the Group including the following
sources of funding:
-- On the 6 July 2023, the Company announced advanced late stage
discussions with a number of funding sources, including a number of
grant applications.
-- The Directors are in advanced discussions with a financial
institution pertaining to a capital debt draw-down facility.
-- Discussions with brokers and corporate finance advisors
regarding potential future equity rounds.
Based on achieving successful cultivation cycles and the sale of
crops, securing only one of the grant applications currently in
progress, implementing savings in discretionary operational spend
and delaying capital investment, the Directors, whilst
acknowledging the material uncertainty that exists at the date of
these financial statements, nevertheless are confident of
maintaining sufficient working capital for the twelve-month period
from the date of this report.
The auditors make reference to the material uncertainty in the
Auditors' report on page 37 of the Report and Accounts.
Internal controls
The Board of Directors reviews the effectiveness of the
Company's system of internal controls in line with the requirement
of the Code. The internal control system is designed to manage the
risk of failure to achieve its business objectives. This covers
internal financial and operational controls, compliance and risk
management. The Company had necessary procedures in place for the
period under review and up to the date of approval of the annual
report and financial statements. The Directors acknowledge their
responsibility for the Company's system of internal controls and
for reviewing its effectiveness. The Board confirms the need for an
ongoing process for identification, evaluation and management of
significant risks faced by the Company. The Directors carry out a
risk assessment before signing up to any commitments. This is by
way of either arranged Board meetings or informal meeting of the
Board.
The Directors are responsible for taking such steps as are
reasonably available to them to safeguard the assets of the Company
and to prevent and detect fraud and other irregularities.
Shareholder relations
Communication and dialogue
Open and transparent communication with all shareholders is
given high priority and there is regular dialogue, as well as
general presentations made at the time of the release of this
annual report as per page 15 of the Report and Accounts. All
Directors are kept aware of changes in major shareholders in the
Company and are available to meet with shareholders who have
specific interests or concerns. The Company issues its results
promptly and also publishes them on the Company's website. Regular
updates to record news in relation to the Company cultivation and
other business and supporting activities by way of RNS Reach, RNS
and press by way of PR and via the Company's various social media
accounts. This is in addition to updates to the Company's
website.
The Directors are available to meet or talk with shareholders to
discuss any issues and gain an understanding of the Company's
business, its strategies and governance.
Annual General Meeting ("AGM")
At every AGM individual shareholders are given the opportunity
to put questions to the Chairman and to other members of the Board
that may be present. Notice of the AGM is sent to shareholders at
least 21 working days before the meeting. Details of proxy votes
for and against each resolution, together with the votes withheld
are announced to the London Stock Exchange and are published on the
Company's website as soon as practical after the meeting.
This Governance Report was approved by the Board and signed on
its behalf by:
Anthony Jolliffe
Non-Executive Director
DIRECTORS' REPORT
The Directors present their report with the audited financial
statements of the Group for the period ended 31 March 2023. A
commentary on the business for the period is included in the
Chairman's Statement on pages 2 to 3 of the Report and Accounts. A
review of the business is also included in the Strategic Report on
pages 6 to 14 of the Report and Accounts.
General information
Registered office 21 Arlington Street
London
SW1A 1RN
United Kingdom
Company registration No . 06374598 (England and Wales)
Wholly owned subsidiary Hellenic Dynamics SA
Chorigi - Kilkis
P.C. 6100
Greece
The Company's ordinary Shares of GBP0.001 each ("Ordinary
Shares") are admitted to the Official List (by way of a Standard
Listing) and to trading on the London Stock Exchange's main market
for listed securities. The Listing Rules set out the listing
obligations for a Standard Listed company.
Directors
The Directors of the Company during the period and their
beneficial interest in the Ordinary Shares of the Company at 31
March 2023 were as follows:
Position Appointed Resigned Ordinary Options
Director Shares
Sir Anthony Non-Executive
Jolliffe Chairman 05/12/2022 - - 93,975,000
--------------- ------------ ------------ ------------ ------------
Non-Executive
Joseph Colliver Director 05/12/2022 - - 62,650,000
--------------- ------------ ------------ ------------ ------------
Filippos Papadopoulos Director 05/12/2022 - 982,963,319 62,650,000
--------------- ------------ ------------ ------------ ------------
Davinder Rai CEO 05/12/2022 - 452,923,219 250,600,000
--------------- ------------ ------------ ------------ ------------
Peter Jay Chairman - 16/12/2022 36,664,557 46,305,478
--------------- ------------ ------------ ------------ ------------
Nigel Brent Non-Executive
Fitzpatrick Director - 05/12/2022 17,721,519 32,413,835
--------------- ------------ ------------ ------------ ------------
Non-Executive
Simon Grant-Rennick Director - 05/12/2022 - 32,413,835
--------------- ------------ ------------ ------------ ------------
Qualifying Third Party Indemnity Provision
At the date of this report, the Company has an indemnity policy
in place for all four Directors.
Substantial shareholders
As at 31 March 2023, the total number of issued Ordinary Shares
with voting rights in the Company was 12,530,000,000. Details of
the Company's capital structure and voting rights are set out in
note 17 to the financial statements.
The Company has been notified of the following interests of 3
per cent or more in its issued share capital as at 31 March 2023.
No changes have been disclosed to the Company since year ended 31
March 2023 to the date of this report.
Number of Ordinary % of Share
Party Name Shares Capital
George Papadopoulos 2,936,796,770 23.44%
------------------- -----------
Samos Investments Limited 2,061,288,134 16.45%
------------------- -----------
Vidacos Nominees Limited 1,121,288,149 8.95%
------------------- -----------
Keynes Ventures Limited 1,024,371,061 8.18%
------------------- -----------
Filippos Papadopoulos 982,963,319 7.74%
------------------- -----------
Ja mes Brearley CREST Nominees
Limited 595,238,095 4.75%
------------------- -----------
Davinder Rai 447,024,327 3.57%
------------------- -----------
Financial instruments
Details of the use of the Company's financial risk management
objectives and policies as well as exposure to financial risk are
contained in the accounting policies and note 24 of the financial
statements.
Emissions
The Company is aware that it needs to measure its operational
carbon footprint in order to limit and control its environmental
impact. However, given the very limited nature of its operations
during the period under review, requiring significantly less than
40,000kWh of energy, it has not been practical to measure its
carbon footprint in the period.
In the future, the Company will only measure the impact of its
direct activities, as the full impact of the entire supply chain of
its suppliers cannot be measured practically.
Dividends
The Directors do not propose a dividend in respect of the period
ended 31 March 2023 (2022: nil).
Future developments and events subsequent to the period end
The Company has adopted a contract cultivation product
outsourcing and development ("POD") concept and repaid a
convertible loan note post year end. Further details can be found
in the Chief Executive Officers report on page 4 of the Report and
Accounts.
Corporate Governance
The Corporate Governance report forms part of the Director's
Report and is disclosed on pages 24 to 27 of the Report and
Accounts.
Going Concern
The Company's business activities, together with facts likely to
affect its future operations and financial and liquidity positions
are set out in the Chairman's Statement and also note 24 to of the
financial statements. In addition, note 24 to the financial
statements disclose the Company's financial risk management
policy.
The Directors, whilst they draw attention to the material
uncertainty that exists at the date of these financial statements,
nevertheless consider it appropriate to continue to adopt the going
concern basis of accounting in preparing the financial statements.
The going concern statement is detailed in full in note 2.1 of the
consolidated financial statements. In making their assessment of
going concern, the Directors have reviewed forecasts for the newly
formed Group, for a period of at least 12 months from the date of
approval of these financial statements. The Group is not currently
generating revenues, and therefore an operating loss has been
reported in the period. Revenues from the first cultivation cycle
are expected in the second half of the calendar year.
Auditors
The Board appointed PKF Littlejohn LLP as auditors of the
Company on 6 March 2023 They have expressed their willingness to
continue in office and a resolution to reappoint them will be
proposed at the Annual General Meeting.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report
alongside the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the financial statements in accordance with
UK-adopted international accounting standards ("UK-adopted
IAS")
Under Company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and the Company and of
the profit or loss of the Group for that year. The Directors are
also required to prepare financial statements in accordance with
the rules of the London Stock Exchange for companies with a
Standard Listing.
In preparing these financial statements, the Directors are
required to:
-- Select suitable accounting policies and then apply them consistently
-- Make judgments and accounting estimates that are reasonable and prudent
-- State whether applicable UK-adopted international accounting standards ("UK-adopted IAS")
-- have been followed, subject to any material departures
disclosed and explained in the financial statements; and
-- Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and the
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and the Company and enable
them to ensure that the financial statements and the Remuneration
Committee Report comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Group and the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities. They are also
responsible to make a statement that they consider that the annual
report and accounts, taken as a whole, is fair, balanced, and
understandable and provides the information necessary for the
shareholders to assess the Group and the Company's position and
performance, business model and strategy.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.
Statement of Directors' responsibilities pursuant to Disclosure
Guidance and Transparency Rule
Each of the Directors, whose names and functions are listed on
page 24 of the Report and Accounts confirm that, to the best of
their knowledge and belief:
-- the financial statements prepared in accordance with
UK-adopted international accounting standards ("UK-adopted IAS"),
give a true and fair view of the assets, liabilities, financial
position and loss of the Group and the Company and the undertakings
included in the consolidation taken as whole; and
-- the management report, as required by the Disclosure Guidance
and Transparency Rules of the Financial Conduct Authority which is
covered by the Directors' Strategic Report (pages 6 to 14 of the
Report and Accounts ) and the Corporate Governance Report (pages 15
to 23 of the Report and Accounts ) of this annual report and
financial statements, includes a fair review of the development and
performance of the business and the position of the Group and the
Company and the undertakings included in the consolidation taken as
whole, together with a description of the principal risks and
uncertainties that they face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit
information of which the Group and the Company's auditors are
unaware, and each Director has taken all the steps that 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
auditors are aware of that information.
This Directors' report was approved by the Board of Directors
and is signed on its behalf by:
Davinder Rai
Chief Executive Officer
REMUNERATION COMMITTEE REPORT
The Remuneration Committee presents its report for the period
ended 31 March 2023.
Membership of the Remuneration Committee
During the period ended 31 March 2023 and until 28 July 2023,
the Remuneration Committee was comprised of one Non- Executive
Director, Sir Anthony Jolliffe (chair) and Davinder Rai the
Company's CEO. Details of the audited Directors shareholding can be
found on page 29 of the Report and Accounts.
During the period ended 31 March 2033, no formal meeting of the
Remuneration Committee was held.
Subject to what appears below, no other third parties including
shareholders have provided advice that materially assisted the
Remuneration Committee during the period.
The items included in this report are unaudited unless otherwise
stated.
Remuneration Committee's main responsibilities
-- The Remuneration Committee considers the remuneration policy,
employment terms and remuneration of the Board and advisers;
-- The Remuneration Committee's role is advisory in nature, and
it makes recommendations to the Board on the overall remuneration
packages;
-- The Remuneration Committee, when considering the remuneration
packages of the Company's Board, will review the policies of
comparable companies in the industry.
Report Approval
A resolution to approve this report will be proposed at the AGM
of the Company. The vote will have advisory status, will be in
respect of the remuneration policy and overall remuneration
packages and will not be specific to individual levels of
remuneration.
Remuneration policy
On 5 December 2022, the Company entered into a service contract
with its Chief Executive Officer, Davinder Rai and its Executive
Director Filippos Papadopoulos on terms as set out in the
prospectus published on 14 November 2022.
There was no vote taken during the last general meeting with
regard to the Directors' remuneration policy. This is considered
reasonable given that the Company was suspended pending direction
from the FCA on its proposed Admission.
Non-Executive Directors
The Company policy is that the Non-Executive Directors are
expected to attend scheduled Board meetings and attend committee
meetings as required. The Company issued fresh letters of
appointment to its Non-Executive Directors, effective 5 December
2022 on terms as set out in the prospectus published on 14 November
2022.
Other Employees
During the period ended 31 March the Company had 5 members in
its management team and 5 members in its Advisory Board.
Recruitment policy
Base salary levels will take into account market data for the
relevant role, internal relativities, their individual experience
and their current base salary. For external and internal
appointments, the Board may agree that the Company will meet
certain relocation and/or incidental expenses as appropriate.
Terms of appointment
The services of the Directors during the period ended 31 March
2023 were provided in accordance with their appointment letters.
Directors were expected to devote such time as was necessary for
the proper performance of their duties, but as a minimum they were
expected to commit a minimum of 2-3 days a month, which should
include attendance at all meetings of the Board and any
sub-committees of the Board.
Director Appointed Number of months completed
Sir Anthony Jolliffe 05/12/2022 4
------------ ---------------------------
Joseph Colliver 05/12/2022 4
------------ ---------------------------
Filippos Papadopoulos 05/12/2022 4
------------ ---------------------------
Davinder Rai 05/12/2022 4
------------ ---------------------------
Directors' emoluments and compensation (audited)
Set out below are the emoluments of the Directors for the period
5 December 2022 to 31 March 2023 (GBP):
Annual
bonus Pension
Salary Taxable and long-term related
Name of Director and fees benefits benefits benefits Total Options
GBP GBP GBP GBP GBP
---------- ---------- --------------- ---------- -------- ------------
Sir Anthony
Jolliffe 16,667 - - - 16,667 93,975,000
---------- ---------- --------------- ---------- -------- ------------
Joseph Colliver 15,000 - - 188 15,188 62,650,000
---------- ---------- --------------- ---------- -------- ------------
Filippos Papadopoulos 10,000 - - 125 10,125 62,650,000
---------- ---------- --------------- ---------- -------- ------------
Davinder Rai 50,000 - - 625 50,625 250,600,000
---------- ---------- --------------- ---------- -------- ------------
Base salary (per annum) Notice Term
Name of Director Gross period
GBP
------------------------ --------- -------------------------
Sir Anthony 12 months from Admission
Jolliffe 50,000 3 month
------------------------ --------- -------------------------
Joseph Colliver 45,000 3 month 12 months from Admission
------------------------ --------- -------------------------
Filippos Papadopoulos 30,000 3 month -
------------------------ --------- -------------------------
Davinder Rai 150,000 3 month -
------------------------ --------- -------------------------
All Directors are subject to re-election at the Company's annual
general meeting.
Set out below are the emoluments of the Directors for the period
1 April 2022 to 5 December 2022 (GBP):
Salary and Payments upon Salary and Resigned
fees resignation fees
1 April 2022 Year to
to 5 December 31 March
Name of Director 2022 Total 2022
GBP GBP GBP GBP
--------------- -------- -------------- ----------- ------------
16 December
Peter Jay 33,663 33,663 9,079 37,200 2022
--------------- -------- -------------- ----------- ------------
5 December
Simon Grant Rennick 33,663 33,663 9,079 37,200 2022
--------------- -------- -------------- ----------- ------------
5 December
Nigel Brent Fitzpatrick 34,021 34,021 9,079 37,200 2022
--------------- -------- -------------- ----------- ------------
Payments for loss of office (Audited)
The following payments were made to the former directors UK
S.P.A.C. Plc upon their resignation after the reverse takeover:
-- Peter Jay: GBP9,079 *(resigned 16 December 2022)
-- Simon Grant Rennick: GBP9,079 **(resigned 5 December 2022)
-- Nigel Brent Fitzpatrick: GBP9,079 ***(resigned 5 December 2022)
UK 10-year performance graph
The Directors have considered the requirement for a UK 10-year
performance graph comparing the Company's Total Shareholder Return
with that of a comparable indicator. The Directors do not currently
consider that including the graph will be meaningful because the
Company has only been listed as a medical cannabis cultivator since
late 2022, is not paying dividends, is currently incurring losses
as it gains scale and its focus during the year ended 31 March 2023
was to complete the reverse takeover, gain Admission and complete
all works at its facility in Greece with a view of beginning
commercial cultivation. In addition, and as mentioned above, the
remuneration of Directors was not linked to performance and we
therefore do not consider the inclusion of this graph to be useful
to shareholders at the current time. The Directors will review the
inclusion of this table for future reports.
UK 10-year CEO table and UK percentage change table
The Directors have considered the requirement for a UK 10-year
CEO table. The Directors do not currently consider that including
this tables would be meaningful given that the Directors of the
Company were only appointed on 5 December 2022. The Directors will
review the inclusion of this table for future reports.
Relative importance of spend on pay
The Directors have considered the requirement to present
information on the relative importance of spend on pay compared to
shareholder dividends paid. Given that the Company does not
currently pay dividends we have not considered it necessary to
include such information.
UK Directors' shares (Audited)
The interests of the Directors who served during the period in
the share capital of the Company at 31 March 2023 which includes
the previous directors prior to the completion of the reverse
takeover and at the date of this report has been set out in the
Directors' Report on pages 24 to 28 of the Report and Accounts.
The Company does not currently have any other annual or
long-term incentive schemes in place, other than the share option
scheme as set out on page 25 of the Directors report of the Report
and Accounts, for any of the Directors and as such there are no
disclosures in this respect.
Consideration of shareholder views
The Board considers shareholder feedback received and guidance
from shareholder bodies. This feedback, plus any additional
feedback received from time to time, is considered as part of the
Company's annual policy on remuneration.
Approved on behalf of the Board of Directors by:
Sir Anthony Jolliffe
Chair of the Remuneration Committee
AUDIT AND RISK COMMITTEE REPORT
The Audit and Risk Committee comprises of one Non-Executive
Director, Joseph Colliver (chair) and Amit Parhar the Company's
Head of Financial Operations. From Admission the Audit and Risk
Committee has overseen the Company's financial reporting and
internal controls and provides a formal reporting link with the
external auditors. The ultimate responsibility for reviewing and
approving the annual report and financial statements and the
half-yearly report remains with the Board.
Main Responsibilities
The Audit and Risk Committee acts as a preparatory body for
discharging the Board's responsibilities in a wide range of
financial matters by:
-- monitoring the integrity of the financial statements and
formal announcements relating to the Company's financial
performance;
-- reviewing significant financial reporting issues, accounting
policies and disclosures in financial reports, which are considered
to be in accordance with the key audit matters identified by the
external auditors;
-- overseeing that an effective system of internal control and
risk management systems are maintained;
-- ensuring that an effective whistle-blowing, anti-fraud and bribery procedures are in place;
-- overseeing the Board's relationship with the external auditor
and external accountants and, where appropriate, the selection of
new external auditors;
-- monitoring the statutory audit of the annual financial
statements, in particular, its performance, taking into account any
findings and conclusions by the competent authority;
-- approving non-audit services provided by the external
auditor, or any other accounting firm, ensuring the independence
and objectivity of the external auditors is safeguarded when
appointing them to conduct non-audit services; and
-- ensuring compliance with legal requirements, accounting
standards and the Listing Rules and the Disclosure Guidance and
Transparency Rules and the Regulation on Market Abuse ("MAR")
Governance
Joseph Colliver has over 19 years of experience working with a
wide variety of companies in the roles of board director, Chief
Financial Officer, Finance Director, and auditor. As a result, the
Board is satisfied that the Audit and Risk Committee has recent and
relevant financial experience.
Members of the Audit and Risk Committee are appointed by the
Board. Neither Joseph Colliver or Amit Parhar are shareholders in
the in the Company. The Board believes they are considered to be
independent in both character and judgement.
The Company's external auditor is PKF Littlejohn LLP and the
Audit and Risk Committee will closely monitor the level of audit
and non-audit services they provide to the Company.
Meetings
During the audit and process to approve the annual report and
accounts for the period to the 31 March 2023 the Audit and Risk
Committee has meet with the auditors on two occasions, in addition
to five calls and virtual meetings.
The key work undertaken by the Audit and Risk Committee is as
follows:
-- interview of external auditors and recommendation to the Board
-- review of audit planning and update on relevant accounting developments;
-- consideration and approval of the risk management framework,
appropriateness of key performance indicators;
-- consideration and review of full-period results;
-- review of the effectiveness of the Audit and Risk Committee;
-- review of internal controls; and
-- consider whether an internal audit function is required and
confirmed not considered necessary given the present size of the
Company.
The following significant issues were considered by the Audit
and Risk Committee.
Significant Summary of significant Actions and conclusion
issue issue
Going concern Assessment of the Group's On 6 July, the Company announced
ability to continue the redemption of a GBP375,000 convertible
as a going concern loan note and the application for
as part of the preparation a number of grants. In addition,
of the financial statements. the Directors are also in active
conversations with advisers and finance
This assessment of providers regarding access to a range
going concern covers of funding sources, including grants,
a period of at least a loan drawdown facility, and discussions
12 months from the with advisers regarding future equity
date of signing the funding.
financial statements.
The Directors are confident that
based on obtaining some or all of
these various sources of finance
over the coming months, as well as
contribution from the anticipated
first harvest later in the year,
and therefore the Committee, whilst
they draw attention to the material
uncertainty that exists at the date
of these accounts, nevertheless consider
it is appropriate to continue to
adopt the going concern basis of
accounting in preparing the financial
statements. The going concern statement
is detailed in full in note 2.1 of
the consolidated financial statements.
--------------------------------- ---------------------------------------------
Acquisition The accounting treatment Management concluded that the acquisition
accounting of the Company acquiring should be accounted for as a reverse
Hellenic Dynamics S.A. acquisition but since the Company
giving rise to a share-based did not meet the definition of a
payment under IFRS business it was not treated as a
2. business combination under IFRS 3.
Instead, in accordance with IFRS
2, a share-based payment expense
equal to the deemed cost of the acquisition
less the fair value of the net assets
at acquisition was recognised. Further
details of the accounting treatment
are set out in notes 2.3 and 9 of
the financial statements.
--------------------------------- ---------------------------------------------
Share-based The Company makes equity-settled The charge was calculated based on
payments share-based payments market conditions such as share price
to its employees and volatility, risk free rate, and expected
directors. The fair life, using the Black-Scholes framework.
value of the options Management used inputs from impartial
were charged. external sources to appropriately
calculate share-based payments reserve
postings and share based payments
expense during the period. Calculations
are set out in note 19 to the consolidated
financial statements.
--------------------------------- ---------------------------------------------
Convertible The Company issued Under IAS 32, Convertible loan notes
loan notes GBP375,000 of convertible are classified as either equity,
loan notes in conjunction financial liabilities or a mixture
with the reverse takeover of both in accordance with the contractual
and subsequent Admission. agreement. Management concluded that
The accounting treatment it should be accounted for as a 'compound
was assessed under financial instrument' under IAS 32.
IAS 32 Financial Instruments. Further details are included in note
23 to the consolidated financial
statements.
--------------------------------- ---------------------------------------------
Carrying The carrying values Management conducted a discounted
value of of the Group's property, cashflow forecast over the next five
the investments plant and equipment years, to determine if there were
and assets (PPE), and investments any indications of impairment of
are tested for impairment. PPE and estimated the recovery value
of future cash flows from the cash
generating units (CGUs). Management
were satisfied that no indications
of impairment were present.
--------------------------------- ---------------------------------------------
External auditor
The Company's external auditor is PKF Littlejohn LLP. The
external auditor has unrestricted access to the Audit and Risk
Committee Chair. The Committee is satisfied that PKF Littlejohn LLP
has adequate policies and safeguards in place to ensure that
auditor objectivity and independence are maintained. The external
auditors report to the Audit and Risk Committee annually on their
independence from the Company. In accordance with professional
standards, the partner responsible for the audit will be changed
every five years. The current auditor, PKF Littlejohn LLP was first
appointed by the Company on 6 March 2023 following them being the
reporting accountants to the Admission and therefore the current
partner is due to rotate off the engagement after completing the
audit for the period ended 31 March 2027. Having assessed the
performance objectivity and independence of the auditors, the
Committee will be recommending the reappointment of PKF Littlejohn
LLP as auditors to the Company at the 2023 Annual General
Meeting.
Prior to being the Company's auditor, PKF Littlejohn LLP was
appointed as the Company's reporting accountant for the Admission.
As reporting accountants PKF Littlejohn LLP was appointed on 1
August 2021 and the role of reporting accounts ended on 5 December
2022.
Joseph Colliver
Chair of the Audit and Risk Committee
NOMINATION COMMITTEE REPORT
The Nomination committee is comprised of Sir Anthony Jolliffe
(chair), Filippos Papadopoulos and Davinder Rai.
The committee considers potential candidates for appointment to
the Company's Board who maintain the highest standards of corporate
governance and have sufficient time to commit to the role.
Nomination Committee evaluation
The nomination committee evaluates the composition, skills, and
diversity of the Board and its committees and identifies a
requirement for a Board appointment.
Identify suitable candidates
The nomination committee undertakes a review of each candidate
and their experience in accordance with the Company's 'director's
profile' and suitable candidates are identified.
For the appointment of a Chairman, the Nomination Committee will
prepare a job specification, including an assessment of the time
commitment expected, recognising the need for availability in the
event of crises.
Nomination committee recommendation
Following interviews with a candidate conducted by the Chairman,
and other members of the Board, the nomination committee makes a
recommendation on a preferred candidate to the Board.
Due diligence
After a candidate has been recommended to the Board by the
Nomination Committee, the company secretary undertakes appropriate
background checks on a candidate. The Board agrees to meet any
candidate recommended by the Nomination Committee and the candidate
is given an opportunity to make a presentation to the Board prior
to deciding on their appointment.
Board appointment
The Board formally approves a candidate's appointment to the
Board.
Approach to Diversity
The Nomination Committee believes in the benefits of diversity,
including the need for diversity in order to effectively represent
shareholders' interests. This diversity is not restricted to gender
but also includes geographic location, nationality, skills, age,
educational and professional background. The Board's policy remains
that selection should be based on the best person for the role.
On behalf of the Nomination Committee
Sir Anthony Jolliffe
Chair of the Nomination Committee
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF HELLENIC DYNAMICS
PLC (FORMERLY KNOWN AS U.K. SPAC PLC)
Opinion
We have audited the financial statements of Hellenic Dynamics
Plc (the 'parent company') and its subsidiary (the 'group') for the
period ended 31 March 2023 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Parent
Company Statements of Financial Position, the Consolidated and
Parent Company Statements of Changes in Equity, the Consolidated
and Parent Company Cash Flow Statements and notes to the financial
statements, including significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted international
accounting standards and as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and of the parent company's affairs as at 31
March 2023 and of the group's loss for the period then ended;
-- the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
-- the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the
Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Other Matter
The financial statements of the group for the year ended 31
December 2021 were not audited given that they solely relate to the
financial information of the subsidiary Hellenic Dynamics S.A.
which was acquired through a reverse takeover (see note 9). Hence
the comparative balances within these financial statements for the
group are unaudited.
Material uncertainty related to going concern
We draw attention to note 2.1 in the financial statements, which
indicates that the group's current cash resources are insufficient
to enable the group to meet its recurring outgoings for the twelve
months from the date of approval of the financial statements. The
group incurred a net loss of GBP4,853,146 during the period ended
31 March 2023. As stated in note 2.1, these events or conditions,
along with the other matters as set forth in note 2.1, indicate
that a material uncertainty exists that may cast significant doubt
on the group's and parent company's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
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 group's and parent
company's ability to continue to adopt the going concern basis of
accounting included:
-- Reviewing the cashflow forecast and budgets for the period to
31 December 2024 and the corresponding key assumptions and inputs
used. This included the expected cash receipt in relation to grant
applications, initial revenue generation, repayment of convertible
loan notes and future equity raises;
-- Discussions with management regarding the future plans of the group; and
-- Challenging management's key assumptions and inputs, in
particular the forecasted income and cash generation, committed
costs and plausible scenarios impacting the going concern
assessment.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
We apply the concept of materiality both in planning and
performing the audit, and evaluating the effect of misstatements on
our audit and on the financial statements. For the purposes of
determining whether the financial statements are free from material
misstatements, we define materiality as the magnitude of
misstatement that makes it probable that the economic decisions of
a reasonably knowledgeable person, relying on the financial
statements, would be changed or influenced. We also determine a
level of performance materiality which we use to assess the extent
of testing needed to reduce to an appropriate level the probability
that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole. When
establishing our overall audit strategy, we determined a magnitude
of uncorrected misstatements that we judged would be material for
the financial statements as a whole.
Materiality for the group financial statements was set at
GBP58,700. This was calculated based on 3% of net assets. Net
assets were used as the benchmark for the basis of materiality
being the key area of relevance to stakeholders in assessing the
financial performance of the group in its early years of
production. Performance materiality was set at GBP38,150. In
determining performance materiality of the group, we considered the
risk profile of the listed entity, including the key audit maters
as described below and the increased risk associated with the first
year of reporting requirements.
We agreed with the Audit and Risk Committee that we would report
to them all audit differences identified during the course of our
audit in excess of GBP2,930 for the group. We also agreed to report
any other audit misstatements below that threshold that we believe
warranted reporting on qualitative grounds.
The parent company's materiality was calculated on the same
basis as the group but restricted to GBP57,700 (2022: GBP33,823),
to ensure that if fell level below that of the Group. Performance
materiality was set at GBP37,500 (2022: GBP25,367). This was
determined in line with the reasons outlined above with regard to
the group.
We agreed with the Audit and Risk Committee that we would report
all individual audit differences identified during the course of
our audit in excess of GBP2,880 (2022: GBP1,691) together with any
other audit misstatements below that threshold that we believe
warranted reporting on qualitative grounds.
The audit of Hellenic Dynamics S.A., the wholly owned
subsidiary, was performed by a component auditor, with materiality
set by us at GBP30,000.
Our approach to the audit
The group includes the listed parent company and its subsidiary.
We tailored the scope of our audit to ensure that the planned
procedures allowed us to gain sufficient appropriate audit evidence
to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the group and the
parent company, the accounting processes, and the industry in which
they operate.
As part of our planning, we assessed the risk of material
misstatement including those that required significant auditor
consideration at the component and group level. In particular, we
looked at areas of estimation, for example in respect of the
carrying value of property, plant and equipment, the carrying value
and recoverability of investments in subsidiary at parent company
level, and the consideration of future events that are inherently
uncertain. Procedures were then performed to address the risk
identified and for the most significant assessed risks of
misstatement, the procedures performed are outlined below in the
key audit matters section of this report. We re-assessed the risks
throughout the audit process and concluded the scope remained the
same as at planning.
An audit was performed on the financial information of the
group's significant operating components which, for the period
ended 31 March 2023, were located in the United Kingdom and Greece.
The component in Greece was audited by a component auditor
operating under our instruction. We communicated regularly with the
component audit team during all stages of the audit and we were
responsible for the scope and oversight of the audit process. This,
in conjunction with additional procedures performed by us, provided
sufficient appropriate audit evidence for our opinion on the group
and parent company financial statements.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. In addition to
the matter described in the Material uncertainty related to going
concern section we have determined the matters described below to
be the key audit matters to be communicated in our report.
Key Audit Matter How our scope addressed this matter
Hellenic Dynamics S.A. acquisition
treatment and disclosure (Note
2.3 and Note 9)
On admission to the London Stock Our work on this key audit matter
Exchange, the parent company acquired included the following:
Hellenic Dynamics S.A. by way of * Obtaining the share purchase agreement to identify
a share for share exchange on 5 the key terms and conditions of the acquisition and
December 2022. This was for a consideration to confirm ownership;
of GBP31,243,342, with the consideration
being satisfied through the issuance
of 10,414,447,530 new ordinary * Obtaining management's accounting paper and reviewing
shares in the parent company at and challenging key assumptions, inputs, data and
a price of 0.3 pence. As part of method applied in the determination of the fair
the acquisition, U.K SPAC Plc changed value;
its name to Hellenic Dynamics Plc.
Although the transaction resulted * Reviewing the accounting treatment and accounting
in Hellenic Dynamic S.A. becoming entries included in the period in relation to the
a wholly owned subsidiary of the reverse acquisition against the requirements of IFRS
parent company, the transaction 2 Share-based Payments; and
constitutes a reverse acquisition
as the previous shareholders of
Hellenic Dynamic S.A. own a substantial * Ensuring that disclosures in the financial statements
majority of the ordinary shares were in accordance with the requirements of the
of the parent company and the Board relevant financial reporting framework.
of Directors of the parent company
principally comprise of the Directors
of Hellenic Dynamics S.A.
Based on the audit procedures performed,
There is a risk that the reverse we are satisfied that management's
acquisition has been accounted assessment of Hellenic Dynamics
for incorrectly and not disclosed S.A. as the accounting acquirer
appropriately given the complexity and Hellenic Dynamics Plc as the
of the transaction which falls accounting acquiree was appropriate,
outside the scope of IFRS 3 Business and was outside of the scope of
Combinations. This gives rise to IFRS 3 Business Combinations. The
significant management judgement reverse acquisition expense recognised
in the acquisition treatment and in accordance with IFRS 2 Share-based
disclosure. payments, and management's treatment
in respect of the reverse acquisition,
was in line with our expectations.
Carrying value and recoverability
of property, plant and equipment
(Note 2.9 and Note 13)
The group has property, plant and Our work on this key audit matter
equipment at the reporting date included the following:
totalling GBP632,244, as shown * Reviewing component auditor's work over additions
in the in the Consolidated Statement during the year which included the vouching of a
of Financial Position. This property, sample of invoices to supporting documents and also
plant and equipment pertains to ensuring their capitalisation was in accordance with
building installations, technical IAS 16 Property, plant and equipment;
equipment and machinery, transportation
means, PC hardware and fixtures
and furniture. These assets have * Reviewing component auditor's work over a site visit
been purchased and capitalised to physically verify a sample of assets from the
in respect of the group's core fixed assets register;
strategy of cultivation and distribution
of medical-grade THC end-products.
To determine whether an item of * Reviewing component auditor's work over the
property, plant and equipment is depreciation charge for the year;
impaired, the requirements of IAS
36 Impairment of Assets must be
applied. Items of property, plant * Considering whether there were indicators of
and equipment shall not be carried impairment in line with IAS 36;
at more than recoverable amount.
Recoverable amount is determined
as the higher of an asset's fair * Reviewing and challenging the model inputs as well as
value less costs to sell and its estimates and judgements made by management for
value in use. reasonableness in the impairment review;
There is a risk that indicators
of impairment exist which have
not been identified, and therefore * Verifying the mathematical accuracy of the impairment
that the carrying amount of property, model used;
plant, and equipment is overstated
as at the period ended 31 March
2023. There is also a risk that * Reviewing the depreciation policies of the group for
inappropriate purchases have been reasonableness and testing an appropriate sample of
capitalised with respect to IAS depreciation calculations; and
16 Property, Plant and Equipment.
* Ensuring that sufficient and appropriate disclosures
had been made in relation to the judgements and
estimates.
Based on the audit procedures performed,
we are satisfied with management's
assessment of the impairment indicators
relating to property, plant and
equipment given their plans and
activities since acquisition to
prepare for revenue generation.
We are also satisfied with the
carrying value of property, plant
and equipment given the work performed
over additions and depreciation
in the period.
Carrying value of the investment
in subsidiary and intragroup receivables
(Note 30)
Following the reverse takeover Our work on this key audit matter
in December 2022 the parent company included the following:
holds a significant investment * Confirming ownership of the investment by agreeing
in Hellenic Dynamics S.A. of GBP31,243,342 the shares and shareholders to share certification
and has an intragroup receivable and share purchase agreement;
of GBP439,77 due from the subsidiary,
which are both material to the
Parent Company's Statement of Financial * Considering whether there were any indicators of
Position. impairment in line with IAS 36;
The group is in its infancy stage
and currently, the assets are not
revenue generating. There is a * Obtaining management's recoverability assessment in
risk that the investment and intragroup respect of the investment in Hellenic Dynamics S.A
receivable may not be fully recoverable and the intragroup receivable, and challenging key
and therefore materially overstated. assumptions and inputs;
The valuation and potential impairment
of the investment in subsidiary
involves significant judgement * Reviewing and challenging management's budget, cash
and estimation and therefore is flow forecasts and projections for Hellenic Dynamics
an area than can be subject to S.A. to ensure that the investment in subsidiary and
management bias. intragroup receivable was recoverable; and
* Ensuring that sufficient and appropriate disclosures
had been made in relation to the judgements and
estimates.
Based on the audit procedures performed,
we are satisfied with management's
assessment of impairment and recoverability
of intragroup receivables given
their plans and activities since
acquisition to prepare for revenue
generation.
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 group and parent company financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the
other information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial period for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and their environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements and the part of the
directors' remuneration report to be audited are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors'
responsibilities, the directors are responsible for the preparation
of the group and parent company 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 group and parent company financial statements,
the directors are responsible for assessing the group's and the
parent 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 group or the parent 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.
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. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the group and parent company
and the sector in which they operate to identify laws and
regulations that could reasonably be expected to have a direct
effect on the financial statements. We obtained our understanding
in this regard through discussions with management, industry
research and application of our cumulative audit knowledge and
experience of the sector.
-- We determined the principal laws and regulations relevant to
the group and parent company in this regard to be those arising
from the Companies Act 2006, the Quoted Companies Alliance (QCA)
Corporate Governance Code, General Data Protection Regulation
(GDPR), Anti-bribery Laws, Serious Organised Crime and Police Act
2005, Proceeds of Crime Act 2002, Listing Rules, Disclosure
Guidance and Transparency Rules, 1961 United Nations (UN) Single
Convention on Narcotic Drugs, European Union (EU) Good
Manufacturing Practices (GMP), Good Agricultural and Collection
Practices for Medical Plants (GACP) and the EU Good Distribution
Practices (EU-GDP)
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the group and parent company with those laws and regulations. These
procedures included, but were not limited to:
o Making enquiries of management;
o A review of Board minutes;
o A review of legal edger accounts; and
o A review of Regulatory News Services announcements.
-- We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the potential for management
bias was identified in relation to the carrying value and
recoverability of the property, plant and equipment and the
carrying value of investments in subsidiary and intragroup
receivable and the accounting treatment and disclosure of the
acquisition as described in the Key Audit Matters section above. We
addressed this by challenging the assumptions and judgements made
by management when auditing these significant accounting
estimates.
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
-- As part of the group audit, we have communicated with
component auditor the risks associated with the components of the
group, including the risk of fraud as a result of management
override of controls. To ensure that this has been completed, we
have reviewed component auditor working papers in this area and
obtained responses to our group instructions from the component
auditors.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the directors of Hellenic Dynamics Plc on 6
March 2023 to audit the financial statements for the period ending
31 March 2023 and subsequent financial periods. Our total
uninterrupted period of engagement is from the date of appointment
noted above, covering the period ended 31 March 2023.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to
the Audit and Risk Committee.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Daniel Hutson (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
Date: 30 July 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODED 31 MARCH 2023
(unaudited)
15 months 12 months
to 31 March to 31 December
2023 2021
Note GBP GBP
Revenue - -
Cost of sales - -
------------- -----------------
Gross profit - -
Administrative expenses 5 (1,147,442) (334,560)
Operating loss (1,147,442) (334,560)
Reverse acquisition expenses 9 (3,700,209) -
Net finance costs 6 (15,388) (14,840)
------------- -----------------
Loss before income tax (4,863,039) (349,400)
Income tax expense 10 - -
Loss for the period (4,863,039) (349,400)
Other comprehensive income
Exchange differences on translating
of foreign operations 9,893 7,388
Total other comprehensive income
for the period 9,893 7,388
Loss for the period and total
comprehensive income (4,853,146) (342,012)
Earnings per share 11
Basic earnings per share (0.044p) (0.003p)
--------- ---------
There are no recognised gains and losses other than those
passing through the Statement of Comprehensive Income.
The notes on pages 48 to 74 of the Report and Accounts form part
of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
(unaudited)
31 March 31 December
2023 2021
Note GBP GBP
ASSETS
Non-current assets
Intangible assets 12 8,814 8,396
Property, plant and equipment 13 632,244 528,141
Right-of-use assets 14 317,583 315,830
Other receivables 15 3,085 2,938
------------- --------------
961,726 855,305
------------- --------------
Current assets
Other receivables 15 186,896 168,275
Cash and cash equivalents 16 2,117,159 5,020
------------- --------------
2,304,055 173,295
------------- --------------
TOTAL ASSETS 3,265,781 1,028,600
============= ==============
EQUITY AND LIABILITIES
Issued share capital 17 14,800,182 232,211
Share premium 18 2,971,570 902,610
Merger reserve 18 20,828,894 -
Reverse acquisition reserve (31,497,974) -
Convertible loan notes reserve 41,305 -
Capital redemption reserve 7,500 -
Share based payment reserve 62,921 -
Retained losses (5,533,007) (679,861)
------------- --------------
TOTAL EQUITY 1,681,391 454,960
------------- --------------
Current liabilities
Trade and other payables 20 654,990 209,437
Provisions 21 212,175 -
Lease liabilities 22 80,530 54,520
------------- --------------
947,695 263,957
------------- --------------
Non-current liabilities
Lease liabilities 22 303,000 309,683
Loan notes 23 333,695 -
------------- --------------
636,695 309,683
------------- --------------
TOTAL EQUITY AND LIABILITIES 3,265,781 1,028,600
============= ==============
The financial statements were approved by the board on
Davinder Rai
Chief Executive Officer
The notes on pages 48 to 74 of the Report and Accounts form part
of these financial statements.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIODED 31 MARCH 2023
(unaudited)
Period Year to
to 31 March 31 December
Notes 2023 2021
GBP GBP
Cash flows from operating activities
Loss before taxation (4,863,039) (349,400)
Adjusted for:
Reverse acquisition share-based
payment expense 9 3,700,209 -
Depreciation 5 62,451 35,083
Share based payment expense 5 62,921 -
Finance costs 6 15,388 14,840
Foreign exchange movements 28,411
Changes in provisions 5 76,016 -
------------- -------------
Operating cashflow before working
capital movements (917,643) (299,477)
Increase/(decrease) in trade
and other receivables 723,167 (96,871)
(Increase)/decrease in trade
and other payables (84,820) 15,215
Finance costs 6 (15,388) (190)
------------- -------------
Net cash outflow from operating
activities (294,684) (381,323)
------------- -------------
Cash flows from investing activities
Purchase of property, plant and
equipment 13 (123,512) (93,968)
Disposal of property, plant and
equipment 13 25,187 -
Disposal of intangible assets - 6,932
Cash acquired on acquisition 1,781,047 -
------------- -------------
Net cash flows generated from/(used
in) from investing activities 1,682,722 (87,036)
------------- -------------
Cash flows from financing activities
Proceeds from issue of shares,
net of issuing cost 378,696 -
Proceeds from borrowings - 464,299
Payment of lease liabilities (29,595) -
Issue of non-convertible loan 375,000 -
notes
Net cash flows generated from
financing activities 724,101 464,299
------------- -------------
Net cash increase/(decrease)
in cash and cash equivalents 2,112,139 (4,060)
Cash and cash equivalents brought
forward 5,020 9,080
Cash and cash equivalents carried
forward 16 2,117,159 5,020
============= =============
Major non-cash transactions
On 5 December 2022, the Company issued 10,414,447,530 shares of
0.1p each at a price of 0.3p per share to the shareholders of
Hellenic Dynamics S.A. as part of the RTO acquisition for a total
of GBP31,243,343. See note 9.
The Company also issued 13,333,333 shares of 0.1p each at a
price of 0.3p per share for a total value of GBP40,000 for the
settlement of services rendered to the Company. See note 17.
The notes on pages 48 to 74 of the Report and Accounts form part
of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 31 MARCH 2023
Share
based Reverse Convertible Capital
Share Share payment Merger acquisition loan note redemption Retained
capital premium reserve reserve reserve reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
At 31 December
2020 225,703 - - - - - - (337,849) (87,853)
=========== ========== ========= =========== ============= ============ =========== ============ ============
Shares issued
during the
period 6,508 902,610 - - - - - - 909,118
Total
comprehensive
loss for
the period - - - - - - - (342,012) (366,305)
---------- --------- ----------- ------------- ------------
At 31 December
2021 232,211 902,610 - - - - - (679,861) 454,960
=========== ========== ========= =========== ============= ============ =========== ============ ============
Shares issued
during the
period 263,333 526,667 - - - - - - 790,000
Transfer
to reverse
acquisition
reserve (232,211) (902,610) - - 1,135,821 - - - -
Recognition
of PLC equity
at
acquisition
of subsidiary 4,122,400 2,816,208 - - (1,389,452) - 7,500 - 5,556,656
Issue of
shares for
the
acquisition
of subsidiary 10,414,449 - - 20,828,894 (31,243,343) - - - -
Equity element
of
convertible
loan notes - - - - - 41,305 - - 41,305
Cost of share
issue - (371,305) - - - - - - (371,305)
Share based
payment - - 62,921 - - - - - 62,921
Total
comprehensive
loss for
the period - - - - - - - (4,853,146) (4,853,146)
---------
At 31 March
2023 14,800,182 2,971,570 62,921 20,828,894 (31,497,974) 41,305 7,500 (5,533,007) 1,681,391
=========== ========== ========= =========== ============= ============ =========== ============ ============
Share Capital - Share capital represents the nominal value of
shares that have been issued.
Share premium - Share premium represents the difference between
the nominal value of shares issued and the total consideration
received.
Merger reserve - The merger reserve arises when the company
acquires at least a 90% interest in the shares of another company
and under s612 Companies Act 2006 the excess of fair value of the
shares issued in excess of their nominal value is precluded from
being recognised in the share premium account. This reserve is not
distributable.
Share based payment reserve - The value of equity settled
share-based payments provided to employees, including key
management personnel.
Reverse acquisition reserve - See note 9.
Convertible loan note reserve - Convertible loan note reserve
represents the fair value of convertible loan notes issued and
outstanding which meet the definition of equity as per IAS 32.
Capital redemption reserve - Capital redemption reserve
represents amounts transferred following the purchase of own
shares.
Retained earnings - Retained earnings represent cumulative
profit or losses, net of dividends and other adjustments
The notes on pages 48 to 74 of the Report and Accounts form part
of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 General information
Hellenic Dynamics Plc (Formerly known as U.K. SPAC Plc) ("the
Company") is a public company limited by shares and incorporated
and in England and Wales. The registered number of the Company is
06374598. The address of its registered office is 21 Arlington
Street, London, SW1A 1RN.
The Company and its subsidiary ("the Group") have a principal
activity of the cultivation and supply of medical cannabis
flowers.
2 Summary of significant accounting policies
Statement of compliance with UK-adopted IAS
These financial statements have been prepared in accordance with
UK-adopted international accounting standards, IFRIC
Interpretations and with those parts of the Companies Act 2006
applicable to companies reporting under UK-adopted IAS.
The adoption of these standards has not resulted in any changes
to the Group's accounting policies and has not affected amounts
reported in prior periods.
The financial statements have been prepared under the historical
cost basis.
2.1 Going concern
The preparation of the financial statements requires an
assessment on the validity of the going concern assumption. The
financial statements have been prepared under the going concern
assumption. In making their assessment of going concern, the
Directors have reviewed forecasts for the newly formed Group, for a
period of at least 12 months from the date of approval of these
financial statements. The Group is not currently generating
revenues, and therefore an operating loss has been reported in the
period. Revenues from the first cultivation cycle are expected in
the second half of the calendar year, however an operating loss is
expected in the 12 months from the date of these financial
statements.
Following the redemption of the GBP375,000 convertible loan note
in early July, due to the realisation of significant cost savings
against its initial budget for the purchase of plant and equipment,
the Directors have assessed the cash requirements of the Group in
terms of operational costs, capital expenditure, gross profit
contribution from the initial sales of product, and the financial
resources available to the Group including the following sources of
funding:
-- On the 6 July 2023, the Company announced advanced late stage
discussions with a number of funding sources, including a number of
grant applications.
-- The Directors are in advanced discussions with a well-known
financial institution pertaining to a capital debt draw-down
facility.
-- Discussions with brokers and corporate finance advisors
regarding potential future equity rounds.
Based on achieving successful cultivation cycles and the sale of
crops, securing only one of the grant applications currently in
progress, implementing savings in discretionary operational spend
and delaying capital investment, the Directors, whilst
acknowledging the material uncertainty that exists at the date of
these financial statements, nevertheless are confident of
maintaining sufficient working capital for the twelve-month period
from the date of this report. For this reason, the Group has
therefore adopted the going concern basis in preparing the
financial statements.
The auditors make reference to the material uncertainty in the
Auditors' report on page 37 of the Report and Accounts.
2.2 Standards and interpretations
(a) New standards, amendments and interpretations adopted by the Group
There were no new or amended accounting standards that required
the Group to change its accounting policies for the period ended
31(st) March 2023 and no new standards, amendments or
interpretations were adopted by the Group during the period.
(b) New standards, amendments and interpretations not yet adopted by the Group
At the date of authorisation of these financial statements the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
Effective Date
IAS 1 Amendments regarding the classification 1 January 2023
of liabilities
IAS 8 Amendments to IAS 8 1 January 2023
IAS 1, IFRS Amendments to IAS 1 and IFRS Practice 1 January 2023
Practice Statement Statement 2
2
IFRS 16 Amendments regarding lease liability 1 January 2024
in a sale and leaseback
IAS 1 Amendments regarding non-current liabilities 1 January 2024
with covenants
It is anticipated that the Group will hold a number of
biological assets in the future and therefore will be applying IAS
41 "Agriculture" as an accounting policy. This is not applicable in
the current year's financial statements as no biological assets
were held as at 31 March 2023.
2.3 Consolidation and Acquisitions
The financial statements consolidate the financial information
of the Group and companies controlled by the Group (its
subsidiaries) at each reporting date. Control is achieved where the
Company has the power to govern the financial and operating
policies of an investee entity, has the rights to variable returns
from its involvement with the investee and has the ability to use
its power to affect its returns. The results of subsidiaries
acquired or sold are included in the financial information from the
effective date of acquisition or up to the effective date of
disposal, as appropriate. Where necessary, adjustments are made to
the results of acquired subsidiaries to bring their accounting
policies into line with those used by the Group. All intra-Group
transactions, balances, income, and expenses are eliminated on
consolidation. The financial statements of all Group companies are
adjusted, where necessary, to ensure the use of consistent
accounting policies.
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls and entity
when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect
those returns through its power over the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to
the Group. They are deconsolidated from the date that control
ceases. Please refer to note 9 for information on the consolidation
of Hellenic Dynamics Plc and the application of the reverse
acquisition accounting principles.
The Group applies the acquisition method to account for business
combinations that fall within the scope of IFRS 3. For commentary
on how the acquisition of Hellenic Dynamics S.A., which falls
outside the scope of IFRS 3, was accounted for, see below note
9.
The consideration transferred for the acquisition of a
subsidiary is the fair values of assets transferred, the
liabilities incurred to the former owners of the acquiree, and the
equity interest issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest
in the acquire on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of acquiree's identifiable net
assets.
Acquisition related costs are expensed as incurred.
On 5 December 2022, the Company acquired Hellenic Dynamics S.A.
via a reverse takeover which resulted in the Company becoming the
ultimate holding company of the Group. The transaction was
accounted for as a reverse acquisition since it did not meet the
definition of a business combination under IFRS 3. In accordance
with IFRS 2, a share-based payment expense equal to the deemed cost
of the acquisition less the fair value of the net assets of the
Company at acquisition was recognised. The comparatives within the
consolidated statement of financial position, the consolidated
statement of comprehensive income, consolidated statement of
changes in equity and the consolidated cashflow statement represent
that of the legal subsidiary and accounting acquirer, Hellenic
Dynamics S.A. for the year-ended 31 December 2021. In the
consolidated statement of financial position, the share capital and
premium as at 31 March 2023 is that of Hellenic Dynamics Plc with
the reverse acquisition reserve representing the difference between
the deemed cost of the acquisition and the net assets of Hellenic
Dynamics Plc as at 5 December 2022. The consolidated statement of
comprehensive income for the 15-month period to 31 March 2023
represents the results of both Hellenic Dynamics Plc and Hellenic
Dynamics S.A. For more details on the key terms of the reverse
takeover and a breakdown of what the reverse acquisition reserve as
of 31 March 2023 comprises of, see note 9.
2.4 Revenue recognition
Revenue from contracts with customers is recognised when the
control over the goods is transferred to the customer. The
transaction price is the amount of the consideration that is
expected to be received based on the contract terms, excluding
amounts collected on behalf of third parties (such as taxes).
In determining the amount of revenue from contracts with
customers, the Company evaluates whether it is a principal or an
agent in the arrangement. The Company is a principal when the
Company controls the promised goods or services before transferring
them to the customer. In these circumstances, the Company
recognises revenue for the gross amount of the consideration. When
the Company is an agent, it recognises revenue for the net amount
of the consideration, after deducting the amount due to the
principal.
Revenue from the sale of goods:
Revenue from the sale of goods is recognised when significant
risks and rewards of ownership of the goods have transferred to the
buyer, the amount of revenue can be measured reliably, it is
probable that the economic benefits associated with the transaction
will flow to the Company and the costs incurred or to be incurred
in respect of the transaction can be measured reliably. Revenue is
measured at the fair value of the consideration received or
receivable, net of returns, trade discounts and volume rebates.
Revenue from selling agreements is recognised when the revenue
recognition criteria have been met and only to the extent the
consideration is not contingent upon other deliverables in the
agreements.
2.5 Share-based payments
The Group makes equity-settled share-based payments to its
employees and directors. The fair value of options and warrants
granted is recognised as an employee expense with a corresponding
increase in equity. The fair value is measured at grant date and
spread over the period during which the employees become
unconditionally entitled to the options. The fair value of the
options and warrants granted is measured based on the Black-Scholes
framework, taking into account the terms and conditions upon which
the instruments were granted. At each balance sheet date, the Group
revises its estimate of the number of options and warrants that are
expected to become exercisable.
2.6 Retirement benefits: Defined contribution schemes
Contributions to defined contribution pension schemes are
charged to the statement of comprehensive income in the period to
which they relate.
2.7 Foreign currency translation
i) Functional and Presentation Currency
The consolidated financial statements are presented in Pounds
Sterling, which is also the Company's functional and presentation
currency.
ii) Transactions and Balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement.
iii) Foreign operations
The assets and liabilities of foreign operations, including
goodwill and the fair value adjustments arising on acquisition, are
translated to GBP at exchange rates at the reporting date. The
income and expenses of foreign operations are translated to GBP at
exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other
comprehensive income.
2.8 Intangible assets
Intangible assets acquired separately are recognised at
historical cost, on the date of acquisition. Subsequently, they are
carried at cost less accumulated amortization and accumulated
impairment losses. All intangible assets have a finite useful life
and are amortised on a straight-line basis over their useful life.
The useful life of intangible assets is reviewed on an annual
basis, and adjustments, where applicable, are made
prospectively.
The intangible assets of the Group relate to licences, the
useful life of which has been estimated to be between 5 and 10
years.
2.9 Property, plant and equipment
Items of property, plant and equipment are measured at
historical cost, plus interest costs incurred during periods of
construction, less accumulated depreciation and any impairment in
value. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Repairs and maintenance costs are expensed as incurred. The cost
and related accumulated depreciation of assets retired or sold are
removed from the corresponding accounts at the time of sale or
retirement, and any gain or loss is recognised in the income
statement.
When significant parts of the property, plant and equipment are
required to be replaced at intervals, The Group recognises such
parts as individual assets with specific useful lives and
depreciation, only when it is probable that future economic
benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying amount of
the replaced part is derecognised. All other repairs and
maintenance are charged to the income statement during the
financial period in which they are incurred.
Depreciation is recognised on a straight-line basis over the
estimated useful lives of property, plant and equipment, which are
periodically reviewed, at least annually. The estimated useful
lives and the respective rates are as follows:
Item Description Estimated Useful Life Depreciation Rates
Building installations in third party properties Duration of lease
8-12%
Technical equipment and machinery 5-10 periods 10-20%
Transportation means 6-9 periods 11-17%
PC Hardware 2-5 periods 10-20%
Fixtures and fittings 5-10 periods 10-20%
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within "Other
(Losses)/Gains - Net" in the income statement.
2.10 Impairment of non-financial assets
The carrying values of the Group's non-financial assets are
tested for impairment, when there are indications that their
carrying amount is not recoverable. In such cases, the recoverable
amount is estimated and if the carrying amount of the asset exceeds
its estimated recoverable amount, an impairment loss is recognised
in the income statement. The recoverable amount of an asset is the
higher of its fair value less costs of disposal and its value in
use. In measuring value in use, estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to that asset. If an asset does not generate
cash flows individually, the recoverable amount is determined for
the cash generating unit to which the asset belongs. At each
reporting date, the Group assesses whether there is an indication
that an impairment loss recognised in prior periods may no longer
exist. If any such indication exists, the Group estimates the
recoverable amount of that asset and the impairment loss is
reversed, increasing the carrying amount of the asset to its
recoverable amount, to the extent that the recoverable amount does
not exceed the carrying value of the asset that would have been
determined (net of amortisation or depreciation), if no impairment
loss had been recognised for the asset in prior years.
2.11 Financial instruments
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
Initial recognition and subsequent measurement of financial
assets
The financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value through other
comprehensive income 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 business model within which the financial asset is held.
Trade and other receivables
Due to the short-term nature of the current receivables, their
carrying amount is considered to be the same as their fair
value.
Impairment of financial assets
The Group assesses at each reporting date, whether a financial
asset or group of financial assets is impaired and recognise, if
necessary, an allowance for Expected Credit Losses for all debt
instruments not held at fair value through profit or loss. Expected
Credit Losses are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash
flows that the Group expects to receive, discounted at an
approximation of the original effective interest rate.
For all the Group's financial assets at amortised cost, the
simplified approach is applied. These assets are considered to have
low credit risk and any loss allowance is therefore limited to 12
months' expected losses.
Derecognition of financial assets
A financial asset (or, a part of a financial asset or part of a
group of similar financial assets) is derecognised when:
-- the rights to receive cash flows from the asset have expired;
-- The Group retains the right to receive cash flows from the
asset, but has assumed an obligation to pay them in full without
material delay to a third party under a "pass-through" arrangement;
or
-- The Group has transferred its rights to receive cash flows
from the asset and either (a) has transferred substantially all the
risks and rewards of the assets, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset but
has transferred control of the asset.
When the Group has transferred its rights to receive cash flows
from an asset or has entered into a pass-through arrangement, it
evaluates if, and to what extent, it has retained the risks and
rewards of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset, nor
transferred control of the asset, the Group continues to recognise
the transferred asset to the extent of its continuing involvement.
In that case, the Group also recognise an associated liability. The
transferred asset and the associated liability are measured on a
basis that reflects the rights and obligations that the Group has
retained.
Continuing involvement that takes the form of a guarantee over
the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of
consideration that the Group could be required to repay.
Initial recognition and subsequent measurement of financial
liabilities
All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. For the purpose of
subsequent measurement, financial liabilities are classified as
financial liabilities at amortised cost or financial liabilities at
fair value through profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original
liability and a recognition of a new liability. The difference in
the respective carrying amounts is recognised in the income
statement.
Offsetting of financial assets and liabilities
Financial assets and liabilities are offset and the net amount
is presented in the statement of financial position only when the
Group has a legally enforceable right to set off the recognised
amounts and intends either to settle such asset and liability on a
net basis or to realise the asset and settle the liability
simultaneously. The legally enforceable right must not be
contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or
bankruptcy of the Group or the counterparty.
2.12 Trade and other receivables
A receivable represents the Group's right to an amount of
consideration that is unconditional (i.e., only the passage of time
is required before payment of the consideration is due).
Trade receivables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
2.13 Cash and cash equivalents
In the Statement of Cash Flows, cash and cash equivalents
comprise cash in hand and deposits held at call with bank with a
three month maturity or less.
2.14 Share capital
Ordinary shares are classified as equity. Share capital issuance
costs, net of related tax, are reflected as a deduction from Share
Premium.
2.15 Share premium
Share premium represents the difference between the nominal
value of shares issued and the total consideration received, net of
issue expenses incurred by the Group.
2.16 Trade and other payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less (or in the normal
operating cycle of the business if longer. If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective
interest method.
2.17 Convertible loan notes
Convertible loan notes are classified as either equity,
financial liabilities or a mixture of both in accordance with the
contractual agreement.
Where a convertible loan note is deemed to meet the definition
of equity as per IAS 32, the proceeds receive less any associated
issue costs are recognised directly within equity and is not
subsequently remeasured.
2.18 Leases
The Group assesses at contract inception whether a contract is,
or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
Accounting by lessee
The Group apply a single recognition and measurement approach
for all leases (including short-term leases and leases of low-value
assets). The Group recognise lease liabilities to make lease
payments and right-of-use assets representing the right to use the
underlying assets.
a) Right-of-use assets
The Group recognise right-of-use assets at the commencement date
of the lease (i.e., the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Right-of-use
assets are depreciated on a straight-line basis over the shorter of
the lease term and the estimated useful life of the assets.
If ownership of the leased asset is transferred to the Group at
the end of the lease term or its cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated
useful life of the asset.
The right-of-use assets are also subject to impairment.
Payments associated with short-term leases of equipment and all
leases of low-value assets are recognised on a straight-line basis
as an expense in the Statement of Comprehensive Income. Short-term
leases are leases with a lease term of 12 months or less. Low-value
assets compromise IT equipment and small items of office
furniture.
b) Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating the lease, if
the lease term reflects the option to terminate.
Variable lease payments that do not depend on an index or a rate
are recognised as expenses in the period in which the event or
condition that triggers the payment occurs. In calculating the
present value of lease payments, the Group use the group's
incremental borrowing rate because the interest rate implicit in
the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced through
the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a reassessment or
modification of the lease contract.
2.19 Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. If the effect
of the time value of money is material, provisions are measured by
discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and
the risks specific to the liability. Where discounting is used, the
increase of the provision due to the passage of time is recognised
as a borrowing cost. Provisions are reviewed at each reporting
date, and if it is no longer probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation, they are reversed. No provisions have been
recognised
2.20 Taxation
Income tax for the period comprises current and deferred tax.
Tax is recognised in the income statement, except to the extent
that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
Current income tax is measured on the taxable income for the
year using enacted or substantively enacted tax rates at the
reporting date. Management periodically evaluates positions taken
in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to
the tax authorities.
Deferred income tax is provided on all temporary differences
arising between the carrying amounts of assets and liabilities for
financial reporting purposes and their tax bases.
Deferred tax liabilities are recognised for all taxable
temporary differences except:
-- where the deferred tax liability arises from the initial
recognition of goodwill of an asset or liability in a transaction
that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable
profit or loss; and
-- in respect of temporary differences associated with
investment in subsidiaries and associates, where the timing of the
reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets are recognised for all deductible temporary
differences, carry forward of unused tax credits and unused tax
losses, to the extent that is probable that taxable profit will be
available against which the deductible temporary differences and
the carry forward of unused tax credits and unused tax losses can
be utilised except:
-- where the deferred tax asset relating to the deductible
temporary differences arises from the initial recognition of
goodwill of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.
Deferred tax is measured at the tax rates that are expected to
apply in the year when the asset is realised or liability is
settled based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date. The carrying amount of
deferred tax assets is reviewed 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 tax
asset to be utilised.
The Group did not recognise deferred tax assets on unutilised
losses due to uncertainty over the timing and existence of
sufficient future tax profits.
3 Significant accounting matters
The preparation of the financial statements in accordance with
UK-adopted international accounting standards requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Company's
accounting policies.
Estimates and judgements are continually evaluated, and are
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances. The Group consider the significant
accounting judgements, and key sources of estimation uncertainty
used within the financial statements to be:
Significant judgements
Reverse acquisition accounting (Note 9)
When considering how the acquisition of Hellenic Dynamics S.A.
should be accounted for, the Directors have been required to make a
judgment on whether the acquisition falls within the scope of IFRS
3 or not. The directors assessed the accounting acquiree, Hellenic
Dynamics Plc, at the time of acquisition to not be a business as
defined by IFRS 3. As a result, the acquisition was assessed as
falling outside the scope of IFRS 3. See note 9 for commentary on
how the reverse takeover was accounted for.
Leases - estimating the incremental borrowing rate (Note 14)
The company cannot readily determine the interest rate implicit
in the lease, therefore, they use the incremental borrowing rate to
measure lease liabilities. The incremental borrowing rate of 4% is
considered to be the rate of interest that the Company would have
to pay to borrow over a similar term, and with a similar security,
the funds necessary to obtain an asset of a similar value to the
right-of-use asset in a similar economic environment.
Cost of issuing shares (Note 18)
When considering costs that relate to both the issue of shares
and the listing the Directors are required to make an assessment of
the relevant allocation between these functions. In their judgement
the best way of allocating these is based on the proportion of new
shares issued to the total number of (new and existing) shares
listed.
Major sources of estimation uncertainty
Recoverability of investment in subsidiary and intragroup loan
(Note 30)
The Company considers whether investments are impaired. Where an
indication of impairment is identified the estimation of
recoverable value requires estimation of the recoverable value of
the cash generating units (CGUs). This requires estimation of the
future cash flows from the CGUs and also a selection of appropriate
discount rates in order to calculate the net present values of
those cash flows.
As at 31 March 2023, the carrying value of the Company's
investment in Hellenic Dynamics S.A. was GBP31,243,342. The
recoverable value of this investment is not considered to be less
than it is carrying value as at 31 March 2023 and therefore no
impairment has been have recognised. The Directors have made this
assessment through reviewing forecasts, other available financial
information available and developments during the year and since
the year-end. The key inputs within the forecast include revenue
growth, gross profit margins and overheads, which are used to
estimate future cash flows together with judgements and estimates
relating to the cost of capital and long-term growth rates.
Share Based Payments (Note 19)
During the period, 1,171,555,000 share options, and 375,000,000
warrants were granted by the Company. When accounting for the
share-based payment expense in respect of those share options
granted, Management must calculate the fair value of the share
options issued. Management have done so using the Black-Scholes
model. However, several of the inputs into this model, including
the risk-free rate, the dividend yield, the expected life of the
instrument where it is not a defined period and the volatility, are
subjective and thus management has made estimates in respect of
these inputs.
4 Segmental reporting
Following the acquisition of Hellenic Dynamics S.A. (see note
9), for management purposes the Group is organised into business
units based on its products and services and has two reportable
segments, as follows;
-- Medical Cannabis Supply - Cultivation and supply of medicinal cannabis flowers
-- Head Office - The provision of management services of the Group
No operating segments have been aggregated to form the above
reportable operating segments.
The Executive Management Committee is the Chief Operating
Decision Maker (CODM) and monitors the operating results of its
business units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance
is evaluated based on profit or loss and is measured consistently
with profit or loss in the consolidated financial statements. Also,
the Group's financing (including finance costs, finance income and
other income) and incomes are managed on a Group basis and are not
allocated to operating segments. Transfer prices between operating
segments are on an arm's length basis in a manner similar to
transactions with third parties.
Segmental operating performance
(unaudited)
Period to Year to 31 December
31 March 2023 2021
----------------------------- -----------------------
Profit
Profit/(Loss) before
Revenue before tax Revenue tax
GBP'000 GBP'000 GBP'000 GBP'000
Medical Cannabis Supply - (468) - (342)
Head Office - (685) - -
--------- -------------- ---------- ----------
(1,153) (342)
Inter-segmental revenue and
unallocated - (3,700) - -
--------- -------------- ---------- ----------
- (4,853) - (342)
============= ============== ========== ==========
Business segments assets and liabilities
(unaudited)
31 March 2023 31 December 2021
----------------------- -----------------------
Assets Liabilities Assets Liabilities
GBP'000 GBP'000 GBP'000 GBP'000
Medical Cannabis Supply 1,019 592 1,029 574
Head Office 2,247 992 - -
-------- ------------- -------- -------------
3,266 1,584 1,029 574
======== ============= ======== =============
5 Expenses by nature
(unaudited)
Year to
Period to 31 31 December
March 2023 2021
GBP GBP
Payroll 204,213 81,315
Directors Remuneration 92,455 -
Professional services 361,422 66,578
Repairs and maintenance 4,217 2,663
Electricity 10,263 6,692
Fuel 9,158 12,692
Security services 12,186 31,413
Taxes and duties 46,705 2,737
Travelling 41,349 14,293
Promotion and advertising 87,743 49,256
Depreciation 62,451 35,083
Share based payment 62,921 -
Provisions 76,016 -
Other charges 76,343 31,838
1,147,442 334,560
============= =============
6 Net finance expenses
Finance costs:
(unaudited)
Period Year to
to 31 March 31 December
2023 2021
GBP GBP
Finance expenses
Lease liability interest 15,203 14,650
Other interest 185 190
------------ ------------
Interest paid 15,388 14,840
============ ============
7 Employees
Average number of employees
The average number of employees (including executive Directors)
was:
(unaudited)
Period Year to
to 31 March December
2023 2021
No. No.
Management 4 2
Administration 5 1
------------- ------------
9 3
============= ============
Staff costs:
Wages and salaries
(unaudited)
Year
to 31
Period to 31 December
March 2023 2021
GBP GBP
Wages and salaries 258,330 57,234
Social security
costs 37,375 14,892
Other costs 963 9,189
Share based payment 62,921 -
------------- ------------
359,589 81,315
============= ============
Key management personnel compensation
(unaudited)
Period Year to
to 31 March 31 December
2023 2021
GBP GBP
Short-term employee benefits 91,667 -
Post-employment benefits 788 -
Share based payment 62,921 -
------------- -------------
155,376 -
============= =============
8 Auditor's Remuneration
(unaudited)
Period Year to
to 31 March 31 December
2023 2021
GBP GBP
Fees payable to the Company's auditors and their
associates for the audit of the Company's financial
statements 66,420 10,411
Other fees payable to the Company's auditors and
their associates in connection with the Company
in respect of:
Due diligence services in respect of acquisition
targets 15,000 -
============== ==============
9 Reverse acquisition
On 5 December 2022, Hellenic Dynamics Plc ("the Company")
formerly known as UK SPAC Plc acquired through share for share
exchange the entire share capital of Hellenic Dynamic S.A
("Hellenic"), a company whose principal activity is the cultivation
of medical grade cannabis.
Although the transaction resulted in Hellenic becoming a wholly
owned subsidiary of the Company, the transaction constituted a
reverse acquisition, as the previous shareholders of Hellenic own a
substantial majority of the Ordinary Shares of the Company and the
executive management of Hellenic became the executive management of
the Company.
In substance, the shareholders of Hellenic acquired a
controlling interest in the Company and the transaction will
therefore be accounted for as a reverse acquisition. As the
Company's activities prior to the acquisition were purely that of a
cash shell seeking a suitable acquisition, it will not meet the
definition of a business in accordance with IFRS 3. Accordingly,
this reverse acquisition will not constitute a business combination
and will be accounted for in accordance with IFRS 2 "Share-based
Payments" and associated IFRIC guidance. Although, the reverse
acquisition is not a business combination, the Company has become a
legal parent and will be required to apply IFRS 10 and prepare
consolidated financial statements. The Directors have prepared the
financial statements using the reverse acquisition methodology, but
rather than recognising goodwill, the difference between the equity
value given up by Hellenic Dynamics S.A.'s shareholders and the
share of the fair value of net assets gained by these shareholders,
is charged to the statement of comprehensive income as a
share-based payment on reverse acquisition, and represents in
substance the cost of acquiring the funds held by the cash shell
and the cost of obtaining a listing.
The acquisition cost of Hellenic was GBP31,243,342.59 the
consideration for the transaction was satisfied by the issue and
allotment of a total of 10,414,447,530 Consideration Shares to the
Sellers, such shares having an implied issue price of GBP0.003.
Because the legal subsidiary, Hellenic Dynamics S.A., was
treated on consolidation as the accounting acquirer and the legal
Parent Company, Hellenic Dynamics Plc, was treated as the
accounting subsidiary, the fair value of the shares deemed to have
been issued by Hellenic Dynamics S.A., was calculated at
GBP5,556,656, using the number of UK SPAC shares in issue at the
date of acquisition (1,852,219,137) multiplied by the subscription
price of GBP0.003, based on an assessment of the purchase
consideration for a 100% holding of Hellenic Dynamics PLC.
According to the IFRS 2 the value of the share-based payment is
calculated as the difference between the deemed cost and the fair
value of the net assets as at acquisition. The following reflects
these figures as at 5 December 2022;
GBP
Deemed Cost 5,556,656
Trade and other receivables 741,935
Cash and cash equivalents 1,781,047
Trade and other payable (666,535)
----------
Fair value of assets acquired 1,856,447
----------
RTO expenses 3,700,209
==========
The difference between the deemed cost (GBP5,556,656) and the
fair value of the net assets assumed per above of GBP1,856,447
resulted in GBP3,700,209 being expensed within "reverse acquisition
expenses" in accordance with IFRS 2, Share Based Payments,
reflecting the economic cost to the Hellenic Dynamic S.A.
shareholders of acquiring a cash shell and of obtaining a
listing.
The reverse acquisition reserve which arose from the reverse
takeover is made up as follows;
GBP
Pre-acquisition retained losses (a) (5,089,661)
Hellenic Dynamics S.A. share capital at acquisition (b) 1,134,821
Investment in Hellenic Dynamics S.A. (c) (31,243,343)
Reverse acquisition expense 3,700,209
(31,497,974)
=============
(a) Recognition of pre-acquisition retained losses of Hellenic
Dynamics Plc as at 5 December 2022.
(b) Hellenic Dynamics S.A. had issued share capital of
GBP232,211 and a share premium of GBP902,610. As these financial
statements present the capital structure of the legal parent
entity, the equity of Hellenic Dynamics S.A. is eliminated.
(c) The value of shares issued by the Company in exchange for
the entire share capital of Hellenic Dynamics S.A. The above entry
is required to eliminate the Statement of Financial Position impact
of this transaction.
10 Income tax expense
No current or deferred tax amounts were recognised as a tax
expense/(credit) in the income statement, or in other comprehensive
income in the year (2021: GBPnil).
(unaudited)
Period Year to
to 31 March 31 December
2023 2021
GBP GBP
Current tax
UK corporation tax on profits for
the period - -
------------- -------------
Total current tax
Deferred tax
Deferred tax - -
------------- -------------
Income tax expense - -
============= =============
Factors affecting tax charge
Loss before income tax (4,863,039) (349,400)
Tax at the applicable rate of 19.29%
(2021: 22%) (938,080) (76,868)
Effects of:
Disallowed expenditure 765,398 167
Capital allowances (449) -
Foreign operations - foreign currency
translation differences (715) 4,018
Tax losses not utilised and carried
forward 173,846 72,683
Current tax charge - -
============= =============
The weighted average applicable tax rate of 19.29% (2021: 22%)
used is a combination of the 19% standard rate of corporation tax
in the UK and 22% Greek corporation tax.
A deferred tax asset has not been recognised in respect of these
losses of the Company due to the uncertainty of future profits. The
amount of deferred tax asset not recognised is approximately
GBP248,054 (2021: GBP94,811).
At the Budget 2021 on 3 March 2021, the Government announced
that the corporation tax rate will increase to 25% for companies
with profits above GBP250,000 with effect from 1 April 2023. These
changes were substantively enacted at the balance sheet date and
hence have been reflected in the measurement of deferred tax
balances at the period end.
11 Earnings per share
The basic earnings per share is calculated by dividing the
earnings attributable to equity shareholders by the weighted
average number of shares in issue. The diluted earnings per share
is calculated by dividing the earnings attributable to equity
shareholders by the weighted average number of shares in issue plus
the number of warrants and share options.
(unaudited)
Period to Year to 31
31 March December
2023 2021
Basic earnings per share GBP GBP
Loss for the financial period (4,863,039) (349,400)
Weighted average number of
shares 10,953,796,397 10,268,189,195
=============== ===============
Earnings per share (0.044p) (0.003p)
=============== ===============
The loss attributable to equity shareholders and weighted
average number of ordinary shares for the purposes of calculating
diluted earnings per ordinary share are identical to those used for
basic earnings per ordinary share. This is because the exercise of
share options would have the effect of reducing the loss per
ordinary share and is therefore anti-dilutive.
12 Intangible assets
Licences
GBP
Cost
At 1 January 2021 15,868
Disposals (6,746)
Exchange differences (726)
---------
At 31 December 2021 8,396
Exchange differences 418
---------
At 31 March 2023 8,814
---------
Amortisation and impairment
At 1 January 2021 -
Impairment -
---------
At 31 December 2021 -
Impairment -
---------
Balance at 31 March 2023 -
---------
Net book value
At 31 March 2023 8,814
=========
At 31 December 2021 8,396
=========
Following their assessment of impairment, the Directors
concluded that no impairment charge was necessary for the year
ended 31 December 2022 (2021: GBPNil).
Amortisation of intangible assets will begin when they are
available for use.
13 Property, plant and equipment
Computers,
Leasehold furniture
Improvements and fittings Land Total
GBP GBP GBP GBP
Cost
At 1 January 2021 520,178 21,280 27,115 568,573
Additions - - - -
Disposals - - - -
Exchange differences (36,991) (1,513) (1,928) (40,432)
-------------- -------------- --------- ---------
At 31 December
2021 483,187 19,767 25,187 528,141
Additions 5,497 118,015 - 123,512
Disposals - - (25,187) (25,187)
Exchange differences 24,107 986 25,093
-------------- -------------- --------- ---------
At 31 March 2023 512,791 138,768 - 651,559
-------------- -------------- --------- ---------
Depreciation
At 1 January 2021 - - - -
At 31 December - - - -
2021
Charge for the
period - 18,811 - 18,811
Exchange differences - 504 - 504
-------------- -------------- --------- ---------
At 31 March 2023 - 19,315 - 19,315
-------------- -------------- --------- ---------
Net book value
At 31 March 2023 512,791 119,453 - 632,244
============== ============== ========= =========
At 31 December
2021 483,187 19,767 25,187 528,141
============== ============== ========= =========
The Group has not recognised depreciation charge in profit or
loss for the periods 2021, 2020 and 2019.
Depreciation of assets will begin when they are available for
use, i.e. when are in the location and condition necessary for they
to be capable of operating in the manner intended by
management.
14 Right-of-use asset
Land
GBP
Cost
At 1 January 2021 441,092
Exchange differences (31,367)
---------
At 31 December 2021 409,725
Reassessment of lease liability 30,806
Exchange differences 20,441
---------
At 31 March 2023 460,972
---------
Depreciation
At 1 January 2021 64,326
Charge for the period 35,083
Exchange differences (5,514)
---------
At 31 December 2021 93,895
Charge for the period 43,640
Exchange differences 5,854
---------
Balance at 31 March 2023 143,389
---------
Net book value
At 31 March 2023 317,583
=========
At 31 December 2021 315,830
=========
The above right-of-use asset concerns a 12- year land lease
started April 2019.
During the period, rent paid on operating leases of GBP55,015
(2021 - GBPNil) were recognised in the profit and loss.
15 Trade and other receivables
(unaudited)
31 March 31 December
2023 2021
GBP GBP
Due within one year
Amounts due from directors 14,353
Other receivables 44,006 24,929
VAT receivables 128,537 143,346
---------- -------------
186,896 168,275
Due over one year
Other receivables 3,085 2,938
---------- -------------
3,085 2,938
Total trade and other receivables 189,981 171,213
========== =============
No interest is charged on overdue receivables. There is no
material difference between the fair value of receivables and their
book value.
16 Cash and cash equivalents
(unaudited)
31 March 31 December
2023 2021
GBP GBP
Cash at bank and in hand 2,117,159 5,020
========== =============
17 Share capital
As at 31 March 2023, the Company had 12,530,000,000 allotted and
fully paid ordinary shares and 2,270,182 founder shares.
The ordinary shares have attached to them fully voting,
dividend, and capital distribution rights (including on a winding
up). The ordinary shares do not confer any rights of
redemption.
2,270,182 Founder shares were issued in 2016. The founder shares
were never quoted and do not carry a right to vote or to receive a
dividend.
Number of Number of
Ordinary Shares Founder Shares
As at 1 January 2021 1,852,219,137 2,270,182
Shares issued in the year for RTO (a) 10,414,447,530 -
Shares issued to settle debt (b) 13,333,333 -
Shares issued in placing and subscriptions
(c) 250,000,000 -
As at 31 March 2023 12,530,000,000 2,270,182
================= ================
Ordinary Shares Founder Shares
of 0.1p each of GBP1 each
GBP GBP
As at 1 January 2021 1,852,219 2,270,182
Shares issued in the year for RTO (a) 10,414,448 -
Shares issued to settle debt (b) 13,333 -
Shares issued in placing and subscriptions
(c) 250,000 -
As at 31 March 2023 12,530,000 2,270,182
================ ================
The total value of Ordinary Shares of 0.1p each and Founder
Shares of GBP1 each is GBP14,800,182.
(a) On 5 December 2022, the company completed its reverse
takeover ("RTO") process with Hellenic Dynamics Plc ("HELD"). The
RTO was completed in the form of a share for share exchange and the
ratio was approximately 1:38,858.86.
(b) On 5 December 2022, the company issued 13,333,333 shares
issued in respect of the settlement of professional fees raising
GBP13,333.
(c) On 5 December 2022, the Company issued 250,000,000 shares raising GBP750,000 before costs.
18 Reserves
Share Premium
GBP
As at 1 April 2022 2,816,208
Shares issued to settle debt 26,667
Shares issued in placing and subscriptions 500,000
Share issue costs (371,305)
As at 31 March 2023 2,971,570
================
Merger Reserve
GBP
As at 1 April 2022 -
Shares issued in the year for RTO 20,828,894
As at 31 March 2023 20,828,894
================
19 Share Based Payments
Warrants
Details of the warrants outstanding during the period are as
follows;
Weighted Weighted
average remaining average
contractual exercise
life (periods) price
Number GBP
Brought forward at 1 April
2022 0.92 1,647,594,936 0.003
Granted 0.67 375,000,000 0.003
Lapsed (0.92) (1,584,810,126) (0.003)
Carried forward at 31 March
2023 0.71 437,784,810 0.003
=================== ================ ==========
On 3 March 2021, the Company entered into a financial adviser
warrant deed entitling Peterhouse Capital Limited to warrants over
a number of ordinary shares, representing approximately 0.5 per
cent, of the enlarged Issued Share Capital (the share capital on
the date of the RTO). The warrants are exercisable at the
fundraising price for a period to 3 March 2024. Total warrants
issued sum to 62,784,810.
On 5 December 2022 ("date of admission"), the Group granted a
warrant to the noteholders to subscribe for one Ordinary Share for
every one Ordinary Share issued to the noteholder. The warrants are
exercisable at the Conversion Price (0.3p) and will be valid for a
period to 5 December 2024. Total warrants issued sum to
375,000,000. The warrants were not issued for goods or services
provided and therefore fall outside the scope of IFRS 2 and do not
require fair valuing.
Share Options
Details of the equity settled share options outstanding during
the period are as follows:
Weighted
average
Weighted average exercise
remaining contractual price
Number life (years) GBP
Brought forward at 1 April
2022 111,133,148 0.5 0.002
Granted 1,171,555,000 4.67 0.002
Lapsed - - -
Carried forward at 31 March
2023 1,282,688,148 4.48 0.002
============== ========================= ==========
On 3 March 2021, the Group granted 111,133,148 share options
with the share price at the date of the grant of 0.33p and exercise
price of 0.1975p. The vesting period of these share options is 18
months. On 10 November 2022, the exercise date of these share
options was extended to 30 September 2025.
On 5 December 2022, the Group granted 1,171,555,000 share
options with the share price at the date of the grant of 0.175p and
an exercise price of 0.1975p. The vesting period of these share
options is five years. Half of these options become exercisable
once a production licence is issued and approval for export is
obtained, the remaining options become exercisable after commercial
sales are achieved.
The fair value of the remaining share options has been
calculated using the Black-Scholes model. The assumptions used in
the calculation of the fair value of the share options outstanding
during the period are as follows:
Grant Date 3 March 2021 5 December
2022
Exercise period March 2021 December 2022
- September - December
2025 2027
Share price at
date of grant 0.33p 0.175p
Exercise price 0.1975p 0.1975p
Shares under option 111,133,148 1,171,555,000
Expected volatility 26% 47.55%
Expected life
(periods) 1.5 5
Risk free rate 0.01% 3.24%
Expected dividend
yield 0% 0%
Fair value per
option 0.12p 0.064p
Volatility was determined by reference to the average movement
in the share price of comparable European companies involved in the
cultivation of medicinal cannabis.
The average share price movement was based on a 1-year
movement.
All of the above options are equity settled and the charge for
the period is GBP62,921.
20 Trade and other payables
(unaudited)
31 March 31 December
2023 2021
GBP GBP
Trade payables 458,939 80,298
Other payables 59,210 13,258
Amounted owed to related
parties (Note 25) 3,665 -
Amounts owed to personnel 17,140 112,336
Accruals 100,920 -
Other tax and social security 15,016 3,545
Corporation tax 100 -
---------- -------------
654,990 209,437
========== =============
The directors consider that the carrying amount of trade
payables approximate their fair value.
21 Provisions
31 March
2023
GBP
Balance at 1 January 2022 -
Provision recognised during the
year 212,175
Balance as at 31 March 2023 212,175
=========
The provision represents tax reclaimed that could become
repayable if the assessment of the position were to be successfully
challenged. The Directors are in the process of obtaining a
professional opinion in this respect, however until such opinion is
obtained believe it appropriate that the provision is made. The
provision represents the full amount of the potential
repayment.
22 Lease liabilities
(unaudited)
31 March 31 December
2023 2021
GBP GBP
Current
Amounts due within one year 80,530 54,520
Non-current
Amounts due within two to five
years 161,300 133,747
Amounts due over five years 141,700 175,936
---------- -------------
303,000 309,683
383,530 364,203
========== =============
Lease liabilities at 31 March 2023 are in respect of leasehold
property.
(unaudited)
31 March 31 December
2023 2021
GBP GBP
Up to 1 year 92,553 41,978
2 to 5 years 193,918 167,912
After 5 years 145,439 209,890
Total 431,910 419,780
Less: Future financial charges (48,380) (55,577)
========== =============
Present value of future lease
payments 383,530 364,203
========== =============
23 Borrowings
(unaudited)
31 March 31 December
2023 2021
GBP GBP
Current
Unsecured non-convertible loan
notes - -
---------- -------------
- -
---------- -------------
Non - current
Unsecured non-convertible loan
notes 333,695 -
333,695 -
--------
Total borrowings 333,695 -
========
Whilst the loan notes were due for repayment after one year they
were repaid post year as disclosed in note 28 .
24 Financial instruments
Capital risk management
The Company's objectives when maintaining capital are to
safeguard the entity's ability to continue as a going concern, so
that it can continue to provide future returns for shareholders and
benefits for other stakeholders.
The Company monitors the capital structure with the debt to
capital ratio. This is calculated as the ratio of net borrowing to
total capital employed. Net borrowings are calculated as total
borrowings (including short-term and long-term borrowings as shown
in the Statement of Financial Position) less cash and cash
equivalents. Total working capital is calculated as the total
equity as shown in the balance sheet plus net borrowing.
Classification of financial instruments
All financial assets have been classified as at amortised cost,
and all financial liabilities have been classified as other
financial liabilities measured at amortised cost.
(unaudited)
31 March 31 December
2023 2021
GBP GBP
Financial assets
Cash and cash equivalents at fair
value 2,117,159 5,020
Loans and receivables at amortised
cost:
Trade and other receivables 182,481 171,213
---------- -------------
Total 2,299,640 176,233
---------- -------------
Financial liabilities
Loans and payables at amortised
cost:
Trade and other payables 554,070 209,437
Lease liabilities 383,530 364,203
---------- -------------
Total 937,600 573,640
---------- -------------
Net 1,362,040 (397,407)
========== =============
Cash and cash equivalents
This comprises cash and short-term deposits held by the Company.
The carrying amount of these assets approximates their fair
value.
General risk management principles
The Group is exposed to financial risks, such as market risks
(changes in exchange rates, interest rates, market prices), credit
risk and liquidity risk. The Group's overall risk management
program seeks to minimise the potential negative impact of
financial market volatility on the Group's financial
performance.
Risk management is handled by the Group's financial department,
which operates according to specific rules.
The following represent the key financial risks that the Group
faced during the period.
Market risk
The Group at this stage of operation is not exposed to the risk
of fluctuations in interest rates arising from bank loans with
floating interest rates. The Group is also not exposed to
fluctuations in market interest rates that may have affected its
financial position as well as its cash flows. Due to the
non-lending of the Group there is no risk.
Nevertheless, the Group monitors interest rate trends as well as
the duration and nature of financial needs.
Credit risk
The Group's credit risk arises from cash and cash equivalents
with banks and financial institutions. The Group banks with
Barclays Bank Plc who have a Fitch Credit rating of A+ and Piraeus
Bank S.A. who have a Fitch Credit rating of B and therefore the
credit risk is not considered material.
Liquidity risk
The maturity of the Group's financial liabilities including
trade and other payables, other loans to related parties and lease
liability total payments with the interest payable is as set out
below. Current liabilities were payable on demand or to normal
trade credit terms with the exception of lease liabilities which
are payable quarterly.
The tables below summarise the maturity profile of the combined
Group's non-derivative financial liabilities at each financial
period end based on contractual undiscounted payments:
31 March 2023 Less than 1-2 years 2-5 years
1 year
Non-derivative financial GBP GBP GBP
liabilities
Borrowings (current and
non-current) - - 333,695
Trade payables and other 553,970 - -
payables
Lease liabilities 80,530 161,300 141,700
634,500 161,300 475,395
---------- ---------- ----------
31 December 2021 (unaudited) (unaudited) (unaudited)
Less than 1-2 years 2-5 years
1 year
Non-derivative financial GBP GBP GBP
liabilities
Borrowings (current and
non-current)
Trade payables and other 209,437 - -
payables
Lease liabilities 54,520 133,747 175,936
263,957 133,747 175,936
-------------- -------------- --------------
Currency risk
Foreign exchange risk is the risk that fair value of future cash
flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Group reports in Pounds Sterling,
but the functional currency of its subsidiary is the Euro. The
Group does not currently hedge its exposure to other currencies.
The Group's cash and cash equivalents are held in Pounds Sterling
and Euros. At 31 March 2023, less than 1% (2021: 100%) of the
Group's cash and cash equivalent were held in Euros and therefore
this is not considered to be a risk.
25 Related party transactions
Transactions between the Company and its subsidiary which are
related parties, have been eliminated on consolidation. Related
party transactions are considered to be conducted at arm's
length
Transactions with Directors
Remuneration paid and share options granted to the Directors is
disclosed in the Remuneration Committee report on pages 29 to 31 of
the Report and Accounts.
During the period, Ocean Park Developments Limited invoiced the
Company GBP33,663 (2021 - GBP37,200) for consultancy services
provided by N B Fitzpatrick, a director at that time.
During the period, the Company advanced amounts of GBP52,000
(2021 - GBPNil) and was repaid amounts of GBP37,647 (2021 - GBPNil)
by a director. At the period end, the Company was owed GBP14,353
(2021 - GBPNil) by one of the directors.
At the period end, the Group was owed GBP25,754 (2021 - GBPNil)
by one of the directors of the subsidiary. This amount has been
repaid post period-end.
At the year-end, the Company owed GBP3,665 (2021 - GBP3,491) to
a company under common control by one of the directors.
26 Pension costs
The Group operates a defined contribution pension scheme in
respect of the directors and employees. The assets of the scheme
are held separately from those of the Group in an independently
administered fund. The pension cost charge represents contributions
payable by the Group to the fund and amounted to GBP963 (2022 -
GBPNil). The amount payable at the period-end was GBP2,567 (2022 -
GBPNil).
27 Ultimate Controlling Party
The Directors have determined that there is no controlling party
as no individual shareholder holds a controlling interest in the
Company. Controlling party is defined as a shareholder which holds
more than 25% ownership of shares in the Company.
28 Post Balance Sheet Event
Subsequent to the year-end GBP375,000 of convertible loan notes
were repaid and the associated warrants lapsed then.
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
2023 2022
Note GBP GBP
ASSETS
Non-current assets
Investments 30 31,243,342 -
Property, plant and equipment 31 1,791 -
------------ ------------
31,245,133 -
------------ ------------
Current assets
Other receivables 32 572,623 216,871
Cash and cash equivalents 33 2,111,653 2,095,682
------------ ------------
2,684,276 2,312,553
------------ ------------
TOTAL ASSETS 33,929,409 2,312,553
============ ============
EQUITY AND LIABILITIES
Issued share capital 34 14,800,182 4,122,400
Share premium 2,971,570 2,816,208
Merger reserve 20,828,894 -
Convertible loan notes reserve 41,305 -
Capital redemption reserve 7,500 7,500
Share based payment reserve 62,921 -
Retained losses (5,774,612) (4,681,916)
------------ ------------
TOTAL EQUITY 32,937,760 2,264,192
------------ ------------
Current liabilities
Trade and other payables 35 445,779 48,361
Provisions 36 212,175 -
657,954 48,361
Non-current liabilities
Convertible loan notes 37 333,695 -
------------ ------------
TOTAL EQUITY AND LIABILITIES 33,929,409 2,312,553
============ ============
As permitted by section 408 of the Companies Act 2006, the
parent Company's statement of comprehensive income has not be
included within these financial statements. The loss for the parent
Company was GBP1,092,696 (2022 - GBP613,696).
The financial statements were approved by the board on
Davinder Rai
Chief Executive Officer
The notes on pages 78 to 81 of the Report and Accounts form part
of these financial statements.
COMPANY REGISTRATION NO. 06374598
COMPANY CASH FLOW STATEMENT
FOR THE YEARED 31 MARCH 2023
Notes 2023 2022
GBP GBP
Cash flows from operating activities
Operating loss (1,092,696) (613,511)
Adjusted for:
Share based payment charge 19 62,921 112,578
Pre-acquisition costs - 197,510
Share-based compensation 5,913 -
Changes in provisions 36 212,175 -
------------ ------------
Operating cashflow before working
capital commitments (811,687) (303,423)
(Increase) in trade and other
receivables (355,752) (181,254)
Increase/(decrease) in trade and
other payables 431,505 (80,721)
Finance costs - (185)
------------ ------------
Net cash outflow from operating
activities (735,934) (565,583)
------------ ------------
Cash flows from investing activities
Purchase of property, plant and
equipment 31 (1,791) -
Pre-acquisition costs - (197,510)
------------ ------------
Net cash flows used in investing
activities (1,791) (197,510)
------------ ------------
Cash flows from financing activities
Proceeds from issue of shares,
net of issuing costs 34 378,696 -
Proceeds from issue of convertible
loan notes 37 375,000 -
Net cash flows generated from 753,696 -
financing activities
------------ ------------
Net cash increase/(decrease)
in cash and cash equivalents 15,971 (763,093)
Cash and cash equivalents brought
forward 2,095,682 2,858,775
------------ ------------
Cash and cash equivalents carried
forward 33 2,111,653 2,095,682
============ ============
Major non-cash transactions
On 5 December 2022, the Company issued 10,414,447,530 shares of
0.1p each at a price of 0.3p per share to the shareholders of
Hellenic Dynamics S.A. as part of the RTO acquisition for a total
of GBP31,243,343. See Note 9.
The Company also issued 13,333,333 shares of 0.1p each at a
price of 0.3p per share for a total value of GBP40k for the
settlement of services rendered to the Company. See note 19.
The notes on pages 78 to 81 of the Report and Accounts form part
of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2023
Convertible Share
loan based Capital
Share Share Merger notes payment redemption Retained
capital premium reserve reserve Reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP GBP GBP
At 31 March
2021 4,122,400 2,816,208 - - - 7,500 (4,180,798) 2,765,310
=========== ========== =========== ============= ========= =========== ============ ============
Share based
payment
charge - - - - - - 112,578 112,578
Total
comprehensive
loss for
the year - - - - - - (613,696) (613,696)
------------- ---------
At 31 March
2022 4,122,400 2,816,208 - - - 7,500 (4,681,916) 2,264,192
=========== ========== =========== ============= ========= =========== ============ ============
Shares issued
during the
year 263,333 526,667 - - - - - 790,000
Shares issued
for
acquisition
of subsidiary 10,414,449 - 20,828,894 - - - - 31,243,343
Share based
payment
charge - - - - 62,921 - - 62,921
Equity element
of
convertible
loan notes - - - 41,305 - - - 41,305
Cost of share
issue - (371,305) - - - - - (371,305)
Total
comprehensive
loss for
the year - - - - - - (1,092,696) (1,092,696)
------------- ---------
At 31 March
2023 14,800,182 2,971,570 20,828,894 41,305 62,921 7,500 (5,774,612) 32,937,760
=========== ========== =========== ============= ========= =========== ============ ============
Share Capital - Share capital represents the nominal value of
shares that have been issued.
Share premium - Share premium represents the difference between
the nominal value of shares issued and the total consideration
received.
Merger reserve - The merger reserve arises when the company
acquires at least a 90% interest in the shares of another company
and under s612 Companies Act 2006 the excess of fair value of the
shares issued in excess of their nominal value is precluded from
being recognised in the share premium account. This reserve is not
distributable.
Share based payment reserve - The value of equity settled
share-based payments provided to employees, including key
management personnel.
Capital redemption reserve - Capital redemption reserve
represents amounts transferred following the purchase of own
shares.
Retained earnings - Retained earnings represent cumulative
profit or losses, net of dividends and other adjustments
The notes on pages 78 to 81 of the Report and Accounts form part
of these financial statements.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE PERIODED 31 MARCH 2023
29 ACCOUNTING POLICIES
The accounting policies of the Company are shown in the
Consolidated Financial Statements on pages 48 to 56 of the Report
and Accounts.
29.1 Investment in subsidiaries
Investments in subsidiaries are stated at cost less any
provision for impairment.
30 Investment in subsidiary undertakings
Shares
in subsidiary
undertakings
Cost GBP
At 1 April 2021 -
Additions -
---------------
At 31 March 2022 -
Additions 31,243,342
---------------
At 31 March 2023 31,243,342
---------------
Accumulated Impairment provisions
At 1 April 2021 -
Impairment provision -
---------------
At 31 March 2022 -
Impairment provision -
---------------
At 31 March 2023 -
---------------
Net book value
At 31 March 2023 31,243,342
At 31 March 2022 -
As set out in note 3 the Company carried out an impairment
review of its investment in Hellenic Dynamics S.A. and based on
this it was considered that no impairment is required.
The following companies are the principal subsidiary
undertakings at 31 March 2023 and are all consolidated:
Percentage
of shares
Country Class directly
Subsidiary undertakings Registered Office of incorporation of share held
Hellenic Dynamics Chorigi-Kilkis P.C.
S.A. 61100 Greece Ordinary 100%
Subsidiary undertakings Principal activity
The cultivation and supply of medical
Hellenic Dynamics S.A. cannabis
NOTES TO THE COMPANY FINANCIAL STATEMENTS
31 Property, plant and equipment
Computer
equipment Total
GBP GBP
Cost
At 1 April 2021 - -
Additions - -
Disposals - -
- -
At 31 March 2022
Additions 1,791 1,791
Disposals - -
At 31 March 2023 1,791 1,791
Depreciation
At 1 April 2021 - -
Charge for the period - -
On disposals - -
At 31 March 2022 - -
Charge for the period - -
On disposals - -
At 31 March 2023 - -
Net book value
At 31 March 2023 1,791 1,791
At 31 March 2022 - -
32 Trade and other receivables
2023 2022
GBP GBP
Other receivables 461,330 153,193
Other taxation and social
security 111,293 63,678
572,623 216,871
========
33 Cash and cash equivalents
2023 2022
GBP GBP
Cash at bank 2,111,653 2,095,682
==========
34 Share capital
2023 2022
Number GBP Number GBP
Allotted, called up
and fully paid
Ordinary shares of 0.1p
each 12,530,000,000 12,530,000 1,852,219,137 1,852,218
Founder shares of GBP1
each 2,270,182 2,270,182 2,270,182 2,270,182
14,800,182 4,122,400
2,270,182 Founder shares were issued in 2016. The founder shares
were never quoted and do not carry a right to vote or to receive a
dividend.
On 5 December 2022, 10,677,780,863 0.1p ordinary shares were
issued at a value of 0.003p per share.
35 Trade and other payables
2023 2022
GBP GBP
Trade payables 295,188 8,001
Other payables 36,995 -
Accruals 100,920 40,260
Other taxation and social
security 12,576 -
Corporation tax 100 100
445,779 48,361
======== =======
36 Provisions
2023
GBP
Balance at 1 April 2022 -
Provision recognised during the
year 212,175
Balance as at 31 March 2023 212,175
========
The provision represents tax reclaimed that could become
repayable if the assessment of the position were to be successfully
challenged. The Directors are in the process of obtaining a
professional opinion in this respect, however until such opinion is
obtained believe it appropriate that the provision is made. The
provision represents the full amount of the potential
repayment.
37 Borrowings
2023 2022
GBP GBP
Current
Unsecured non-convertible loan
notes - -
----- -----
- -
----- -----
Non - current
Unsecured non-convertible loan
notes 333,695 -
333,695 -
Total borrowings 333,695 -
========
Whilst the loan notes were due for repayment after one year they
were repaid post year as disclosed in note 28.
38 Capital Commitments
There were no capital commitments at the 31 March 2023.
39 Key management personnel compensation
Key management personnel expenses are disclosed in Note 7 to the
Consolidated Financial Statements.
40 Related party disclosures
Related party disclosures are detailed at Note 25 to the
Consolidated Financial Statements. The company has taken advantage
of the exemptions from the requirement to disclose transactions
with group companies.
41 Financial instruments
Details of key risks are included at Note 24 to the Consolidated
Financial Statements.
Categories of financial instruments
2023 2022
GBP GBP
Financial assets
Cash and cash equivalents at fair
value 2,111,653 2,095,682
Loans and receivables at amortised
cost:
Trade and other receivables 565,123 216,871
---------- ----------
Total 2,676,776 2,312,553
---------- ----------
Financial liabilities
Trade and other payables at amortised
cost (344,859) (48,361)
Net 2,331,917 2,264,192
41 Post Balance Sheet Event
Details of post balance sheet events are included at Note 28 to
the Consolidated Financial Statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR GIGDRUSXDGXB
(END) Dow Jones Newswires
July 31, 2023 05:00 ET (09:00 GMT)
Hellenic Dynamics (LSE:HELD)
過去 株価チャート
から 4 2024 まで 5 2024
Hellenic Dynamics (LSE:HELD)
過去 株価チャート
から 5 2023 まで 5 2024
